California Commercial Loans
Is the California commercial market still strong? YES! Many real estate investors have been worried that the sub-prime mortgage meltdown has affected the commercial real estate market.
It would be naive and silly to say that nothing has affected the commercial market; however, due to the fact that commercial real estate loans are based on the cash flow of the property or cash flow from the operating company, many banks and lenders are turning to commercial loans to strengthen their portfolios.
While it is true that many lenders now require higher credit scores and stronger liquidity from their borrowers, the strength of every deal still lies in the property's cash flow.
Because of California's desirable location, many people are willing to pay the higher prices for location.
The high demand creates a strong commercial market even in the midst of lending meltdowns.
Many people are asking, "how to I qualify for California commercial loans"? Or "Should I invest in commercial real estate in California"? While there is no simple answer to this question and many variables go in to deciding whether a certain transaction is worth the risk, commercial real estate has been a steady investment in California over the past 100 years.
Investors should be aware however; that their are certain property types that lenders do prefer to lend on, especially in tight markets like we are seeing right now.
this is mainly due to the fact that many lenders have limited funds and only want to invest in loans that are strong and that includes property types.
For example, a lender will be more willing to lend on a multi-purpose office building as opposed to a gas station.
The reason being, if they had to take back the property, it would be easier to lease out and sell a multi-use building which could lease to a number of different businesses rather than a gas station which would only lease to someone in that specific field.
California is still a great place to find strong commercial real estate; however investors do need to do a little more homework to find the great deals.
It would be naive and silly to say that nothing has affected the commercial market; however, due to the fact that commercial real estate loans are based on the cash flow of the property or cash flow from the operating company, many banks and lenders are turning to commercial loans to strengthen their portfolios.
While it is true that many lenders now require higher credit scores and stronger liquidity from their borrowers, the strength of every deal still lies in the property's cash flow.
Because of California's desirable location, many people are willing to pay the higher prices for location.
The high demand creates a strong commercial market even in the midst of lending meltdowns.
Many people are asking, "how to I qualify for California commercial loans"? Or "Should I invest in commercial real estate in California"? While there is no simple answer to this question and many variables go in to deciding whether a certain transaction is worth the risk, commercial real estate has been a steady investment in California over the past 100 years.
Investors should be aware however; that their are certain property types that lenders do prefer to lend on, especially in tight markets like we are seeing right now.
this is mainly due to the fact that many lenders have limited funds and only want to invest in loans that are strong and that includes property types.
For example, a lender will be more willing to lend on a multi-purpose office building as opposed to a gas station.
The reason being, if they had to take back the property, it would be easier to lease out and sell a multi-use building which could lease to a number of different businesses rather than a gas station which would only lease to someone in that specific field.
California is still a great place to find strong commercial real estate; however investors do need to do a little more homework to find the great deals.