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Unraveling the Maze of Commercial Real Estate Loans

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Unraveling the Maze of Commercial Real Estate Loans

The economy is good and much of the commercial real estate inventory has been absorbed. Lease rates are climbing and property values are increasing. The temptation is to renovate, develop, and purchase commercial real estate. And rightfully so. Significant wealth can be built in owning and developing commercial real estate in the current market.

Banks have become more aggressive and have money to lend for commercial real estate deals. Local community banks not only have a need to loan money, they have an obligation to. Regional and national institutions are seeking good deals too.

However, commercial real estate loans are far different than residential mortgages that many individuals have experience with. Many small businesses that are candidates to own their own facility are perplexed or caught off guard when they try to finance a building or land for their business.

Small investors wanting to invest in commercial income producing properties often hit an unfamiliar wall as well. If your business is not occupying a large percentage of the property, the requirements for a commercial real estate are much more restrictive.

If the property has credit worthy tenants (including space your business will occupy) it lowers risk for both you and the lender. But, if the property is unoccupied, needs major renovation, or you are wanting to develop a new property, you are a speculator and viewed as such by a lender.

Here is a good primer on commercial real estate lending: http://www.investopedia.com/articles/personal-finance/100314/commercial-real-estate-loans.asp

iMark Realty Advisors has invested in cultivating many local lender relationships, and monitors basic parameters for community lenders. We also have experience with Small Business Administration (SBA) programs and help guide clients to these programs, when they make the most sense. We can help with detailed financial analysis and loan packaging that is required by lenders for commercial real estate.

We have helped many, just like you. Please call if we can be of assistance.

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About the Author

Mark Glover is the Principle of iMark Realty Advisors in the Dallas/Fort Worth market. Mark has over 25 years experience in advising clients on how to safely and profitably buy, sell, lease, develop and invest in commercial real estate. Mark also helps clients gain cash-flow in their business with a specialized suite of tax studies and tax credits. These include cost segregation. R&D credits, Energy credits, and Recapture credits.