Options to Get Commercial Real Estate Loan in Houston

Finding the right type of commercial real estate loan to fund your commercial real estate financing needs can be a daunting task. Financing forms a major part of commercial real estate investing and small mistakes in this light may lead to huge financial losses. Therefore, making a well-informed decision is of prime importance. If you're looking for commercial real estate loans Houston, here are some options you can explore from:

#1 - Traditional commercial real estate loans

The first option that comes to many people's minds when they think of commercial real estate financing options are traditional Commercial loans. These loans come from banks and are the least costing option with the privilege of obtaining best terms. But the downside is that bank loans are hard to get. They are easily available only to those businesses who have a steady profit flow for at least a couple of years and are thus not suitable for borrowers who do not have a great credit score.

#2 - Commercial Bridge Loans

Bridge loans are provided both by banks and alternative lenders and are used when investors want to quickly buy a property of capitalise on an opportunity without having to wait for a long time. These loans are paid off after the completion of their short term period, either in full or by being converted into a refinanced loan, with a longer-term. This is go-to if you're in a quick need of finance.

#3 - Hard money loans

Hard money loans are easy to procure and are a boon to investors who do not flaunt a great credit score. They are provided by private money lenders or investors and are generally short-term coupled with high rates of interest. They are the last resort for people with average to poor credit scores and a boon to self-employed people who do not have steady cashflows.

#4 - SBA Commercial Real Estate Loans

The next option to choose from while finding commercial real estate loans Houston is the SBA loan programs which comes in 2 broad variants - (A) SBA 7(a) Loan Program and (B) SBA 504 Loan Program. SBA 7(a) Loan Program is the best go-to if you're looking to buy or repair your commercial real estate property. And, the SBA 504 Loan Program is best suited for people who want to upgrade or purchase capital heavy assets as it offers highest savings in the long run. So, depending on the purpose and application of your loan, you should make a pick between the two options.

Are Stated Income Commercial Real Estate Loans available in US Market

You would probably go through a bunch of hoops for securing a commercial real estate loan to fund your housing or real estate investing needs, unless you have all the money in cash stacked up to make a purchase. So, that leaves the majority of us trying to get our hands on the best kind of loans there are to finance our needs. For many people, it won't be very hard to find the best loans in the market, but for the remaining lot of people who do not have a steady income flow every month, it's quite challenging to find the right loan.

In other words, if you are self-employed and do not have a consistent income patterns, it is very hard to get your hands on best type of loans because most lenders are looking to provide loans to people who can verify their income. However, to your rescue there are stated income commercial lenders in the market who provide commercial stated income loans.

So, what are commercial stated income loans?

Stated income commercial real estate loans are loans that are provided to self-employed borrowers who cannot provide proof of income as their income patterns are irregular or inconsistent. They are also provided to people who have poor credit scores and find it difficult to avail a loan to finance their needs. In other words, commercial stated income loans are loans that are provided on the basis of the income that is "stated" and not verified.

Are they available in the US market?

Stated income commercial real estate loans are still available in the US market, yes, but with a little change in how it is executed and lent. Earlier, these loans were lent merely on the basis of the income that was 'stated' with zero check on anything and that created a huge housing market crash in the year 2008. In today's scenario, these loans are still available but the lenders however will seek a little verification in the form of bank statements of the past 10-12 months as a proof. So, it is wise to say that stated income commercial real estate loans are still available but you will now need to provide a proof of your income, even if it's irregular of the past 12 months to your stated income commercial lenders.