Many people in today’s market are wondering how to get a commercial loan for real estate. That answer is easy and yet .. complex! We teach investors and sponsors hot to get a commercial loan for real estate every day and we find that some ‘get it’ and other just don’t get it all.
Whether applying for a commercial loan for real estate for purchasing an apartment complex or multifamily development, office building, industrial warehouse, select service hotel or retail shopping center the question of how to get a commercial loan is simple .. listen to what the lenders and investors are willing to offer you and then find a way to say YES! when they make the offer.
There are many borrowers and sponsors in the marketplace today chasing very few investor dollars. This means that the lenders who are willing to invest in loans to borrowers have the chance to pick the best, brightest, most experienced AND, yes, most agreeable partners. If you prove to be difficult or choose negotiate terms to aggressively you may find you are out of luck when it comes to getting an offer.
We were on a call with a sponsor (borrower) and our investor (bridge lender and equity provider) when the subject of the terms of the investment (commercial loans structure) came up. The sponsor was upset that the investor was “not impressed with the 12% return he was offering on the equity portion of the investment.” The borrower was further insulted that the lender didn’t see the wisdom of accepting an 8% interest rate on the bridge loan portion of the transaction. Needless to say, the call ended badly with the investor (lender) walking away and not wanting to do business with the sponsor.
Later, we explained to the sponsor that just an hour before we had another call with a sponsor that was offering this same investor up to a 25% return on equity portion of the investment and a minimum 12% interest rate on the bridge portion bringing the investor’s total return profile to a 22% IRR instead of a 10.5% IRR. Whether the sponsor is investing in apartments, multifamily development, hotels, office buildings, industrial warehouse or other income producing investments, the answer of how to get a commercial loan for real estate is simple, find a way to say yes when terms are offered .. yet complex, because the project must be able to withstand the high, risk-adjusted returns that investors (lenders and equity providers) expect today.
To find out how we can help you find out how to get a commercial loan for real estate, just give us a call. We are having frank, down-to-earth conversations daily with sponsors and helping to change the way they see the market. We help our customers understand how they should buy and what they can expect from our lending clients. Starting here first, helps answer the simple, yet complex, question of how to get a commercial loan for real estate in today’s market.
Call Michael Gross, 404-819-4511 or email for multifamily development loans, apartment complex loans, hotel lending, industrial and warehouse financing and office building acquisition loans. We lend in all 50 states with a focus on major and secondary markets: