Beginner Commercial Property Financing

10 Replies

Trevonte, previous experience in real estate investing does play a factor in the lender you work with and the terms you may receive. Many lenders will ask for a schedule of real estate owned to show your past experience. Lack of experience will not disqualify you from obtaining financing but it may limit your source of financing. My suggestion is to you use a private lender or non-bank commercial lender, they will have more flexibility than traditional or conventional sources. 

@Trevonte Mosby , it also depends on deal size and location. If you're in a smaller metro area, you can make a connection with a local bank, that can help. Or you can find a commercial mortgage broker if you're in a larger more competitive metro area.

Good luck, and feel free to reach out if you want to bounce ideas off someone.

I would recommend starting with the local banks in your area, call them, ask who their real estate banker is, and email them the information on the deal. I am purchasing a commercial property right now with a local bank, 3.6% interest, 20 year AM, 5 year term.

Look up commercial mortgage brokers and see if you can get 5-10 minutes and come prepared with questions.

As brokers they see a lot of diff banks and the same problems, so they can prep you better when you get to the 4+ stage.

Just going to a bank, unless you get the "right" one, probably won't help as much since they're all looking for something a little different in who/want they lend on.

I have used two local banks and one national bank to finance my deals so far. I typically financed with 25-30% down. There terms varry from 2-5 years amortized over 15-25 years. Hope this helps. Feel free to message me if you have more questions.

Once you get into the commercial space, some lenders will look at the property in order to assist in financing. Keep in mind you will still be an important aspect in getting the loan done but the property does play a big role. 

Who is your lawyer? your CPA? Who does your banking now? If its a big national, consolidate and be willing to move your personal accounts. $250k across accounts will help.