Commercial Real Estate Financing: Thinking Outside Of The Bank
Commercial real estate investors are part of a growing and competitive field. From simple house flipping projects and rentals to large scale construction projects, investors and developers alike require a reliable commercial real estate financing source to see ventures through to completion. However, traditional loans do not always fit into those plans, so CRE investors have to start thinking outside of the bank to find better solutions.
Traditional Financing Does Not Always Work
Traditional financing for commercial real estate properties has become less efficient and robust over the years. Banks and similar lending channels view independent commercial real estate investors as risky clients. Because they do not fully understand commercial real estate, they do not understand the time constraints on lucrative opportunities, and the overall profitability of a venture does not fit in with the processing time for bank loans. As a result, banks have placed much higher requirements on traditional commercial real estate financing, which drives many investors away.
Commercial Real Estate Financing Alternatives
With all of the red tape involved with securing traditional loans for time-sensitive commercial real estate opportunities, CRE investors are looking elsewhere. Some people borrow money from family and friends to purchase and renovate commercial properties. This is a very precarious venture, and usually leads to tension, if not fall outs, with loved ones. Others think the only recourse is to max out personal credit cards and dump their savings into an investment property when traditional lending channels are not in the picture. It should go without saying the potential horrors that can arise from putting your personal finances on the line, especially it it ends up being less than the amount needed to complete a project. Instead, clever CRE investors are using other methods for commercial real estate financing. Bridge loans for house flipping projects, mezzanine loans for larger transactions, and even construction and contract financing to the really big ventures can all be secured without waiting for weeks and months on traditional channels. By using commercial real estate financing alternatives, investors and property developers get the funding they require, when they need it, and with much much more flexibility than traditional lenders.
A New Approach To Commercial Properties
At BG Capital Funding Group, we cut through the red tape and work with investors to create customized CRE financing solutions. Contact our team today to start exploring your options and generating revenue with your next project.