A person handing a house key to another person

A Brief Guide to Buying Your First Commercial Property

April 23, 2022/in Blog /by Bruce Kent

Congratulations! You’re finally on the way to fulfilling your dream of owning a commercial property for your business.

But now comes the tricky part — actually buying a suitable property. The process might seem simple enough. All you have to do is find a good property and buy it, right? Well, not really, because there are many other critical elements involved in the property-buying process that you’ll need to thoroughly understand first. With the commercial real estate market growing exponentially every year, you now have more options to explore.

Here’s a brief guide to buying your first commercial property.

Determine the Purpose

The first thing you need to do is determine your exact reason for buying the property. You should know what your goal is and what you hope to accomplish by making this investment. The most ineffective decision you could make is buying a commercial property with no intentions that’ll result in profits. For an investment this hefty, you should have a clear goal or set of goals in mind before making the purchase.

Your goals will also help you determine the type of commercial property you should be looking for. You could invest in a commercial office space, retail property, or multi-family complexes depending on the purpose of your investment.

Explore Financing Options

The second-trickiest part of buying a commercial property is financing it. Like many other property owners in the growing commercial real estate market, you’ll probably need a loan to buy a property, too.

The type of hard money loan you require will depend on your current financial situation. Are you in a position to make an investment of this size? If not, then your other options are to secure a commercial hard money loan from a financial institution or a private money lender.

Find the Right Partners

It’s nearly impossible to go through the entire property-buying process smoothly without the help of industry professionals. You’ll need a real estate agent to help you find commercial properties, a commercial real estate lawyer to help you do due diligence, and a private money lender who can help you secure financing. Working with the right team can be the make-or-break of your investment!

Get the Real Estate Financing You Need!

Are you looking to secure real estate financing? Our team at Commercial Private Equity can help you out!

We provide commercial loans and financing services to clients across the nation. As your trusted hard money nationwide lenders, we have the expertise required to help you secure the best loan terms in the market. Whether you need an asset-based loan, raw land loan, bridge loan,or commercial hard money loan, we’ve got you covered!

You can secure a pre-approval through our website. Apply today!

A person taking out loan from a private hard money lender

Everything You Need To Know About DSCR

April 21, 2022/in Blog /by Bruce Kent

The Debt-Service Coverage Ratio (DSCR) measures a company’s or an individual’s ability to repay loans. It’s the ratio of your operating income to your total debt obligations, including the principal and interest.

Both your short-term and long-term debts are included in this calculation. In different formulations, you can define the numerator differently. Some may use net operating income as the numerator, while others use EDBT.

The DSCR is a tool that helps investors assess a company’s creditworthiness. It also helps determine the current net worth of the company.

How Is It Calculated?

The most commonly used debt-service coverage ratio formula has net operating income as the numerator and total debt as the denominator.

Method 1

Some estimations do not include the company’s or individual’s operating costs. The formula in this example is as follows:

DSCR = EBITDA ÷ Total Debt Service

Or

DSCR = Revenue ÷ Total Debt Service

Where,

DSCR = Debt-Service Coverage Ratio
EBITDA = Earnings before Interest, Tax, Depreciation, and Amortization
Total Debt Service = Principal + Interest (short-term and long-term)

Method 2

By subtracting operational expenses from revenue, this method generates net operating income. The revenue used in this calculation does not include taxes, interest payments, amortization, or depreciation. EBITDA is the acronym for earnings before interest, taxes, depreciation, and amortization.

DSCR = Net Operating Income ÷ Total Debt Service

Where,

DSCR = Debt-Service Coverage Ratio
Net Operating Income = Revenue – Operating Expenditure
Revenue = total earnings before the deduction of tax interest, depreciation, or amortization
Total Debt Service = Principal + Interest (short-term and long-term)

What Is The Role Of DSCR In Lending?

The debt-service coverage ratio demonstrates an entity’s ability to service its current debts entirely based on its net revenue for personal, commercial, or government finance.

The DSCR figure illustrates how many times net income exceeds current debt obligations. For example, a DSCR of three shows that net operating income exceeds existing debt commitments by three times.

Lenders compute the DSCR using the borrower’s financial data before making a loan offer to determine whether the borrower will be able to repay the debt.

