5 Ways Your Commercial Real Estate Investment is Ugly

| August 15, 2013 | 0 Comments


Many investors will get excited when they come across an almost vacant shopping center, medical facility or apartment complex.  When the location is right and the numbers work, it can be a very, very lucrative investment.

Business owners sometimes require bigger spaces or updated facilities to keep their business growing.  A good funding partner can help a business get the money needed to turn plans into reality.

Often – when the deal looks ugly – business owners and investors must go outside the traditional funding sources to find a reasonable solution.  Here are a few times when creative solutions must be considered.

Ugly Cash Flow

Any commercial real estate asset that is not making money will probably not look all that interesting to the bankers.  It is only when the borrower has a really strong cash position without the financing that a bank will want to become involved.

Leading banks will tell stories of partially rehabbed projects that lost money.  Because of that experience, they are not likely to share your dream of renewed cash flow after renovation.  Generally, when current cash flow is weak, funds must be obtained from other sources.

Ugly Bank Process

Traditional bank financing can take a long time to process.  During that time-consuming procedure, your company may be losing money that could be generated if the project were complete.  This is a great example of when you may want to consider a variety of commercial real estate construction loans that offer flexible terms.

For a busy commercial real estate entrepreneur, time is one of your most valuable assets.  With an ugly bank process, it can kill your profitability to wait.  With other funding sources, you will be up and running quickly.  Time saved will easily balance the higher interest rates of a creative funding option.

Ugly Credit Issues

A great way to overcome damaged credit is to successfully remodel a commercial real project and ultimately sell it with strong positive cash flow.  If you do your due diligence to find that rents can be greatly increased after renovation, this type of project can exhibit your business savvy while making you a handsome profit.  Some organizations will extend funding to customers with no FICO minimums and no prepayment penalties.

Ugly Buildings

Sometimes a building simply looks outdated and only needs cosmetic improvements to bring it up to current market standards.  The building could need a technology update to meet the needs of current and prospective tenants.  This type of project can have a relatively rapid turnaround time and result in a significant increase in cash flow.

Ugly Funding Terms

A bad loan can jeopardize even the most solid investment.  Working with a funding organization that moves quickly at every step of the remodeling project will minimize delays that will cost you money.  Be certain that the terms of funding your project will not cause unnecessary time delays and the frustration that accompanies the experience of poor funding terms.

Whether you need a stated income loan with no income verification, funds with no FICO minimums or survey requirements, or a higher loan-to-value ratio to purchase, getting the right lender is critical to your results.

Capital Funding Hard Money


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Houston, Texas. 77046


Category: Commercial Loans

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