Options, options, and more options – you have OPTIONS and you may not even be aware.
Especially when it comes to securing the financing needed to secure a commercial real estate property. When it comes to financing, it can be quite difficult to find an institution willing to lend you the funds but on top of that, the process can be time-consuming, require a great deal of work, and unneeded stress. Only to find out that the financing just didn’t go through for a number of different reasons.
But have no fear, you have options – in particular, Commercial Bridge Loans.
Also known as commercial mortgage bridge loans – commercial bridge loans are a great option for CRE investors because they allow investors the opportunity to secure interim funding to easily and quickly purchase commercial real estate until they can secure permanent financing, which again can take some time to secure.
Commercial bridge loans are typically acquired for properties that need renovations or upgrades before permanent financing can be secured. This being one of the many reasons why a borrower might want to consider applying for this type of loan, other reasons include; the property has unsatisfactory occupancy rates, your credit profile needs improving, you can’t wait for permanent financing or incomplete ownership/project team in place.
On average a commercial bridge loan will have repayment terms of anywhere between 6 months to 3 years, after which the property is either sold or refinanced with permanent financing, which is typically the case. The great thing about this type of loan is that there are no restrictions as to what kind of property you can use the loan for. Office buildings, hotels, retail, multifamily, and raw land can all be purchased or refinanced using a commercial bridge loan. But why would you want to use this type of loan? Well again these loans typically allow for quick closes, but the loan amounts are based on the fully improved value, not its “as-is” value.
If you’re interested in applying for a commercial bridge loan to help temporarily finance a commercial real estate property or to learn more about how they work, contact Anthony West, who has 15 years of mortgage financing experience and is myNOI.com’s top choice for your commercial bridge loan needs.