It’s tough to succeed in the world of commercial real estate without proper financing. If you’re looking to break into this investment field or strengthen your foothold, avoid the following mistakes when you’re applying for funding.
Failing to Research Your Options
If you don’t investigate several commercial real estate financing options, you’ll be doing yourself a disservice. For example, even a seemingly small difference in interest rates can make the overall cost of two loans vary by thousands of dollars.
Not Writing a Business plan
While real estate investing may seem different from traditional businesses, you’ll still want to have a business plan. A business plan will guide you through the early, middle, and advanced stages of your investment adventure and a good one will be an invaluable tool for obtaining financing. Meanwhile, a subpar or absent business plan will make you look unprepared and untrustworthy to potential financiers.
Not Having a Project-Specific Plan
Beyond a general business plan, lenders will also want to see what specifically you plan to do with any funds they extend. It will be important to show the timeframe and financial projections of your commercial real estate investment.
Skimping on the Attorney
In commercial real estate, a good lawyer is worth his or her weight in gold. As Attorneys.com highlights, these professionals will review and draft documents and represent you in tenant disputes, among other duties. The fine print matters quite a lot in loan offers, lease agreements, and other real-estate-related documents. No one can navigate the fine print quite like a skilled attorney. Don’t skimp when hiring one.
Diving In without Cash
While financing will go a long way, you should still have some cash on hand before investing in commercial real estate. Cash is helpful for both making lenders to feel more at ease and for handling unexpected hiccups like repairs and vacancies.
Want to learn about your financing options from a professional in the field? Don’t hesitate to get in touch with Coastal Commercial Lending.