Investing in Commercial Real Estate

Are you thinking of investing in commercial real estate? Are you looking for a solid return on your investment? If you answered yes to these questions, you may want to speak to a commercial mortgage broker. Why should you deal with a commercial mortgage broker?  With today’s market conditions, the loan approval process is getting tougher and tougher. Banks and other lenders are very selective in determining what types of investment properties they are willing to finance. By paying attention to which types of properties lenders are willing to finance and which they aren’t, you may be able to make better investment decisions.  Commercial mortgage lenders are constantly evaluating which types of properties to finance.  This valuable data may help you determine which type of investment property to consider.

Which types of loans are banks and other lenders are currently considering?  Apartment building loans are very popular right now. Due to the turmoil in the housing and employment markets, many people are choosing renting over buying. This is creating demand in the rental sector. Other favorable property types include:  anchored retail centers, medical office buildings, and other general purpose multi-tenanted properties.  In addition, lenders like business mortgage loans where the owner will occupy the property and use the property to operate his/her own business.

You may want to think twice before investing in any of these properties, as they are tough to finance:  vacant property, raw land, construction projects, or retail space without anchor tenants.  In addition, lenders do not want to finance projects with insufficient down payments.  Seller financing and no-down payment deals will not be considered in today’s market.  Lenders expect to see the borrower invest a significant amount of money before risking their investment capital.

To learn more about what commercial underwriters consider when evaluating a commercial loan request, please see What Do Commercial Mortgage Underwriters Look for?