You do not want your business to be stagnant in one position. You want it to grow further. And the only way to do that is to acquire a suitable industrial real estate investment loan. If this is your first time acquiring any loan or form of credit, you will have to ensure that you do not end up making the most common and critical mistakes just like any other investor. Let's have a look at what these errors can be and how they can be avoided: 1. Not Knowing The Correct Property Value Valuation of any commercial property is going to be of a lot of importance to you. Accurate evaluation requires a significant amount of homework on your part. You have to check out various similar properties on the market and must connect with local commercial brokers before you seek any line of credit. If you are looking for a multi-family loan, evaluating the property becomes even more critical. 2. Not Understanding Underwriting Guidelines It is very essential to understand all the underwriting guidelines of the bank /financial institution. There are a few federal restrictions that do not allow bank lenders to be as liberal as they used to be with their lending amount. You will have to understand their underwriting rules before you sign any agreement. 3. Forgetting To Check If The Property Is Up To Code This is also a very big responsibility that you have to perform. Get in touch with a reputable contractor or property inspection professional to examine the property beforehand. Check out the permit of the building and whether it complies with the relevant codes or not. This is going to help you save a lot of money after the closing. 4. Improper Research At the end of the day, the most critical mistake that you can make is that of performing improper research. When you are looking for industrial real estate investment loans, you have to compare your options. This is like window shopping and should never be ignored. You will be able to understand a lot of loan terms and lingo while performing this research. If you do not take out enough time to understand what options are available, you might end up with the wrong loan. You may even end up drying up all your finances, and that could spell a lot of trouble for you. Be more practical and diligent with your finances, always. |
AuthorGet in touch with us at PACT Capital to manage the risks associated with real estate lending through our proprietary risk mitigation framework and asset class diversification. Archives
December 2021
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