We Close More Commercial Bridge Loans than Anyone!
Commercial Bridge loans are just that, interim loans to “bridge” the gap between the current situation and the exit strategy. Bridge loans typically have some cash flow but for some reason, will not qualify for conventional lending right now. You see these mostly on investment properties.
We closed a $2 million plus bridge loan on an apartment complex purchase, a very common type of bridge loan. Because the complex was only 67% occupied and needed work, it would not qualify for conventional financing. Experienced investors with good credit are beginning to gobble up these properties at great prices and with their knowledge and some work; they can often fill the property up in less than a year. Bridge loans are typically 75-80% of value/sales price, 7.5%-12% in interest rate, 2-3 years fixed, interest only payments and points can range from 2-6. Is it cheap? No. But you cannot get a FNMA rate of 4.5%-6% right now. The key is, you are buying a property at $2 million, that once full, will be worth $4 Million – doubling your money. Then, a refinance in 90 day to 12 months to a 4.5% or 5.5% rate is easy. The result is $2 Million in profit! Yes, the rate you paid was higher than normal for 90 days to a year but that extra interest of $120K yielded them a $2 Million return. What a deal!
Does loan amount size matter in commercial bridge loans?
Yes. Many lenders will not finance if the loan amount falls below $10,000,000.00 and some minimum requirement is $3,000,000.00. Well good news! We have commercial hard money loan amount products that go down to $250,000.00 dollars.
What do underwriters want to know in order to approve the loan?
The underwriter wants to know how you are going to make the monthly payment and how you are going to pay off the loan also known as the “exit strategy”. I suggest you have two ways you can pay off your loan to make the loan appealing to the underwriter.
What are the Rates?
Rates typically range from 7.5% to 12%. The rate will depend on:
- Loan Amount
- Property type
- Term Length of the loan
- Your credit
- Loan to value
How long are the terms of the loan?
The note terms are when the loan will be due in either 3 months, 6 months, 12 months, 24 months or 36 months.
Commercial Capital LTD Difference
We close more commercial bridge loans than anyone! Call Commercial Capital LTD today at (512) 650-8630 or 512-354-5949. You may also click here to fill out the form to get started today.