Commercial Land Loans
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Are you planning on taking out a commercial land loan to kick-start your journey in the real estate business? Can’t decide on which type of commercial land loan to take?
While all of those questions juggle inside your head, how well do you know and understand what a commercial land loan is? Before you dive into asking that question, it is important and imperative for you to have a clear understanding of what commercial land loans are.
What is a Commercial Land Loan?
Commercial land loans or commercial real estate loans are the loans that an individual or a business can take to be able to purchase a commercial land or property. But, that’s just not limited to the purchasing or the buying of land or property. You can also use it to:
- Refinance a property off of its previous or prior mortgage
- Rehabilitate and/or renovate the real estate property
- Buy a piece of land or a portion of land
- Develop a part of a portion of land and make it commercial
- And many more
So long as it involves commercial land or if it would be transformed into a commercial property or real estate, you can consider it to be a part of a commercial land loan.
Types of Commercial Land Loans
For you to be able to understand it better and easier, there actually are quite a few types of commercial land or real estate loans. Some of these kinds include, but are not limited to:
If the case is you’re trying to purchase a property but you lack the funds for it, the respective seller of the property can help you with the funding or the financing. Should this option be available, it’s called and dubbed to be “seller-financed loans,” and it is when the seller provides the funds to the buyer at a fixed agreement and at a variably changing interest rate. More often than not, seller-financed loans would only be available for properties that produce income like apartments, groceries, stores, etc. These regular or ordinary commercial land loans refer to how you would normally get a land or a real estate property – through mortgages. More often than not, lenders would demand the borrower to place security or collateral against the loan or the financing and it’d usually be real estate property or land. The term “bridge” refers to it acting as a bridge or a link for a different scenario, like when the buyer is expecting to sell the property within the time frame or when commercial developers would sell it to another party. Bridge loans are usually a short-term type of loan where the repayment schemes usually range between six (6) months to two (2) years. These are the loans wherein you could place the land or the property in question as collateral for you to be able to get the loan. However, it doesn’t always have to be the property you are going to develop or enhance. There are instances where it could be other assets such as machinery, inventory of goods, land, etc. Those are just some of the few types of commercial land and/or real estate loans in the market.
Seller-Financed Loans
Regular Commercial Real Estate Loans
Bridge Loans
Hard Money Loans
Advantages of Commercial Land Loans
If we are to look at it from a real estate and a business perspective, commercial land loans usually have more diversity and options compared to a usual consumer or personal real estate mortgage or loan.
In addition to that, there also are tax breaks with these commercial land loans, coming with property ownership as well as building equity. Those are just some of the advantages and pros of taking commercial land loans. But, what about the drawbacks or the cons of taking one?
Disadvantages of Commercial Land Loans
While you might think that taking commercial land loans involved nothing but goodness, there actually are a couple of things and factors you might want to take note of.
Difficulty
Compared to a different type of loan, commercial real estate funding or commercial land loans are more difficult and more challenging to get.
This is because of the complexity and many other factors involving it. If you want to get the best rates possible, then it will require you to be patient to wait for the best rates and the best pool of lenders to come your way.
Terms Could be Unfavorable
In the eyes of lenders, several commercial land loans can seem to be a little bit unfavorable to them. Why – Because of the high amount of loan they can get, thanks to the collateral but no a position where they can apply pressure.
So, you can expect terms that might be a little bit out-of-the-favor of your odds. These are just some of the few things and the few drawbacks that you could consider if you take out a commercial land loan. But, working with us here at Florida Commercial Real Estate Loan Group can clear your mind off of those drawbacks because we want and perform nothing but only the best for our clients.
The commercial land loans that we offer? – We don’t care if it’s unfavorable for us. We follow what most of our contractor and our developer clients need and we’ll always be ready to help them. If you need such a loan, don’t ever hesitate to work with us here at Florida Commercial Real Estate Loan Group for the commercial land loans that you need!
We’ll Give You a Free Quote!
In the event that you’re really in dire need of a sample computation for you to know the value of what you would be paying for, don’t worry, we got you!
Before you decide on what type of loan you’ll go for, we can already send you a free sample computation of the commercial land loans you need!
We can be your one-stop shop for whatever funding or financing you need for your commercial property or establishment.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below:
