Commercial Real Estate Financing

Business-Purpose Real Estate Financing

Business real estate financing may help eligible businesses and investors purchase, refinance, renovate or finance qualifying commercial or investment property. Clear Water focuses on business-purpose transactions rather than consumer primary-residence mortgages.

Potential Uses

• Owner-occupied commercial property
• Office, retail, warehouse and industrial property
• Multifamily and mixed-use investment property
• Investment-property acquisitions
• Refinancing qualifying real estate
• Renovation and improvement projects
• Fix-and-flip investment properties

Types of Financing

Potential structures may include commercial property purchase financing, investment-property financing, refinancing, renovation financing, bridge financing and fix-and-flip financing. Availability varies by lender and transaction.

Fix-and-Flip Funding

Real estate investors purchasing properties to renovate and resell may need financing designed around a shorter investment timeline. Depending on the provider and program, fix-and-flip financing may help fund acquisition and eligible renovation costs.

What Fix-and-Flip Lenders May Evaluate

Factors may include purchase price, current value, projected after-repair value (ARV), renovation budget, scope of work, investor experience, borrower financial profile, available equity, project timeline and exit strategy.

What Is ARV?

After-repair value is an estimate of what a property may be worth after planned renovations are completed. It is not a guaranteed future sale price, and lenders may use their own valuation requirements.

Typical Fix-and-Flip Process

1. Identify the investment property.
2. Develop the renovation scope, budget and timeline.
3. Explore potential financing.
4. The provider underwrites the borrower, property and project.
5. Renovation funds may be distributed according to lender draw procedures.
6. The investor executes an exit strategy, typically sale or potential refinance; neither is guaranteed.

What Real Estate Lenders May Consider

Property value and type, location, LTV, borrower equity, property income, debt-service coverage, business cash flow, credit, experience, liquidity, existing debt and intended use may be considered.

Important Things to Consider

Review rate structure, loan term, amortization, balloon payments, equity requirements, points and fees, closing and appraisal costs, guarantees, prepayment provisions, recourse terms and property requirements. Fix-and-flip borrowers should also review LTC/LTV/ARV limits, draw procedures, inspection fees, maturity and extension fees.

Frequently Asked Questions

Can renovation costs be included in fix-and-flip financing?

Some programs may finance a portion of eligible renovation costs, subject to provider requirements and draw procedures.

Do I need previous flipping experience?

Requirements vary. Some lenders consider newer investors while others adjust terms or requirements based on experience.

Can I use fix-and-flip financing for my primary residence?

Clear Water markets fix-and-flip options for business-purpose investment transactions, not consumer primary-residence financing.

Will a commercial property require an appraisal?

Many transactions require an appraisal or other valuation, although requirements vary.

Important: Clear Water Funding Source is not a bank or direct lender. We connect businesses with independent third-party lenders and funding providers. Financing is subject to provider approval, eligibility requirements, rates, fees and applicable terms. Submission of a funding request does not guarantee approval or an offer of financing.