Investing in commercial real estate can be an excellent way to earn steady income without working a full-time job. People interested in pursuing this option should know they can pursue one of several different loan types to assist with the costs of property management.
Below is a brief outline of possible loan options for commercial real estate.
A bridge loan is a temporary financing option for people who don’t yet qualify for traditional financing. A stable income and a high credit score will make it easier to qualify and move onto a standard loan.
A real estate purchase loan might be an option for people who have a healthy savings account. This loan type also requires a perfect credit score. The lender will list the property itself as collateral when approving this loan. Borrowers will need a current appraisal to determine their interest rate based on loan-to-value ratio.
A hard loan helps to keep homes out of foreclosure by approving funds the property owner needs to pay the mortgage and maintain the property. This loan is more high-risk than other types but may be the only option when foreclosure is on the line.
Joint property owners might consider a joint venture commercial real estate loan if they currently split all expenses and profits. A private lender or investment firm representative can assist prospective buyers with submitting a joint application. Both parties will then be legally liable for repayment.
Tenants of retail outlets and office building who make a long-term commitment to the property may do well with a participating mortgage. When the loan holder makes a payment each month, the lender also receives a pre-determined percentage of business income from sales and rent. Businesses with owners that take out a participating mortgage help to provide stability and reliability to the community.
Deciding on the right commercial real estate loan isn’t easy but Purevue Capital can help. Please schedule an appointment today to meet with a loan representative.