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Commercial Loan Blog

Why are Multifamily Loans Easier Than Commercial Loans?

July 21, 2015

It’s simple – less moving parts. An analogy is the difference between the construction of a lawn mower engine and the construction of an automobile engine.

For example, let’s look at the difference between getting a loan for an apartment complex and a retail mall. For an apartment complex loan you have one borrower for the property. For the retail mall, let’s say that you have 35 tenants.

For the apartment complex, you just need to get the financial strength of the borrower. For the retail mall, you have to get the financial strength of all 35 tenants. It... Read More

Investment Properties: Commercial vs. Residential

July 15, 2015

There are big differences between commercial apartment properties and residential investment properties. You could say it’s somewhat like two different planets. People new to the commercial apartment world need to understand the differences before getting involved. Before we continue, it’s important to know that commercial apartment properties are also known as multifamily properties.

First, there is one particular key distinction to keep in mind. A residential investment property has 1 to 4 units. A commercial apartment property is defined as having 5 or more... Read More

Key Qualities of an Inferior Commercial Loan Broker, Part 2

June 21, 2015

In the previous blog, we covered some key characteristics of a commercial loan broker who does inferior work. This can include a direct lender too. In the blog were several negative characteristics to stay away from including: A commercial broker asking for upfront fees unless it was a project of great complexity – like a New York skyscraper, the lender refusing to give you some of his customers to talk to as references, and getting an inexperienced lender.

This week we include 4 more key characteristics of a poor commercial loan broker, or direct lender.

... Read More

Key Qualities of an Inferior Commercial Loan Broker

June 17, 2015

In your quest for a commercial loan it is so important to know some key qualities of a Commercial Loan Broker to avoid:

  • The commercial loan broker asks for an upfront fee and your loan is not complex. If your loan is simple and you are being charged an upfront fee, it is quite likely that the commercial mortgage broker is not being honest. Yet, also keep in mind that if you have a commercial project such as a 100 story skyscraper in a major city, charging for an upfront fee may be OK. But, even then it’s essential that you conduct a background check on the... Read More

    • Low Rates: Always the Most Important Feature? Part 2

    June 10, 2015

    Going for the lowest rate could be a good practice generally.  But, as we covered in the previous blog, there are quite a few lenders who quote a rate too low to hook you into working with them. Later on when you are well into the loan process, they give you a higher rate than originally quoted. They may tell you that rates have gone up, but the problem is they changed the rate artificially to try to get your business.

    This most recent past article also covered what you can do to help prevent this from happening.

    This week we are going to continue looking... Read More

    Low Rates: Always the Most Important Feature?

    No.

    Why? Even though there are arguments lenders could give you that you should go with them because they are quoting you a low rate at the inception of the loan process – the low rate quite possibly is deceptive.

    A lender can quote you anything they want to quote you at the beginning of the loan process. Because you are not trained in commercial loans, whatever they quote you, you very well could believe.

    Let’s say for example that they quote you 4.25% for a 10 year fixed rate, 30 year amortized apartment loan purchase, but the problem is, at that rate they wouldn’t... Read More

    What Are Good Motives to Want to Become a Commercial Lender?

    May 29, 2015

    This is an important question to the writer of this blog because the motives having to do with why a commercial lender is in the commercial loan business is connected to the effectiveness of that lender.

    I believe this would be a good question to ask a commercial lender you are interviewing to see if you want that lender to represent you. It is an unusual question to ask, but it could give insight into the quality of the commercial loan person as well as the commercial loan company.

    I believe this is the kind of question that may be able to help bring out... Read More

    Why Would You Consider Getting an Apartment Bridge Loan?

    May 25, 2015

    This is an important question in certain types of situations in purchasing a multifamily property, or in refinancing a multifamily property. An apartment bridge loan may be able to help you acquire a property that an agency loan or other high quality type of loan would not.

    However, before getting an apartment bridge loan, know that bridge loans have increased risk. If you are not experienced in owning properties in which you have done... Read More

    Choosing a Lender for a Commercial Loan, Part 2

    May 21, 2015

    In the previous article, we looked at the question of why choose a commercial lender who represents a good number of loan programs as opposed to choosing a direct lender who represents their one loan program.

    To summarize this first part,

  • With a lender who represents a multitude of lenders, you have many more choices of loans and are likely to get more competitive rates and terms.
  • A direct lender who represents only one loan program is less likely to have the knowledge of the loan products that are on the market. Therefore, it’s quite possible... Read More

    • Choosing a Lender for a Commercial Loan

    May 11, 2015

    When you are in the market for a commercial loan, you have the choice of:

  • Choosing to work with a direct lender who represents their one loan program.
  • Choosing to work with a lender who represents a good number of different loan programs.

    • There are a number of advantages in working with a commercial lender who represents a good number of different loan programs.

  • Good commercial lenders who represent a good number of lenders are educated on and familiar with quite a few different loan programs. This gives them great insight on what’s... Read More

    • Where to Find Information on Commercial Real-Estate, Part 2

    April 27, 2014

    This week’s article and the previous one are on how to find various types of information regarding commercial real-estate.

    Regarding the previous article I posted, it included a website where you can find commercial properties for sale in various cities – https://www.loopnet.com/.

    Also in the same article I posted about another website which is on how to get some information to learn more about the area of commercial real-estate – https://www.ccim.com/cire-magazine.

    This week we will first look at a way to get information on how well different... Read More

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