When looking to secure a commercial property mortgage to complete a purchase, the all important first consideration is the amount of time you have. 

Unlike most residential mortgages that can be closed in 10 business days, a commercial mortgage tends to take longer due to many of the different lender requirements that can come into play.  More specifically, commercial property loans can require updated appraisals, environmental assessments, title surveys, building inspections, business financial statement reviews, to name the most common areas of assessment.

While these areas may also be covered off for residential home purchases, the equivalent processes with commercial properties tend to be more involved and take longer to complete.

When the buying opportunity is for a property that isn’t long for the market, the time lines for closing will be shorter, making optimal or ideal financing difficult and perhaps impossible to locate and secure before time runs out on the offer to purchase.

If the property is a great buy or is an ideal fit for your business and too good to pass up for whatever reason, you may want to reconsider your property financing strategy.

Remember that the goal is to complete the purchase and if financing is going to be required, then you have to focus on sources of commercial mortgage financing that will work with your time requirements.

And even though it may cost a bit more in fees and rate in the short term, a private mortgage may be the best approach to make sure time doesn’t run out on the deal.

While private mortgage lenders may require many of the same third party reports, they may also consider reports that are already available even though they may be several years old if the lender is comfortable they still represent the subject property.  And because you will be dealing with typically one person versus an entire organization, the speed to assess and generate a financing commitment will be much faster.

This is not to say that you should abandon seeking a long term low cost commercial mortgage.  The economics related to the property may require the ability to eventually secure more optimal financing over time.  But once again, the key is to get the deal closed, so after that’s out of the way, there will be plenty of time to search for the best possible solution.

On the one hand, this private bridge loan strategy is going to cost you more money in the short run, but this may actually be offset over time if a less rushed approach to looking for best fit mortgage financing results in options that would not have likely been discovered in the rush to close the deal.

If you’re in the process of purchasing a commercial property, I suggest you give me a call so that we can identify the options you need to be focusing on to get any potential deal closed on time.

Click Here To Speak To Commercial Mortgage Broker Joe Walsh.

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