Tag Archives: commercial bridge loan

Commercial Bridge Loan: How to Evaluate the Pros and Cons

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You are more than
likely aware of your commercial short-term financing options and how they can
help you achieve your long-term goals at this point. Nevertheless, if you are
leaning towards a commercial bridge loan,
make sure you weigh all the pros and cons before making your final decision.
The commercial bridge loans are a lot of things. For instance,
these particular kind loans may be just what you need for your future endeavor,
they can be the capital you were hoping for and they can help you realize your
investment goals in record time. But, for all the good that comes with
commercial short-term financing, there are still a few minor disadvantages and
one major disadvantage to this particular kind of commercial financing.
In fact, the story always starts out the same. So often you will
see a bright, business savvy person with a great investment plan get a commercial bridge loan without weighing
the pros and the cons. Consequently, their great investment can easily blow up
in their face because they did not truly take the time to consider one of the
biggest disadvantages—larger or rather costly regular payments. Sure, this
business savvy individual more than likely was aware that short-term financing
is just that short-term and with all things short-term there tends to be a
price. But, like most people, this bright, savvy business person simply did not
realize exactly how short-term affects the repayment process.
Additionally, most commercial bridge loan lenders are simply not
flexible with it comes to delayed or delinquent payments. This means before you
know it you could be struggling to pay late payments, penalties, and even
larger loan fees. You may even think well making sure you have permanent
financing lined up will ensure that you won’t end up owning an absorbent amount
of money on regular basis. Well, of course, long-term financing that is readily
available will help solve this problem, but long-term financing that isn’t
quite yet available means you still incur interest (high interest) on your
commercial bridge loan in the meantime.

Beyond the
Pitfalls


commercial bridge loan
So at this point you are probably wondering—well if bridge loans
have the ability to turn into a financial nightmare, why are they still so
popular in the investment property industry? Well, as previously mentioned,
when handled right, bridge loans can ultimately help get the job done.
Moreover, most lenders allow their borrowers to choose from several repayment
options. Thus, if you take the time thoroughly think through your current and
future financial situation, your plans for your commercial property as well as
just how you plan to pay your loan back in full then a bridge loan isn’t a
nightmare waiting to happen.  

Dreams
come true when you think things through


Ultimately, as previously mentioned, short-term financing may be
just what you need to get your next business venture going. But, it is always
in your best interest to look at a commercial bridge loan or any other kind of short-term
financing from every possible angle to ensure that you are not putting yourself
in a worse position than you started out in.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    


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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.

Applying For A Commercial Bridge Loan

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So
you’ve decided that short-term financing is the best option for your new
construction or upcoming investment. But, you’ve never applied for a commercial bridge loan before—no
worries let’s go over the basics.
Applying for a commercial bridge loan is not necessarily any different than
applying for any other kind of commercial loan. In other words, you still need
the right documentation and a lender that understands your particular business
needs or market. Thus, if this is not your first commercial loan, which it more
than likely is not, you’re in luck. You do not have to lose sleep over
narrowing down your short-term financing options.
With that being said, it may be more
beneficial for you to focus on why a commercial bridge loan is right for you next project. For instance, say you already
have an investment property or two underneath your belt and you are looking to
make a few upgrades or improvements. If this scenario sounds familiar to you,
then great! This is exactly the time for a short-term financing.
Generally,  you can be approved for this
particular loan if your new construction will take some time but will not
exceed three or more years depending on your specific market( hint:
construction that takes longer than three years, in general, is not a little
upgrade).  In fact, non-residential
bridge loans can be for a small time period of say two weeks or you if you go
with a more traditional lender you may find bridge loans that range from 45 to
60 days.
Ultimately, when you start talking about
years’ worth of upgrades you may want to rethink your need for short-term
financing. However, it is important to note that you may be able to find a
lender that offers what is known as bridge-to-permanent programs. These
particular kinds of programs can make the transition from short-term financing
to long-term financing more seamless (for a price of course).
                                  
