When discussing the differences between commercial and residential real estate financing, the main thing you need to worry about is the differences in the loans you can get.
As commercial real estate generates income for the owner, the commercial loans thus tend to be different from the residential ones.
Read MoreMany people are not aware that most loans for commercial properties are not fully amortizing. Typically they are on a twenty five year amortization schedule, but the loan comes due in 7 or 10 years. What this means is that when the loan comes due, then the owner must pay it off, either through cash reserves, or by refinancing the loan. Most investors do not have the funds to just payoff the loan, so instead look to refinance the balance.
Read MoreDO YOUR CLIENTS HAVE THE DESIRE, ABILITY, AND MOTIVATION TO INVEST?
Save yourself time and energy by qualifying all of your clients.
Not everyone is ready to make an investment in commercial real estate right away. Sometimes a person will have the means to invest, but they may not be at a point in their life where it’s in their best interest to invest. Or they may just not have the motivation to invest in commercial real estate if there are other more lucrative alternative investments available such as the stock market or business opportunities. If an investor is going to close the deal with you, it’s going to be because they have the desire to invest, the ability to invest, and the motivation to follow through on those wants and needs.
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