4 Questions You Need To Ask Your Hard Money Lender

November 18, 2021/in Blog /by Bruce Kent

If you’re opting for hard money loans for the first time, you might be confused about who to trust.

Asking them a few questions will help you ensure that the hard money lender is trustworthy and credible. That’ll also help you avoid getting into an unpleasant situation with a hard money lender who adds hidden fees to your loan at the last minute or doesn’t deliver on time.

Any suspicious answers indicate you need to find a different hard money lender. Here’s what you need to ask them.

What Interest Rates Do You Offer And How Many Points Do You Charge?

Points and interest rates are the two factors that determine the overall cost of your loan. These depend on the region and the riskiness of your project.

Interest rates are usually 10% to 15% on hard money loans, with points ranging from 2% to 4% of the loan amount.

Is There Any Other Fee That’ll Be Charged on Your Hard Money Loan?

The upfront fee is another crucial factor you need to inquire about to ensure no hidden charges are applied.

If you fail to ask your lender this question, there’s a possibility they might charge you a lending fee that you didn’t know about.

Document fees and appraisals are customary, but some lenders even charge you an additional amount apart from the interest for lending.

What Loan To Value Ratio Do You Offer?

In loan-to-value loans, the amount is given based on the current value of the property. However, each lender offers a different percentage. Some offer 70%, while others offer 75%; it’s really up to the lender.

The LTV percentage is also influenced by the type of property you’re investing in. For example, residential properties have a higher LTV than commercial ones.

Similarly, rural properties have a low LTV than urban ones. Vacant lands have the lowest LTV due to the risk involved.

How Long Will Funding The Loan Take?

Time is crucial for real estate investors. Hard money lenders are preferred as they fund your loans faster than any other method of financing.

They’ll approve your loan and fund you in about 2-3 weeks maximum. In some cases, they can even provide your loan in 3-5 days.

If you’re looking for a reliable hard money lender in Atlanta, GA, to finance your investment, reach out to Commercial Private Equity. We’ll guide you on the best practices to fund your projects through hard money loans.

Contact us to know more about our loans.

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A Beginners Guide To Bridge Loans

November 15, 2021/in Blog /by Bruce Kent

Want to invest in new properties and diversify your portfolio? Bridge loans are the ideal financing options to go for. However, you might find them a bit confusing as these include a fast-paced transaction.

To help make things a little smoother for yourself, go over this beginner’s guide to learn what bridge loans are and how you can use them as a tool to invest in more properties.

What Is A Bridge Loan?

Bridge loans, also known as hard money loans, are a type of short-term loan (STL) used for remortgaging, renovating, or buying a property. They usually have higher closing fees and interest rates than regular loans.

Traditional lenders such as mortgage brokers, credit unions, and banks don’t issue hard money loans, but private lenders such as Commercial Private Equity offer these short-term hard money loans.

How Long Is A Bridge Loan Granted For?

Bridge loans need to be paid back in 12 months or less. It’s a temporary but quick source of cash to fund your investment activities when you’re short on finances.

How Many Types Of Bridge Loans Are There?

There are two types of bridge loans: loan-to-cost 0 and after-repair-value bridge loans.

In loan-to-cost (LTC) bridge loans, the loan value is a percentage of your total required amount. It’s usually between 70-85% of the total costs.

For example, you want to acquire a property costing $500,000 and need an additional $50,000 for its renovation, making a total cost of $550,000. The lender will offer you 75% of $550,000, which means a loan of $412,500, the remaining $137,500 is the amount you’ll have to fund yourself.

In after-repair-value (ARV) bridge loans, the hard money loan amount is usually 70-80% of the selling price of the property you want to invest in.

For example, if you buy a property at $500,000 and need $50,000 for refurbishment so that it sells for $750,000, then you’ll get 70% of the selling price ($750,000) as a loan. This means you’ll get a loan of $525,000, and you’ll only have to add $25,000 of your own money for the project.

Hard money loansare an integral part of your investments. If you’re interested in getting a hard money loan, reach out to Commercial Private Equity to finance your real estate investments.

With more than 75 years of experience, we’ve rightfully owned the title of the leading commercial hard money lender in the market. We assist you in meeting your financial objectives by offering commercial hard money loan consultation.

Contact us now to get started.

