How to get conventional financing for commercial properties

[Binod G.]

I am in contract to buy a commercial property but I having an hard time finding a lender who would finance because it is bit leased out yet. I am planning to close, renovate and lease it out. Looked into bridge loans but they are very expensive. Any tips?

[Stephanie P.]

@Binod G.

Not one area of lending is historically expensive right now. Not Fannie/Freddie, Not DSCR or asset based lending or bridge loans. Interest rates are at an all time low.

Take the bridge loan, renovate the property and then get into a long term financing vehicle.  If it's a multi family property and your credit is good, the floor rates on a 30 year fixed are at 3.5% and for the most part, they're closing in the 4's.  That's crazy low.

It's all math.  If the eventual rents will cash flow, then what's the projected amount of money that has to be spent to get there and what's the time frame where it's a profitable venture?  Once you figure that out, you can make a decision whether it makes sense, but interest rates should not be hindering you; maybe purchase price or renovation cost, but not interest rates.

Stephanie