Commercial Real Estate Loans: Which Loan Is Right For You?

There are a multitude of commercial real estate loans. Are you sure you found the right loan for your business venture?
If you haven’t done your research yet, it may behoove you to know that there are several different types of commercial real estate loans. However, our focus will be on joint venture loans, participating mortgages and your standard real estate purchase loans. These particular commercial loans tend to be the most common choice when it comes to business ventures. Thus, with that being said, let’s go over what each of these loans can do for you and your next business venture.
For starters, a joint venture loan is what you want when all parties (generally two partners) are willing to share equally in the losses and profits of the property. Moreover, this particular commercial loan is extremely beneficial to those parties that cannot or may not be able to qualify for financing separately. A real estate purchase loan, on the other hand, requires one party or rather one borrower with excellent to near perfect credit along with the saving to back it up. Additionally, when it comes to collateral, in general, lenders tend to expect more with these purchase loans.
Lastly, participating mortgages, in essence, are when your joint partner is actually your lender. In other words, the lender receives the standard monthly payment plus interest, but because the lender is also a partner they ultimately share in the commercial property’s proceeds or income. This third option is definitely something to look into if you have potential tenants with financial stability and long-term goals.

How to Decide What Commercial Real Estate Loans You NEED!

So, now that we’ve gone over some of the commercial loan basics, it’s time to see what works best with your business plan and overall goals. Of course, additional research is always key to finding out which type of commercial loan will ultimately work best. But, nevertheless, when it comes to picking and choosing between the above-mentioned commercial real estate loans clearly the best course of action is to sit down and go over your credit score, your available capital or rather collateral and what your long-term purpose is for your future commercial property. Obviously, if you do not qualify on your own a joint venture loan would be in your best interest or you may even consider a participating mortgage, especially if you are interested in an office park. Ultimately, If your credit score is well into the 700s and you’ve got extra savings just laying around well then you have no reason to fear the all mighty real estate purchase loan.

Is Rotten Credit a Factor?

If you are like most business savvy people and do not have the credit scores that dreams are made of that’s perfectly okay. The reality is you still have other options, even more than we’ve covered. So, do not let rotten credit keep you from reaching your dreams or from taking your business venture to the next level. Remember, your goal is to pick a commercial real estate loan that works for you!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 

Texas Tel:      (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

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About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.