Today’s world moves pretty fast. That speed is great when we’re communicating on social media, or shopping online. But in today’s commercial property market, it’s not uncommon for the seller of a commercial property to receive multiple offers, especially if the property is in a great location, and it is priced competitively. If you’re looking to buy, you need to move fast, but more importantly, you need to be prepared.
Along with speed, there are more choices than ever before available to us. Take account of your financial situation and have some discussions with lenders to see how your investment may fit their criteria. Armed with this knowledge, your parameters for investment will be fine-tuned and you will negotiate more confidently, knowing where you stand with a lender. When you find the commercial property for you, you need to be at least somewhat ready to get moving on a mortgage. Yesterday, we shared a few tips with you to help find the best commercial lender and get the best deal.
Today, we’d like to share a few more.
- You’ve probably done this already, but if not, make sure you check your credit. An excellent credit score is one more supporting argument for your investment. Equifax, Experian, and TransUnion are the three main credit bureaus, and they are required by law to give you 1 free credit report per year. If your credit could stand to be improved, get in touch with a credit counseling company and start working on it as quickly as possible. You’re better off knowing about potential problems with your credit and resolving them.
- Organization and documentation make the lenders life much easier and demonstrate that you have your act together. The opposite is a red flag to lenders, creating questions about your ability to manage the property effectively.
- When you’re talking with the loan officer, give them as much information as possible about yourself. Let them know what kind of financial and professional situation you’re in up front. The last thing you want is thinking you’ve been approved for a loan with a good interest rate, then discovering you’ve been turned down.
- Think about what your plan for the property is in the long term. If you can’t imagine leaving this investment property, the smart move might be to make a larger down payment in order to secure a low-interest rate over the course of 15, 20 or 25 years. Also, consider the debt service of various payments.
- These days, qualifying for a commercial loan usually requires a lot of documentation. Ask your commercial lender exactly what paperwork they need, and be ready to provide all of it. One of the main reasons the commercial mortgage process gets slowed down is because borrowers don’t have all of their paperwork ready to go.
- Before you fill out the online form to reach out to a commercial investment company, make sure you know what kind of company you’re dealing with. You may start getting emails or phone calls from commercial mortgage companies trying to lure you in. Will the company run your credit report immediately, or will they do that after you speak with a representative?