Private Money Loans

Private money loans are loans for situations where traditional banks will not lend. With the credit squeeze going on and banks increasingly less focused on lending, these loans have really grown over the past year. These loans are not for bad borrowers, they are for people who need money quick. Maybe it is a purchase contract that needs to close in 3 weeks, or a tight situation that just needs a short term bridge…these loans are great loans for a quick close. Common sense underwriting is the norm for these loans. There are two basic types of commercial private money loans, often called “hardmoney” loans:

• Cash flowing properties: Apartment complexes, retail strip centers, etc. These are properties that kick off enough cash to support the debt at almost 1 to 1 coverage or better. When that is the case, we have PLENTY of sources available. You may think; why if it is cash flowing does someone need hard money? The reasons are endless. I have one deal where it is a developer who has a bunch of properties working but because of long delays, they are cash poor. He has one property that he owns free and clear that is cash-flowing; we are getting him short term hard money to get him $12 Million to keep things rolling while the other loans close. We have a small $400,000 hard money loan where the guy just needs to close quick because he shopped too long and now his closing date is in 3 weeks and no one can close him. On these types of properties, money is available all the way up to $25 Million. LTV’s up to 75% are possible if the property cash flows strong. These are GREAT loans and can close quickly!
  
• Non-cash flowing properties: Whether it is raw land, or a vacant building that needs to be gutted and rented out or an apartment complex that is mostly empty and losing money, if it doesn’t cash flow, the rates are higher and the availability of funding is greatly diminished.. Excellent credit on the part of the borrower and borrower financial strength is critical on these deals. The lenders will also want a lower LTV, generally 50%. But a good borrower at a low LTV can get the money quick, whether it will be for cash-out, purchase, whatever. Even though these are tougher, we DO have loans available on these products from $200,000 up to $25 Million. Again, closings are generally very quick, 2-3 weeks is the norm.

Remember with private/hard money loans the terms are short. 1 to 2 years is preferred. They often have NO pre-payment penalty because the lenders want to get the money back so they can re-deploy it again. The EXIT STRATEGY IS CRITICAL. How are you going to pay it off in 1-2 years? If the exit strategy is compelling, these deals can close. But if you need money fast, and the banks are saying NO, this is a great option! To run scenarios by us, just call 863-298-8900. Remember, WE HAVE COMMERCIAL HARD MONEY LOANS AVAILABLE FOR CASH FLOWING AND NON-CASH FLOWING COMMERCIAL PROPERTIES FROM $200,000 UP TO $25 MILLION. JUST CALL 863-298-8900 TO RUN THE SCENARIOS BY US – WE CAN GET THOSE DEALS CLOSED TODAY!