Mar 24, 2021
Multifamily Bridge Lenders- Fast Close and Higher Leverage
The most common uses of bridge loans are to quickly purchase a
property when all cash isn’t an option and the property is not
stabilized (occupancy is under 90%)
There are several factors that differentiate bridge loans from more
conventional kinds of loans:
Term: Traditional mortgages span a much longer term than bridge
loans, which typically only range up to two or three years. The
name “bridge” is meant to signify a short waiting period while more
permanent financing is secured.
Interest rate: Bridge lenders take on larger risks, including
liquidity, default and informational risks. For this reason,
mortgage rates are generally higher.
Amortization: Most bridge loans are interest-only, with little or
no principal amortization. The full principal amount is usually due
at maturity, and negative amortization and zero-coupon notes can be
an option in some cases.
Collateral: There’s a focus among bridge lenders on underlying
collateral, rather than the typical emphasis put on
creditworthiness.
Timing/Flexibility: These loans can be provided in under 30 days,
and have more flexibility in structuring and due diligence
requirements. They can be expedited much more quickly than typical
loans, which often take 90 days or more.
If you'd like to meet with Beau to talk financing, book a
call here
( http://bookwithbeau.com/ )