A debt-service coverage ratio of less than one implies negative net cash flow, indicating that the borrower’s current debt cannot be serviced entirely from net operating income. They’ll have to rely on other resources, such as a second loan or cost-cutting measures.

You can easily apply for a loan based on your DSCR. At Commercial Private Equity, we accept business loan applications with DSCR scores that most traditional lenders reject.

Contact us today for various hard money loans, including raw land, asset-based, and other types of commercial and industrial lending that is simple, quick, and cost-effective.

A private lender reviewing a loan application

The Private Lending Aspects You Probably Didn’t Know About

April 20, 2022/in Blog /by Bruce Kent

It’s disappointing to see banks erect barriers to obtaining loans in today’s times when companies are striving to expand their operations to stay ahead of the competition. You’re likely to find it tough to secure a loan in a short period due to the demanding and lengthy loan application process.

Private lending is the best alternative for funding as it’s a quick way to get funds with minimal limitations. Here are a few aspects of private lending you probably didn’t know about.

Flexibility

Loan agreements between private lenders are known to be flexible. Many reputable private lending organizations offer a variety of loan packages to assist you in making an informed decision. A private lender, unlike a bank, allows you to negotiate the conditions of your loan agreement.

Approval In A Flash

Need speedy financing to close a deal or get your hands on a hot commercial property? A private lender is an ideal option. Banks will take an eternity to process your loan application. Private lenders can expedite the process and give loans as quickly as a few weeks.

Minimal Requirements

You might avoid banks because of the long list of standards you’ll have to meet, and even if you provide every document, your application’s acceptance isn’t guaranteed. Approaching a private lender is a preferable option.

They require less paperwork and fewer standards to get your loan approved. You’ll simply need your real estate documentation to obtain a loan from a private hard money lender.

No Need For High Credit Scores

Private lending, unlike banks, doesn’t demand a perfect credit rating and history to approve your loans. It’s not hidden how the world suffered due to the pandemic in 2020 and 2021.

The credit scores have been declining since then. The not-so-good credit scores led to many businesses struggling to obtain loans via traditional techniques.

Private lending is your savior and can assist you in these scenarios by offering loan solutions to businesses with ordinary credit scores. Many reputable private money lenders in the United States have developed a variety of lending schemes to accommodate clients with varying credit scores.

No Rejections

Banks have stringent rules and a long list of requirements that make them more likely to deny giving loans. A minor issue, such as a plumbing leak or property damage, can cause the bank to reject your loan application.

Banks are risk-averse lenders, and if your loan application contains minor errors, they will refuse to fund your investment. People find it tough to obtain their loans accepted due to their high application conditions.

With private lending, there are no such problems of rejection. All a lender wants is a property you can use as collateral that does justice to your lending amount, and you’re good to go.

The condition of the property, your credit scores, or any other requirement, which was another significant when applying for bank loans, becomes baseless.

Commercial Private Equity can assist you if you’re looking for a dependable private loan. We offer commercial hard money loans with low-interest rates. We’ve created a three-tiered loan program to provide you with more options. We have a long list of specialized loans, including commercial hard money, bridge, construction, asset-based, and raw land loans, to name a few.

Contact us today to learnmore about our services.

Two people discussing and calculating mortgage payments

Everything You Need To Know About Loan Workouts

April 19, 2022/in Blog /by Bruce Kent

Have you been struggling to fulfill your mortgage payments recently? You’re not the only one!

Commercial property owners across America have been struggling to keep their mortgage payment streaks going. There can be many reasons attributed to the general decline in financial security for commercial businesses in the country. Similar to how it is for regular American adults, American business owners are also finding themselves in deep water due to worsening personal and economic conditions. Most property owners who default on their mortgage payments do so because of reasons like income reduction, debt, financial emergencies, and unprecedented personal problems.

As a result of commercial property owners being unable to fulfill their mortgage liabilities, many commercial properties are increasingly at risk of foreclosure. The rate of foreclosures across the country continues to rise every year. The good thing is that foreclosures aren’t the only course of action your lender can take. You can get them to forgo foreclosure by offering a loan workout plan.

What are Loan Workouts?

Loan workouts are exactly what they sound like — agreement plans that “work out” loan terms between a lender and a defaulting borrower.

