A substantial investment is required in order to purchase or refinance commercial real estate. Most investors will need to seek out commercial real estate loans Jacksonville FL in order to finance their investments. When attempting to find and qualify for a commercial real estate loan it is essential for the investor to research what options are available to them. The following are the major types of commercial real estate loans that are available.

Purchase

This type of loan is used for purchasing commercial real estate. The property can either be purchased for investment purposes or to be used for the operations of a business. Usually purchasing commercial properly will involve getting a mortgage from a conventional commercial lender. However, hard money financing or bridge loans can also be used.

Refinancing

Refinancing a mortgage can be used for buying out a current commercial mortgage loan and replacing it with a term loan with a lower interest rate, one that has a longer amortization or term than the original mortgage, or tap into the equity of the property to obtain cash that can be used for either investment or business purposes.

Bridge Loan

This is a short-term kind of commercial loan that is used for either acquiring commercial real estate or utilized by investors and business as temporary financing until a long-term mortgage is obtained. A majority of bridge commercial loans have terms of less than two years and have higher interest rates compared to regular commercial mortgages.

Cash-Out

This kind of refinancing or financing either involves cashing out on the equity of a property or extracting cash from a property’s equity that doesn’t have a mortgage that can be refinanced.

Hard-Money

This is a kind of short term commercial loan that institutional and private lenders offer where financing is provided and secured based solely on the collateral of the commercial real estate.

Construction

Businesses use this kind of commercial loan for business operation purposes,and by inventors for constructing communities, development and buildings for investment purposes.

Fix-And-Flip

Usually this kind of commercial loan is used by investors in large-scale, multifamily and single family real estate development. The sole purpose with a fix-and-flip is to get commercial real estate developed and then quickly sell the property for a profit.

Summary

There are a number of different types of loans that are available for purchasing, refinancing, rehabilitating, constructing and investment in commercial real estate. It is critical to understand what your options are and then make sure that you get the right loan to meet your investment or business needs.