Very often, when you’re first starting out as a commercial real estate investor, you lack the collateral to acquire the funding necessary to proceed with your next transaction. In situations like these, a hard money loan just might be the answer to your issue, as long as you have some kind of commercial real estate property. A direct lender would consider your real estate property sufficient collateral to use for a hard money loan, which you could then used to purchase income-producing real estate.
The Flexibility of Hard Money Loans
There are other uses for hard money loans besides helping beginning real estate investors to achieve their goals. You can also use a hard money loan as a kind of bridge loan, which can help your real estate business develop into a successful company that would then be more appealing to commercial banks. You might then be able to acquire bank loans which could be used to pay off your hard money loan and to use towards your next commercial real estate investment.
Your Collateral Can Serve as Credit
When you acquire property which generates income, it can be extremely valuable as credit, because it is a clear demonstration to lenders of a successful enterprise which is already bringing in revenue. As a commercial real estate investor, you can leverage the value of your income-generating property so as to earn approval for other hard money loans, and in some cases even for loans from traditional lending institutions. The key is to somehow acquire that first property which produces its own income and is self-sustaining, and then a great number of possibilities open up to you with regard to additional financing.
Need a Hard Money Loan?
At Norris Commercial Capital, we try our best to accommodate the financial needs of our clients. If you’re in need of a hard money loan for your next commercial real estate project, contact us today so we can discuss some alternatives.