The one key aspect of the whole commercial real estate business is basically a more or less permanent need for financing, especially with reference to deals that more often than not, typically require very large down payments as well. As a matter of fact, many if not most, very new investors almost always end up running into various problems, in a bid to save up such huge amounts of money, all on their own.
For example, a property dealer in downtown Canberra can potentially come across a great apartment unit that can net him around 20k AD per month, but he might not have the million required to close the deal. However, there is no need to feel even remotely dejected, due to a pronounced lack of funds since the same can actually be raised provided you know how: Let us take a look as to what to do to raise the much needed capital typically required for various commercial ventures.
Raising capital from small time private investors
Basically, there are actually two main reasons due to which one needs to learn how to go about raising the required amount of capital.
- The commercial real estate developer has basically run out of his own monetary resources
- Such financing is pretty much the best way to leverage one’s otherwise limited financial resources
Sometimes a building goes up when there are a group of people effectively pooling in their resources. You just simply need to tap into that pool and f possible, lead it towards a mutually beneficial financial outcome for all concerned.
Raising money using creative financing to raise funds for commercial real estate venture
There are various different methods that may be used to raise funds for commercial real estate financing. These include the following:
- The seller carry first mortgage
- The master lease agreement
- Seller carry second mortgage, and lastly
- Hard money loan
This is where Stamford Capital commercial property financing can really help you acquire the critical funds that you need, so as to ensure that your project has smooth sailing from the word go.
Raising funds for Commercial Real Estate through the usage of Self-Directed IRAs
This is a singularly rewarding method in which it is possible for a real estate investor to use his or her vey own self-directed IRA or for that matter, even someone else’s IRA to fund their very own down payment up front.
Raising funds for commercial property development through a crowd-funding initiative
Crowd-funding is widely reckoned to be a great a method of raising capital. It works through the combined efforts of various friends and family members as well as individual investors, per se. It basically allows an individual to tap into a pool of potential investors who in turn use their own networks to help the individual acquire the funds that he or she needs.
In the light of the above five methods, we can easily see that rising funds for a commercial real estate endeavour is not as difficult as it looks.