Cash Flow the King Of Commercial Loans
Unlike residential loans, cash flow of the investment is what drives all rates and terms for any investment property loan.
Unlike residential loans, cash flow of the investment is what drives all rates and terms for any investment property loan.
If the profit and loss statement, and the interim financial statement do not demonstrate a positive cash flow after servicing the new debt, no conventional lender will lend you money for the project.
AND YOU SHOULD WALK AWAY AND FIND ANOTHER DEAL
All Investment Loans are made to be repaid.
The average banker won't tell you that but that is the underlined assumption when any lender makes you a loan. This might be an obvious point but it is so easily overlooked in the excitement of the transaction. If a lender is telling you that they won't finance your project they are doing you a service. They are telling you directly that you will lose money, but on the other hand the lender does make you a loan then you know that the deal is at least cash flowing as it is presented today. Commercial loans are geared specifically to each type of real estate investment.
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For the remaining information on this topic click here http://www.loanforbiz.com/CommercialLoans.html
3 comments:
Glad to see you started a blog on this topic.I think this will provide great information for a lot of people.
I'm a residential real estate broker and not very familiar with the commercial side of real estate. This is really informative and worth reading. Keep up with the blogs and I look forward to contunually getting informed.
Thank you and I invite you to tell other residential realtors abour our blog, It will always remain informative and be updated daily, so check back often.
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