Types of Commercial Real Estate Loans

Commercial real estate loans differ from residential conventional loans in several ways:

Purpose: Commercial real estate loans are used to finance the purchase or renovation of income-generating properties, such as office buildings, retail spaces, or apartment buildings. Residential conventional loans, on the other hand, are used to finance the purchase of a primary residence or investment properties that are rented out to tenants.
Loan Amounts: Commercial real estate loans tend to have higher loan amounts compared to residential conventional loans. This is due to the larger size and higher value of commercial properties.
Loan-to-Value Ratios: Commercial real estate loans often have lower loan-to-value ratios compared to residential conventional loans. This means that the borrower must provide a larger down payment to secure the loan.
Repayment Terms: Commercial real estate loans tend to have longer repayment terms compared to residential conventional loans. This is due to the higher loan amounts and longer investment horizons of commercial real estate projects.
Interest Rates: Commercial real estate loans often have higher interest rates compared to residential conventional loans. This is due to the higher risk associated with commercial real estate investments.
Underwriting Criteria: The underwriting criteria for commercial real estate loans are typically more stringent compared to residential conventional loans. Lenders will typically look at the income and cash flow of the property, the creditworthiness of the borrower, and the market conditions in the area.

In summary, commercial real estate loans are designed to finance larger, income-generating properties and typically have different terms and requirements compared to residential conventional loans.

Type of Commercial loans GoKapital offers:

Private Commercial Mortgages: Private commercial mortgages are loans that are provided by private lenders rather than traditional banks or financial institutions. These loans often come with higher interest rates but offer more flexible terms.

Jumbo Loans for Investment Properties: Jumbo loans are commercial real estate loans that exceed the loan limit set by the Federal Housing Finance Agency. These loans are typically used to finance larger commercial properties, such as apartment buildings or shopping centers.

Fix and Flip Loans: Fix and flip loans are short-term loans used to finance the purchase and renovation of a property that is being flipped for a profit. These loans are typically used by real estate investors and come with higher interest rates than traditional mortgages.

Hard Money Loans: Hard money loans are short-term, high-interest loans that are secured by real estate. These loans are typically used by real estate investors who need to quickly finance a property purchase or renovation.

Bridge Loans: Bridge loans are short-term loans that are used to finance the purchase of a property until a long-term loan can be obtained. These loans are typically used by real estate investors and come with higher interest rates than traditional mortgages.

Cashout Refinance: Cashout refinance is a type of commercial real estate loan that allows the borrower to refinance their existing mortgage and take out cash from the equity in their property.

Cannabis Real Estate Loans: Cannabis real estate loans are commercial real estate loans that are specifically designed for businesses involved in the cultivation, production, and sale of cannabis products. These loans often come with higher interest rates and more restrictive terms due to the unique risks and regulatory environment of the cannabis industry.

HARD MONEY REAL ESTATE LOANS

Loans Amounts: $100K to $500MM
Terms: 1 to 5 Years
Interest Rate: 6% to 14%
LTV%: 50% TO 75%

COMMERCIAL/RENTAL PROPERTY

Loan Amounts: $100K to $50MM
Terms: 1 to 5 Years
Interest Rate: 4% to 7%
LTV%: 60% TO 80%

COMMERCIAL MORTGAGE

Loan Amounts: $100K to $50MM
Terms: 5 to 30 Years
Inerest Rate: 6% to 14%
LTV%: 50% TO 75%

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