Whether you found the perfect location for your new mixed-use high rise or you’re sinking your teeth in possible lots for a new apartment complex, finding the funding may be the only thing holding you back.
The good news is that commercial real estate construction loans can help you finance your project as a business owner, investor, entrepreneur, or the like. In fact, the market for commercial construction is growing. In 2020, despite the effects of COVID, commercial construction loans issued by banks alone increased 9.4% from the previous year.
However, there’s a lot to consider before building commercial real estate. You should know how commercial construction loans work, what the typical commercial construction loan rates are, real estate development financing options, and more.
Luckily for you, we cover all of that – and then some – below.
Table of Contents:
Construction loans provide short-term financing where the construction cost of a building project may otherwise be too expensive to pay for in a lump sum. Many traditional and private lenders offer construction loans with interest rates between five and 18% on permitted or permit-ready lots. Typical construction loan terms can range anywhere from 12 – 18 months.
Revolution Realty Capital offers ground-up construction loans between $500,000 and $5 million for non-owner-occupied single-family properties, townhomes, multi-family, and mixed-use properties. Rates start at 8.49% and, depending on the appraisal process, can close within 10 – 20 days – more than two times quicker than many traditional lenders.