Commercial real estate is, and has always been, a booming industry to tackle. Because the country is founded on private companies, everything begins and ends with the emergence of new companies and the expansion of organizations. This, of course, creates an opening for those with investment capital that are willing to offer it up to commercial speculators. Commercial hard money lenders are taking advantage of the unique opportunity created by the banking industry’s reluctance to loan out money to private groups or individuals. Because the interest rates are generally higher, those with capital are able to earn a substantial return on their investment, while providing assistance to those purchasing commercial properties.
The Commercial Real Estate Boom
Because so many businesses were hit hard by the economic downturn, properties are turning up across the country. You don’t have to have a business idea to get involved in the purchasing of commercial real estate – purchasing it and renting it to a business is your business idea! But, unless you have quite a bit of capital lying around, you’ll need to find a lender. Banks aren’t offering up what they used to, which can exclude many from taking the plunge into the lucrative commercial property scene. However, if you know how the industry is changing and where those involved are currently finding the capital, you can dive in all the same…
A commercial hard money lender understands what your business concept is, and they will do everything possible to approve you for the necessary funding. Granted, they will only offer 70% of the property’s value, but in doing so, they are simply trying to circumvent their own risk. But, when managed properly, the windfall of money, when coupled with the rapid closing process, can allow an investor to take advantage of any property they see as an opportunity for profit. While they may be losing some profit on the repayment of the loan, the idea is to generate the revenue and eventually be able to fund your own commercial property endeavors. When considering hard money lending from this perspective, it’s no wonder that the industry has seen such a rapid increase in the last 5 to 10 years.
Commercial hard money loans are a great way to finance potentially profitable ventures. Millions of Americans have seen their credit ratings tumble during the recession, making it even more difficult to find a bank that is willing to fund a purchase. With the lenient lending practices, just about anyone can find the perfect commercial property, purchase it, refurbish it, and begin their new career as a real estate mogul. Ok, that may seem a bit on the optimistic side, but ultimately, this situation is witnessed time and again in the industry. These lenders understand your goals, can help you find the capital you need to set the wheels in motion, and once the loan is repaid, you have a piece of property that can generate returns for years to come!