Brian Fielding has been in the commercial, office, industrial and retail property management industry for over 40 years. One of the biggest questions that potential investors oftentimes have is where they can get financing for their investment ventures. In order to help investors, commercial real estate advisor Brian Fielding is revealing these tips.
Choose tenants carefully. Unless the investor has a credit score well into the 700s, commercial lenders will be looking to the quality of the tenant, the term of the lease and the demographics of the market. If an investor has found a really good location and signed on a national (or even a strong regional) tenant, lenders will be likely to lend anywhere from 50 – 75 percent of the purchase. Of course, it helps if the investor can show that they have been prudent in their personal finances, but over time the investor’s track record of successes can enable them to borrow on a non-secured or partially secured basis, shares Brian Fielding.
Bring in other investors so that the upfront contribution to the purchase merits consideration by more than one lender.
The more capital that the investor can raise, the more able they will be to establish the sort of credibility that lenders are “comfortable” with,explains commercial real estate advisor Brian Fielding. When starting out, investors are unlikely to be able to obtain sufficient financing to pursue more than one or two properties at a time. Lenders want to see a track record of success and repayment and by limiting the investor’s leverage (the amount of borrowing divided by the equity), the investor can quickly establish their credentials as a prudent, cautious and creditworthy investor.
Consider the alternatives.
It is important to use whatever assets the investor has prudently. Investing in real estate, as with any other venture, should be done with funds that an investor can afford to lose and not change the investor or their family’s lifestyle. As the investor demonstrates their proficiency, speaking with their family and friends about the investor’s ideas to try to show them they have, indeed, become an expert in their target market. Many investors seek loans from peer-to-peer lending sites, and from private investors, but the best resources are those people who know the investor best. Just make certain that they also limit their investment to capital that they can also afford to lose.
Think about seeking financing from smaller lenders.
It is advisable to not start the search for financing at a large bank since they are likely to have less flexibility and may be somewhat less understanding and accommodating than a neighborhood bank, or local credit union. Some investors plan for their future financing needs and open accounts at their hometown bank. It is important to always do some homework on the broker and financial institution that the investor goes to.
For more information about these and other topics, visit commercial real estate advisor Brian Fielding’s website at http://brianfielding.com.Read More