How to Find a Genuine Stated Income Commercial Lender

If you are trying to buy a new property or upgrade your old one, getting a hard money loan is the first thing that might cross your mind. There are several banks that loan out money for such purposes. However, if you do not have a great credit score, then you might have to narrow down your search to stated income commercial lenders. Though there are bad credit loans available in the market, there are also a number of scammers who take advantage of an unwary customer. In such circumstances, it is essential to check if the lender is genuine or fake. Once you are sure about this, only then must you approach them for any kind of financial assistance. 

Checking the Private Commercial Lender’s Legitimacy

Before you apply with a stated income commercial lender, it is essential to do thorough research about the different lenders in your city. There are several means to check if the financer is genuine or no. Here are some ways through which you can spot potential red flags.

• Online Presence

You may get an offer for hard money loans from several lenders, the moment you start looking out. In case someone approaches you, check online for the company name and if possible, customer reviews. 

• Better Business Bureau

Every genuine company will be listed on the Better Business Bureau website. You can learn more about the lender and his company. Check for the grade and reasons for it. Reading customer reviews will also help you decide if you can apply for a loan with that particular lender. If you are not satisfied, then you can search the BBB portal for another one.

• Approach

Though lenders want to give out loans, none of them would be desperate or run behind borrowers. If you feel like the company is overtly manipulative or rushing you into applying for a loan, even before you check for facts, then it is advisable to discontinue all contact.

• State Attorney General

As a last resort, you might want to check with your state’s attorney general to be entirely sure of the business. By law, every loan broker and lender should register with a state agencies before commencing their business. If there is no record found, then you for sure are in for a scam. So be careful.

Sometimes, lenders may ask for your bank details to know where to transfer the loan amount, once the application has been approved. However, no lender will ask you for your online banking credentials. If this is the case, then it can be a fraudster who wants to lay their hands on your money. Knowing how to check if a stated income commercial lender is genuine can potentially save you from losing your money and property.

How do Stated Income Loans work?

Stated Income Loans are back in the real estate market again and this is turning heads of both the investors and the commercial real estate loan lenders. Is that a good news for commercial real estate investors? It can be! In fact, for borrowers who are self-employed and who cannot show a consistent cash flow pattern to lenders in order to get their loan request approved, stated income loans being back in the market is a great news! Borrowers no longer have to worry about being turned down by the banks and other conventional lending instructions. Stated income loans are the best safety net for any investor borrower who cannot find other forms of financing for their commercial real estate property. So, what are Stated Income Loans and how do they work? Here's a brief. 

What are Stated Income loans? 

Stated income loans are commercial real estate loans that are provided on the basis of income stated by the borrower, requiring a much lesser time period for processing and very little documentation. These loans were made illegal to be issued by lenders after the housing market crash of 2008 and the Frank-Dodd Act of 2010. However, they are back in the market now with a few changes in their approach to ensure that such a crash does not happen again, and in the best interests of both lenders and borrowers. 

How do Stated Income Loans work at present? 

Stated income loans are back and that's definitely great news for every self-employed borrower and other borrowers with poor credit scores who cannot get other forms of financing. However, they are not back just exactly how they used to be. That is, stated income loans are no longer given solely on the basis of the income that is "stated" by the borrower. Rather, such loans are now provided based on the bank statements of a borrower that proves that a particular borrower has the loan repaying ability and thus a lender can safely process the loan request. 

Thus, although heavy documentation and stringent verification of income are not needed, lenders still look for income proof on the basis of the bank statements provided and thus the Stated Income Loans are now provided under the name "Bank Statement Loans", meaning loans that are provided on the basis of the bank statements submitted. 

Stated income commercial lenders typically require the borrower to submit the bank statements concerning the transactions dating back to 2 to 3 years. If a borrower can convince stated income commercial lenders about repaying the loan based on bank statements, there's a good chance loan request will be approved.

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.

How to Find Trusted Commercial Real Estate Loan Lender in Dallas

It goes unsaid that the people involved in the business of real estate are definitely involved in the constant process of buying loans. Well, unless you're a millionaire, you're on a look out for loans to finance your commercial real estate needs from time to time. Finding the right lender is the most overlooked but the most important part of procuring your loan. With hundreds of private money lenders, conventional banks, private lending institutions providing various loan programs out there, it is quite a challenging task to stumble upon the right lender. Having a trusted commercial real estate loan lender on your side can help you save lots of time and procure timely loans. If you're looking for commercial real estate loans in Dallas, here's how you can find the trusted real estate loan lenders.

