Ways to finance commercial real estate investments in Canada
Looking to add real estate investments to your portfolio but unsure how to balance your financing? Here are four ways to help you leverage your finances to include real estate investments as one of them.
Bank Loans & Mortgage Lenders
Local banks are the most popular destinations to look for a loan. Many provide appealing terms to borrowers who have good credit risks and substantial savings.
If personal banks can't service all your needs, there are many mortgage lenders that specialize in this area. They often offer expanded underwriting options for a wider variety of property types and transaction scenarios.
Crowdfunding's popularity has been increasing over the past couple years. This source has become a staple in commercial property finance, by expanding on simple peer-to-peer direct lending over the internet to donation based funding for art and nonprofit projects.
New platforms offer both debt and equity crowdfunding solutions. This can be an advantageous option for those looking to launch new developments from the ground up, with needs of extra visibility and marketing, as well as funding.
The main caveat with this option is that successful crowdfunding campaigns can require extensive resources in promoting the campaign itself.
Joining in with a partnership structure can prove to be advantageous. However, it's important to do your research and ensure your personal investing priorities are in line with the partnership's.
The Hybrid Approach
Maybe the standard approach isn't up your alley. There are always opportunities to combine these options. This could involve partnering up on the down payment or improvement funds and financing the balance through more conventional means, or using third party funds to assist with additional value.
Whichever approach you decide to take, it's important to know none of these above options are the best ways or the right way. It's all about selecting the best option of each individual investor and for the current opportunity.
How will you finance your next property investment?