The commercial real estate business is not for the faint of heart. Before you can even add a commercial property to your portfolio, you must first get funding. This may be enough to send some prospective investors running for the hills. Most traditional lending institutions, such as banks and credit unions, require a long list of documents, including credit reports, W-2s, salary verification and proof of additional revenue streams.
So How Can You Get Into The Investment Property Game And Secure Commercial Real Estate Lending?
How to Get Commercial Real Estate Lending Without Verification
At Total Capital Network, we know it’s hard enough to secure a solid deal on an investment property, let alone get the financing you need to close. That’s why we’ve developed a diverse network of investment friendly lenders who offer low doc loans for commercial investors. Whether you are looking to invest in multi-family rentals, hotels, retail, or other commercial property, our network of direct lenders is ready to offer you no documentation loans. That means no W-2s, no tax returns, no bank statements, and no time wasted!
So how can you qualify for a no income verification mortgage or loan for the purchase or development of a commercial property?
Here’s what you need to know:
When dealing with real estate lending and trading, an investor’s personal finances factor less into the loan than you’d think. Most commercial property lenders are going to look at the value of the property in question, as well as how much the investor is willing to put down as a down payment. Serious investors who already have skin in the game are able to pull a deposit from an existing investment property in order to fund a new property and grow their business. These are individuals who understand the risks involved and are experienced at making sound financial decisions.
But what if you are new to commercial investing?
Don’t worry! New investors can also qualify for a no income verification mortgage. Lenders will look at the Loan-to-Value (LTV) ratio of the property in question to decide how much risk is involved. The lower your LTV the better. So, if you are looking to borrow $200,000 for a property that’s worth $400,000, your LTV is 50%. Most lenders agree that an LTV under 80% is relatively low risk.
And while you might not be required to provide income verification, new investors might be asked to provide a credit report and plan for the property to make up the difference.
Now that you know how to get a low documentation loan, here are some examples of low doc loans that are available for commercial investors:
Fix and Flip Loans
If you are buying a property with the intention of fixing it up and selling it at a profit, you’ll want to look at fix and flip loans. These loans are higher risk due to the volatile market and the lack of certainty around renovation costs and schedules, so you’ll want to have a good understanding of the market and the property in question before seeking out this type of financing.
Commercial Hard Money Loans
If you’re looking to buy a commercial property quickly, without the hassle and long waits of traditional financial institutions, then this type of loan is for you. While the rates are higher and the terms shorter than a traditional bank loan, you’ll be able to move a lot quicker and start making money right away. If you are someone who can spot a high value property a mile away, then you’ll benefit from this type of asset-backed financing.
New Construction Loan
Looking to finance a new build? Sometimes, it makes more sense to just start from scratch than fix and flip an existing property. If you’re looking to build a new commercial property from scratch, then you should seek out a new construction loan. Unlike a fix and flip or a commercial hard money loan, there is no value associated with the property (because it doesn’t exist yet!). That’s why lenders require project plans, a detailed budget and a timeline with construction milestones to assess what type of risk is involved with the project.
Have you already burned through your financing but your goals are still a little out of reach? Bridge loans are designed to help you reach those goals. These are high-interest, short term loans for investors who need to buy themselves a little more time, whether due to repairs, renovations, inspections, opening dates or some other setback.
Get a Low Documentation Commercial Loan Today!
If you’re ready to be paired with one of our investor friendly lenders, simply fill out our quick form so we can match you with the best lender for you! Just tell us a little about who you are and what you want to invest in and we’ll do the rest. No credit checks, no income verification, no wasted time!
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Total Capital Network does not offer loans, make investment recommendations nor do we negotiate loan terms, and any information found herein should not be construed as such. Any loan information contained herein has been secured from sources Total Capital Network believes are reliable, but we make no representations as to the accuracy of such information and accept no liability therefore. All loans are subject to lender approval. Loan rates may vary and Total Capital Network does not guarantee that you will be offered a loan nor do we guarantee loan rates or loan terms. We recommend that you consult an attorney, accountant or financial advisor that can help you assess the risks associated with any loan offered.