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Home > Hard Money Commercial Loans
Hard Money Commercial Loans
We are still closing commercial hard money loans. You are NOT wasting your time. In fact, commercial hard money is one of the most viable sectors in the
business today. However, it can be a treachous area of the industry and we warn borrowers to not pay good faith deposits unless they have been referred to the lender by a third party. There are many so called lenders that are only taking application fees/good faith deposits and not funding loans. There is very little recourse a borrower has if they get their fee taken and, unfortunitly, we see it happening more and more.
As a professional commercial mortgage broker we get paid when your loan funds... Therefore we will only take you to reliable, legitimate commercial hard money lenders.
Fill out or preapproval form now for meaningful answers.
Commercial Hard Money Loans
Hard money commercial loans offered through private lenders, are typically used when conventional sources are not available for the borrowers due to timing restraints, the general credit crisis or because of difficult situations. It is an expensive option, but it's always a cheaper route than either losing the property outright, or taking on a partner. Commercial hard money loans, in this credit crisis, are the best option for borrowers that have exhausted all conventional financing sources.
The three biggest components in underwriting a successful hard money commercial real estate loan:
1. Loan to Value on the proposed loan is not to exceed 60%. In other words if your property if worth $1,000,000 the maximum loan amount would be $600,000. Some lenders are willing to go as high as 65% loan to value but the norm is max 60%. What this really means is that the lender is mitigating their risk by the amount of equity, to help offset potential loses due to borrower default.
2. Debt Service. In other words, how is the borrower going to be able to make the monthly payments? Does the property or operating company cash flow? As credit criteria tightens this is becoming more and more of an issue.
3. Exit Strategy. What is the plan in paying the lender back? Are you going to rehab the subject property than sell? Perhaps you have another transaction that you’re waiting on and will use those profits to pay off the hard money loan. Are you going to refinance the debt with a conventional loan? Again, how is the commercial hard money lender going to get paid back? You have to have a solid plan.
Commercial Hard Money- Still Doable:
- Low personal credit scores of borrower allowed. (Click here to learn about ways to improve your credit score.)
- Lack of liquidity of borrower or borrowing entity allowed.
- Short time constraints - Needing to close in as short as two weeks, for example is allowed.
- Cash flow on investment property not stabilized.
- Cash flow on business (for owner occupant transaction) to low to meet traditional standards is permited.
- Subject property is in a state of foreclosure.
Other issues are allowed such as divorce, partnership break ups, construction issues with building, etc.
Again, hard money commercial loans are expensive but they are cheaper than losing your building, business or taking on a partner. Loan amounts that we work with range from $400,000 - $10,000,000 and the loans are for both commercial real estate investors and business owner/users.
Bottom Line: If you know you are facing a difficult situation, or tight time frames a commercial hard money may be your best solution. We have solid relationships with trustworthy hard money lenders that FUND deals, not just take the borrowers application fees and run. Again, we get paid when you get your money. Get preapproved now by filling out our mini commercial loan application.
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