Investing in commercial real estate is the natural next step if you already have some experience with investing in residential real estate. However, commercial real estate is often more expensive than residential real estate. For this reason, it can be harder to qualify for a loan to get the amount of money needed to invest. Luckily, there are some things that you can do to improve your chances.
Improve Your Credit Score
As with any other type of loan, you are much more likely to be approved for a commercial real estate loan if you have a high credit score. Raising your credit score can take a while, so if your credit score is currently low, then it is not likely that you will be able to qualify for a loan any time soon. You can work on improving your credit score by paying off your debts. If you do not have any debts, then you may want to consider taking out a credit card, even if you don’t necessarily need one. Paying off purchases on a credit card is another way to raise your credit score.
Save Money for a Down Payment
The more money you have set aside to pay on a down payment for any type of property, the more like you are to be approved for a loan. As a bonus, putting more money down up-front will reduce the amount you will end up paying in interest later. So, it’s a win-win for both you and the lending institution you are planning on making.
If you do not have enough money to make a large down payment, but you do make a lot of money from your job or from payments from other rentals, then this is something important you should mention to your lending institution. This can be seen as an assurance that you will be able to pay your mortgage, even if you don’t have the money for a large down payment right away.
Flash Your Resume
Do you have previous experience in investing in property, commercial, or residential? If so, this is something that can help you stand out from others who are looking to be approved for a loan. If possible, bring in any paperwork that can prove your success in the field. This will help to provide further assurance to your lending institution that you have what it takes to make a profit off of the building.
Keep these three things in mind the next time you try to take out a loan. Remember to prove your worth. This is the best way to get what you want.