The loan given to the property owners for construction of the building is known as commercial real estate loans.
Some property owners also mortgage loans after the construction of the building when the requirement of additional finance is observed to keep the building maintained and leased.
The property owners get such loan amount from the banks, insurance companies, private lenders, pension funds, etc. which help them in making deals and foreclosure.
Understand the mediums of real estate loans
When it comes to Commercial Real Estate loans, the loans are available from two different mediums like CRE loan lenders and CRE loan advisors.
Both the parties come with different concepts for lending money to the commercial real estate owners.
Getting in touch directly with the loan lender is a straightforward process, while working with an advisor in the middle would require to meet out some qualifications and requirements which can be slightly hectic.
What’s Commercial Real Estate Loan Lenders?
The commercial real estate bridge loan lenders are the individuals that provide loans to the property owners, during the time of purchases of any kind of commercial property.
The loan is given against some protection that includes some property or any such asset, etc.
When the property owner fails to pay the commercial real estate loans, the lien has the right to auction the property and recover his money.
The Commercial real estate bridge loan lenders are the individuals that can be termed as direct lending parties who calculate the proper loan amount and lend it directly to the developers.
They also have a complete inspection of the security assets, profit ratios, interest rates, etc. at the time of lending money.
Such lenders are direct dealers who are mostly termed to be from private firms.
While getting loans from the lenders, the main benefit is that you don’t need to give an extra share to the broker who would help you both.
Who are Commercial Real Estate Loan Advisors?
Also known as CRE loan officers, they are the individuals that come with specialization in mortgage, commercial loans, consumer, and much more.
They work with the mortgage companies, commercial banks, credit unions, etc. and play the role of a liaison that handles both the applicant and the institution.
The commercial real estate funding advisors make utmost efforts to make loan arrangements that would be beneficial for both the parties.
The CRE loan advisor assists the customers or the property developers with different plans on where to invest their money in the best loan plan.
They come with expertise in commercial real estate funding suggestions and help their customers for the best returns.
They also work on the ability of the applicant to repay the loan and work on the amount and other important aspects accordingly.
In short, the loan advisors serve as a middleman that help in gaining profits for both the lender and the applicant.
For such job, they are paid a particular amount in the form of fees. The advisors give you an opportunity to choose from a variety of lender plans for commercial loans which is one of the plus points of going through the loan advisors.
Difference between CRE loan lenders and CRE loan advisors
Undoubtedly both CRE loan lenders objective is to provide loans to commercial property owners in times of need.
Though they work with the same objective and motive, their working methods and approach is different.
Get to know the difference between the CRE loan lenders and CRE loan advisors and choose the best one that is suitable for your requirements.
The most common difference between CRE Loan lenders and CRE Loan Advisors
| CRE Loan Lenders | CRE Loan Advisors |
| Direct agents to complete the formalities and avail loan | Middlemen to connect lenders and borrowers |
| Borrower has complete information about the loan, lender and more | Borrower do not have complete information on lenders to approach for any legal formalities |
| Licensed professionals following fair practice without hidden complexities | Licensed professionals following strict regulations and limitations to loan amount |
| Owns license to various locations | Owns license to the one location/State |
Their operating methods
The commercial real estate funding advisors work as a middleman when it comes to loan and mortgages.
They come with a variety of lending sources and may also have good relations with nearly ten of the wholesale lenders that help in finding the correct lender for the clients.
This is a beneficial point when it comes to commercial real estate loans. The advisors don’t lend the money but have the capability to bring different clients for you to select the best lending party for the applicant.
They also handle the deal, communication, paperwork, and all other legal formalities that need to be done for getting the loan.
On the other hand, the commercial real estate bridge loan lenders come with a single stop for all the formalities for getting the loan amount. They carry out all the legal processes under the single roof along with closing functions. The lenders come have more authorities, rights, and controls from the beginning of the loan process to the end as compared to the advisors.
Regulations
This is one of the major differences among the commercial real estate bridge loan lenders and the advisors.
The lenders are much fair and chartered as compared to the advisors. Working with the lenders comes with proper regulations at the time of CRE loan borrowing as compared to that of the advisors.
The CRE loan advisors are licensed and need to work according to the rules and regulations decided by the state authority.
The lenders are authorized with different regulations and hence, can lend money without any boundaries. They have unlimited loan options along with products without any specific regulations.
Licensing
The licensing is also another difference that bifurcates the lenders from the advisors.
The advisors need to have a license of a particular state only, where they can originate loans and carry on their work.
However, when it comes to the commercial real estate bridge loan lenders, they need to be licensed with a particular state; yet can work with other states too by getting licensed with other states too.
If you are looking for a loan in a particular state, which is also the origin place, you can go for a CRE loan advisor, while if you are looking for an out of station loan, the CRE loan lender is the best to get in touch with.
Flexibility
The CRE loan advisors are by and large subject to the crude rules of their speculators, while the commercial real estate bridge loan lenders can make their own particular judgments.
That gives coordinate moneylenders somewhat more adaptability with regards to endorsing borrowers, says Rodriguez.
“We do have this adaptability to move around our own particular rules, contingent upon the client and how we feel about the general exchange.”
That is unquestionably an or more. Adaptability can be particularly advantageous in circumstances where a subjective choice or little special case is required.
Also, guide banks have the ability to offer breaks on contract rates or advance items that representatives might not approach, says Rodriguez.
A lot of that is because of the way that banks are hoping to build up a long-haul association with a client. Also, the commercial real estate bridge loan lenders come with the flexibility of changing and breaking the loan rates or the loan products, which is not possible for the loan advisors.
Hence, if the CRE property owners are looking for some flexibility on interest and other grounds, the lenders are the best option to go with.
What happens after closing the loan?
This is another important aspect to think about when it comes to CRE loans.
Whether you go to the advisor or the lender, have you ever thought what would happen to the loan when the process of after closing is complete?
The commercial real estate funding advisors, in this case, sell the loans to the investors in the market, and the loans are re-sold to other investors.
When dealing with the advisor, the borrower of the loan might know the individual who is servicing the loan they have borrowed but wouldn’t know the person who he needs to get in touch with for various legal terms and work.
When it comes to the commercial real estate bridge loan lenders, the lenders come with all the rights.
There is not re-selling of the property or the loan that is mortgaged.
This means you can simply walk to the lender and solve your queries any time as the lender would be the only person responsible for the loan amount and the principal amount.
Related Fees
The commercial real estate funding advisors charge the borrowers an origination amount as compared to the commercial real estate hard money lenders.
Hence, when you are approaching for a loan, you need to know the costs and fees that would be levied on you and compare them before selecting the correct medium for the CRE loan.
The lender of the loans also helps you with a loan estimate form within 3 days after you have submitted the application for a loan.
The form comes with complete details of the fees, terms, and other closing costs, which remains invisible to a great extent when it comes to the advisors.
Hence, both the commercial real estate bridge loan lenders and advisors have different concepts and regulations to work with, which have their own benefits. So, while looking for a CRE loan, make sure you think twice on both the categories and select the fairer one.
You can get help from Private Capital Investors as they are leading stated income commercial lenders.
