Hard money lenders make the riskier commercial loans, the deals the banks won't touch. As a result, hard money commercial loans are more expensive than bank loans. Where a bank might finance a commercial property at 7.5% and one point, the typical hard money commercial lender will charge in the neighborhood of 11% to 13% and three points.
Hard money lenders are lending companies offering a specialized type of real-estate backed loan. Hard money lenders provide short-term loans (also called a bridge loan) that provide funding based on the value of real estate that has been collateralized for the loan. Hard money lenders typically have much higher interest rates than banks because they fund deals that do not conform to bank standards.
When an investor doesn't have great credit, hard money lenders can help him finance a loan. These investment professionals offer short term loans, also called bridge loans, for higher than normal interest rates. These bridge loans are based on the value of the real estate being collateralized for the loan.
These loans are typically issued at much higher interest rates than conventional commercial or
residential property loans and are almost never issued by a commercial bank or other deposit
institution. Those lenders structure loans based on a percentage of the quick-sale value
of the subject property.
Hard money financing for commercial property has never been easier with our
commercial hard money program. Because a security interest in the property is the basis of making a
hard money loan, the lender usually always requires first lien position of the property. Cross
collateralizing or blanket loans are more frequently used with investors on Commercial Hard Money
Loan programs.
Commercial Hard Money Loans may not be subject to the same consumer loan safeguards
as a residential mortgage may be in the state the mortgage is issued. We know that in most cases
time is of the essence when you are in the market for hard money financing. If you own property
in some of the states and counties that have been hardest hit it is likely that most hard money
lenders will have increased requirements and may not be interested in lending on your property at
all until the market settles out. Simple, 100% financing does not exist (to the best of our knowledge)
in the hard money / private money world…at least not unless your parents are willing to loan you all
of the money.
Some of these lenders are represented by commercial brokers who may take a percentage of the
loan (called points) in deal for preparing and submitting the loan documentation (as well as finding
a direct lender). Unlike conventional lenders, hard money lenders usually close on the loan in less
than a week. In distressed situations, such as bankruptcy or imminent foreclosure, hard money loans
may be the only way for a homeowner to avoid a catastrophe.
Unfortunately, depending on the project,
if you were going to approach your regular investors to find international hard money, you would also
have to provide them a copy of your detailed business plan so that they can evaluate your
opportunities for themselves. This site will provide all of the information you need to make a
wise decision when it comes to commercial hard money loans.