Foreclosures aren’t ideal for either party involved. They’re harmful to the property owner for obvious reasons, but they’re also an annoyance to the lender. So, when neither party wants to opt for a foreclosure, they attempt to come to an agreement. This agreement often takes the form of a loan workout plan. The two parties discuss how to restructure or modify the loan terms in order to come to a more suitable agreement for the borrower.

Loan Workout Strategies

There are a lot of ways that a lender may agree to restructure the loan terms. You should also remember that every loan workout plan and its process will be unique to each lender. There’s no obligation for your lender to agree to a loan workout plan in the first place, either. So, you’ll have to charm your way into getting your loan terms modified.

Let’s start by looking at the most effective loan workout strategies that you should know about.

Reductions

Your lender can agree to reduce the number of payments you’re obligated to make. They can also lower the interest rate that you’re charged on the payments. These actions will be temporary, i.e., for the short-term, but they can significantly help you get back on track. Your lender will likely only agree to reduce your payments or interest rate if the cause of your default is also temporary.

Forbearance

Forbearance is often the first strategy borrowers try to use since it’s seemingly the most helpful one. Your lender may agree to forbear your owed/missed payments for a fixed period of time. This act is called forbearance since you won’t be required to make any payments during the specified time period. The purpose behind this strategy is to give you a chance to stabilize your income again and bounce back stronger. When you’re able to save up for a while, you’ll have enough money to make good on your missed payments.

Don’t make the mistake of assuming that forbearance equals forgiveness. Your missed payments will not be forgiven if your lender agrees to forbearance; they’ll only be postponed. You’ll still be required to pay the complete overall payments that the original loan agreement established. Forbearance periods don’t typically last for over a year.

Restructuring

In cases where the borrower’s cause of defaulting isn’t temporary, the lender might agree to restructure or modify the loan terms permanently. Any factor that directly influences your mortgage payment amount can be changed by the lender. These factors can include the interest rate, payment amount, or the term itself. This process is also called loan modification, and it is permanent.

One concern with this strategy is that it could incur additional costs for you. The lender might charge you for the structuring since the process impedes the previously agreed-upon loan terms. Make sure to discuss every detail of the agreement with your lender before you sign off on it.

Collateral

Lastly, the lender could refuse to make the aforementioned changes to the terms and opt for additional collateral instead. Collateral refers to any belongings or possessions a borrower has that the lender can hold onto until the mortgage payments are completed in full. The lender could have you provide an additional amount of collateral in exchange for your missed payments. You can use cash, property shares, private company shares, marketable securities, and other assets as collateral for the deal.

Conclusion

Loan workout plans are highly helpful to commercial property owners who are unable to keep up with mortgage payments. You can consult with a commercial hard money lender or real estate lawyer to gauge the legality and applicability of the loan modification strategies you intend to implement. The best course of action for property owners is to prevent foreclosure from occurring in the first place. So, try your best to make timely payments, keep a stable credit score, and reduce any debts you may have. Good luck!

Get Pre-Approved for a Commercial Loan Today!

Would you like to have your commercial loan application pre-approved within a day? Head over to the Commercial Private Equity website!

As trusted commercial hard money lenders, we’re dedicated to making commercial financing safer for clients across the US. We understand how tricky it can be to secure safe and risk-free commercial financing loans. That’s why we help you secure hard money loans, asset-based loans, raw land loans, and other types of commercial loans. Through our experience and expertise, we can come up with tailored financing solutions as per every commercial client’s individual needs.

Feel free to get in touch with us or directly apply for a loan through our website.

A Brief Guide To Buying A Commercial Property

April 18, 2022/in Blog /by Bruce Kent

Commercial real estate tops the wish list of many investors, and for all the right reasons; it has continually shown to be a profitable venture, with a growth of 4% expected in 2022.

However, when getting into the world of real estate and purchasing properties, you should be aware that greater profit also welcomes a greater responsibility.

As a result, doing your homework and following best practices is crucial. One wrong move and all the profits can turn into losses for your firm.

This blog will guide you on the most effective methods for purchasing a business property for the first time.

Choose A Property You Want To Purchase

You may get ahead of the competition by investing in the perfect property at the right moment. Don’t fret and fear missing out if you don’t have the technical expertise in the commercial real estate market. Here are some commercial buildings you can invest in.

