Don't give up on your real estate investment until you read this article
March 08, 2022
In a time when market dynamics are constantly changing, acting quickly is one of the advantages that allow you to survive in the market, not only in the real estate sector, but in investments in general. The ability to react quickly determines your ability to do business and increase your reach, thus increasing your profits.
Borrowing is something that many investors do all the time. However, choosing the provider of such credit is something that causes indecision among investors. Choosing between bank loans and private equity is not an easy task. In this article, we will focus on one particular and crucial feature when choosing your loan provider: Time.
Slow funding is a deal killer for many. This is especially problematic in the real estate industry, where multiple buyers in a competitive market often depend on how quickly they can get their financing in order. The main difference between these providers is that private lenders can get done in days what banks take weeks to do. With any bank, there is a lot of paperwork to complete. The bank has to do a credit check and prepare a real estate appraisal. All of that takes time.
The process with private lenders is much more efficient. It is therefore also much faster. Minimal paperwork is required, and since there are no third parties, the lender does its own appraisals. Your hard money loan can be funded as quickly as you can provide the required information. Approval occurs within days rather than weeks. In some cases, some lenders can complete the entire process in a matter of hours.
Speaking of time, with bridge financing, time becomes a non-issue when closing important deals. Time does not have to be the enemy, as there are ways to work around even the tightest of schedules. Essentially, a bridge loan is a type of short-term loan that can be used in real estate transactions where the buyer does not have the funds to finance the purchase of a new property without first selling the first property. When you use a bridge loan for a real estate transaction, you can immediately use your existing equity to purchase a new property without having to wait for your old property to sell.
Bridge loans are often used for commercial real estate purchases, to close on a property quickly, to release a property from a lien, or to take advantage of a short-term opportunity to secure long-term financing. Bridge loan lenders understand the importance of short-term financing and have no problem funding a bridge mortgage for properties that are currently on the market. Businesses can usually find bridge loans from hard money lenders that fund loans with your property as collateral and from alternative lenders on the Internet.
With a commercial bridge loan, you can get financing to take advantage of an urgent real estate opportunity right away. You can then find a more favorable form of long-term financing or refinance an existing business loan. A bridge loan allows consumers to pull money out of a home they currently own and use it as a down payment on a new home, with the expectation that the current home will close, and the bridge loan will be repaid within a short period of time. Bridge lenders have the same recourse as lenders for bridge loans.
Traditional lenders do not want to go through the approval and underwriting process just so a loan can be paid off within a few months. This scenario is typically considered bridge financing because your company has a potential source of capital - a buyer - to exit the bridge financing in the near future. Even if the loan in this scenario is never formally refinanced, using the proceeds to grow your business until you benefit from the acquisition agreement qualifies the financing as a form of commercial bridge financing.
As we mentioned earlier, the world of real estate investing is fast-paced. The faster you can find a property, make an offer, close, and get started on your next project, the faster you can earn a return and continue to expand your reach. If you are looking for real estate investment financing, a bridge loan gives you the flexibility and funding of a short-term loan that you can use for your investment property purchase, closing costs and renovations. Bridge loans are extremely customizable, meaning you get a product with interest rates and terms that fit your needs.
At Gallagher, we specialize in helping investors obtain quick home loans for their capital projects. Our team will make sure you get the most competitive interest rate and a fast closing, so you do not waste time before you get started on your latest vision.
Do not let slow financing screw up your business. You'll have plenty of time to negotiate with banks later. Now you need fast financing to secure your venture. We can help. Our fast and efficient approval process can secure financing for your project in a comparatively short time. Do not hesitate to count on us whenever you need it. If you have any questions or would like more information, call or text us at 800-369-2342.