If you want to invest in commercial real estate, you may need financing to help you do so. This will allow you to purchase the property that you want and work to make money on it in the process. Knowing tips that will ensure you get the money you need for the purchase may help you get started.
Tip #1: Be prepared
Before meeting with your lender of choice, you should have the necessary documentation in hand and be sure it is up-to-date.
Listed below are some things you should bring to your meeting with your banker:
1. Business plan – This should include a summary of the business you want to start. For instance, if you are purchasing the real estate for renting out to others, a projected amount of rental income should be included.
2. Tax returns – It's ideal to have you past tax returns with you to present to the banker. This will provide the amount of your gross income and the verification of it.
3. Loan amount – You should have the amount of money listed that you want to borrow.
4. Appraisal – Be sure to have a professional appraiser look at the real estate you want to purchase and provide a report stating its value.
Tip #2: Have money down
You will need to have a certain amount of money to put down to get a commercial real estate loan. This is referred to as earnest money and will show your banker that you are responsible and can afford to repay the loan.
Tip #3: Maintain good credit
One of the first things a lender will look at is your credit score. This score will show the lender how responsible you have been in the past about repaying your debt.
A credit score in the high 700's is good and should be high enough to help you obtain the money you need to finance your commercial real estate investment. If you have a credit rating less than 550, you may want to wait until this score increases before applying for a loan.
Finally, it's critical to receive the money you are in need of for the loan to prove to the lender that you can repay it. Be sure to consult with your real estate agent on other tips that can help you get the money you need when investing in this type of property. You can also contact a local financial firm, like NAI Norris Beggs & Simpson.