Commercial Bridge Loan, Commercial Lenders, Hard Money Lenders
Dreaming of an Investment Property? Well, find out if a commercial
bridge loan is your dream come true or a nightmare.
can move quickly, commercial real estate or investment properties are no
different. Sometimes, it is your best interest to move quickly with a purchase.
For instance, say you are interested in a foreclosed property time is usually
of the essence i.e. you need to move quickly in order to purchase said property
before someone else does. This particular scenario is when most commercial
buyers consider applying for a commercial
bridge loans. Other instances
where many companies looking into bridge financing is when their current
mortgage is due and they have yet to find or rather secure a replacement
mortgage or if a company needs to cover shortfalls in regards to general
capital say for an upcoming balloon payment.
important to know what you need to qualify for one. Lender requirements are
often just the beginning.
Lending i.e. commercial
real estate loans. are nothing to sneeze at. In other words, you’d be
surprised how much of an impact commercial
bridge loans have on the overall financial future of companies.
Consequently, when it comes time to enter the vast world of non-residential
mortgages, it is extremely important to your eligibility. Of course, you may be
asking yourself, aren’t non-residential mortgages loans similar to most mortgage
loans? Well, obviously the answer to that question is no.
real estate lenders. Are you sure you found the right loan for your
your research yet, it may behoove you to know that there are several different
types of commercial
real estate lenders. However, our focus will be on joint venture loans,
participating mortgages and your standard real estate purchase loans. These
particular commercial loans tend to be the most common choice when it comes to
business ventures. Thus, with that being said, let’s go over what each of these
loans can do for you and your next business venture.
venture loan is what you want when all parties (generally two partners) are
willing to share equally in the losses and profits of the property. Moreover,
this particular commercial loan is extremely beneficial to those parties that
cannot or may not be able to qualify for financing separately. A real estate
purchase loan, on the other hand, requires one party or rather one borrower
with excellent to near perfect credit along with the saving to back it up.
Additionally, when it comes to collateral, in general, lenders tend to expect
more with these purchase loans.
participating mortgages, in essence, are when your joint partner is actually
your lender. In other words, the lender receives the standard monthly payment
plus interest, but because the lender is also a partner they ultimately share
in the commercial property’s proceeds or income. This third option is
definitely something to look into if you have potential tenants with financial
stability and long-term goals.
Who are Commercial Hard Money Lenders and What do They Offer
you may be a seasoned vet. Regardless of which category you fall under it never
hurt to consider all your lending options and be clear on what they all have to
hard money lenders are generally
non-banking institutions i.e. private individuals or small groups that solely
provide fast financing for such individuals as house flippers, developers and
so on. Typically, most people that venture into the world of commercial real
estate and investment properties are familiar with the term hard money. But,
more than likely do not know exactly what a hard money loan is. This may sound
strange, but the fact is unless you are in the business of flipping houses or a
developer, hard money is a hard concept to follow.
not alone when asking the question just who exactly needs hard money? Moreover,
how does hard money differ from standard financing? Well, the obvious answers are
listed above. But, the in-depth answers are that hard money is for individuals
who for a variety of reason cannot qualify or obtain conventional or rather
standard loans/ financing and hard money differs from standard financing
because there is simply less red tape.
sound like these particular individuals have bad credit or are just from a bank
standpoint a bad investment, but the truth is this isn’t always the case. Nine
times out of ten, the people that need hard money are those that need to move
quickly on a property and often times need to borrow the full purchase price.
Consequently, these people are often far from a “bad investment” as most commercial
hard money lender require their borrowers to back up hard money with
real assets i.e. the collateral and credit are often more than there. In
reality, it is often the banks that simply cannot move at the required speed
necessary to allow the borrower to make a profit
Private Money Lenders vs. Commercial Hard Money Lenders
hard money lenders aren’t banks or other traditional institutions that
are in the business of loans, but are they private money lenders? Moreover, if
hard money lenders are not private money lenders, then you may just be asking
yourself, well who are they?)
interchangeable terms when it comes to the world of commercial lending that it
is easy to forget that not all interchangeable terms always mean the same
thing. For instance, it is not uncommon to hear the phrase private money
lenders and naturally think non-bank lenders. Moreover, when people think of commercial
hard money lender, they are also inclined to think non-bank lenders.
Are you confused yet? Well, it is okay if you are because you are definitely
private money lenders and commercial
hard money lenders are traditionally not banks. But, that doesn’t mean
that both of these non-bank lenders are the same nor do they offer the same
loan options. So, now that that’s a little clearer, let’s go over just how
these two particular commercial money lenders are different.
learn very quickly that hard money loans meet a very specific need. For
example, let’s say you are a house flipper or a commercial developer and you
need quick, short-term financing without a lot of red tape. These two instances
are generally when you want a hard money loan. In fact, these instances really
make up the bulk of hard money loans. Moreover, it is because of this fact that
hard money lenders appeal to a certain niche market. Private money lenders, on
the other hand, are more relationship-based and offer loans for real estate
transactions—plain and simple. In other words, there really are not any
specific scenarios where you absolutely need to contact a private money lender
to provide financing rather private money lenders are basically just another
non-bank financing outlet.
Pitfalls to Avoid with a Commercial Bridge Loan
properties, a commercial
bridge loan can be just the type of funding you need to keep your
investment plan running smoothly and many loan scammers are aware of that fact.
