Real Estate Financing (11/5/12)

Real estate financing has no definite shape or method to it but ultimately depends on the property type and involved parties to custom tailor how a building will be be paid for. For commercial real estate, lenders are either debt or equity capital suppliers depending on what provides the best returns for investors. I worked last summer at a real estate capital company in which we actively managed two families commercial real estate investment portfolios looking for new deals and finding the best plans to secure the highest possible returns. One creative and unique financing method was on a building that offered an equity investment opportunity but didn't provide the desired return. My boss knew that the company offering the opportunity had other failing properties and needed debt funding for these that the equity funding would have been alocated for. He proposed to offer a separate debt loan to the man which would lower his cost of capital while achieving a return that my boss's customers demanded. Knowing what people really want or need can help seal the deal on financing to the benefit of both parties. As seen in the video, many financing outlets have become scarce from our real estate meltdown. The real estate industry is very cyclical so at times of difficult financing, you must be creative to find ways to make all of the potential projects come to life. Although it may be difficult to secures loans at certain times, there still is a large amount of capital to be provided for real estate through many sources, providing loan terms of 3 to 7 years of debt up to $10 million plus. https://www.capitalsource.com/commercial_lending/lending_products/commercial_real_estate_finance