Commercial real estate financing can be overwhelming for new investors- primarily the multiple types of financing. One type of financing is bridge loans. A bridge loan offers investors a flexible source of short-term financing. In this article, we’ll explain more about how to use bridge loans for multi-family real estate.
What is a Bridge Loan?
A bridge loan is a short-term financing tool that investors can use until they can obtain long-term financing. Terms vary with bridge loans, from 3 months to 3 years. Permanent, long-term financing sources may take a long time to close- but a bridge loan closes more quickly.
Advantages of Bridge Loans
Speed is the primary advantage of bridge loans. When you apply for permanent financing on a multi-family apartment, the closing period can take 90 days or more. You can obtain a bridge loan in about 2 weeks. If you’ve got a time-sensitive deal on the table, this speed is critical to your success.
Additionally, lenders typically have stringent requirements on both the borrower and the property. For example, prior to closing, most lenders require that the property meet specific stabilized lease-up thresholds as high as 95%. A bridge loan allows you to avoid these requirements and close quickly, moving the property into service.
Disadvantages of Bridge Loans
Though speed and flexibility are significant advantages, it has some disadvantages as well- primarily cost. In return for those advantages, a bridge loan has a higher interest rate than permanent financing.
Depending on the deal and the borrower, bridge loan interest rates vary from 3% to 10% above market rates of permanent ones. In addition, the closing fees are often higher, which is another factor to consider when purchasing multifamily real estate.
As you can see, bridge loans can be a great financial tool for multifamily real estate, but you’ll need to weigh the advantages and disadvantages before you apply for one.
Reasons to Consider Bridge Loans for Multifamily Real Estate
When it comes to real estate investing, there are several situations where multifamily real estate developers and investors can use bridge loans. Three of the most common are:
- Time-sensitive deals
- Value-added multifamily real estate deals
- Cover delayed capital contributions
When it comes to commercial real estate, you have a variety of options, each one having its own advantages and disadvantages. Bridge loans are just one of them. Under the right circumstances, a bridge loan is a great way to make a deal happen- but that speed and flexibility come with a cost.
If you’re interested in learning more about your options for multifamily real estate deals, contact Artis Commercial Capital today. We can help you get the best financing for your situation to start or enhance your commercial real estate career.
Financing your real estate business can be done in a number of ways. One way to finance your business is to get a loan from a bank. You can also use your own personal savings to finance your business. You can also look into getting private money to finance your business. Private money is when you borrow money from an individual or group instead of a bank. This can be a good option if you are having trouble getting a loan from a bank. Whichever way you choose to finance your business, make sure you do your research and find the best option for you.
The Benefits of Real Estate Crowdfunding
Another way to finance your real estate business is through real estate crowdfunding. This is when you raise money from a group of people instead of just one person or institution. This can be a great option if you have a good idea for a real estate project but don’t have the funds to get started. There are a number of different platforms you can use to crowdfund your project.
Some of the best crowdfunding platforms for starting a real estate business include Kickstarter, Indiegogo, and GoFundMe. You can also look into getting a loan from a peer-to-peer lending platform like LendingClub or Prosper.
Other Real Estate Business Funding Options
If you have good credit, you may be able to get a business loan from a bank. You can also look into getting a line of credit from a home equity loan or HELOC.
You may also want to consider using your personal savings to finance your real estate business. If you have money saved up in an emergency fund or retirement account, you may be able to use it to start your business.
Another option for financing your real estate business is to find investors. You can look for angel investors or venture capitalists who are interested in investing in your business.
You can also look into getting a grant from the government or a private foundation. There are many grants available for businesses, so you may be able to find one that can help you finance your business.
Preparation Is Key
Whatever way you choose to finance your real estate business, make sure you are prepared. Make sure you have a solid business plan and that you know what you are doing. Financing your real estate business is a big decision and should not be taken lightly. Do your research and start by contacting Artis Commercial Capital for access to experts in the realm of business and real estate – we’ll help you make the best decision for your business.
It is commonly said that the best road to wealth is through real estate. One form of real estate investing is the acquisition of undeveloped land with the intent to sell it at a higher price or develop it.
Investing in Undeveloped Land
Raw land can be a great investment for two main reasons: there is a limited supply of it, and demand for it is almost always rising. Additionally, raw land does not require much, if any, in the way of upkeep.
Securing the Parcel of Interest
Purchasing Land can be quite costly. Most folks need some form of financing to accomplish that. There are a number of alternatives to check out when looking for funds to acquire raw land. Some of these include:
Personal or Investment Savings. If you are fortunate enough to have a significant sum in personal savings, this can be used to purchase raw land, but most people don’t choose this because they haven’t enough available or wish to keep it for other goals such as retirement.
Loans from a Traditional Bank. A mortgage from a traditional bank is certainly an option to consider. However, it may take some time to get the funding or you may be denied if the bank considers raw land too risky for their tastes.
Bridge Loans. Obtaining a bridge loan from a private lending agency is a third alternative. In this situation, a short-term loan is provided to buy the land. The loans are often backed by using the land itself as collateral.
Bridge loans are usually more accessible than bank loans. Keep in mind that the repayment period tends to be shorter and interest rates are often higher than other forms of financing.
Partner with Artis Commercial Capital
Artis Commercial Capital offers bridge loans and other options for those desiring to purchase raw land as an investment. Give them a call today to discuss your specific situation in more detail.
Although some business owners panic at the thought of impending recession, others see it as an opportunity to grow. According to some analysts, recessions provide unique opportunities for starting up or expanding businesses. Here are some of the advantages of growing your company during periods of economic instability.
Become More Visible to Consumers
During periods of market growth so many businesses start up that it is easy to get lost in the crowd. However, if you demonstrate that you can continue to offer value during a recession, discerning consumers will look to you to meet their needs. Provide quality information about your products or services so potential customers are willing to place their trust in you.
Take Advantage of Decreased Competition
As other businesses pull back and fold, consider this as a further opportunity to grow. In continuing to remain strong and promote your company, you will stand out from the rest. This will enable you to grab a solid share of a market that has been vacated by the competition.
Recruit Talented Personnel
In the midst of a strong economy, talented employees are in demand and difficult to obtain. During a recession, though, even highly qualified people have been laid off and are looking for work. You can revitalize your workforce with top personnel for reasonable salaries and without the competition prevalent during boom periods.
Obtain Favorable Rates from Vendors
Recessions are difficult for vendors too, and to stay competitive they are often forced to reduce prices to attract and retain customers. This means that you are more likely to find reasonable prices and terms for real estate, equipment, technology, raw materials, and inventory. Many vendors may even be open to negotiation so that you can obtain the needs of your business for costs even below market rates.
For more advice on using a recession as an opportunity to grow, get in touch with Artis Commercial Capital.