One of the loan types that has come into demand recently is a bridge loan. They’re typically used in situations where there’s stress in the situation resulting in a bargain element in the pricing, and time is a material factor. (Our current environment is causing a lot of this.) We have a fair amount of discussion about the terms and conditions of these loans, a lot of it dispelling misinformation floating around the market.
We continually get calls & emails from lenders looking for deals to fund. This is normal – the pulse of our business.
We can arrange funding for a variety of loan types and match them to the type of product and circumstance. Also, different type of lenders are more or less active/aggressive at any point in time depending on their circumstances and market conditions.
Below are criteria offered directly by one of our commercial bridge lending sources. This is what they want to fund.
- LOAN SIZE: $2–$15 million
- LIEN POSITION: 1st lien
- LOAN-TO-VALUE (LTV): not to exceed 75%
- TERM: 12–24 months
- EXIT: clearly defined exit strategy.
- LOCATION: any U.S. metropolitan market—comparable sales info will be important in the underwriting.
- PROPERTY TYPE – OWNER-OCCUPIED: Golf Course & Other Special Use Facilities, Industrial, Office, Medical, Mixed-Use, Retail, Self-Storage.
- INVESTMENT REAL ESTATE: Golf Courses & Marinas, Industrial, Medical, Mixed-Use, Mobile Home Parks, Multi-family, Office, Retail, Self-Storage.
- COLLATERAL: is cash flowing, commercial real estate (DSCR > 1.0)
- DEBT YIELD: (NOI/loan amt) greater than 8%
- TIMING: Must close in 10 to 20 business days.
Why & when would you use a bridge? What are the advantages & disadvantages? Are bridge lenders the same as hard money lenders? What else should I be asking?
For answers to these and other questions, contact us at your convenience. We offer a variety of products and services, ask us how we can assist you today. We work for you, not the lender.