Hospitality

Motels and Hotels catering to both leisure and business guests are known as hospitality real estate. It can also include short-term rentals.

Industrial

Distribution centers and warehouses of various sizes are bought as a part of industrial real estate investing.

Retail

Retail real estate can range from a large regional retail center or a small coffee shop around the block.

Office

An office can be as small as a commercially zoned home housing used as a lawyer’s workplace or a skyscraper downtown for all the business operations.

Multifamily

This might range from a simple duplex with two rooms to a garden-style apartment with multiple rooms.

Assess The Surrounding Area

Acquiring commercial real estate at a reasonable price is pointless if the neighborhood is unsafe. Professionals advise first-time homebuyers to thoroughly investigate the locality and only invest when they’re comfortable with it.

Examine Your Financial Situation And Explore Your Funding Alternatives

Financing a property, whether a retail store or an office, is always challenging, particularly with property prices soaring and touching the skies. It’s significant to first do a thorough budget analysis before deciding on a property.

If your property is beyond your budget, you can get in touch with a reliable hard money lender offering a variety of specialized loans to meet your needs.

Associate With The Right Person

Buying commercial real estate is no exception to the rule that real estate is a people’s business. You’ll want to ensure that you get in touch with reliable professionals to get your real estate business up and running smoothly.

Reach out to Commercial Private Equity to assist you in buying a commercial property. We provide quick hard money loans to help you secure the best deals on the ideal properties in time.

We have over 75 years of private money lending experience and provide a variety of specialty loans, including commercial hard money, bridge, construction, asset-based, and raw land loans, to mention a few.

Contact us today for more details.

Private Hard Money Financing: How Does It Work?

April 16, 2022/in Blog /by Bruce Kent

It’s no secret that banks are lending less money to US firms than before. In such challenging financial circumstances, completing your commercial projects can be tricky. Luckily, you can reach out to private hard money lenders for financing options.

Private hard money lenders use your firm’s existing property as collateral to offer exceptional asset-based loan deals. And unlike traditional banks, private lenders don’t use your business credit scores to provide loans.

Continue reading this blog to find out all about private hard money financing.

Step1: Select A Reputed Private Lender

If you’re looking for private loans, the first thing you need to do is to select a private lender. Choosing an inexperienced private lender can become a nightmare for you. This is why we recommend you hire reputed private lenders who can help you speed up the loan process.

Popular private lenders have a professional underwriting team to analyze your firm’s financial circumstances and pre-approve your loan application within twenty-four hours. Many private lenders have developed loan programs with different requirements to make loan acquisition favorable for clients.

We recommend selecting a reputed private lender with an excellent underwriting team and multiple loan programs.

Step2: Choose The Right Hard Money Loan

We’ve listed some specialized hard money loans that can be beneficial for your business in 2022:

Commercial hard money loans
Bridge loans
Workout loans
Raw land loans
Blanket loans
Construction loans

Step3: Submit The Relevant Documents

Undoubtedly, submitting insufficient documents can lead to the rejection of your loan application. If you’re applying for a bank loan, you’d be aware of the plethora of documents every applicant must submit and how even a small mistake can give the bank an excuse to reject your application.

Fortunately, with private lenders, you need to fulfill minimal requirements. You should submit your firm’s basic information (contact number, address, registration papers) and the property documents of the collateral to complete the loan application.

Specialized Hard Money Loans Available At Commercial Private Equity

Finding a reliable private hard money lender isn’t as easy as it sounds. We recommend you visit Commercial Private Equity to hire a team of financial experts to help you find the perfect hard money loan deal that suits your needs.

We’ve been providing hard money loans for over seventy-five years and have helped several clients get out of a financial crunch. We offer various asset-based loans, including commercial hard money, bridge, raw land, construction, blanket, and workout loans.

Visit our website to apply for a hard money loan!

A Beginner’s Guide To Hard Money Bridge Loans

April 14, 2022/in Blog /by Bruce Kent

It’s no secret that the booming housing market in the US will help the commercial real estate market grow to new heights. In such circumstances, commercial property prices are expected to skyrocket in 2022.

If you’re thinking of expanding your business, we recommend you purchase a commercial property before its prices skyrocket and become a burden on your firm’s budget. We recommend getting a hard money bridge loan if you need financial assistance in purchasing a commercial property.

