SMALL BUSINESS FINANCING

Real Estate Financing

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Fund Your Next Investment Property with Real Estate Financing from Upwise

As an investor, there are a few different ways to go about financing real estate investments. Each one will have its own set of pros and cons, and your financing approach will depend on the property and the situation. For investors, it’s important to remember that not all financing options are created equal. What works for someone else may not necessarily work for you, but the trick is understanding which real estate financing option will compliment your business strategy. Let us guide you and compare the best real estate financing options.

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What is Real Estate Financing?

An asset-based loan is secured by assets instead of emphasizing cash flow, which is typically real estate or whatever assets a business has on its balance sheet. The lender will use collateral that can be quickly and easily liquidated. Assets can also be accounts receivables, equipment, land, crop, purchase orders, and inventory. Asset-backed loans secured by collateral offered by Upwise are most often structured as term loans and revolving lines of credit.

Real Estate Financing Details

Maximum loan amount

$150K - $200M

loan term

1 - 30 Years Ammortization

interest rates

6% - 12%

speed

As Fast As 2 Weeks

Real Estate Financing Pros vs Cons

PROS

CONS

How Does a Real Estate Loan Work?

Most borrowers turn to asset-based lending because they’ve had bad luck getting approved by traditional cash flow-based lenders or they want a cheaper cost of capital and confidence in their ability to pay back the loan. In asset-based lending, tangible collateral serves as the most important aspect of the approval process. Borrowers will use an asset for more favorable terms typically resulting in a higher loan approval and lower interest rate.

The loan amount is determined by the market value of your assets. Typically, most lenders will lend 75 to 85% of the value of their accounts receivables, and around 50% of the cost of their inventory or equipment. Also 70% to 90% on the market value of the property and typically 50% of the value of raw land.

So, if you have assets that you would like to leverage as collateral for more favorable terms, then this may be the best choice for you.

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Real Estate Finance Requirements

Loan to value (LTV)

Received 80% LTV

Credit Score

Over 620+

Existing Lien

None

Collateral

Valued over $150K

* Note: These real estate financing requirements are based on previous Upwise customers and is just an average.

What Do Real Estate Loans Cost?

You should know how much the cost of capital will cost you no matter what type of financing you’re applying for.

Let’s take a look at a cost example.

Example of a Real Estate / Asset-Backed Loan

Let’s say you have a commercial property that you operate your business out of, that is worth approximately $1.1 Million.

In most cases, the lender will require you to get an appraisal done to determine the value of your property.

Let’s say the property’s appraised cost was determined to be $1 Million. In this scenario, Upwise will be able to lend 80% LTV based on the appraised value of the property. Meaning the loan size will be $800k based on the appraised cost of the asset.

The term length will determine the monthly payment and amortization schedule. Payments can be interest only, principal and interest rate, deferred, and an interest reserve may be required.

Consider other fees associated with asset-based loans as well. These fees include but may not be limited to appraisal fees, site survey fees, legal fees, escrow fees, origination fees, packaging fees, prepayment fee, and others.

Don’t overlook fees on your loan offer—be sure to factor in any and all small fees you might have to pay in order to understand the true cost of your asset-based loan.

In order to understand your loan completely, make sure to ask Upwise for an amortization schedule. All fees associated with the proposal will be transparently laid out for each borrower in a term sheet. For more information, please call (646) 837-5522 to speak with an Upwise Real Estate Financing Specialist.

How to get a Loan for Investment Property

We make it easy, simply apply online and we’ll be in touch to go over your options.

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Documents You'll Need to Apply

Completed Application
Driver’s License
Voided Business Check
Business Bank Statements (Last 6 Months)
Property Information
Property Deed
Balance sheet
Profit & Loss Statements
Business Tax Returns
Personal Tax Returns

*See above for real estate loan requirements.

Types of Real Estate Investment Financing

Loan Types

Property Types

Recent Investment Loans for Real Estate

Single-Family Residential
South Hampton, NY

Experienced borrower looking to fix and flip the subject property in South Hampton, NY. UpWise Capital was able to provide a 12 month loan at a 78% LTV. The investor is planning on spending $160K on renovations. The plan that this developer for this subject property was to renovate the property and add a pool in the backyard. Total Loan Amount: $2,745,800

Commercial Development
Dallas, TX

Repeat borrowers and experienced investors were under contract to acquire two buildings for $22 Million with $12 Million in construction costs. Upwise was able to provide a 36 month loan at 70% of the After-Repair Value with a 6 month interest reserve and interest only payments. Once the project is complete the investment group is anticipating a 23% return-on-investment from a sale. Total loan amount: $23.8 Million

Cash Out Refinance
Denver, CO

Experienced borrower and builder with great credit and experience in the cannabis industry was looking for a 12-month loan against his businesses land valued at $10 Million owned outright. Upwise was able to provide a loan at 65% LTV. Total loan amount: $6.4 Million to build a warehouse, production facility, and greenhouse.

Real Estate Financing

can be used for

Construction.

Cash Out Refi.

Properties.

Purchases.

One of the biggest misconceptions of real estate investing is that you need to have lot of money to get started, which simply isn’t true. The secret that many professionals don’t understand, is the fact that there are a number of different real estate financing options available to fund every investment. Because the method in which a specific deal is funded can greatly impact its outcome, understanding the financing aspect is imperative.