When it comes to commercial real estate and land lending, it should go without saying that having your paperwork in order is necessary.

But what paperwork is required in land lending, and why is that paperwork so important?

Three of the most important documents you’ll need to have if you’re looking to find a real estate investment opportunity and are in need of a commercial real estate loan from a private lender to complete the deal are the: Appraisal, Survey, and Title. All of these documents are required in land lending.

Whether you’re financing your project with funding from a private or traditional financer such as a bank, it’s necessary to have the required paperwork.

Why Documentation Matters in Land Lending

The world of commercial real estate is fast-paced and if you don’t have the funding you need, when it’s needed, you could lose out on significant investment opportunities. Working with a private lender vs. a traditional lender can make a substantial difference when it comes to both the experience of your direct lender and how prioritized your project is when it comes to how long it takes to process the necessary paperwork and get the funding you need.

Private lenders for commercial real estate such as RoseRock Capital Fund are experienced in commercial real estate throughout East Texas and the Dallas area. They can help guide you through the loan process and make sure you know your private lending options and what’s necessary to make the loan process happen, such as the appraisal, survey, and title.

Appraisal

In order to determine how much a property is worth, you must first have an appraisal by a professional, licensed appraiser. You cannot close on a private loan until you know the official value of the real estate. An appraisal is done by a licensed appraiser who makes a call on what the property is worth based on various factors, including what type of real estate it is. This valuation is based off multiple factors and your private lender for commercial real estate will determine the loan terms, interest rates, etc. based off this and other information.

Many factors impact the current value of a property. Property values fluctuate due to numerous aspects but the appraisal will help give a determination based off of details such as the property’s condition and ability to be used, the viability of the location, what the property’s potential is for generating income, and the current market value.

An appraisal of a commercial property is different than that of a residential property, as an appraiser is looking at not just the property, but the different things that impact a property’s financial viability such as rental income potential, location, the property size, and other comparable commercial spaces, etc.

Survey

A survey is necessary to a commercial real estate transaction. It has the basic function of providing a legal description of the land. A survey contains many critical components to a private money lender for real estate when they’re generating your loan. A few examples are: the property’s relationship to attached properties; zoning details; utilities; parking; whether it’s in a flood or other hazard area, etc.

While an existing survey might be on file, it’s a good idea to have an updated survey done to ensure your lender has all the updated and necessary information.

Title

A title report is required by your direct private lender for a commercial real estate land acquisition to show ownership and that, when the agreement is reached, the seller and owner match on the commercial real estate purchase agreement.

As the title carries so much important information, it’s crucial you and your private money lender read it over carefully for any issues or discrepancies that might hold up the finalization of the real estate deal. There’s nothing worse than getting close to signing on a property agreement and discovering that something is missing from the title paperwork. Do your due diligence and make sure all the necessary information is there and save yourself time in the long run.

Preparing for Commerical Real Estate Financing

If you want to find viable real estate financing solutions, it’s important to work with a trusted, experienced, direct private lender in Texas direct private lender in Texas like RoseRock Private Lending to finance your land purchases.

In order to complete a successful commercial real estate project, it’s necessary to have funding and a loan from a private lender is the ideal option to get the financial support you need, when you need it.

Surveys, appraisals, and the title are required in land lending for transparency and to ensure all legal avenues are covered, which benefits all parties involved.

If you’re looking for funding make sure you have all your paperwork ready for your direct private lender so you have the financing you need, when you need it.