Bridge Loans

A multifamily bridge loan is a financial tool used by commercial property owners to bridge the gap between the moment they get the loan and the moment they can do what they want to do with the property. Multifamily and commercial real estate bridge loan terms are usually between 3 months and 3 years, most landing in the 12 – 24 month range. Now if this seems incomplete as a definition, please forgive the apparent vagueness, it’s just that a bridge loan can be used for so many things and so many reasons.

The most common uses of bridge loans are to quickly purchase a property when all cash isn’t an option. The frequent advantage to bridge loans is that they often close very quickly and are based more on the value of the property than anything else. Other types of loans are often heavily based on the income a property generates and heavy analysis. Because of this lack of necessity of analysis a bridge loan can close much faster than a traditional loan. This however comes at a trade off. Interest rates on bridge loans can be triple or quadruple market rates for conventional financing.

Another use of a bridge loan for a multifamily or other commercial property, would be for a substantial rehabilitation and stabilization prior to getting conventional multifamily funding.. The bridge loan would be used to keep the property financed while finishing up the necessary upgrades and then likely leasing up the property. This can apply to most property types such as multifamily, retail, office, etc.

The gist is that bridge loans are usually for out-of-the-box, one-off type situations. Each borrower may have very unique circumstances, but bridge loans requirements remain pretty consistent at around 65% of the property value and a payoff date usually in less than three years

Architectural Drawing Picture of a mixed use building in Nutley NJ that is currently being funded with a Bridge Loan. Local Bank in Fairlawn NJ
Architectural Drawing Picture of a mixed use building in Nutley NJ that is currently being funded with a Bridge Loan. Local Bank in Fair lawn, N.J

Depending on where you live and what property type you are funding you have available to you many different lenders. Some are better than other and it is the job of the mortgage broker to determine which bridge loan lenders are the best.

Bridge Loans are offered when you need money fast and cannot either qualify of wait for a conventional loan. The LTV is more conservative than a conventional loan 65% to 70% LTV and the rates can start at 7-11%  plus 2 to 4 points and yes the deal must make sense.

Most importantly there must be a take out strategy in place within a reasonable period of time.

These loans are for a savvy investor to move quickly to close on a purchase opportunity, or renovate a property to improve the value and income.

 

Below we are going to discuss a handful of loan programs available.

New!

Bridge Program

Owner Occupied or Investor

Non recourse available

Property Types:  Multifamily, Mixed use, Retail, Office, Light Industrial, Warehouse and Hospitality (Other case by case)

Borrower: LLC

First Mortgage Lien

Loan Amount   1 Million – $ 5 Million

Max LTV    80 %

Term:    1 -3 Years

Interest Rates:   Floating interest Libor +500    8% to 12%

Interest Guarantee:   12-18 months

Amortization:  Interest only

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New!

Fixed Bridge Loan Program

PURPOSE: Fixed-Rate financing on income-producing properties GEOGRAPHY: Continental United States

LOAN SIZE: $1,000,000 to $20,000,000

PROPERTY TYPES: Multifamily, Manufactured Home Communities, Office, Industrial, R&D Flex, Retail,

Self-Storage (other asset classes considered on a case-by-case basis)

TERM: 1 to 3 years

AMORTIZATION: None; Interest-Only

 INTEREST RATES: Pricing is based on transaction quality, location and leverage. Rates are typically 7.75% – 9.75%

PAYMENTS: Payments calculated on an interest-only basis and made via auto-debit from borrower’s account

 LOAN-TO-APPRAISED-VALUE: Up to 75%

 MINIMUM DSCR: 1.05x (without interest reserve)

 LIABILITY: Recourse and Non-recourse offered

 LOAN FEES: 2% PREPAYMENT: Typically a minimum of 6 – 12 month’s interest will be charged

 SECONDARY FINANCING: Not allowed

 OTHER COSTS: Generally $10,000 – $15,000, plus legal

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Popular Bridge Loan Program

   Product Description:

