Naples Florida Real Estate Information Series

Getting a real estate investing loan is quite different than getting a residential property loan. This is especially the case with commercial property loans. How can you apply for and qualify for an investing property loan? Read on to find out.

There are two types of investing loans. There are Non-Owner Occupied (NOO) loans which apply to real estate purchases of 4 units or less. With a NOO loan, the loan process is pretty similar to that of a residential loan. The most important factors are your credit score, Debt to Income ratio, etc.

The second type of loan is the commercial real estate investing loan. This type of loan applies to any loan for buildings with more than 4 units. The process for getting approved for these loans is completely different.

First off, your personal credit as an investor has very little bearing on a commercial property loan. Even someone with poor credit can qualify for a commercial property loan if the rest of the numbers look right. Often time’s lenders won't even pull your credit report.

When considering a commercial property loan, lenders rely much more heavily on the "Three C's of Credit." These are:

Character - What is your investing history? How reliable are you to repay the loan?

Capacity - Rather than looking at your personal income, the primary factor will be the income of the commercial property. How does the income from the property look, can it pay for the loan and then some?

Collateral - Finally, if you should default on the loan, how difficult will it be for the lender to get their money back? What is your property worth on the open market or at auction? How easy or difficult is it to liquidate the property?

If you can prepare a good case for your loan with the Three C's in mind, you're very likely to get your commercial loan approved.

You now know about the two types of real estate investing loans, the difference between the two and how to qualify for each type of loan.

There is a lot of free information available to you about buying, selling or investing in Naples Florida real estate. For complete information about the Naples Florida real estate market including current homes for sale, property values and more please visit the most complete website online dedicated to everything Naples Florida real estate at TaylorDonovan.com. Please feel free to contact me with any of your real estate or mortgage related questions and I will be more than glad to answer your questions. You can contact me via the form below.

Naples Real Estate Expert,

Benjamin Sovacool

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Article's Author

Benjamin Sovacool
Taylor Donovan Realty, Inc.
Naples, FL

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