Tag Archives: commercial hard money lenders

Secrets of Commercial Hard Money Loans

October 9, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

As one of the quickest and most popular sources for lending, commercial hard money loans are often a mystery to borrowers. Understanding exactly how these loans work will not only help borrowers to apply for them, but also how to handle the loan once it has been granted.

Due to the fact that traditional commercial lending has become more restrictive, there has been a rise in hard money loans for commercial development and purchasing. However, many borrowers jump at the chance of these loans without truly understanding how the operate. Here are some secrets of commercial hard money loans that will help you to be prepared.

Secret #1: The interest rates are going to be higher. One of the catches of having ease of access and speed of these loans is that you are going to end up paying more for it in the long run. Sometimes, this might be a significant amount.

Secret #2: Commercial hard money loans are typically high risk. Overall, these types of loans have a default rate that is above average. Because the requirements for receiving the loan are much lower, it is easier for borrowers to get in over their head with terms and amounts that they cannot pay back. Taking such a risk is not necessarily bad, as long as you know what you are getting into, but many borrowers do not enter into the contract properly prepared and end up losing their property because of it.

Secret #3: Commercial hard money loans are not bridge loans. Anyone who tells you that they are the same might not understand the differences between the two. Bridge loans are often granted for commercial properties that are not yet finished or do not quite yet qualify for a traditional loan. Hard money loans, however, are still asset-based, as with traditional lenders.

Secret #4: Hard money lenders are typically the first on the list of lien positions. Due to the nature of the loan, with it being against the value that the property would bring in a quick sale, hard money lenders are often the first creditor on the list to get paid back. If anything is left over after the hard money lender gets their cut, then the assets will trickle down as such. This is a critical fact as hard money loans are usually coupled with other, smaller loans, to cover various aspects of the overall lending amount.

How do I know if a commercial hard money loan will work for my property?

If you are not able to qualify for a traditional commercial loan, or if you need the funding very quickly, then you might not have a choice other than to pursue this type of loan. Please note that hard money loans are not bad. They simply operate differently than a traditional loan and many borrowers are caught off guard by the difference. This ends up costing them dearly in either cash or their property. Commercial hard money loans can be a great solution to commercial property issues, but borrowers need to be cautious.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How To Successfully Prepare For Commercial Real Estate Financing

October 9, 2017Uncategorizedcommercial hard money lenders, commercial hard money loans, commercial real estate financingbigdaddydennis

Finding the right loan is not just about shopping around or crossing your fingers that everything will work out. If you are to successfully obtain commercial real estate financing, you must prepare your paperwork in a professional, organized manner to show potential lenders that you not only take this loan seriously, but also that you respect them.

One major mistake that so many potential borrowers make is not professionally preparing their paperwork for the loan application process. Waiting until the last minute or throwing the documents together in an unorganized manner is a surefire way to undermine your chances of obtaining commercial real estate financing.

So how do you properly prepare you documents for examination? The first thing to do is to approach this with an attitude of absolute professionalism. Approach it as if you were making a huge sales to pitch to a business partner or potential client. Because that is basically exactly what you are doing. If all goes well, your lender will be wrapped up in your business for millions of dollars. That is most definitely deserving of a professional approach.

As you put together your paperwork for your commercial real estate financing, keep in mind that you are trying to convince lenders to invest in you and your property. So think like they would think and answer the questions that you would want to know ahead of time. Give them every reason to jump at the chance to loan you the money for your commercial property. And prepare your paperwork accordingly so that they have no choice but to jump at the opportunity that you are putting before them. It should visually convey that you take pride in your work and that you will treat this loan with equal professionalism.

What exactly should you include in your documents? For starters, include any piece of information about the commercial property that you can think of. This should include photos and some sort of executive summary about breaking down how the loan will be applied. Also include any income statements that you can expect from the property. You should also include information about you, the borrower. Personal finances, other owned properties and taxes should definitely be included. It also might be a good idea to include some sort of resume or equivalent document so that the lender can get an understand of who they will be going into business with.

What happens after with commercial real estate financing after I have talked to a lender over the phone and submitted my paperwork?