1) The rates and interests must be competitive

Trusted commercialreal estate loan lenders charge competitive rates and interests on their loans. On your voyage of finding the right loan lender, you will stumble upon lenders who're desperate to close deals and somehow manage to convince their borrowers to utilize their services. Such lenders cannot be trusted and you'll never know if they're trying to trick you into some fraudulent transactions. These lenders would often propose flashy rates that are way too minimal but remember that all that glitters is not gold! Trusted lenders always keep their rates competitive, neither too expensive nor too cheap!

2) Trusted lenders maintain high transparency

If you're lender is trying to conceal some relevant information that you demand, you must know that something is fishy. Trusted lenders never back out from providing the full and complete information about the type of the loan, the time period required to process the loan, all the terms and conditions.

3) Trusted lenders offer various schemes of loan programs

Lenders who dive in with a couple of loan options are often middlemen trying to get some commission. Trusted lenders are the ones who offer a wide range of loan programs to choose from. The variety of options and their vast network of lenders speaks a lot about their authenticity and integrity.

Things to Know About Commercial Stated Income Loans

Stated income loans are often regarded as a boon to the commercial real estate investors. They act as an alternative to the people whose loan requests have been rejected by traditional banks. One of the major reasons why people avail stated income loans is the red tape factor of qualifications and criteria to be met by a loan borrower set by the traditional banks. So what exactly is a commercial stated income loan?

What are commercial stated income loans?

Stated income loans are the loans that are provided based on the income which is 'stated' by the borrower and does not require the borrower to have an overwhelming credit score or an amazing financial history. It is best suited for people who derive income from varying sources and do not have any consistent cash inflow patterns. These commercial stated income loans are provided only based on the bank statements and will not involve any verification on the previous financial history of the borrower. This makes it one of the major reasons why people avail stated income loan.

Here's all you need to know about commercial stated income loans:

1) No proof of employment required

In order to avail stated income loan, you do not have to provide any proof of your employment. Banks or even private money lenders are only interested in looking at your bank statements for their security reasons of determining if you have the loan repayment capacity. Thus, this is a 'Go-To' loan if you do not have any particular source of income and your sources vary from time to time.

2) It is best suited for people who derive income from other sources, different from income from business or profession

Many real estate investors do not derive their income from the business or profession but derive income from different sources like renting out a property, sale of a property, capital gains and so on. Since these incomes do not have any regular pattern or consistency in occurence, stated income loans will be the right kind of loan.

3) Stated income loans require bank statements and tax records

Since there is absolutely no check on the previous financial history or the credit score, banks or a private money lender will ask you to provide your bank statements and tax records for their verification and security purposes.

4) These loans can be arranged very quickly

Since there is very less paperwork involved, these loans can be arranged very quickly within a short period of time. Hence, it is the best fit for people who are in need of immediate Finance.

How to Find Best Commercial Real Estate States Income Loans

commercial stated income loan

Once you've made the big decision of buying a real estate property, the next big decision you need to make is 'How' to finance your real estate property. There is a plethora of options you could consider for raising finance and unless you're a millionaire, raising finance in the form of loans is the best option for you! Commercial real estate stated income loans are given both by the banks and the private hard money loan providers. While the banks require a list of qualifications which you need to pass, hard money lenders make your life much easier by making loans available to you easily and quickly! Read on to know the tips on how to find the best commercial real estate stated income loans.

1) Interest rates

Interest rates are the primary factor you must be considering while thinking about which loan to buy. Banks and private money lenders have different interest rates and choose the best deal for you in light of your financial requirements and position.

2) The credibility of the source

Undoubtedly, you can rely on all the banks for the credibility of the source. But when you're choosing from the hard money loan providers, you must run a credibility check by looking at their website. Have no shame in asking for the details of testimonials provided and if possible, make some calls to their previous customers and listen about their customer experience!

3) Time window required to sanction the loan

The time factor can literally make or break the deal for you. If there's a very good deal and you fail to arrange for money, there will be a hundred others who'd be rushing to grab your deal. So it's very important that your commercial stated income loan provider promises you a short time window for providing you the loan.

4) The pre payment penalty rates

Some banks and private hard money lenders have stringent policies on account of pre payment. The pre payment penalties can surprisingly be higher and put you in losses. Remember that it's in best interests of you to buy a loan that has less pre payment penalties.