Financing Your Commercial Real Estate Opportunities
Entrust your commercial real estate and rental financing needs to Springboard Funding Partners in Chicago, IL and Wisconsin. You get our in-depth industry expertise and broad network of direct lenders working for you at reasonable interest rates and terms. We put our resources of referrals, affiliates, and lenders to work assisting you in securing direct funding and other financial support to ensure your commercial real estate venture goes as smoothly as possible while keeping your investment affordable. Larger commercial properties include various preferred asset classes in today’s market, such as multi-family, medical buildings, light industrial, mixed-use, warehouse, and self-storage. Real estate lending has interests currently ranging between 3% and under 6%. Your specific interest rates will depend on cash flow, credit, loan to value, and location.
Financing for Rental Investments & Other Projects
You have many lending options available with currently low-interest rates to apply to fix-and-flip projects and investment rentals. There are three key elements to investment rentals a lender uses to approve loans: a borrower’s credit score, monthly cash flow versus expenses, and the loan to appraised equity or value in the property. Your total income should be a minimum of 20% more than your monthly expenses, and the preferred amount is 25% to 30% above expenses. This figure includes your principal and interest payment, utilities, and property taxes. If you are trying to secure a loan, lenders prefer borrowers with a credit score at or above 640. An investment rental lender’s average loan to value is 65% to 70%.
Investment Rental Approval Process
The approval process for investment rental loans begins with an application. Other documents you need to provide include copies of two years, property profit and loss statements for the current year, a rent roll (shows current tenant list), their current lease income, and their lease’s start and end date. Lenders also require copies of the current leases as part of the underwriting process.
Review and approval have an average turnaround time is one week, starting with issuing the term sheet, including the loan’s rate and length. After the loan is signed, the property is appraised at the borrower’s upfront cost. Typically, it takes two weeks for the appraisal to come in, and then they confirm the value and order the title on the property. If the property has any outstanding loans or liens against it, they will be listed on the title report, as well as unpaid utilities or property taxes and unsettled judgments. Lenders require a clear title with all issues resolved to close. Investment rental loans are currently fixed in the 4% range for five years, with a 25-year timeline to write off the property’s initial cost.
Funds for Commercial Real Estate & Rental Financing
Springboard Funding Partners has you covered with our network of lenders, ready to work with you to finance your real estate and investment rental loans. Let us make the process as smooth as possible with our decades of experience and wealth of resources.