Other than sit and wait, there is not a whole lot that you can do to affect their decision, at this point. Once the lender has decided that they would like to work with you and provide commercial real estate financing, make sure that they provide you with an offer in writing. Receiving an offer over the phone is meaningless. It should come in the form of a letter of interest. Once you have that in hand, you can begin to move forward.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Mortgages: How Can I Select The Best Loan?

October 9, 2017Uncategorizedcommercial hard money lenders, commercial mortgagesbigdaddydennis

Understanding the differences between the various options for commercial mortgages is critical in determining which loan is going to serve your needs the best. However, it is not quite as simple as just picking a loan from a list.

Finding the best loan for your commercial property is similar to juggling. All of the pieces need to be handled carefully, work in unison and fall into place at exactly the right moment. Selecting the best loan for you from the vast number of commercial mortgages begins with selecting the right lender.

But how do you make sure that you find the right lender and have them offer the best loan for you? The secret to this is to make them come to you. If lenders are truly interested in financing your loan, they will bring the best terms and rates to your doorstep, instead of you having to beg and plead for any sort of amicable terms.

The first step in doing this is to do a lot of work researching what is happening with commercial mortgages and commercial real estate market near the property. This will do two things to help you become enticing to lenders. First, it will equip you with the knowledge necessary to know exactly how other loans are being handled so that you can have a frame of reference when it comes to the terms that you are being offered. But it will also enable you to play competitive lenders off of each other. You are the customer, after all, and can use this knowledge to make sure that you are getting the rate and terms that will best suit you.

The second step is to start making phone calls about various commercial mortgages. In doing this, you must be completely prepared and know exactly what you are looking for in your loan. If you come off as unorganized or unsure, potential lenders will not take you seriously. So make sure that you know about your potential property and your plans for it. After gathering information about their rates and terms, thank them for their time. Remember, to a loan officer, time is money. Most of them are paid off of commission and do not want to waste time. They do, however, want to close a loan as quickly as they can, so they can move on to the next and collect their commission. Use this knowledge to your advantage.

By knowing the market, you will be able to use various offers to get loan officers to give you the best deal without much negotiation. At the end of the day, they want your business. They want your loan.

How can I better prepare myself for talking about commercial mortgages with a loan officer?

To begin with, you must know the basics of the property you are pursuing. What kind of property is it? How much will the loan be for? Are you refinancing or buying? What would be the expected Net Income of the property? It would also be a good idea to familiarize yourself with the lingo and vocabulary of commercial mortgages so that you understand the answers that are given.

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How the Consumer Financial Protection Bureau Impacts Commercial Lenders

October 9, 2017Uncategorizedcommercial hard money lenders, commercial hard money loans, commercial lenders, commercial lendingbigdaddydennis

Over the past couple of years, the power of the Consumer Financial Protection Bureau (CFPB) has continued to grow. While it remains to be seen what impact the current administration will have on the CFPB, it would be wise for commercial lenders to pay attention to way the lending industry is being changed.

With the Dodd-Frank Act, the commercial lending industry has been scrambling to ensure that institutions fall within the guidelines of the law. While this is not a bad thing for consumers, it does make the industry much more regimented. This, ultimately, has the potential of damaging growth over the long run. Because of Dodd-Frank, commercial lenders will be at the mercy of the CFPB not in both current and future activities. But what exactly does this mean for both lenders and borrowers?

One of the major changes that will affect both lenders and borrowers with these regulations is in data collection. This might not seem like a burden, especially on the borrowers, but the data collection infrastructure that is going to be built in the industry surrounding this need has the potential of costing borrowers on the back end. Commercial lenders are now required to gather demographic information that will identify borrowers as women, minorities, veterans, and other ethnicities. This information will be compiled about the principal business owner.

However, the stipulation is that this information cannot be shared with underwriters or anyone else who might be able to halt the lending process because of discriminatory demographic information. That is, unless they share a non-discrimination clause with a potential lender. The necessary steps that will need to be taken by commercial lenders to gather this information, but then not share it remain to be seen, but this will certainly impact the process in terms of cost and time that it will take to process the application.

