Tactics and Case Studies for California Commercial Investment Properties

 

With so much diversity in land and culture, California is home to many different types of commercial real estate opportunities.

Where else could you have such a wide range of property types?  In San Francisco, you could invest in a mixed-use property located in the heart of the bustling city.  On the other hand, you could own a self-storage facility in a smaller suburb located in southern California.

Investors stay busy in California.  The state is often ranked as the number one commercial real estate market in the country.

But that doesn’t mean investors have it easy in California.

In fact, if you’re new to commercial real estate investing, it can be difficult to consider all the different locations and property types available in such a large state.

But that’s not the only concern for investors.  Getting the financing needed to make a purchase can be a real challenge – especially if you have had financial difficulties in the past or if the property you wish to purchase does not meet bank lending guidelines.

Hopefully, the case studies below will help.

The following stories show that, while challenges do exist, investors are able to create success stories for themselves in California.  You can use these case studies as a guide to help you secure the financing needed to make your investment dream a reality.

 

 

Success Story in Hemet, California

 
Property Type:  Retail   Purpose:  Cash-Out Refinance   Loan Amount:  $1,900,000   Location:  Hemet, California

Property Type: Retail

Purpose: Cash-Out Refinance

Loan Amount: $1,900,000

Location: Hemet, California

 

Investing in a retail strip center can be a great idea – with a collection of strong tenants in place, an investor has the opportunity to see a consistently strong return.

But not all tenants are created equally.  Some businesses are more risk-prone than others, and this can make it more difficult for an investor to obtain financing.

An investor in Hemet, California, found this to be the case.

Their strip center was made up of a mix of tenants that included an automotive business.  Seasoned investors know that automotive properties often have environmental issues that make them difficult to finance. 

But that wasn’t the only issue.  Other tenants in the strip center had month-to-month leases in place, which made it appear as though the investor could be dealing with a number of vacancies soon.

These factors made it difficult for the investor to accomplish their objective, which was a cash-out refinance loan request of $1,900,000.

Due to the property and tenant issues, the investor knew bank financing would be difficult to obtain.  So he took his request to the team at Commercial Direct.

This was a smart decision for a few key reasons.  First, Commercial Direct is simply more flexible than most traditional banks.  The factors that made the retail property a bad fit for traditional lenders just weren’t as big of an issue with an alternative solution like Commercial Direct.

The other reason had to do with documentation requirements.  The team at Commercial Direct was able to help the investor get approved for a loan without ever having to provide tax returns.  This can make a huge difference for investors who find it difficult to prove their income through this type of documentation.

All told, this was a case where additional flexibility helped an investor accomplish their financial objectives.

 

Success Story in Sacramento, California

Property Type:  Self-Storage   Purpose:  Cash-Out Refinance   Loan Amount:  $1,584,000   Location:  Sacramento, California

Property Type: Self-Storage

Purpose: Cash-Out Refinance

Loan Amount: $1,584,000

Location: Sacramento, California

 

One of the most common reasons why borrowers refinance their commercial property is to tap into the equity built into it over time.  They can then use this money to make property improvements or invest in a new opportunity.

An investor in Sacramento wanted to take cash out of their self-storage property, but they ran into the same issue that plagues many borrowers.  The cash-out amount they were seeking was too high for their current lender to accept.

Traditional lenders like banks often either won’t do cash-outs or severely restrict the amount borrowers are able to receive.

With that being the case, the borrower took their financing request to the team at Commercial Direct.  One of the benefits of Commercial Direct’s commercial loan solutions is the fact that we do not have bank-level restrictions on cash-out amount.

So the investor in Sacramento was able to secure a $1,584,000 loan and receive the full cash-out amount they initially sought.  Talk about a win-win!

Success Story in San Joe, California

Property Type:  Mixed-Use   Purpose:  Cash-Out Refinance   Loan Amount:  $710,000   Location:  Sacramento, California

Property Type: Mixed-Use

Purpose: Cash-Out Refinance

Loan Amount: $710,000

Location: Sacramento, California

 

It’s no secret that it takes longer to obtain commercial financing than a residential home loan.  But timing is still important, especially for borrowers looking to refinance before their original loan matures or those in need of cash to fund a new purchase.

An investor in San Jose wanted to refinance their mixed-use property and had 2 requests for lenders: they needed a quick closing and they wanted to access the equity they currently had in the property.

The problem was that traditional banks asked for a great deal of documentation as they were determining whether to approve or deny the loan request.

Many investors today are either unwilling or unable to provide the amount of documentation these lenders require.  Fortunately alternative solutions like Commercial Direct do exist.

We offer financing solutions for investors who do not wish to provide documentation like tax returns.  And we are able to work as fast as borrowers need so that they can more easily accomplish their financial goals.

In this case, Commercial Direct helped the investor in Sacramento secure a $710,000 loan and the cash-out they needed.

 
 
 

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