Commercial Real Estate Financing Options
Commercial real estate investors have multiple financing options depending on their strategy, property type, and timeline. This guide covers the main loan types available.
Bridge Loans
Short-term financing for acquisitions, repositioning, or transitions.
Best for:
- Quick closings
- Value-add properties
- Transitional situations
Typical Terms:
- 12-36 month terms
- Interest-only payments
- Higher rates than permanent financing
DSCR Loans
Debt Service Coverage Ratio loans qualify based on property cash flow rather than personal income.
Best for:
- Investors with multiple properties
- Self-employed borrowers
- Portfolio building
Requirements:
- Minimum 1.0-1.25x DSCR
- 20-25% down payment
- Rental income documentation
Construction Loans
Finance ground-up development or major renovations.
Best for:
- New construction
- Major rehab projects
- Development
Structure:
- Draw-based funding
- Interest on disbursed amounts
- Typically converts to permanent
Permanent Financing
Long-term loans for stabilized, income-producing properties.
Options include:
- Bank loans
- CMBS loans
- Life insurance company loans
- Agency loans (Fannie/Freddie)
Choosing the Right Loan
Consider these factors:
- Timeline - How quickly do you need to close?
- Property condition - Stabilized or transitional?
- Exit strategy - Hold long-term or refinance/sell?
- Cash flow - Current or projected NOI?
Work with Joseph Capital Network
Our team helps investors find the right financing for every deal. We have relationships with numerous lenders and can structure loans to meet your specific needs.