The interesting thing about this regulation is that the CFPB has yet to divulge exactly how they plan to implement this regulation. This leaves the industry in limbo. Lenders cannot comply with or adapt to regulations that have yet to be implemented and so it is virtually impossible how this will impact lenders and borrowers in a specific way. The strange reality of pending regulations is that they actually might be changed before they are ever implemented.

What are the future of the regulations that will affect commercial lenders?

While it is very hard to tell exactly what will come from the government, there does seem to be a trend toward tighter regulations on the commercial lending market. Part of this is motivation to protect consumers after the last real estate collapse and part is a general trend toward a regulated lending market across the landscape, as many predatory loans have poisoned the waters. Commercial lenders will have to deal with an ever-changing landscape of pending and enforced regulations. And you can be sure that it will ultimately end up affecting borrowers as well.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Hard money lenders vs Crowd funders: What are the differences?

October 9, 2017Uncategorizedcommercial hard money lendersbigdaddydennis

Hard money lenders and crowdfunding websites are both faster and more convenient than traditional banks loans. But what are the differences?

The main difference comes down to how these two types of lenders raise money. Hard money providers fund their loans up front, while crowd funding sites collect money from individual investors.This has an impact on the speed at which borrowers can receive funding.

These two lending options became popular as a result of the 2008 financial crisis. New regulations and underwriting guidelines made it increasingly difficult for even high quality borrowers to get mortgages from banks. Hard money lenders, previously considered a last ditch option, began to appeal to many real-estate investors. This is because hard money loans are asset based, leading to easier and faster underwriting and approval process. Hard money loans can be very expensive however, which increased the appeal of crowd funding sites.

Crowdfunding came onto the scene in 2013, potential borrowers use crowdfunding platforms to solicit funds from accredited investors over the internet. These investors meet a certain income criteria and have a net worth of at least a million dollars. Loans from crowd funding websites can be secured or unsecured with personal collateral. Crowdfunding advocates claim the process offers the same speed and efficiency as hard money lending at a considerably lower cost. Proponents claim that a loan secured on a crowd funding site can be 300-600 basis points less expensive than a hard money loan. The terms of each loan secured on a crowd funding website can vary depending on the borrower, making it hard to generalize about the cost of these loans. The supposed speed of these websites is also questionable. The time before a loan is fully funded depends on the willingness of individual investors. This can create a significant lag between when a loan is approved a when a borrower actually receives the money.

Hard money lenders differ from crowdfunding sites in that their loans are fully funded by private groups or individuals. Hard money lenders consider the specific property being financed, the total interest they can charge for each loan and the advance rate on the loan itself. The advance rate is often expressed as a loan to value ratio and it is simply a percentage of the underlying properties total value. This underlying property value usually determines the amount a hard money lender is wiling to lend. Generally hard money is a more expensive option than crowdfunding, with interest rates ranging from 7 to 18. This is in addition to origination fees which can range from 2 to 7 percent of the total loan amount.

Hard money lenders and crowd funding sites both offer greater convenience over traditional banks.

The main difference between these two financing sources is the way in which they raise money, however both of them offer a simplified and easier process when compared to traditional banks. Hard money lenders use a simplified asset based underwriting process, allowing them to approve loans faster. Crowdfunding sites use the internet to connect borrowers with potential investors. Although crowdfunding sites can offer fast approval of loans it may take a considerable time before a loan is fully funded.

The loans offered by hard money lenders are fully funded.

Generally hard money loans are more expensive than loans secured on crowd funding websites. But hard money loans once approved, are fully funded, and borrowers wont need to wait for individual investors. Even with the expense, hard money lenders remain a viable option if you need money quickly.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Regional Commercial Lenders revise expectations as the demand for business loans declines

October 9, 2017Uncategorizedcommercial hard money lenders, commercial lenders, commercial lendingbigdaddydennis

Regional commercial lenders are complaining about a decline in the demand for new loans by business owners. Many blame global instability and political uncertainty.

2017 has particularly strong year for most businesses, economic activity is up and stock indexes are higher than ever. But this growth has not translated into increased lending by regional banks.