Continue reading this blog to find more about hard money bridge loans.

The Basics Of Hard Money Bridge Loans

Want to get ahead of your competitor in today’s cutthroat market? It’s time to expand your company and kickstart a brand-new commercial project by purchasing a commercial property. Undoubtedly, commercial real estate is a hot commodity in 2022, and as firms look to get back on track, they will aim to get their hands on commercial property.

If your firm has a low credit score and deteriorating financial condition, you can use asset-based bridge loans that use your existing commercial property as collateral.

What Are Its Benefits?

Why do many firms in the US prefer getting asset-based bridge loans over conventional bank loans? The vast benefits of these loans attract firms from across the US. These include:

Minimal loan requirements
Uses your commercial property as collateral
Quick financing option
Flexible lending terms

How To Get Bridge Loans?

Closing a bridge loan deal on your own can be tricky, especially if you don’t have the right technical knowledge. We recommend you get in touch with an experienced private hard money lender who can help you at every step of the bridge loan process. Many reputable lenders have a professional underwriting team who can study your financial condition and find the perfect asset-based bridge loan deal for you.

Exceptional Hard Money Bridge Loan Deals Available In The US

Looking for a top-class hard money bridge loan deal for your firm? You’ve come to the right place! At Commercial Private Equity, we offer asset-based bridge loan deals with interest rates as low as ten percent. We’ve been offering hard money loans for the past seventy-five years and have served thousands of clients in the US.

As a private hard money lender, we deliver multiple loans, including commercial hard money, construction, raw land, blanket, and workout loans. We’ve got an experienced underwriting team who can pre-approve your loan application within twenty-four hours.

So, what are you waiting for? Apply for an asset-based bridge loan at Commercial Private Equity.

How to Get a Loan with A Low Credit Score?

April 12, 2022/in Blog /by Bruce Kent

You’ll be surprised to know that twenty-six percent of Americans believe their financial condition will deteriorate in 2022. These are alarming signs for Americans and their businesses because completing commercial projects can become a nightmare during a financial crisis.

With poor financial conditions, business credit scores will undoubtedly go down. So, how do you get financing with a low credit score?

Let’s find out how to get a loan with a low credit score.

Improve Your Credit Score And Apply For Bank Loan

If your credit score is low, you should forget about getting a bank loan, as traditional banks require a high credit score to accept your loan application. There’s no point in starting the lengthy bank loan process before improving your credit history.

Here are some strategies you can use to improve your credit score in 2022:

Timely pay your utility bills
Get higher credit limits
Use a secured credit card
Frequently review your credit reports
Minimize credit utilization

Upgrading your credit score and applying for a conventional bank loan can take an eternity. We don’t think opting for this route is the best solution for quick commercial financing.

Apply for An Asset-Based Bridge Loan

An asset-based bridge loan can help you get your hands on the commercial property you’ve been eyeing, even if you have a low credit score.

You can reach out to private lenders to get a bridge loan in no time. Private hard money lenders use your existing properties as collateral to give loans regardless of your credit scores.

Invest In the Commercial Real Estate Market With Hard Money Loans

Investing in the booming commercial real estate market in the US can be tricky with a low credit score. If your firm wants to expand quickly, you can buy multiple commercial properties with exceptional hard money loan deals from private lenders. You can opt for blanket loans to buy several commercial properties simultaneously.

If you need raw land and want to construct an office, you can get hard money raw land and construction loans.

Asset-Based Loan Deals Available In The US

If you’re looking to finance an upcoming commercial plan, visit Commercial Private Equity. We’ve been a part of the private lending industry for seventy-five years and aim to help our clients fulfill their financial objectives.

We’ve got a wide variety of asset-based loans, including commercial hard money, raw land, construction, bridge, workout, and blanket loans. We’ve developed an extensive three-level loan program to make loan acquisition flexible for our clients in the US.

You can apply for the hard money loans at Commercial Private Equity to start your commercial projects in no time.

Common Misconceptions About Hard Money Loans

April 11, 2022/in Blog /by Bruce Kent

Applying for a traditional bank loan can be draining and tiring due to the never-ending application processes. A great alternative to bank loans is hard money loans. They are well known for their flexible lending terms and speedy approvals. However, many people are wary of them due to various myths surrounding them.

