How to Finance Income Producing Commercial Real Estate

September 27, 2024

Building wealth and securing long-term financial stability are goals for many investors. However, knowing which financing options offer the best chance for success can be difficult.

Thought to be one of the most effective, time-tested strategies in Texas is to invest in income producing commercial real estate that gains value over time.

For the individual partners that we serve at Texas Gulf Bank, commercial real estate investments can provide a wealth of opportunities. Discover how the right financing solutions from our bank may help you achieve your goals.

Investing in Commercial Real Estate? Discover Your Options

Unlike investment opportunities that typically carry more risk, commercial real estate properties have long been considered a generally safe investment option because they have the potential to be income-generating assets that build value over time.

Commercial real estate includes a wide variety of property types, each offering unique investment opportunities. Here are some common types of commercial property investments you might consider:

• Office Buildings: Ideal for businesses that need to centralize their office space or upgrade to a property with newer amenities. Commercial buildings such as office spaces can range from small single-tenant spaces to large skyscrapers.

• Retail Spaces: A commercial property can attract retail businesses looking for new locations in growing markets. These properties can range from shopping centers to strip malls or standalone stores.

• Restaurant Properties: Consider developing a commercial property that caters to multiple businesses in the food service industry, such as casual or upscale restaurants, bakeries, cafes, and coffee shops.

• Multi-Use Properties: Combining retail, office, and residential spaces, multi-use properties are versatile investments that can attract a diverse tenant base. It could conceivably provide steady cash flow with a mix of short-term and long-term tenants.

• Apartment Complexes: A new apartment complex in a high-demand area can be a stable investment, particularly in areas near good schools and located near key roadways. Rental properties may provide a stable stream of passive income that can help you build wealth over time.

• Industrial Properties: Investing in commercial warehouses, manufacturing plants, and distribution centers can be a smart decision since these are essential for businesses in logistics, manufacturing, and storage.

To maximize your rental income potential, commercial real estate investors should consider purchasing a plot of land big enough to create multiple commercial spaces available for rent. In addition, your business can pursue stable long-term tenants, such as grocery stores, local utility offices, government agencies or healthcare facilities.

No matter what type of commercial property you decide to pursue, Texas Gulf Bank has the expertise and effective lending solutions needed to help make your commercial property a successful investment.

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Financing Options for Income Producing Commercial Real Estate

Finding the ideal investment property to purchase is an important first step. Then, you will likely need a business loan to acquire the space from the property owner and begin your development plans. Texas Gulf Bank offers several financing solutions uniquely tailored to the needs of business owners and investors. 

Commercial Real Estate Loans 

Commercial real estate loans are ideal for purchasing existing commercial properties like office buildings, retail spaces, and industrial facilities. These loans provide flexible financing options, making it easier to manage cash flow while acquiring valuable real estate.

Texas Gulf Bank offers both owner-occupied and non-owner-occupied commercial real estate loans so your business has the best possible financing option for your specific investment and business needs.

Construction Loans 

Construction loans are ideal for individual partners who plan to build new commercial properties or renovate existing buildings. In this setup, your business can make interest-only payments during the short-term construction or draw period. Then, once the project is completed, the loan will need to be refinanced into a mini-permanent mortgage*, which Texas Gulf Bank can provide.

*NOTE: Some creditors may offer one-time-close construction loans that include a permanent mortgage, but Texas Gulf Bank’s one-time close construction loans only include a mini-permanent mortgage.

A construction loan from Texas Gulf Bank can fund the majority of your entire project – from breaking ground to finalizing construction – to ensure you have the financial support needed at every stage. 

SBA Loans 

Small Business Administration (SBA) loans are backed by the federal government by guaranteeing a percentage of the loan amount of business bank loans and are designed to help businesses secure capital. These loans can be used to purchase or renovate commercial real estate.

SBA loans may be an attractive option for individual partners looking to buy a new commercial space, as an SBA loan may allow you to keep more cash on hand for other operating expenses.

When you’re ready to invest in commercial real estate, Texas Gulf Bank can help you review whether an SBA loan is the right fit for your plans. Our dedicated SBA lender will partner with you to provide loan options that are designed to help achieve long-term financial growth and stability. 

Texas Gulf Bank is the Lending Partner You Need 

For over 110 years, our bank has supported regional growth. We are committed to helping individual partners reach their commercial real estate goals. With a deep understanding of the Southeast Texas Gulf Coast region and a broad range of financial products available, our bank is the best choice to meet your unique financial needs.

When you choose Texas Gulf Bank as your lending partner for commercial real estate needs, we strive to provide you with a seamless, streamlined loan process that puts you on the right path. We strive for a high level of service for all of our customers, including:

• Expert Guidance: Our bank’s experienced, local lenders will guide you through each step of the application process, helping you choose the right loan product and loan structure.

• Customized Solutions: Texas Gulf Bank understands that every real estate project is different. Our team works with you to tailor loan terms and conditions that align with your business goals and budgetary needs.

• Local Market Knowledge: As a local bank, we have extensive experience with the regional real estate market. As a result, you’ll receive in-depth insight and competitive loan options that reflect current market conditions.

If you are an individual partner who needs reliable, strategic funding solutions for investing in real estate properties, Texas Gulf Bank is ready to help.

Contact Our Lenders Today

Investing in income producing commercial real estate is a significant step toward financial growth and stability.

Contact the lenders at Texas Gulf Bank today to learn more about our range of effective loan options for commercial real estate investments. See how we can help support your financial future.

All loans subject to credit approval