Some speculate global uncertainty may be driving down the demand for new loans. “Some of the international issues that have risen have also put uncertainty in our customers’ minds,” said Comerica CEO Ralph Babb, adding that some business owners have “ held back on what I would call investing for the immediate future.” Demand for new loans is certainly declining this year. Commercial lending by regional banks has been expanding at a steady 6 percent in recent years. However the pace of lending by regional banks in particular has stalled since the beginning of the year and analysts claim it is unlikely to accelerate.

If businesses are getting financing in many cases they aren’t going to regional banks. Many business owners are apparently turning to capital markets and to non-bank lenders. Evercore ISI analyst John Pancari says that “some of that demand ( for commercial loans ) is finding its way out of the banks and into the bond markets.” Evercore ISI notes that corporate bond issuance has only been growing by single digits in recent years, while commercial lending has been growing by 10 percent. Evercore claims that the trend is likely to reverse this year. Corporate bond issuance is expected to grow by 7.5 percent,while commercial lending by regional banks will only grow by a tepid 4 percentage points.

Regulatory pressure may be causing the slow down. There is consensus that regulators have been compelling regional banks to reduce exposure to commercial real-estate and some banks are scaling back their lending efforts. Fifth and Third of Cincinnati withdrew from 4.5 billion in “risky” loans last year. The bank plans to scale by its commercial lending activity by an additional 600 million dollars by the end of this year.

Some commercial lenders are blaming instability in Washington.

Both banks and business owners have lost the positive outlook they had at the beginning of the year as a result of instability in Washington. “As an industry, we began the year with high hopes for an improving rate environment along with regulatory and tax reform…it remains to be seen if regulatory relief, tax reform or a dramatically improved economy is going to materialize,” said Bill Demchack CEO of PNC Financial Services Group. Kelly King CEO of BB&T in Winston-Salem, NC claims that initial investments made by businesses at the beginning of the year are tapering off in expectation of more stability in Washington. It seems that until congress provides more certainty, business owners will continue to defer investment and the demand for commercial loans will continue to flounder.

As demand shrinks commercial lenders will have to compete for borrowers.

Political uncertainty rather than stability in the financial markets seems to be the cause for the decline in lending this year.” A lot of it comes down to borrower confidence and a lot of it’s tied to what’s going on in Washington,” said Evercores John Pancari. Even in 2017’s strong economic environment, the unstable political environment is causing businesses to put off new investment, which is lowering the demand for new loans. Pincer hints that “ as the size of the pie is seemingly shrinking, these banks are going to get more competitive.”

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Lender Alpha Flow gets start up funding from Steve Cohen.

October 9, 2017Uncategorizedcommercial hard money lenders, commercial lender, commercial lendersbigdaddydennis

The company, a crowd funding investment platform recently received 4.1 million in start up funds from well-known investor Steve Cohen.

The 4.1 million dollars was raised by the venture capital branch of Steve Cohen’s Point 72 asset management group. Cohen’s reputation precedes him as the head SAC capital, a firm which paid the highest ever fine for insider trading to the SEC. Alphas Flows founder Ray Strum is not concerned about Cohen’s past, claiming he found Cohen and his team to be of “high integrity.” Strum also helped found Realty Shares, another crowd funding web site, but left to form Alpha Flow in 2015.

The Alpha Flow platform focuses on investment in real-estate loans listed on crowd funding websites. Alpha Flow buys these bridge loans from crowd funding sites and hard money lenders and lists them on its platform where individual investors can buy stake in each loan. Alpha Flow’s flagship product is Alpha Flow Optimized Portfolios. The product aggregates and analyzes different loans and helps investors diversify the loans they want to invest in. The process is automatic and the loans the platform invests in are spread across 29 states, with an average loan to value ratio of 72 percent and target returns of 8 to 10 percent. Strum claims that the default rate on these loans is half the industry standard.

Strum got the idea for Alpha Flow during his time at Realty Shares where he noticed investors “enjoyed picking equity deals one by one but when it came to debt they were happy to hand it off to the platform.” The Alpha Flow platform intends to do just that, by automating investment in real-estate loans listed on crowdfunding web sites.

Cohen’s investment in Alpha Flow will strengthen the group as a commercial lender.

