by Anthony Muhammad
So you want to get a loan for your real estate transaction, but you don’t know where to obtain funding, this scenario is all too common. Before going out to acquire a loan, you need to know your exit strategy and what type of loan you’re looking for, whether it’s Residential or Commercial.
What’s the difference between a Residential Loan and a Commercial Loan? The primary difference is the residential lender is looking at the person first and the property second! Conversely speaking for a commercial loan, it’s the property first and then the client second. I focus primarily on commercial transactions, because my niche is Acquation of Small Multi- Family properties from 5 to 20 units. Commercial lenders want to know if this is a purchase, new construction or a refinance! The lender also want to know, what you are going to do with the said property in question.
Should you go to a bank, broker, or seek Private money? Now, you could go to a bank to secure a traditional loan, however, banks are heavily regulated by federal laws, and there is a lot of red tape to go through, but local banks will provide you with great terms if your credit is good and if you have the wherewith all to secure the loan.
Brokers/ Intermediaries are also a good source because they know where the money is, however, is the caveat, if they ask for upfront money, RUN! You won’t find Private money lenders on your own, because they never advertise. Private Money lenders think outside the box and have more flexibility for creative financing. I tell my clients all the time, don’t get too creative, they only want solid deals that will yield returns. At the end of the day, the deal MUST be sound and make sense. In the commercial arena you must have skin in the game, nothing is free, typically, and you have be able to inject 20% to 30% into a commercial real estate deal.
Borrowers need to look at obtaining a loan from the eyes of the lender. I know this comes as a shocker, but remember you are the one seeking the loan from them and not the other way around.
The name of our company is Resolution Investment Inc. My name is Anthony Muhammad and my wife LaZette Muhammad, have been in financial services since 2007, we have worked in banking, we have worked as loan officers and Intermediaries we are also residential wholesalers. We work with Private Money lenders and Hard Money Lenders, we help to solve your real estate problems.