  • Loan Term:  Up to 3 years
  • Loan Amount:  $1m to %50 million
  • Lending Area: United States
  • Loan to value: Up to 65%
  • Interest rate:  7%-11% (Interest only)
  • Origination Fee:  1% to 3%
  • Prepayment Penalty: Not required
  • Closing Time: 1-2 weeks
  • Collateral:
  • Property types (National) Multi family I Office I Retail I Mixed Use
  • Property Types (Core markets) Condo Inventory I Parking Facilities I Urban Land I Luxury residential I Hospitality I Warehouse space
  • Lending Scenario’s
  • Time sensitive Transactions: 1031 exchange, Expiring Purchase, contracts auctions, partnership buyouts
  • Distressed Scenario’s: Bankruptcy bailouts, foreclosure Bailouts, Discounted payoff agreements.
  • Value Add:  Construction Loans, renovation Loans, Construction Completion, Tenant Improvements
  • Cash out: Non revolving Line of Credit
  • Asset Risk: Expiring leases, Non Stabilized properties
  • Sponsorship Risk: Foreign Nationals, credit issues, liquidity Constraint

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Irvington

Second Example of a Bridge Loan Lender:

NY Tri State Area (Brooklyn, Manhattan, Queens and the Bronx)

REAL ESTATE FINANCE & ACQUISITIONS 
The rates wont be 3.5%, however, under certain circumstances we can originate senior bridge financing under the following terms:
  • $500,000 – $2,000,000
  • Origination2%
  • Rates 6.5% – 8%
  • Up to 70% LTC
  • Terms 12-24 Months
  • Multi-Family Mixed-Use Retail & Land
  • 30 Days to Close

       We continue to originate more traditional bridge financing, i.e. higher rates, as follows:

  • $1,000,000 – $10,000,000
  • Up to 80% LTC
  • Multi-Family Mixed-Use Retail Development & Land
  • First Mortgages
  • Mezzanine Loans
  • Preferred Equity
  • Soft Deposit Financing
  • Loan Acquisition Financing
  • Two Weeks or Less to Close
Funding  multi-family, retail and mixed-use assets in Brooklyn, Manhattan, Queens and the Bronx.

  car lot      

Here is a Third lender

      Offering real estate lending and investing. Our firm provides loans for short sales, acquisitions, refinancing, REOs, construction and commercial property acquisitions as well as bridge loans. Product types include multifamily, commercial properties, new construction, retail, land, and industrial. We offer quick decisions to meet your financing needs no matter how complex the transaction.

Loan Types: First and Second Liens, Mezzanine Financing, Acquisition, Refinance, Construction, Cash- Out Refinance, Bridge Loans

Loan Amount: $500,000 to $20,000,000

Term: Six Months to 3 years

Interest Only:  8% to 12%

Loan- to-Value: Up t0 85%

Loan Origination:  1-2 %

Amortization: Interest Only

Prepayment Penalty:  None after 6 months

Payoff Fee:   0% to 15

Property types:  Multifamily, Retail,Mixed Use, Office, Industrial, warehouse, Non owner Occupied  Residential, Self storage, Special Purpose, new construction, land

Costs: Borrower is responsible for all closing costs and out of pocket expenses

East Coast:  Prefer Tri State Area… NJ/NY/CT

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535-amenity-exterior-building-exterior1

4Th Example:

Our knowledge and resources mean we can close in as little as 5 days for loans from $1 million to over $50 million with a loan to value ratio of up to 70%. We are experienced internationally serving clients in the USA, Canada, Europe, the Caribbean and Central and South America.

  • Fast Turnaround
  • 2 Days for Commitment
  • Closing in as little as 5 days
  • Loan amounts from $1 million to over $50 million
  • Up to 70% Loan to Value Ratio
TERM:
Flexible loan term up to 5 years.PREPAYMENT:
No prepayment penalties.LOAN TO VALUE:
Up to 75%.RATES:
Rates from 9% per annum.FEES:
As low as 2%.
LOAN SIZE:
From $1 Million to $50+ Million nationally.COLLATERAL:
Real estate and other fixed or liquid assets.PROPERTY TYPES:
Multifamily, Condo, Office, Retail, Hotel,
Industrial, Mixed-use, Land…………………………………………………………………………………………………………………………………………..
Home-Slider-Panelized-Walls-1680x800

5Th Example:

Bridge capital programs are designed with the creativity needed to service this diverse market. We offer multiple capital allocation buckets to provide a wide-range of products for all classes of real estate.