So, in order to avoid being scammed let’s go over a few red flags.)
time applying for a commercial
bridge loans, you may be surprised to know that you are actually not
alone. Up until recently, many people simply did not use bridge loans due to
the fact credit was once upon a time much easier to get. But, unfortunately, we
no longer live in a world where that is the case i.e. it is much harder to
obtain financing and even harder to maintain good credit.
somewhat of a foreign concept until recently, many people simply do not
understand how they work, which means many do not know when they are actually
getting scammed. Clearly, this is one of the main reasons to do your homework
when it comes to applying for a commercial bridge loan. If you are like most
businesses, much of your financial future depends on not being a party to a
bridge loan, the most common pitfalls and scams are the bait-and-switch
loan scam, the upfront fee loan scam and of course the old-fashion identify
theft loan scam. Out of all three of these particular loan scams, the one you
time and time again is actually the upfront fee scam since actual lenders
generally charge an upfront fee. So, you may be asking yourself, if actual
lenders charge upfront fees how will you know if you are being scammed or not?
Well, the answer, of course, lies in the details—the actual details i.e. pay
attention to email addresses being spelled correctly and lender addresses.
Commercial Hard Money Lenders—Who are they for?
hard money lenders are here to help when traditional funding lenders
can’t. In many ways they do help, but generally, it’s the seasoned real estate
investors that benefit most.)
hard money lender are a great option when
looking for short-term financing and when you do not have the picture perfect
requirements (stellar business credit scores, excellent financial conditions
and so on) for traditional lending institutions such as banks or credit unions.
But, what nobody tells you is that commercial
hard money lenders are not for the timid or for the unseasoned real
estate investors that are new to the commercial investment game. Of course,
this fact doesn’t mean hard money itself is any more complicated than private
money or traditional funding (soft money); rather it just means that those who
have been in the business for a minute know the tricks that commercial lenders
like to play.
commercial lenders are still in the business of making the most on their
investment. Thus, with hard money, these particular lenders aren’t afraid to
charge a higher interest rate. For those individuals that know hard money is
for moving quickly on a lucrative investment, these higher rates are not really
an issue. In other words, they see a great investment, they find a reputable
commercial investor and in less than a few business days the deal is done. With unseasoned real estate investors, you
need time to get your feet wet as well as time to weigh all the pros and
cons—this is, of course, perfectly okay and generally just the nature of the
beast. But, nevertheless, if you need extra time to make your move that’s still
extra time you are essentially sitting on a lucrative investment, which in the
long run generally means more costs and higher fees.
your first or second time utilizing a commercial lender for a hard money loan,
you need to make sure that you have enough capital to pay back the loan and
that you are working with a reputable lender i.e. check their credentials.
These are generally things that a seasoned real estate investor can do
seamlessly. So, remember if you are new to the game, that’s okay, just make
sure you find the right lender, the best rate and move quickly on your
Why A Commercial Hard Money Lender May Be Right
traditional bank loan officer may not be? A Commercial
Lenders may just be the right solution for you. Find out why this is the
ready to move on with business, but in need of a timely loan? Let’s go as far
as to say that you’re ready to make your move and acquire that piece of
commercial real estate, and are hard-up for funding? The good news is that you
don’t have to be hard-up for hard money. A Commercial
Lender is a very viable, attainable option for you and here is why.
Commercial Lenders are able to provide
commercial hard money loans in a timely and efficient manner. They have the
depth of understanding that the time to act on your piece of potential real
estate is now, while others like yourself are competing with dueling bids. You
simply may not have time for the traditional bank loan application approval
process and funding that can sometimes take up to several weeks.
If you’re concerned about being denied a traditional bank loan or have
currently been denied one, Commercial Lenders
are likely more willing to work with you than other banking institutions. While
there are many reasons why you may have been denied a bank loan, a Commercial
Lender will often let your history of denial be just that, history.
They deal with you in the “here and now”–meaning, equity invested and will the
loan be repaid.
What Are Other Things To Consider When Contemplating Using A Commercial Lending?
understand that the commercial real estate opportunity of a lifetime could be
passing you by as you wait and wait for a potential bank loan approval and
related funding. In addition, you should know that Commercial
Lending aren’t what they used to be. They are on the up-and-up, helping
folks like you on a daily basis. Long gone are the days of risky loan practices
and extraordinary interest rates. Today’s Commercial
Lending wants to work with you and see that you succeed! Your success
is their success!
And Funding Process,
Research And Consider
estate property is a loan. Because Commercial
Lenders are willing to work with you, focusing on the value of the
property and not on your history and credentials, researching and considering
this type of lender may be just right for you. You will stand a much better
chance of reaching your goal, so get started now!
The Real Deal Residential Hard Money Lenders
Consequently, here is something you should definitely keep in mind when determining what kind of lender you should be working with. Above all else, it is important to note that residential hard money financing is appropriate in a variety of scenarios such as impaired credit, liens or judgments, time constraints, pending foreclosures and Foreign Nationals—just to name a few. Thus, if you are still interested in your residential hard money options, it helps to focus your lender search on niche lenders that can meet your needs (whatever they may be) and vice versus.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.comhttp://www.Level4Funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.