If you are planning to purchase or renovate a property for business purposes like an apartment complex, office space, hotel, or retail, you may need adequate financing. Hence, getting familiar with the different types of commercial real estate loans and mortgages is highly recommended for all new real estate investors or entrepreneurs to understand which one is right for your specific real estate project. To provide the necessary assistance, some popular commercial real estate loan types are mentioned next. Build your base by going through the list, and then find out more about each of them by visiting BridgeWell Capital the Commercial Real Estate Loan Knoxville, TN.So, let’s get started!
5 Common Commercial Real Estate Loan Types
Even though there are numerous types of commercial real estate loans and mortgages, not all of them are created equally and will have different structures, terms, and requirements. Here are some of the most popular loan types that real estate investors swear by:
1. Bridge Loans
You should search for a trusted in-house private lender as they offer commercial real estate bridge loans, a short-term financing solution designed for real estate investors seeking quick and easy cash flow. Being an interest-only loan, it can assist you in lowering your expenses while ensuring long-term financing aid for your real estate project, whether it is for mixed-use, rental, fix-to-rent, flex industrial, etc. This type of commercial real estate loan is asset-based, allowing easy approval even with a low credit score or income.
2. Commercial Construction Loans
As the name of this type of commercial real estate loan suggests, you can use this loan for the construction of a commercial property. You can even use this loan to acquire land for construction purposes. Here, you will pay interest only on the loan proceeds received. This loan ensures your commercial real estate project is carried on smoothly and effectively.
3. Cash-Out or Refinancing Loans
Already have an outstanding loan on a property intended for business-related activities? Then, learn more about commercial cash-out or refinancing real estate loans, a type of secondary loan. With an experienced and reliable in-house private lender, you can apply for this loan without income verification and tax return submissions. It provides a substantial loan amount ($100K to $ 1 million) and comes with no restrictions on the use of the cash-out proceeds. This type of loan is an optimal choice for making improvements to your commercial property. You can also use it for purchasing new properties or paying off your outstanding business debts.
4. Multifamily Loans
If you are interested in investing in a property with 5 or more units, commercial multifamily real estate loans can help out effectively. For loan approval, the property’s quality and your ability to produce the expected income are taken into consideration. With this type of loan, you can resell, purchase, or improve multi-unit complexes. The best in-house private lenders can offer more than 100 institutional capital loan programs, providing the required flexibility and freedom for your real estate project.
5. Fix-To-Flip Loans
If you are a real estate investor in large-scale, multi-family, or single-family commercial real estate development, a commercial fix-to-flip real estate loan is an excellent choice. Here, your sole purpose should be to develop the property and then sell it off (not for residential purposes). With the right in-house private lender, you can expect up to 75% ARV (After Repaired Value) and up to 100% of rehab costs with no interest on undrawn rehab funds.
The Best Commercial Real Estate Loan Type For You
From the list presented above, you can see that different types of commercial real estate loans and mortgages are available for various types of real estate projects. Hence, finding out your options and determining which one is best for your specific commercial real estate project and your requirements is necessary for the project’s success. So, take your time to find the right assistance and guidance!
