You may have heard of the commercial housing bubble. This is the bad truth you don't want lenders and other insiders to know. If you are interested to get the information regarding commercial properties then you can hop over to this website.
Despite all the advertisements, not every commercial property is problematic. The key for you as an investor is to avoid certain pitfalls and learn from the mistakes of other investors.
Before the economic and credit boom that led to the recent downturn, conventional lenders' limited credit was 65 percent of the property value. This means that your $ 10 million commercial property is eligible for a maximum loan of $ 6.5 million. Current problems with commercial real estate investing began when hedge funds and private equity lenders offer much higher credit-to-value ratios, meaning they will lend your investment property up to 80 percent of the property's value.
Mistakes of commercial investors
Owners who withdraw money from their investments in this way embarked on the path leading to the problems we now see.
Fast forward from then to now and you will see that the entire business climate has changed. Most of the financial resources for commercial real estate have dried up. Property owners who need refinancing find that it is almost impossible to get refinanced for their commercial property investment unless the LTV ratio is 65% or less and the property performs perfectly.