Strum claims Cohen’s investment will not only add strength to the groups balance sheet, but also help them leverage Cohen’s relationships on Wall Street in order to attract institutional investors to the platform. However AlphaFlow is primarily interested in making improvements to its data science team in order to improve their platforms analytical capabilities. Strum claims the investment will help Alpha Flow to achieve its goals of “ providing investors and financial advisors with the resources they need to diversify their portfolios with real estate through cutting-edge technology and data analytics.”

As Alpha Flow and other automated investment platforms improve , it will become increasingly easy for any to become a commercial lender.

The ability of the Alpha Flow platform to automatically analyze hundreds of various loans on crowd funding websites will add to the viability of crowd funding as a source of financing. Crowdfunding sites will able to fund loans at a faster rate without the need to rely solely on small investors. Josh Fritton, CEO of Patch of Land, a real estate crowdfunding website, claims that Alpha Flow and similar platforms will “ help us scale (our lending efforts) significantly.” The question lingers about whether automation will ever be able to replace informed decision making by investment advisors.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Lenders Lima One and Realty Shares expect a win-win from recent merger

October 9, 2017Uncategorizedcommercial hard money lenders, commercial lender, commercial lendersbigdaddydennis

Realty Shares a commercial lender recently sold its residential lending business to Lima One Capital.

Lima One Capital issued a press release on September 7th to announce its acquisition of Realty Shares mortgage origination business. What does the sale indicate about the future of both companies?

Both companies are known for innovative approaches to mortgage origination. Lima One specifically focuses on large, small scale and first time real estate investors who want to finance residential properties. Lima One is known for its Fix-N-Flip loan product, a thirteen month bridge loan specifically for home rehabilitation projects. The company also offers Rental 30, a traditional 30 year mortgage for the purchase of rental properties. Realty Shares is a crowd funding platform, that links investors and borrowers and distributes funds in the form of hard money bridge loans. Realty Shares claims to have originated 750 million dollars in commercial and residential mortgages since it was founded in 2013.

Both companies have a good attitude about the merger and claim it will help them retool their lending efforts. Lima One began a partnership earlier this year with Realty Shares. Lima One was impressed with the quality of borrowers Realty Shares was able to source. “RealtyShares has built a strong business in the residential sector of real estate investor financing by originating high quality loans,” said Lima One CEO John Warren. Lima Ones will get access to Realty Shares pool of high quality borrowers as a result of the deal. Realty Shares in the meantime will be able to give greater focus to its commercial lending business. The deal will enable Realty Shares to continue “to be a diversified real estate investment platform offering a wide range of options to our investors while building best-in-class technology solutions for sourcing and underwriting commercial deals,” claims Realty Shares CEO Nav Athwal.

This July, Realty Shares merged with Acquire Real Estate, another crowd funding platform These two moves show Realty Shares is taking steps to exclusively focus on commercial lending in the future.

By selling its residential lending business and purchasing Acquire Real Estate, Realty Shares is signaling it intends to redefine itself as a commercial lender.

Acquire Real Estate was previously at the forefront of crowdfunding commercial real estate investments. The company was the first to offer a real estate exchange, investor profiles, an investment calculator and tools for self-directed IRA investment on its website. Prior to the buy out Acquire had a specific focus on commercial real estate. “ We targeted commercial equity day one… recognizing that there was just no efficient way for institutions or investors to participate in those types of deals without innovative solutions,” said Acquire CEO Josh Klimkiewicz.

Both moves will help Realty Shares become a strong commercial lender.

The July merger with Acquire Real Estate and the sale of its residential lending business will give Realty Shares the resources and the room to become a major commercial mortgage provider. It remains to be seen whether these specific steps will make Realty Shares a viable competitor against other online commercial lending platforms.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Hard Money Lenders: A comparison of Lending Home, Realty Shares and Patch of Land.

October 9, 2017Uncategorizedcommercial hard money lenders, commercial hard money loansbigdaddydennis

Lending Home, Realty Shares and Patch of Land act as commercial hard money lenders, giving short time financing to real-estate investors. The following article gives details about of each them to help you decide which option is right for you.

