Using Bridge Loans for REO Financing
Aug 12, 2015
There are financial opportunities that seem too good to pass up. Unfortunately, many aren’t taken advantage of because you might not have the credit needed. Real Estate Owned (REO) is one of these opportunities. An REO property is one that is owned by a lender after the failure of a foreclosure attempt. The lender does not want to keep the property, and in order to get rid of it, they sell it on the market, ‘as is’, at a price far lower than its value.
Credit Not a Factor for REO Bridge Loans
Traditional loans require good credit and for most lenders, this means a credit score of at least 700. Many times those who can benefit most from the investment of REO properties don’t necessarily have the credit required for a traditional loan. For these people, a bridge loan, or hard money loan may be the answer. With a bridge loan, good credit isn’t necessary. In fact, a hard money lender will not even factor credit into their loan decision. Bottom line, it’s all about the value of the property.
Short Term Loans with Long Term Value
Hard money loans are approved based on loan to value (LTV) - typically up to 65% . The borrower will need to come up the rest of the money. Bridge loans normally carry a higher interest than traditional loans but they are also held for a shorter term. At the end of the loan term, the loans are paid off from the sold or refinanced property, which has increased in value.
Riverdale Funding, LLC is a commercial hard money lender that provides bridge loans for REO commercial properties. Our loan offerings have a minimum loan amount of $250,000 and a ceiling of $5 million +. To qualify the subject commercial property should be one of the following types:
- 1-4 Family Investment / Non-Owner Occupied (NOO)^
- Multifamily (Apartment Building)
- Office Building
- Strip Center
- Free Standing Commercial
- Light Industrial **
- Self-Storage **
- Improved Land
If you are looking at investing in REO properties that meet these conditions, Riverdale Funding may be just what you need to take advantage of these opportunities. Our loans are granted for up to 65% of the after repair value (ARV) at completive rates with loan terms between 1-3 years. With these options, it isn’t necessary to let a great deal on an REO investment property pass you by. Contact Riverdale Funding, LLC on how one of our bridge loans can help you take advantage of what’s in front of you.