The term ‘mixed-use loans’ can be confusing for many people even in the real estate industry since it isn’t quite specific about what they are or what they consist in to be more clear.
At least, it can be if you aren’t too aware of all the types of investments and properties you can go for when being part of the industry. To understand what a mixed-use loan is you need to understand that all properties have a purpose.
Residential ones are only for people to live in them or use passive investments thanks to the tenants they have in some of the units—if it is a multi-unit property instead of a single one. Meanwhile, commercial properties focus on being the home of a business and the premises of a company that was looking to invest in one and stop worrying about rental expenses.
Now, when you have a mixed-use property the basic concept is that the real estate has two or more uses, which are usually aimed at commercial and residential purposes. For example, you can take a large company building with several floors where the first 2 are for offices, the third for commercial businesses such as bakeries, cafeterias, or one with a retail storefront. And the rest is only for residential use.
Although what predominates the most is the residential units and purpose of the building, it is still for mixed-use since it is for more than one use. The same can happen with the opposite where the property is more commercial than residential. Other situations involve constructions, more retails, and different uses than the regular ones. With that clear, it is easy to determine that mixed-use loans consist of money to acquire this type of property.
Since they are definitely larger than regular single-unit properties and even some multi-unit or family ones, you need more capital to purchase them. And when you go for more expensive or bigger properties, it is only natural for the type of credit to change along with the amount of money you can obtain from it. With this loan for mixed-use properties, you usually need to be more careful since they involve much higher interest rates and conditions.
Our team at Commercial Real Estate Loan Pros of West Palm Beach is able to offer you excellent deals for you to invest in one and aim bigger in your real estate career, or if you just want to have a well-established passive income. Although the conditions will change based on the property you want to acquire, your financial status, and how responsible you are, we are flexible and allow most real estate investors to apply for this type of loan. Therefore, rely on us for it but first, determine if you actually need it or if mixed-use properties are what you want to aim for.
Uses of mixed-use loans in the real estate industry
Since ‘mixed’ doesn’t specify the purposes of the property, we can include any that has two or more of them. As a result, you can decide to apply for this credit to acquire any mixed-use property you want to invest in as long as you show proof of being able to repay it and that the property is a good investment. Now, most real estate investors not only use this option as a way to acquire brand-new properties.
Instead, they aim for different ways to invest in them that aren’t necessarily focused on renovating the entire building and resale it. If you have any of these goals in mind, you will find more than one use for this loan:
- Acquire a mixed-use property.
- Funds to renovate an already existing and owned mixed-use property to stabilize it and reposition it in the market.
- Remodel the property according to your needs and goals.
- Expand it with new buildings and areas.
- Need cash to work around the missing parts of the property.
Determining which use you are going to give it is the easiest part since it usually aligns with the main goals that led you to go for the investment in the first place.
Types of mixed-use loans for your real estate investment
Here’s a common mistake: thinking that as long as you are going for a mixed-use property, there’s no need to investigate further about the loan you need. Among mixed-use loans, you will find different types that have different terms and conditions.
Some are based on how fast you need the funds while others offer you better terms when it comes to interest rates and time for repayment. The one you need will be based on what we discussed before: the use you will give it.
Now, finding a lender that can provide you with the required credit is a difficult task but fortunately, the team at Commercial Real Estate Loan Pros of West Palm Beach have common but also rare loan options in this category. One of the most popular ones is the mixed-use hard money loan, which is quite common for commercial and residential properties with those uses alone.
Since they rely on the value of the property more than the capacity or ability of the borrower to pay for the credit, many real estate investors go for it to have mixed-use acquisitions. But they are of higher risk since the collateral for not paying on time will always be the property you acquired.
The purposes of the property also open or close more types, like construction take-out loans, cash-out refinance, and many others. It is a very extensive category since there are over 10 different types and we truly don’t want to overwhelm you with them since you will know which one you need once you have collected some information:
- The size of the property.
- The purposes for it—and the specific number.
- The value and real price of the real estate.
- Will you use it for purchasing a property or renovating it?
- How much can you afford to pay in interest rates?
With these details, our team will be able to suggest to you the best mixed-use loan for your situation and establish conditions for your application based on what you need only and adding a few general requirements only.
That being said, don’t be afraid of going for any of them. These credits are particularly easy-going compared to others for real estate investors, and with us as your lenders, there’s nothing to worry about.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: