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Joe Fairless from Best Ever Commercial Real Estate Explains How New Commercial Real Estate Investors Can Find Funding

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Joe Fairless from Best Ever Commercial Real Estate Explains How New Commercial Real Estate Investors Can Find Funding

October 27
19:30 2022

As an entrepreneur who has grown a successful business from scratch, Joe Fairless knows that it can be difficult for new investors to find funding to invest in commercial real estate, as banks only provide this type of funding to experienced real estate investors with a track record of successful investments. He explains alternative funding options one can consider in order to get off to a good start in the field and build a profitable investment portfolio.

Joe Fairless explains that bridge funding can be a good option, but only if an investor has a solid strategy for turning a quick profit on the purchase by either collecting rent from tenants or flipping the property for a profit. 

Bridge loans, also known as hard money loans, are short-term loans with a high-interest rate that can be difficult, if not impossible, to repay if the property sale or rental takes longer than originally anticipated. However, the upside to these loans is that the lender takes the collateral (i.e., the property being purchased) rather than the borrower’s credit score into account, making it possible for new investors who do not have a track record for successful sales to borrow money without undue hassle.

Additionally, Joe Fairless points out it is possible for borrowers to connect with private lenders who can offer to finance. Once again, financing is based on property worth rather than the borrower’s credit score; however, there are some important differences between private loans and bridge funding. With private loans, the individual making the loan can offer a certain amount of flexibility to suit a borrower’s needs. Moreover, private loans tend to have lower interest rates than hard ones. 

Alternatively, Fairless explains, an investor may want to partner with other investors to apply for a joint venture loan. Investors do not have to form a partnership in order to do so, as the property itself is all that needs to tie the parties together. With a joint venture loan, multiple parties bear the risks and responsibilities of paying back the loan and can share in the profits once the property has been sold or rented out. 

While a joint venture loan has a lower profit potential than other loan options, it can help investors break into the market and build a track record of successful sales that can make it possible for one to take out a conventional or SBA-backed loan in the future.

Joe Fairless strongly encourages anyone considering investing in real estate to do careful research. Multiple factors can affect the value and profit potential of any commercial property. A volatile real estate market could see commercial property values fall significantly if inflation and FED interest rate hikes continue apace. 

Even so, as Fairless rightly points out, real estate does rise in value long-term, making it an ideal investment option for anyone who wants to boost their income or build a successful business. With help from the right bridge or private lender, just about anyone can break into the commercial real estate market to turn profits on potentially high-value properties.

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Company Name: Joe Fairless
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