How To Get Commercial Real Estate Financing Without Bank Loans



When you want to invest in property, you may feel like your options for financing are limited. Banks dominate the market when it comes to loans, but there are some unfair terms that come along with taking a loan from this source. If you do not feel like dealing with high rates and conditions that do not seem to match your needs, then you may want to explore commercial real estate financing alternatives. There are lots of great options out there that can help you to make the investment that you wish without having to subject yourself to terms that are not the best for your needs.

The most common type of commercial real estate financing option is a conventional plan for commercial real estate. This type of option is usually available for properties that have been acquired or are being refinanced and can include properties that are labeled as offices, multi-family homes, storage units, retail spaces, mobile home parks and more. With this type of plan, you can expect fair interest rates, as low as 3.75 percent, and at least a decade for the term, with more time available depending on the needs.

One of the major factors that will dictate the terms of the loan that you take out is the property itself. The reason that terms are fair for the conventional plan is because there is an assumption that cash flow will be consistent when you purchase the property. Since there are usually already occupants or renters in the building when you purchase it, there is already a set amount of money that will be seen by both yourself and your lender in the immediate future. The more successful the businesses that occupy the space, the more likely that you will be able to pay off the loan in a reasonable amount of time.

There are also other alternatives available. CMBS loans are a great choice, and one that many are not even aware of. Very few banks offer this type of loan, so there are many people out there who do not realize that this option exists. This type of commercial real estate financing plan is usually for properties of more value, with loans ranging from $1,000,000 to $50,000,000. The funds for these loans are usually pooled into a trust, and the interest rates are quite low and manageable. If the property you wish to invest in would fit this criteria, it can be an excellent idea to see how this financing plan works and if it will be the best choice for your specific needs moving forward.


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