The commercial real estate business isn’t for everyone, but for those who are willing to educate themselves about the nuances of the industry, it can be rewarding and profitable. Here are a few things that you’ll need to know about commercial real estate loans, if you intend to plunge into the business of buying and selling commercial real estate.
What exactly is a commercial real estate loan?
Commercial real estate is a property which is only used for the purpose of conducting business, for instance a retail store or an office building. When you’re thinking of purchasing an existing commercial property or building a new one, you can take out a commercial real estate loan to finance the project. Generally speaking, only businesses take out commercial real estate loans as opposed to individuals, and the types of business entities which most commonly seek commercial real estate loans are S-corporations and limited liability companies.
How commercial real estate loans work
In essence, commercial real estate loans are simply mortgage loans which are secured by liens on the property you’re purchasing, as opposed to a mortgage loan on a residential property. That lien is given to a creditor by the property owner, and it serves as a guarantee that the commercial real estate loan will be repaid in full. If that doesn’t happen, the creditor would then have the right to seize the property which has the lien on it. From this, it can be seen that the lien simply provides a commercial real estate lender with some level of protection against having a borrower default on the loan, and not paying the money back.
Commercial real estate loans with Dhanani FundingÂ
If you’ve been considering the purchase of a commercial real estate property, but lacked the funding, we may be able to help. Contact us at Dhanani Funding, so we can discuss some possibilities for financing your next project.