This blog will debunk some of the most common misconceptions surrounding hard money loans.

You Won’t Receive The Entire Loan Amount

The most prevalent misconception regarding hard money loans is that you won’t get the whole amount you requested despite the approval. A private lender may determine that you don’t require as much funding as you believe or that financing the entire amount is too hazardous.

This isn’t true. Private lenders do not hold back any funds and give you the entire loan amount based on your needs.

Hard Money Loans Get Their Name From The Difficulty Level To Get Them Approved

You should never judge a book by its cover. Hard money loans may appear difficult to obtain, but they are surprisingly straightforward. All you need is a commercial property as collateral, and the loan is yours.

There are no other stringent standards to meet for hard money loan approvals. You might be wondering why they’re called hard money loans when the loan approval process is so simple.

The difficult circumstances under which a person opts for these loans, such as minimal cash equity, bad credit history, or quick financing, make these loans popular as hard money loans.

Private Money Lenders Want The Business Property You Held As Security

Private money lenders are rumored to be charging exorbitant interest rates to get hold of property taken as collateral. While the private money lending business does include a few bad apples, this does not apply to the vast majority.

The loan industry is built on trust. Borrowers have faith in lenders to offer them the best credit conditions, and lenders trust borrowers to repay their loans on time. If the lender betrays this valuable trust, it will take seconds for the lender’s reputation to shatter, and they’ll lose business.

They Have A Never-Ending List Of Approval Requirements

Many people feel that these loans have higher loan approval restrictions than traditional loans. That’s not the case. There are no such stringent standards that make it difficult for you to acquire a loan.

Banks have a long list of demands that grows each year, making loan approvals more difficult. Banks are wary of recent foreclosures, short sales, loan modifications, bankruptcies, and low credit ratings and will refuse to lend you money if anything is out of the ordinary.

Looking for a reliable hard money lender, look no further than Commercial Private Equity. We approve loan applications in less than 24 hours.

Contact us today for various hard money loans, including raw land, asset-based, and other types of commercial and industrial lending that is simple, quick, and cost-effective.

Everything You Need To Know About Raw Land Loans

April 10, 2022/in Blog /by Bruce Kent

If you’re starting a business from the bottom up, the first thing you’d want to do is purchase raw land to build your dream office. However, it is not that simple. Acquiring raw land necessitates funding, which you might not have on hand.

This is where a raw land loan steps in. This blog will guide you on everything you need to know about raw land loans.

Inspect The Raw Land First

Assessing the raw land ahead of time can help you determine the land’s value accurately. You can determine the loan amount accordingly and save money on interest.

If you don’t do your homework, you might end up paying more for a commercial property than you should, increasing your company’s expenditures.

With real estate values increasing across the US, it’s best to inspect the property and close the raw land loan agreement as soon as possible before the prices rise again.

Gather All Of Your Financial Records

Incomplete financial documentation can likely delay your raw land loan agreement. To avoid last-minute headaches, gather all of your financial paperwork, from bank statements to commercial property documents. Contact your lenders beforehand to confirm what documentation they require to close the loan.

Present The Lender With The Positives Of Your Land

Financers are eager to assist you in purchasing houses with adequate sewer, water, and electricity systems. You must present all required paperwork and verification for the required utilities to save time.

Always contact a local authority concerned to see what lies ahead for the area to thrive. For example, a lender might not be keen on lending for raw land near a motorway project as it will negatively influence the property price.

On the other hand, a new family park in the locality can potentially raise property values in the future. Presenting lucrative plans will persuade your financer to lend you money.

Reach Out to Private Lenders to Get Raw Land Loans

It’s no secret that banks can take an eternity to approve a loan application and have a long list of conditions. They also rarely provide raw land loans because it is difficult for them to sell raw land if the borrower defaults on the loan.

Therefore, if you need money quickly, a private hard money lender is the way to go. Private lenders provide top-tier hard money loans with your existing property as collateral.

Looking for private lenders with top-of-the-line hard money raw land loan deals to help you get raw land? Look no further than Commercial Private Equity. We follow a rigorous underwriting process to provide loan approval in less than 24 hours.

Apart from raw land loans, we also offer other hard money loans, including asset-based, blanket, workout, construction, and bridge loans.

Contact us today to get exceptional raw land loan deals.