Bridge Lending Platform

Time to close 7 – 14 days from application
Loan Size $1,000,000 – $50,000,000 (Case by case as low as $250,000!)
LTC Up to 80%
Lien Position First Mortgage or Deed of Trust
Loan Term 6 to 24 months
Extentions 6 to 12 months
Interest Rates 8.00% to 12.00% fixed
Amortization Interest-Only
DSCR DSCR below 1.0x acceptable with Interest Reserve
Yield Maintenance Minimal pre-payment penalty
Deposits Deposit adequate to cover third-party reports, legal fees, and other deal costs
Origination & Exit Fees Origination: 1.5% to 2.5% & Exit 0.5% to 1%

        

Above we have a few great examples of what is available today.

If you are interested in a loan or have a question please email or call me? mark@commercialmortgageunlimited.com  201-925-3470

Thanks Mark Fulop (Owner / Underwriter)

Bridge funding available.
Bridge funding available.

      

     Looking for short term funding to buy a commercial property but you want a short term loan.  We offer a variety of programs please email me your scenario?                                                          

  • BASIC LOAN CRITERIA
  • Term 18 Months
  • Loan Amount$100k to $2.5M+
  • LTV
    Up to 70% of the purchase price;
    Up to 50% Refinance;
    Up to 50% Cash-Out
  • Property TypesMixed-use; office buildings; apartment complexes (5 units+); retail spaces
  • FICO 600

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condo1

Bridge Financing for Rental Properties

      We offer longer-term bridge financing for real estate investors who are looking to buy and hold non-owner occupied residential properties for rental income. A six-month extension is available for this product (a 2% fee will apply).

  • BASIC LOAN CRITERIA
  • Term18 Months
  • Loan Amount$50k to $2.5M+
  • LTV
    Up to 85% of the Purchase Price;
    Up to 65% Refinance;
    Up to 50% Cash-Out
  • Property TypesNon-owner occupied 1-4 family residential
  • FICO  No set minimum

Please email any questions?  mark@commercialmortgageunlimited.com

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Proprietary Bridge Loan Program provides attractive financing solutions for borrowers that need flexibility to execute a diverse range of strategies (Up to 75 LTV Term: 18 to 24 Months Loan Amount: $5m to $50M

PROPERTY TYPES : Multifamily, retail, office, industrial, and self storage § Intended to finance moderate value-add opportunities or distressed management turnarounds where tenancy needs to be rebuilt

MARKETS : Primary and secondary MSAs, within the United States § Tertiary markets considered for multifamily assets on a case-by-case basis

MAXIMUM LTV/LTC : Up to 80% LTC § Up to 75% of stabilized value

DSCR AND DEBT YIELD REQUIREMENTS : No minimum § Best pricing for deals with in-place cash flow

LOAN AMOUNT : $5 million to $50 million

TERM : Typically 12-36 months during the initial loan term § Extension options available up to 60 month total term

INTEREST RATE : Competitive floating rate, spread over 30 day LIBOR

AMORTIZATION : Interest only

PREPAYMENT : 18-24 months yield maintenance requirement, open thereafter § Shorter yield maintenance periods available depending on borrower strategy

SECURITY : First mortgage lien and assignment of rents required § Single-purpose entities required

FEES : Standard commitment and exit fee with exit fee waived if CMU provides the permanent financing takeout § Extension fees may apply RECOURSE : Non-recourse except for standard carveouts

RESERVES : Upfront reserves may include interest operating shortfall, Capex, TI/LC and other reserves as needed § Ongoing reserves may include tax, insurance, replacement and TI/LC reserves when applicable

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Feel free to email any scenario’s? mark@commercialmortgageunlimited.com