Hard Money Loans For Apartment and Commercial Property

Hard money loans and private capital for hard money situations were, in the past, a rarity, but as markets evolve and capital ebbs and flows, situations may require hard money that may not have in the past. The benefit to true hard money loans on commercial real estate is that the only underwritten component is the as-is value of the property. This means fast closings... and high costs. In the past borrowers have used hard money because of credit issues, legal, financial, and so on. Another popular use of hard money financing in commercial real estate is for when you need a super-fast closing because of a deadline, or financing that fell through on a property under contract. The bottom line is that hard money is still used every day and for a lot of reasons. That said, there are hard money alternatives and before applying for a hard money loan, you should know if you have any alternatives available. We have a popular alternative to hard money financing for commercial property that we like to call Soft Money. 

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Sample Hard Money Loan Terms For Multifamily and Commercial Property
Terms as of September, 2016

Size:                    $1MM and up

Term:                   6 months to 3 years (extension options available)

Interest Rates:     12% +

Origination Fee:  3.00% - 5.00%

Amortization:       Interest only (deferred payments occasionally available)

Maximum LTV:     65% of as-is value

Advantages

  • Loan amount determined by property value.
  • Fast closing process.
  • Limited borrower qualifications required.

Disadvantages: