There are distinct differences between financing a commercial real estate investment and purchasing residential real estate. Generally, commercial real estate requires a far more significant financial commitment than residential real estate, due to the size and nature of office buildings, retail developments and multi-family properties. This means that the conventional lending options can be difficult for the average investors to utilize, and increasing regulations have only made it more challenging for commercial investors to go the tried-and-true route.
Now, creative financing is becoming the norm, and bridge loans are the lending option of choice for many commercial real estate investors.
What is a Bridge Loan?
According to the National
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Commercial real estate is not the kind of investing that an individual tends to dabble in. Rather, the successful commercial real estate investor owns at least several different properties, and is more focused on earning investment returns than the daily management of those properties. For this reason, many commercial real estate investors look to property managers to help them effectively run and direct their investments.
Anyone who is looking into real estate investment is serious about making a profit, but too many people mistakenly assume that residential real estate is best way to begin their journey. Before you make your first offer on an investment property, be sure to understand the differences between residential and commercial real estate investment. This will help you make a choice that is right for your professional goals and personal aspirations.