One of the most popular mediums for investment opportunity in today’s real estate market involves purchasing a property, making renovations and upgrades before ultimately selling it for what one hopes to be a considerable profit. If managed correctly and properly researched then the return on an investment can be extremely beneficial. So long as the initial purchase price and cost of renovations fall below the eventual sale price then money can be made - often a considerable amount depending on the location and property type.
The above described practice has even earned its very own nickname, now commonly referred to as “flipping” properties. Investors purchase real estate with the sole intent of flipping it to turn a profit before moving on to the next structure for a similar return. Add them all up and eventually there is a considerable amount of money to be made, should all of the ins and outs involved in renovating wind up benefiting the initial investor. Not only has this practice become more common in almost every residential real estate market across the United States but it has garnered enough of an interest that many of the television shows on home improvement channels now have specific programs dedicated to the many different aspects associated with the practice.
While the more prevalent usage of “flipping” has revolved around the residential real estate world, the same opportunities exist in the commercial realm as well. Commercial real estate can even offer a more money-making venture as the properties are commonly rented upon renovation which creates a system for earning well over the initial costs of paying for a loan well into the future. This extra income can then be re-invested into another property type or used at the investor’s own discretion at a later date.
Commercial renovation loans from a hard money lender present one option for funding a specific project that can circumvent the traditional bank. These more traditional lending opportunities rarely offer a full amount for specific renovation types and can fall short in terms of their availability due to increased measures allocated around their lending opportunities. Instead of having to rely on a traditional source which can limit the availability and renovation practice, using a hard money lender offering a useful commercial renovation or rehabilitation loan can be significantly more beneficial for its intended purpose.
These applications and appointments differ from the more traditional methods in a variety of methods and there are numerous factors to consider when utilizing a commercial renovation loan. To begin, the property must properly be evaluated in the current state prior to making any of the forecast improvements. Once these are implemented then the overall value of the property will increase but determining the cost for these renovations in addition to what the real estate may rent or sell for at the end of the process is a key component for any commercial remodeling loan type.
A variety of measures must be implemented when determining the financing for such a loan, even with hard money lending but these are measures put in place to protect both the investor and establishment from which the funds are issued. Details regarding contractor estimates for the work, proper measurements, the intended use of a property and its location must all be considered before a deal is likely completed.
Structuring commercial renovation loans
essentially come in all shapes and sizes. For this purpose no two organizations are going to offer a similar outcome and the best interest of the investor must be taken into consideration when ultimately determining how he or she is going to finance the necessitated improvements for establishing a productive piece of real estate into the future, on the open market, or following a rental agreement and continued productivity from the payments received on a monthly basis. These monies are essential and all will help to ensure the investor completes a successful “flip” of the property but attention to detail is needed when finalizing all the complete aspects of a renovation or rehabilitation loan - especially when dealing with commercial real estate as opposed to residential housing.
For this reason, no two loans will be identical but not every lender is willing to be flexible in extended a potential solution to a remodeling issue. Even projects which have begun construction but will not complete the original components can be given a second opportunity (potentially more) with the flexibility of a renovation loan and the detailed capabilities which can be derived from taking into account the varying aspects of each person’s personal life.
Borrowing money and the institutions from which this type of financing would be accessible are extremely limited. Finding someone you can trust who is able to potentially fund both a renovation from the beginning or other outlet which has fallen short of expectations and left unfinished can be extremely helpful given the situation. Each loan is different and the property conditions - location, state, wear, tear, age, accessibility, etc. all will have some type of variance on the degree of funding available. This, in turn, then makes the production capabilities differ depending on the requirements for each loan.
If you are considering investments within any commercial property type divisions, are in need of a hard money lender, or are ready to move forward with a contact, then come see the experts at COHI Capital Private Equity Lending
who can help you determine and analyze your individual needs. After their free consultation, quality experts can offer meaningful advice and help to set up a beneficial plan immediately for all involved parties in order to achieve the goals of everyone involved in the process. Whether the monies will be needed for refinancing or outright purchase, the best plan available will be applied specifically to your application. They will decide what type of loan will work best for you drawing on experience and benefits of finding successful funding needs for over a decade. A full detailed review of your situation can be completed in addition to resolution issues and monetary considerations. Request some additional information by contacting COHI today. Call 970-922-3277 or contact us
for a decision. Often these are made the same day and can be addressed depending on client needs and schedule.