These three companies have good reputations and have an established online presence, making them convenient and easy to access. Although Lending Home, Realty Shares and Patch Land call themselves crowd funders, the loans they issue are in essence asset based hard money loans.

Lending Home specifically focuses on residential real-estate and is a good bet for investors seeking financing for a fix-n-flip home rehabilitation project. Lending Home offers the largest loan amount, in terms of loan to value ratio (LTV). For properties in good condition, Lending Home will issue bridge loans up 90 percent of the properties fair market value. For projects involving renovation, borrowers can receive loans up to 75 percent of the properties expected value after the repairs are made ( after repair value or, ARV). Lending Home also offers the best loan terms out of all three lenders. The company offers loans with interest rates starting at just 7 percent,but the average interest rate is somewhere around 9 to 12 percent. Lending Home’s origination fees range from 1.5-2.5 percent of the total loan amount. However seeing as how the company doesn’t finance commercial real-estate, it clearly is not an option for commercial real-estate investors.

Realty Shares offers the largest maximum loan amount and is a better bet for commercial real-estate investors. It offers loans with an 80 percent LTV. However Realty Shares offers loans based on the total cost of construction for new developments and projects ( loan to construction cost or LTC). Realty Shares offers loans with up to a 90 percent LTC. Realty Shares parcels out its loans in the form of “loan-stacks,” with each loan carrying a different interest rate, but the average interest rate on these loans is generally around 8 to 13 percent. The minimum loan amount at Realty Shares is 500,000 dollars, the largest among the three companies considered. This makes Realty Shares a better option for financing commercial projects which are often more expensive. Because Realty Shares loan minimum is so high, it also has the highest borrower standards of all three lenders.

For borrowers who need money quickly, Patch of Land is the best option. Patch of Land pre-funds the loans it offers, like a traditional hard money lender which speeds up the lending process considerably. In contrast, Lending Home and Realty Shares both rely on crowd funding to raise money for each individual loan. Patch of Land however offers the lowest LTV or ARV of the group, offering loans at 80 percent LTV or 70 percent ARV. Patch of Land also potentially charges the highest amount in interest on its loans. Rates can range up to 20 percent, making Patch of Land potentially the most expensive option. Pre-funding also means Patch of Land requires more documentation from borrowers up front before the approval process can even begin.

Lending Home, Realty Shares and Patch of Land are good commercial hard money lenders depending on your needs as a borrower.

Lending Home exclusively focuses on residential real-estate and is a good financing option for a single family home rehabilitation project. Realty Shares offers the most money to borrowers, making a it a good option for commercial real-estate investors. Patch of Land may have the least attractive loan terms

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial hard money loans: Benefits and Pitfalls

October 9, 2017Uncategorizedcommercial hard money lender, commercial hard money lenders, commercial hard money loan, commercial hard money loansbigdaddydennis

Commercial hard money loans have easier qualifications and a faster approval process when compared to traditional bank loans.

Hard money loans differ from traditional loans in a number way and these differences make this type of lending ideal for seasoned real estate investors who need take advantage of an immediate opportunity.

Hard money loans are essentially short term bridge loans used to take advantage of immediate investment opportunities that can translate into a quick profit. Hard money loans can be quickly approved often within a matter of days. These loans are given by private groups or individuals, each with its own criteria about who can qualify. Typically though hard money lenders are concerned with the value of the property that is being financed rather than a borrowers credit score. This makes hard money loans somewhat easier to qualify for than traditional loans. These lenders look at the fundamentals of the property being borrowed against, the amount of cash a borrower has on hand for a downpayment and sometimes the borrowers real-estate investment experience. This is in stark contrast to traditional banks that will reject borrowers out of hand simply because of a poor credit score. Hard money lenders also offer short term loans that a traditional bank would never consider. This makes this type of lending ideal for investors who need to finance a short-term project with a quick turn around. Because these lenders are private groups and individuals there is also more room to negotiate the terms of the loan. Borrowers could potentially tailor the repayment terms, negotiate the interest rate or have specific fees eliminated depending on their situation.

