People interested in commercial real estate debt investment in California might be considering working with an online marketplace lender. These platforms offer increasingly attractive opportunities, including the possibility of high returns, and have opened up opportunities to a new wave of potential investors. However, there are a number of questions investors should ask as well.
First, they should look at how the lender uses technology. There should be a variety of investment opportunities available to view online. Some platforms also assist investors with online trackers or managers throughout the process.
Another consideration is whether the company is experienced in commercial real estate investment. There is no substitute for many older processes, and the risks may be high for investors who work with companies that rely only on algorithms. For example, it is critical for the company to have underwriters who are able to review risk factors and make good assessments. Investors should look for the human element and a solid base of knowledge alongside the technological expertise.
Finally, investors should make sure the platform offers the type of investment they are looking for. These might be more diversified investments or could be more focused on single loan opportunities.
Whether they are using the newer technology of online marketplaces or older methods of investing in commercial real estate, investors, no matter their experience, may find it beneficial to work with an attorney. Purchasing and owning commercial real estate may be accompanied by a variety of complexities such as title disputes and enforcement of liens. Depending on the investor's plans for the property, other issues may also arise around development, construction, zoning laws or lease agreements.