Dreams do Come True – Obtaining your First Commercial Real Estate Loan

Whether you’re interested in construction from the ground up, a quick fix and flip, or a long-term investment, real estate can be a very profitable investment strategy. Finding your first commercial real estate loan is often the first step in achieving this vision.

You may have been sitting on the sidelines for some time now, watching your friends purchase properties, rehab them, and then turn around and sell them for a profit. They’ve since left their 9 to 5 (or 8 to 7) jobs while maintaining a lifestyle that allows for weekends with the family and vacations in far off lands. This means of income has been growing in popularity thanks to reality TV and shows like HGTV’s Flip or Flop and Flip that House.

Keep in mind, reality TV shows are just that—TV shows. They are designed to entertain and that may require increasing the drama to the point of taking some of the reality out of those shows that claim to be “real life.” Investing in real estate requires knowing the state and federal regulations, having a deep understanding of the numbers game and accompanying budgets, and a base knowledge of the market and costs of rehab. It also requires patience.

Real estate investors often use hard money loans to fund their projects. This strategy works for several reasons including needing the funds quickly in order to acquire a property that has competing bids, insufficient income history or credit, or investors in need of a quick turn-around. They may want to take advantage of a short sale or foreclosure and do not have the time to wait around for a conventional loan.

Obtaining Your First Commercial Real Estate Loan

Obtaining your first commercial real estate loan is not as difficult as your may have been led to believe. For a hard money loan, you will need collateral and a plan that shows how you intend to pay off the loan, otherwise known as an exit strategy. In many instances, interest only payments are available for a select amount of time as you rehab your property or come up with the right tenants. Using a professional and time-tested real estate mortgage broker can help you achieve your desired outcome without having to find the many individual private money investors. They generally have a wealth of investors that they work with on a regular basis and know which ones will be suited for your type of business or project. They will have varying loan programs designed to meet specific needs.

Working with a mortgage broker gives you access to numerous private money investors and lending programs.

Your first step will be to complete a loan application. It’s important that you take the tact of full disclosure and do not leave anything to the broker’s imagination or leave out pertinent facts. They have done this countless times and can spot transgressions easily. Be up front about any potential issues you foresee. Knowing your “full story” gives them the ability to find the right investor for your project and the right commercial real estate loan for you. Mortgage brokers are professionals who have passed state and national tests and continue their education with yearly courses, and they will often know how to help you even when you think the obstacles are too immense to navigate.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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.