Overcoming Challenges on a Commercial Real Estate Purchase

By: Zack North

What lenders look for

Investors and business owners looking to purchase commercial real estate must clear several hurdles when working with traditional lenders.  These typically have to do with either the borrower’s financial history or the property’s ability to generate revenue.

But what if lenders discover roadblocks in both areas?  That’s what happened with an investor who recently attempted to purchase a multifamily property in Texas.  As a result, they nearly missed out on the investment opportunity altogether.

A Commercial Direct solution in Brookshire, Texas

This investor needed $371,000 to fund the purchase of a multifamily building in Texas.  When they took their request to traditional lenders, it became clear that two issues would make an approval difficult to achieve.

For one, the investor was not able to provide the amount of documentation banks required.  This is actually a problem many investors face – their past tax returns don’t always paint an accurate picture of their current income.

The other issue for the investor had to do with the multifamily property in question.  According to the rent roll provided, the property’s level of occupancy wouldn’t be enough to satisfy traditional lender requirements.

Fortunately, alternative solutions do exist for those who face these issues.
Commercial Direct’s team introduced the investor to reduced documentation solution that would not require tax returns at any point in the loan transaction.  Once it became clear that the income generated by the property offset the dip in occupancy, the Commercial Direct team approved the loan and helped the investor make their purchase.

Are you ready to purchase a commercial real estate property?

Our non-bank solutions may be an ideal fit for your specific set of needs.

Simply visit our Purchase page to learn more about our solutions.  From there, you can leave some basic information regarding your loan request.  One of our mortgage experts will then reach out and provide some quick next steps to help you get the funds you need.

Author: Zack North

Zack North is the Director of Marketing for Commercial Direct.  As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.

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