We continually get calls & emails from lenders looking for deals to fund. This is normal – the pulse of our business. But in the last couple months the tempo has quickened.
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.
One of the loan types that has come into demand lately 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 mis-information floating around the market.
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 for the lender.