How to Get a Real Estate Construction Loan in Charlotte, NC

real estate construction loan

Construction loans are acquired for both residential and commercial real estate development; by individuals and professional developers for respective projects. However, the rules are different in commercial real estate with stakes much higher than building a home. It makes acquiring a real estate construction loan in Charlotte, NC quite a challenging and complex process, unless of course you get connected with a trusted commercial mortgage lender. 

They can help you in securing the finances, offer you flexible loan terms, and guide you through the overall process. With that in mind, let’s walk you through “how to get a construction loan” and everything related to the same.  

Commercial Construction Loan: What are they used for?

First, you need to understand that a construction loan is not the same as your run-of-the-mill commercial mortgages. As the name suggests, these loans are strictly for construction purposes, sort of short-term financing until the developer can get hands-on a permanent long-term loan. 

Developers and investors are known to acquire construction loans to either develop land or old properties to put it to commercial use. 

Types of Commercial Construction Loans

Construction loans for commercial real estate come in multiple forms, mentioned as follows:

  • Land development loans: Used for underdeveloped land to make it ready for construction. It can be used to install power and utility lines along with water and sewer.  
  • Interim construction loans: Short-term loans used to buy materials and equipment along with labor costs for commercial development projects.  
  • A&D loans: Used for development of run-down properties and hence the name acquisition and development loan. It covers the cost of purchasing the land or property, along with the improvements made to the same before construction. 
  • Mini perm loan: Almost similar to bridge loans, this is used for an outstanding commercial property loan or construction loan.

Other than these, there is also the takeout loan, which is mostly long-term used for financing commercial projects. The last one to mention would be crowdfunding, where multiple small investors finance a commercial real estate project through a crowdfunding platform.   

Applying for Commercial Construction Loans

So, now you know all about commercial construction loans and the types of loans you can utilize for your project. What remains is how to apply for one and where?

First, you need to reach out to a commercial mortgage lender, one who can arrange the funding as per terms and conditions that suit your requirements. The lender would assess your loan application based on a few factors:

  • Credit score or creditworthiness.
  • Projected income from the project. 
  • Detailed construction plan of the project.
  • Other details like the contractors, suppliers, etc.
  • Appraisal amount for the project. 

Private lenders and capital investment firms have multiple mortgage products that they can offer you, depending on the range of the project. 

Conclusion  

The key to getting a real estate construction loan in Charlotte, NC, is that you need to seek out a reliable and reputable lender or capital investment firm that believes in your endeavor and is ready to help you get the required funding. So, leverage all your avenues to find the source of your construction financing. 

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