Like the purchase of personal property, commercial real estate is one of the most significant investments one can make. Making decisions comes down to the type, location, and need of your business. There are several considerations to take into account.
Ask yourself these questions:
- What kind of property do I need and where is the best location?
- What purpose will the real estate serve? Do I intend to take advantage of equity that may build?
- Aside from the property itself, what are the associated costs for utilities, insurance, parking, and taxes.
Each industry has specific real estate needs. A restaurant for example, has vastly different property goals than a manufacturing or construction company. Additionally, factors such as terms, conditions, and interest vary based on industry. Construction and food for example, are considered high risk by some lenders citing lack of consistent cash flow and probability of market downturns. Fortunately, Lending4Biz has funding available for each business type.
- Restaurants – Mastering recipes is just the first step in the process of opening a restaurant. You will need a prime location, commercial grade appliances, and staff.
- Medical – assisted living, surgery centers, and medical device manufacturers.
- Retail & Manufacturing– land and real estate for the industries of retail, manufacturing, and construction.
BRRRR, Flip N Fix, & Equity Based Financing
Perhaps real estate is your business, and you want to buy, rehab, rent, refinance, and repeat or “BRRRR” for short. This refers to the practice of establishing a real estate portfolio without the substantial cash up front for a down payment. This includes purchasing a distressed property, renting it, and using the refinanced funds to purchase additional property. Lending4Biz provides loans for builders looking to build and retain the property as a rental, new construction (or teardown projects), model homes, and even entire subdivisions.
The fix and flip method falls under the same concept as BRRRR. The difference is that the intention of a fix and flip is to make a sale once the updates are completed. This option does not involve keeping or renting the property. There is potential for five and six figure returns with this approach. Lending4Biz offers solutions for each investment strategy that includes the purchase of the property and the renovations. Financing up to 3 million dollars available in 46 states. Visit the Fix N Flip, BRRRR, Construction Loans page for more information.
Real Estate (Asset) Based Funding
Use the equity in your existing property (personal or commercial) to access funds. Like residential homes, it is possible that the value of commercial real estate will grow over the years. This means you can apply to borrow against that equity to fulfill business needs and goals.
Equity is the difference between the value of a property and how much is still owed. For example, if you purchased a manufacturing warehouse for $150,000 ten years ago and it is now worth $175,000, there is potentially $25,000 available to borrow against. Equity depends on market fluctuations, location, and condition of the property. Eligible commercial property equity lines of credit and loans generally include offices, retail shops, warehouses, and multi-family housing complexes.
Access up to 2 million in financing with Lending4Biz with no payments for three months and flexible loan structures. This form of lending can be used for general use and is a short-term alternative for businesses that are unable to access traditional funding. See our Real Estate (Asset) Based Funding page for more information.
