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6 Types of Loans for Commercial Investment Properties

April 28, 2020 by in Industry News

If you know where to look, seeking the resources to reap the rewards of real estate investing will not become a challenge. When reading through these commercial investment properties loans below, note that the best choice for you depends on your personal financial situation, on the property you purchase, and on what you intend to do as a commercial property investor.

Conventional Mortgage Loans

A conventional mortgage is a loan offered by private institutions, such as banks or mortgage lenders, for investment in real estate. Your personal credit score and history will decide the eligibility for conventional mortgage loans and the interest rate related to the mortgage.

Hard Money Loans

Hard money loans are ideal for investors who plan to purchase inexpensive investment properties, remodel them, and sell them easily for a profit and pay off the loan in due time (the fix-and-flip strategy). They are easier to get than regular mortgage loans. 

To decide whether to give you the loan, hard money lenders determine the valuation of the investment property you plan to renovate.

Private Money Loans

Private money lenders are people that have the money to lend and who want a decent return on investment. Private money lenders may be in your personal network (family, colleagues, acquaintances, co-workers, etc.) or also other investors and people you have encountered from your investing experience in real estate.

Fix-and-Flip Loans

A fix-and-flip loan is a hard loan that helps an investor to renovate an investment property and sell it as soon as possible. The principal emphasis is on the profitability of the property.

Home Equity Loans

Home equity loans allow homeowners to borrow against their house’s equities to purchase a second home or a property with their profits. 

The loan depends on the disparity between the equity of the borrower and the actual market value of the property. In certain situations, borrowing up to 80% of the market value of the house is workable for a real estate buyer!

Commercial Investment Property Loans

If you want to get into commercial real estate investing, then a commercial investment property loan is right for you. Borrowers need to have a solid business plan and a decent credit score. Lenders want to see the benefits and work needed to develop and maintain cash flow.

There are various categories of commercial property correctly loans, each of which is appropriate for some kinds of commercial assets based on certain conditions and qualifications. To find out more about these commercial loans and decide which one works best for you, call us today.

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