The acquisition of commercial properties by private investors usually requires a great deal of money. Likewise, many investors need the assistance of commercial hard money lenders to get the cash to move on a commercial property before a large corporation with ready cash can swoop in and steal the deal.
What You Need to Know About Commercial Hard Money Lenders
Commercial hard money lenders are private money lenders who do not have the same restrictions as traditional lending institutions like banks and credit unions. They can lend you the money you need to purchase a commercial property based on its after-repair value (ARV), if you are interested in fixing it up and reselling.
Another approach many investors take is to remodel the property precisely the way a potential business occupant wants it to look. The buyer can use a hard money loan to purchase and do the renovations until they can get the property value at a level where conventional financing is available. That way, they can sign the company to a long-term lease and refinance the property through a traditional lender.
An exit strategy, such as a sale or long-term mortgage, is often one of the prerequisites commercial hard money lenders look at before lending you the money.
The ARV determines the amount of money you can borrow because the property is the collateral for the loan. You must have a clear title to the property after purchase. In other words, yours must be the only lien on the property.
Commercial Hard Money Lenders Help You Get Cash for Investment Property
Although the interest and fees are usually much higher than a mortgage through a traditional lender, the loan is short-term. The money you pay on the six to nine-month loan can generally be deducted from your business operating expenses for tax purposes, though it is advisable to consult a tax advisor about all deductible expenses.
The question you need to ask yourself is: Where else can you get the money for a commercial property quickly? Traditional loans take weeks or months, whereas commercial hard money lenders can make the money available much faster, often within a week to ten days.
Red Door Funding – Your Commercial Hard Money Lenders in Houston
In Houston, Red Door Funding, at(832) 539-1099, is the place to get the money you need to purchase commercial property. Red Door Funding has the money available when you need it, through private investors and its corporate partners. Send them an email if you have further questions,dwilliams@reddoorfunding.com.