Applying For A Commercial Bridge Loan
Commercial Real Estate Loan? Things To Consider BEFORE Prepaying
June 24, 2016Commercial Bridge Loan: How to Evaluate the Pros and Cons
June 24, 2016
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.
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.
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.
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).
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?
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.
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.
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
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
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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.