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Commercial Construction: How To Build A Dream Office?

November 12, 2021/in Blog /by Bruce Kent

Creating a new commercial space for your business is a significant investment and an overwhelming one too. A great deal of planning is required when building your office from scratch. You need to ensure a productive and healthy work environment as that’ll influence your profits significantly.

To ensure that the office building process is seamless, here are a few things that you should do.

Figure Out Your Financing

The most important thing to do before you begin your workplace construction is to get all the financing sorted. Create a rough estimate of how much money will be needed and how much your company can afford to invest in it.

Getting estimates will help you plan the construction accordingly. You might need to finance the building through loans, so it’s best to get in touch with a lender as soon as possible.

Hire an Interior Designer

When you’re spending a significant amount of money on your commercial building, you should ensure that it should function adequately and meet the requirements of your business.

You might have a vision of how you want the office space to look, but to bring that vision to life, you’ll have to hire a professional designer.

A designer will create a layout that’ll meet your expectations and the needs of your business all at the same time. You can ask for changes to the design if you have any new ideas. This foundational design plan will ensure your new commercial place is a big hit.

Choose the Right Contractor

Finding the right contractor is equally important as finding an expert designer. It’s the contractor who’ll turn your dreams into reality.

For that, you’ll have to do a good amount of research. You need to ensure your contractor is insured and licensed, go over the work they’ve done previously and see if their style is something that resonates with you.

Make sure that the contractor you choose ensures transparent dealings and isn’t deceiving you in any manner. If you feel the contractor is shady, look out for another one until you find someone you can completely trust.

Building a commercial working space is not a piece of cake. It requires tremendous amounts of effort and financing. If you want to set up a commercial place for your business but are running short on capital, don’t fret! Commercial Private Equity can help you bring your dreams to life.

We’re one of the leading private money lenders in Atlanta, GA that’ll guide you on the best practices for borrowing and repaying your hard money loans. We also offer commercial hard money consultation services.

Contact us now to get started with your dream project.

Why Should You Go For Blanket Loans?

November 10, 2021/in Blog /by Bruce Kent

Juggling multiple mortgages at different conditions and interest rates can be a hassle if you’re a commercial real estate investor who does it daily; blanket loans are a smarter choice to help you stay on top of the game.

You can buy as many properties as you want under a bank loan, and it’ll not be considered due on your sale agreement.

If you’re considering getting a blanket loan, this blog will increase your knowledge on why blanket loans are an ideal option for you.

Less Hassle

As blanket loans require only one credit approval for multiple mortgages, it requires less paperwork and reduces the hassle of keeping track of it.

You don’t need to spend a lot of time collecting and submitting documents like your credit reports, asset verification documentation, and employment details.

Access to More Cash

Pooling your properties under a single loan will help expand your business. It’ll help you maximize the amount you receive in cash from the lender.

Increase Your Cash Flow

Refinancing and coming to just one blanket mortgage rather than multiple loans can help you save on monthly payments as well.

This will help increase your cash flow as you save more. However, these savings are dependent on the new interest rates available to you and the ones you’re currently paying.

It Becomes Easier To Expand Your Portfolio

The biggest challenge that numerous real estate investors face is the restrictions on the number of mortgages they can have at a particular time. This caps your expansion and hinders your proceedings.

A blanket loan, on the other hand, has no such barriers that cap your expansion. You can invest in unlimited properties under a blanket loan without showing it as due on your sale clause.

Work With Potentially Better Loan Terms

Imagine if you have ten traditional mortgages with an average loan amount of $100,000. For every lender, you’re a contributor with a $100,000 loan. You’ll hardly stand out from the crowd in their lending business of millions of dollars.

However, if you combine these loans under a blanket approval and lend it from a single place, you’ll be someone with a loan of $1,000,000.

The amount for you remains the same, but you become a significant contributor to the lender’s business. Thus you may receive V.I.P. treatment.

You can use this high-roller status for your benefit to negotiate a deal with them or even leverage a preferential loan term.

If you’re looking for options to finance your real estate business, get in touch with Commercial Private Equity. Apart from loans, we also provide commercial hard money loan consultation to guide you on the best practices for borrowing and repaying loans. We’re one of the leading private money lenders in Atlanta, GA.

Contact us to get your hard money loans sorted.