Is a
Bridge-to-Perm Loan a Win-win Solution?

Yes, in many ways a bridge-to-perm loan is
a win-win solution, especially if you are not necessarily interested in taking
the time to secure more financing or possibly work with another lender all
together. The fact is it is often a lot easier to stay with the lender or bank
you know. Thus, if you are currently working with a lender or bank that offers
such programs, it would definitely be in your best interest to check out a
bridge-to-perm loan programs or two.

Not to be confused with a Mini-Perm loan

As a side note, it is also important to
understand that a bridge loan, a bridge-to-perm loans and a mini-perm loan are
different from one another in what they ultimately offer. At this point, you
probably are clear on the first two kinds of loans and what they can do for
your commercial venture. Thus, the last thing to cover is what a mini-perm loan
offers. A mini-perm is still a first mortgage on an investment property for mainly
construction, but the terms of the loan differ i.e. typically this is a bank
loan  that covers a  two to three years  period and it can either be an interest only
loan or an amortized loan.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    


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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.

Commercial Real Estate Loan? Things To Consider BEFORE Prepaying

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There are different types of stipulations you have to
follow if you are thinking about applying for a commercial real estate loan. In this brief article you will learn
about how prepayment may affect the way your loan is handled.

No one likes having loans. Well, no one likes having
to pay off loans over a long period of time. For most people that invest in a commercial real estate loan, however,
are usually locked into a fixed rate of interest. Based on this agreement most
lenders will allow you to pay off to 20 percent of your commercial real estate loan each year. For the business owners that
do not follow that rule, there are some penalties that you may face.

It may seem like a weird way to calculate, believe it
or not, many business and homeowners do can do this without even realizing it.
For example, say you have a home that you are using to rent out to tenants.
After which you decide that you want to sell the property you could potentially
pay off your loan. Refinancing is another way that many people pay off their commercial real estate loan in full, as
well. You do, however, end up with another loan on top of that. Once this
happens you will have penalties that follow.


If
you do decide to prepay your commercial
real estate loan may run into more than one roadblock



When it comes to prepayment penalties there are two
different types that you may face. They are called soft and hard penalties.
When a lender allows a soft prepayment penalty option you are able to sell the
asset your mortgage is based on. However, if you do decide to refinance it then
you have to will receive prepayment penalty.

On the other hand, if your lender gives you a hard
prepayment penalty in your agreement it is a little harsher.  In this case, if you were to sell your
property or refinance it you would receive a prepayment penalty either way.
With this type of prepayment penalty, it makes it harder for an investor that
may want to back out of their business.



There
are things you can do to soften the prepaying blow that your commercial real estate loan throw you



Defeasance is something that may help you with the
prepayment penalties that come with your commercialreal estate loan. Defeasance is defined as an action that reduces and
eventually nullifies what you have to pay. Usually, the institution that you
are dealing with will have to review your assets and decide with you are able
to use as collateral to cover the penalty on your commercial real estate loan.

Once that collateral is sold the borrower receives
government securities so thereafter they can sell or refinance their property.
Usually, this can take a little over a month to complete, however, it is
possible to ask for a quicker sell. If you do decide to speed up the process,
however, you do have to pay a premium for expedition services.


Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    


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Face Book 

Active Rain 

Linked In

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.

How To Use Collateral When Applying For A Commercial Real Estate Loan

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When purchasing a new property for your business you most likely will have to take out a commercial real estate loan. This article will show you how collateral works and what you can use as collateral for your property.

There are a lot of things business owners have to take into consideration when applying for commercial real estate loan.  One major issue some small business owners may run into is not having the assets to cover the costs of the loan itself. This is where collateral comes into the picture. Collateral is defined as an asset or assets that are pledged to a lender in the event that you cannot pay your loan back. This is a good thing because it forces you to loan against your assets. The amount of money you receive is calculated on a loan to value formula. The higher the value of your assets to more you could potentially be loaned.



