Because there are so many types of commercial properties, there are also lots of different types of commercial mortgage lenders as well.
The more unique any one property is, the more difficult its going to be to locate and secure a commercial mortgage, unless there is a obvious and active resale market in place.
Because of the larger dollar amounts associated with commercial buildings due to larger square footage, many lenders will have very specific requirements and areas of interest in commercial property financing.
Taking it one step further, all mortgage lenders have a portfolio of mortgages where different property types and different industries must be balanced off against one another so that the lender’s overall level of risk stays within their funding mandate.
What that all means, is that bank and institutional lenders, both on a national and regional basis, can come in and out of the commercial mortgage market on a regular basis, based on what they need to do next to bring their portfolio into balance or keep it in balance.
The result is that commercial properties can have a hard time finding the right type of commercial mortgage at a given point of time which can force them to go into the secondary market of private mortgage lending for a period of time.
While most private money lenders focus on residential mortgage financing, there are quite a few that are comfortable with mortgages for commercial property and have taken advantage of the opportunity the market has provided to them in the form of mortgage financing opportunities that are either not currently “bankable” or that can’t locate a suitable lender at a particular point in time.
Because the quality of some commercial deals are so high, situations where a commercial property owner gets forced into the private market due to timing can still see them secure commercial mortgage rates that are very similar to what the bank would charge anyway.
The big difference though is that the private lender will typically only provide a one or two year interest term, essentially providing a commercial bridge loan until such time that a longer term institutional commercial mortgage financing solution can be arranged.
And even though private lending is very common on commercial properties under $500,000, its not unusual to see private money finance commercial property up to $10,000,000 for everything from bare land acquisition, to construction, and mortgage consolidation.
If you’re looking for mortgage commercial on the web, then I suggest you give me a call to first determine if an institutional or private commercial mortgage option is most appropriate, and second to line up some potential options for your consideration.