Financing Commercial Properties With Hard Money Loans
Sep 29, 2016
Buying any commercial real estate requires one thing – having funding available for the transaction. It’s just like any other transaction; except attaining funding follows a different process. Additionally, financing commercial properties is a little more complicated than funding residential properties as they adhere to different regulations.
When Are Commercial Hard Money Loans Appropriate?
For some deals, commercial hard money loans are an appropriate way to get the deal underway. Private money loans are more lenient in the kind of requirements that you normally associate with real estate financing. The collateral is the property. If you are making a purchase of a distressed property that has an inherent value, a hard money loan may be feasible while a more traditional mortgage loan may not be.
Hard money lenders tend to be more interested in a wider range of property investments, while a more traditional lender will most likely decline such a loan application. The intent of hard money lenders is to provide bridge financing options that allows borrowers to expedite their transactions.
How Are Hard Money Loans Different Than Regular Real Estate Financing?
Commercial hard money loans usually carry a higher interest rate. However, the rate is such that it would make the entire transaction unworkable if the loan is held for a long period of time. Because of that, hard money loans tend to be of shorter duration. This makes it a healthy option for those looking to take advantage of short lived real estate opportunities that quickly come and go.
Is A Hard Money Loan The Right Way To Finance Your Project?
A commercial bridge loan can be a perfect answer for a short term deal. It is a great solution for purchasing a commercial property with the intent of rehabilitating the structure and flipping the building. There are other ideal borrowing situations that call for the quick turnaround of funding as provided by Riverdale Funding and other lenders. Such opportunities for bridge financing can be an essential element in any speculators plans for real estate purchases.