But Hard money loans can be pricey costing borrowers ten percent more than a conventional loan. Hard money lenders assume greater risk, because usually they forgo credit checks on borrowers and therefore have to charge a higher interest rate. Typical rates on hard money loans range from 9 to 14 percent. This is in addition to loan origination fees, a percentage of the total loan amount, which can be up to 4 percent. Hard money lenders also expect a steep down payment, often of 25 to 30 percent.

Commercial hard money loans are best used as short term financing.

The life span of a hard money loan typically ranges from 2 to 4 years. This short term, protects the hard money lender from the risk that a borrower could refinance at a lower interest rate before the loan comes due. This short repayment period means hard money loans are best used for projects can turn a quick profit.

Commercial hard money loans may be a good option for experienced real-estate investors who need to take advantage of an immediate opportunity which can quickly translate into a profit.

It may best to be to have considerable real-estate investment experience before pursuing a hard money loan. These loans are short term and borrowers need to know that their project can quickly achieve a profit within a limited time frame. It is important for borrowers to fully comprehend the terms of any hard money loan and understand the repayment schedule. Still hard money loans are faster and easier to qualify for when compared to traditional bank financing and are a safe bet for seasoned real-estate investors who need to take advantage of an immediate opportunity.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

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Tag Archives: commercial hard money lenders

Secrets of Commercial Hard Money Loans

As one of the quickest and most popular sources for lending, commercial hard money loans are often a mystery to borrowers. Understanding exactly how these loans work will not only help borrowers to apply for them, but also how to handle the loan once it has been granted.

How do I know if a commercial hard money loan will work for my property?

How To Successfully Prepare For Commercial Real Estate Financing

What happens after with commercial real estate financing after I have talked to a lender over the phone and submitted my paperwork?

Commercial Mortgages: How Can I Select The Best Loan?

Understanding the differences between the various options for commercial mortgages is critical in determining which loan is going to serve your needs the best. However, it is not quite as simple as just picking a loan from a list.

How can I better prepare myself for talking about commercial mortgages with a loan officer?

How the Consumer Financial Protection Bureau Impacts Commercial Lenders

What are the future of the regulations that will affect commercial lenders?

Hard money lenders vs Crowd funders: What are the differences?

Hard money lenders and crowdfunding websites are both faster and more convenient than traditional banks loans. But what are the differences?

Hard money lenders and crowd funding sites both offer greater convenience over traditional banks.

The loans offered by hard money lenders are fully funded.

Regional Commercial Lenders revise expectations as the demand for business loans declines

Regional commercial lenders are complaining about a decline in the demand for new loans by business owners. Many blame global instability and political uncertainty.

Some commercial lenders are blaming instability in Washington.

As demand shrinks commercial lenders will have to compete for borrowers.

Commercial Lender Alpha Flow gets start up funding from Steve Cohen.

The company, a crowd funding investment platform recently received 4.1 million in start up funds from well-known investor Steve Cohen.

Cohen’s investment in Alpha Flow will strengthen the group as a commercial lender.

As Alpha Flow and other automated investment platforms improve , it will become increasingly easy for any to become a commercial lender.

Commercial Lenders Lima One and Realty Shares expect a win-win from recent merger

Realty Shares a commercial lender recently sold its residential lending business to Lima One Capital.

By selling its residential lending business and purchasing Acquire Real Estate, Realty Shares is signaling it intends to redefine itself as a commercial lender.

Both moves will help Realty Shares become a strong commercial lender.

Commercial Hard Money Lenders: A comparison of Lending Home, Realty Shares and Patch of Land.

Lending Home, Realty Shares and Patch of Land act as commercial hard money lenders, giving short time financing to real-estate investors. The following article gives details about of each them to help you decide which option is right for you.

Lending Home, Realty Shares and Patch of Land are good commercial hard money lenders depending on your needs as a borrower.

Commercial hard money loans: Benefits and Pitfalls

Commercial hard money loans have easier qualifications and a faster approval process when compared to traditional bank loans.

Commercial hard money loans are best used as short term financing.

Commercial hard money loans may be a good option for experienced real-estate investors who need to take advantage of an immediate opportunity which can quickly translate into a profit.