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السبت، 20 أغسطس 2011

Hard Money Bridge Loans

Hard Money Bridge Loans


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Hard money bridge loans are a small corner of the alternative financing niche market. While many of their characteristics are similar to those of typical hard money loans, they have a specific purpose that is much narrower. By understanding how to use these bridge loans, many real estate investors are able to leverage their existing cash and take advantage of the current real estate market.

Bridge loans, by definition, are short term loans meant to bridge a gap during which traditional financing is unavailable. Often times this can be a construction period, or for commercial properties, a stabilization period. These loans are not meant to be long term solutions, but rather short term "bridges" to allow a project to move forward to the next phase.

These days, many bridge loans made are through private money lenders. Banks and institutions are still conservative in their lending. If a transaction falls outside their strict guidelines, they will not make the loan. By their nature, projects seeking bridge financing do fall outside normal guidelines, and so those in need of this short term financing are turning to hard or private money lenders to provide it.

One of the most common forms of bridge financing these days is the short term rehab or fix and flip transaction. These are typically properties in need of repairs, and often the repairs needed are of the nature that a bank will not make a loan unless the repair is completed. For real estate investors, this presents an opportunity to purchase a property below market value, obtain short term financing to fix the issues and bring it up to par so the banks will lend on it, then resell the property to a consumer who is then able to obtain bank financing.

In this situation, working with a hard money bridge loan allows an individual to finance a distressed property that the general public cannot obtain financing on. This is a large benefit to working with private lenders, as they do not have the same requirements that the banks do when making loans. By having access to this specialized financing, real estate investors are able to make their profits by choosing the right properties and selling them to those who do not have the ability to close with cash or obtain a bridge loan and do the work themselves.

With the right strategy, real estate investors these days can leverage the use of hard money bridge loans to build their business. For more information on hard money loans, please visit us online!

Chris specializes in hard money loans. For more information, please visit him on the web at http://www.loansforcaliforniahomes.com.

Article Source: http://EzineArticles.com/?expert=C_Goulart

Article Source: http://EzineArticles.com/6481392

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