This, however, does not mean you can use just anything for your commercial real estate loan


There are many different assets that you already have at your disposal that you may not even know you have. Collateral is broken up into two different categories, real and paper. Real assets you can use for your commercial real estate loan include cars, watercraft and homes. Most banks, however, do not usually accept vacant plots of land as a form of collateral.

Many large corporations will often use other properties to finance the collateral when applying for a commercial real estate loan. You can also use the equipment that your business has, as well. For example, if you have a logging company and you want to take out a loan for an office to run your operation out of you can use your trucks as collateral. You do have to make sure that the equipment that you are going to use as collateral has a new or long working life.


What else can I use for collateral with for my commercial real estate loan?



For business owners that do not have or do not feel comfortable using their real property, you are able to use paper assets. These assets are things that are intangible. Things that fall into this category include stocks, chattel paper, investment funding and payment rights. When it comes to using your company’s stocks you have to be careful of the market. Say your company hits a few roadblocks and your stock drops. The lender could potentially go head and sell off the assets you have pledged.
You are even able you to use the revenue of your company, as well. This type of collateral is based on the projection of your business over a set period of time. Depending on the bank that is planning on loaning you the money you could have a weekly, monthly, quarterly or even annually revenue payment plans.

Usually, if you are applying for a hard money loan this is a great option for your business. Since the loan itself does not last that long, depending on your business’ income you could repay the loan quickly. Before you look into using some of your assets as collateral you definitely want to make sure you look at the all the ins and outs of the plan you choose. 

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    


You Tube
Face Book 

Active Rain 

Linked In

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.

The Real Deal On Commercial Bridge Loans

Uncategorized, , , ,
commercial bridge loan

When you are looking into obtaining a loan from a
lender you have many options at your disposal. Many people go the route of the
bank, however, you do have hard money loans and commercial bridge loans, also.


From banks to life insurance companies, there are many
different routes you can take to get a loan for your business. Most of the time
people starting out in the commercial real estate business think the only way
they can get a loan is through a bank. Banks are great places to go, however,
it might take a while before you are approved for the loan you want. The
process can take several weeks to complete and even then you are not guaranteed
a loan at the end of the process.

Along with time constraints, you may not be approved
for the loan if your credit report is not favorable in the eyes of the lender.
Needless to say, if you have a couple of red flags on your credit report you
might have to shop around for more than one bank to pitch your business plan.
Some banks even go as far as doing a character check on some applicants. You
may think this is not so bad, but you might have done some unbecoming things in
college which may come back to the surface in your professional career.

Never
fear hard money loans and commercial
loans are here


commercial bridge loan

So where can you go if you have these problems, then?
The easy answer you can go to a private lender that specializes in either hard
money loans or commercial bridge loans.
You can use these loans to get the property that you want fairly quickly. In
fact, a lot of investors starting out that do not have a ton of liquid assets
can use this route to begin their career. Generally, it is a little easier to
get either a hard money loan or commercial bridge loan.


What
makes commercial bridge loans and
hard money loans better?


Quite frankly they are both better when it comes to
your credit report. Most lenders do not care about your credit report. When it
comes to hard money loans most of the time the lender wants to make sure you
have some form of collateral that you can offer. This means to be qualified for
the loan 
itself, you have to possess something of equal or greater value that could potentially be auctioned off.

This
happens in the event you cannot pay your loan back or you do not refinance it.
Often people that are in the real estate flipping business go for a hard money
loan; since they need to get financing quickly on properties. A commercial bridge loan is essentially the
same type of process as a hard money loan, however, you usually apply for one
while you are in between another transaction.

