No Money Down For Commercial Real Estate Investors by sammdada42


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									There are many lenders private lenders throughout the country that offer low or no money down financing
programs for real estate investors. Because they are private there are only one ore two lenders that fund
investors nationally. Even the national lenders do not lend in every state. As such the focus of this article
is to focus on the program requirements for those lenders who finance properties in the Chicago
metropolitan area.

No Money Down

This means no down payment to purchase investment property. Many investors are longing for the old
days that hard money and bridge lenders would lend based on the equity of the property only. Those
where the days of uncontrolled appreciation and values continued to rise beyond any logical means.
Those were the days that novice investors thought that there was no way to lose money investing in
property. The reality for many years there was no investment with a greater return than real estate.

The Bubble Burst

Then the out of control rising of property values hit a ceiling, the bubble burst and instead of appreciating
residential and commercial property began to lose value. As banks and conforming lenders lost money
during this "mortgage crisis" so did private lenders and hard money funds. The response from the banks
and conforming lenders were to tighten there lending requirements. Private and bridge lenders did the
same. The number one thing was to require buyers to have skin in the game. That is investors were
required to actually invest money in their projects.

Exit Strategy

More important than asking buyers to participate in their investment, private lenders who provide short
term funds to R.E.I.s (real estate investors) became more strict in ensuring their clients would have a solid
exit strategy. To ensure this they began to make sure the R.E.I.s would qualify for take out financing. As
conforming lenders reduced their loan to values, increased the credit score requirements and generally
tightened their underwriting requirements, hard money and bridge lenders had to do the same. The
R.E.I.s are tasked to have an exit strategy that is above reproach. To be a successful investor you must
have a fool proof plan to pay off your short term lender and move into permanent financing.

Chicago Commercial Real Estate Investors

Throughout the country many hard money lenders pulled out of the market amidst mounting losses due to
property values going down and R.E.I.s unable to sell or refinance the properties. As the market stabilizes
and private lenders understand the new realities of financing today they have come back into the market.
I have found legitimate bridge lenders that would lend up to 100% of the cost to purchase and rehab
commercial apartment buildings in the Chicago Area.

Purchase Rehab Private Financing Guidelines

Though the guidelines are different for every private funding source these guidelines are representative of
many lenders have polled in Chicago.

Credit Score: 650 to 680 or higher
Assets: 3 to 6 months of mortgage payments or more
LTV: from 50% ARV to 75% of ARV depending on the property
If you qualify for these guidelines you may be able to purchase commercial apartment buildings with little
or no money down.

Commercial Real Estate Investing is an opportunity whose time has come. Louis Jeffries has been a
mortgage banker for over 20 years helping real estate investors achieve their real estate investing goals.
Learn more about commercial real estate investing, down payment assistance for commercial properties,
conventional and creative financing options.

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