Commercial Real Estate Construction Loans Now Available Nationwide
Commercial construction loans are virtually non-existent from banks at this time. Banks used to do commercial construction financing but that was before the crash of 2007-2008. After that, banks have avoided commercial loans for construction of any type commercial property and that includes commercial rehab loans. Fortunately, the private lending industry has filled the void created when the banks pulled out of commercial real estate construction loans.
We are available for questions 7 days a week at 828-689-4683 or 877-655-5625.
Commercial Construction Financing Programs for Most Commercial Property Types Nationwide
Our commercial construction financing programs cover most types of commercial situations, including apartment rehab loans, rehabilitation loans for assisted living, strip mall rehab loans, hotel rehab loans, office condo rehab loans and motel rehabilitation loans. However, while we shy away from ground up development loans, these are also possible particularly on commercial properties but less so on residential developments (but still possible). We also have SBA loans if you need one as an exit strategy.
How our Commercial Real Estate Construction loans work
Most of our commercial construction financing programs usually have a minimum of 6 months loan period or have a minimum of 6 months of interest but can be paid off early, however with commercial construction rehab loans, this loan requirement rarely comes into play. Our loan programs normally are 1 year and 2 years in length but can sometimes extend to 3 years. Some 1 year loans will have a small extension fee to go to 2 or 3 years but this is covered in the LOI. We don’t like receiving surprises on the projects we fund nor do we like to give our clients any surprises.
LTVs on our Commercial Real Estate Construction Financing Programs
LTVs for our commercial construction bridge loans are usually no higher than 65%, however we do offer commercial bridge loans with a seller 2nd which can bring the cumulative LTV up to 80%, although it’s a case by case on how high we can go. Also, for commercial real estate construction the ultimate LTV (Loan to Completed Value can be much higher allowing you to borrow a higher percentage of the commercial construction funding. We recently did a school rehab loan where the client borrowed 80% of the renovation costs. Sometimes this can be higher.
Commercial construction loan rates
Our construction loans are what the industry terms, hard money. Typically hard money construction loans carry an interest rate of between 10 and 14% but sometimes can go lower or higher depending on the projects perceived risk. All our commercial loan programs are Interest Only. Typical points are 3 to 4.
What we need to get started on your commercial construction loan
We normally want to see a good executive summary of the project, including the purchase price and down payment if a purchase and expected future value upon completion of the construction. While we may not be able to use it, a recent appraisal would be very helpful. We also will need the scope of the construction project and expected future value if not in the appraisal. On loans on existing commercial real estate, we want to see your estimated current and future completion values and a history of the project, when purchased, how much down if recent, etc. The key for your executive summary is not to leave out critical information such as your down payment even if you have to put in a range (desired down payment to max down payment). Leaving critical information out (IRS liens, etc.) serves no good purpose as we will find this information out and would rather know up front to be sure our LOI is based on the fullest of information, otherwise the LOI is worthless. We want to work with you to be sure we put you in the best program available for your commercial loan scenario.
Please submit your executive summary to email@example.com
We are also available for questions 7 days a week at 828-689-4683 or 877-655-5625.
Finally, if you have commercial financing needs that aren’t real estate based, we may can still help. Call us to discuss.
Below is an article you may find interesting, particularly if you are seeking a multi-family rehab loan.
Rehabilitating Some Apartments, Don’t Forget the Handicapped
A growing number of people need housing with good handicapped access. And many of them have income from pensions, SS, military retirement or other sources that could offer good streams of income to investors who can accommodate them and their needs.
Most of these people need accessibility in kitchens and baths and ramps plus easy access from parking lots, elevators, and through hallways. They also may need enhanced egress in emergencies.
The customers could range from the elderly, the handicapped, wounded veterans, handicapped children and many others. In a time when many people are obese and diabetic many adults who are not yet retirement age may be handicapped enough to need housing that offers accessibility, too.
It is a large market and sadly a growing demographic.
Investments would include apartments, nursing homes, extended care facilities, home health workers, and other opportunities for investors. At least some of these facilities might take Medicaid and Medicare payments. Senior Apartments might have a combination of all these types of programs as residents’ needs change over time.
The properties need to have facilities that would include lifts, large baths, hospital beds, ramps for wheelchairs, transportation to medical offices and other things these people would need. Often handicapped people need medical care as well as accessible living quarters. They might need assisted living only.
For some people skilled nursing care or even hospital care may be necessary, for example when people have communicable illnesses such as bacterial or viral infections which would pose a threat to others. Additionally patients who need skilled nursing care tend to be more fragile, often needing to be fed, bathed and cared for through all their daily needs.
Additional opportunities are created because many of the nursing homes that provide this type of care are not doing a good job.
Living quarters that are accessible would delay the need for consumers to move to skilled nursing homes and help them maintain their independence, something that is much desired by potential customers. No one wants to be in a nursing home and many people will pay to avoid it.
We know of some housing developments that are geared toward making residents who are retired as comfortable as possible that are booked for years to come and have waiting lists.
The market is there and growing for investors who can offer people what they want. But there is a second market that involves giving people what they need as well.
Whichever way you decide to serve this ever growing market, the opportunities are there. You might build accessible cluster homes, apartments, home health services, assisted living, skilled nursing care and other options. (For a loan to rehab apartments, give us a call. we specialize in commercial construction loans, perfect for multi-family rehabilitation projects.)
Some builders go after the higher end of the market and others opt for the larger market of assisted living and skilled nursing care through insurance, Medicare and Medicare. For most people whether it’s a single family home or an apartment, the cheaper their care will be and the happier the individual will feel. This type of life choice is never easy for people. Offering good options to them is good for business.
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