Say you have a home that you are in the process of
fixing up and selling. However, another home becomes available on the market that
you think would be a good buy. Applying for a bridge loan would be a good idea
just to hold you over until the deal you have with your buyer is done. Hard
money loans and commercial bridge loans
great for these types of investments since they only last a few months to a
couple of years, as well.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    


You Tube
Face Book 

Active Rain 

Linked In

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.

The Real Deal With Commercial Bridge Loans

Commercial Real Estate, , , ,
commercial bridge loan

When you’re wanting into acquiring a loan from a
lender you could have many choices at your disposal. Many individuals go the route of the
financial institution, nevertheless, you do have hard money loans and commercial bridge loans, additionally.

 
From banks to life insurance coverage firms, there are numerous
totally different routes you’ll be able to take to get a loan for your small business. More often than not
folks beginning out within the commercial actual property enterprise suppose the one approach
they’ll get a loan is thru a financial institution. Banks are nice locations to go, nevertheless,
it’d take some time earlier than you’re authorised for the loan you need. The
course of can take a number of weeks to finish and even then you aren’t assured
a loan on the finish of the method.
 
Together with time constraints, you might not be authorised
for the loan in case your credit score report is just not favorable within the eyes of the lender.
Evidently, if in case you have a few crimson flags in your credit score report you
may need to buy round for multiple financial institution to pitch your marketing strategy.
Some banks even go so far as doing a personality test on some candidates. You
might imagine this isn’t so dangerous, however you may need carried out some unbecoming issues in
school which can come again to the floor in your skilled profession.
 

By no means concern hard money loans and commercial loans are right here

 

So the place are you able to go if in case you have these issues, then?
The simple reply you’ll be able to go to a private lender that focuses on both hard
money loans or commercial bridge loans.
You need to use these loans to get the property that you really want pretty rapidly. In
reality, a number of buyers beginning out that do not need a ton of liquid belongings
can use this route to start their profession. Usually, it’s a little simpler to
get both a hard money loan or commercial bridge loan.


What makes commercial bridge loans and hard money loans higher?

 
Fairly frankly they’re each higher in the case of
your credit score report. Most lenders don’t care about your credit score report. When it
involves hard money loans more often than not the lender needs to be sure you
have some type of collateral you could provide. This implies to be certified for
the loan 
itself, it’s important to possess one thing of equal or larger worth that may probably be auctioned off.
 
This
occurs within the occasion you can not pay your loan again or you don’t refinance it.
Typically folks which might be in the actual property flipping enterprise go for a hard money
loan; since they should get financing rapidly on properties. A commercial bridge loan is actually the
identical kind of course of as a hard money loan, nevertheless, you often apply for one
if you are in between one other transaction.
 

 

Say you could have a house that you’re within the strategy of
fixing up and promoting. Nevertheless, one other house turns into out there available on the market that
you suppose could be purchase. Making use of for a bridge loan could be a good suggestion
simply to carry you over till the deal you could have together with your purchaser is finished. Onerous
money loans and commercial bridge loans
nice for a lot of these investments since they solely final just a few months to a
couple of years, as nicely.

 

Dennis Dahlberg Dealer/RI/CEO/MLO

Stage four Funding LLC
Arizona Tel:  (623) 582-4444 
Arizona Tel:      (512) 516-1177 
Dennis@level4funding.com
www.setabay.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Arizona | 78701    

 
You Tube
Face Book Active Rain

Linked In

In regards to the creator: Dennis has been working in the actual property business in some capability for the final 40 years. He bought his first property when he was simply 18 years previous. He rapidly realized concerning the superb funding alternatives offered by trust deed investing and hard money loans. His need to assist others make money in actual property investing led him to concentrate on various funding for actual property buyers who could have hassle getting a standard financial institution loan. Dennis is enthusiastic about various funding sources and sharing his data with others to assist make their goals come true.
Dennis has been married to his fantastic spouse for 42 years. They’ve 2 lovely daughters 5 superb grandchildren. Dennis has been an Arizona resident for the previous 40 years.