Great Falls Commercial Lending

Great Falls Commercial Lending

viernes, 1 de noviembre de 2013

Commercial Hard Money

Hard Money Loans are a great and creative way that has made its way in the Money Lending industry over the past few years because of the economy and banks being a lot more careful about their loans, these changes have made Hard Money Loans a great asset to your portfolio, and will certainly help your clients. As loan originators, we have to know all the options the market has to offer and Hard Money Loans can come in handy when there are significant changes in our clients lives. However, Hard Money Lenders like ourselves know beforehand that Hard Money Lending in New York and New Jerseys an investor’s world therefore they are not your typical lenders, there are requirements your client must meet in order to close a Commercial Hard Money Loan.
These investors are private individuals, or partnerships; Who are willing to lend money but they will do it as long as the ROI is higher than traditional lenders since their own capital is the one at risk.
Commercial Hard Money Loans are a much more complex process than Residential Hard Money Loans.
Investors will analyze the borrower like on any other Residential Hard Money Loan but they will pay much more attention to the commercial property, and by that we mean they will look at every detail since there is often situations where there is something unusual about the property or the borrower, That process could bring the transaction to a complex but not impossible Commercial Hard Money Loan.
Most borrowers in need of residential hard money loans have the following reasons :
Lack of employment, low credit scores, personal emergencies, health issues and so on; all of these scenarios sometimes go hand in hand with commercial hard money, plus you have to keep in mind the fact that the income of any commercial property can change or that there may have been a change in the use of the property.
Also your client cloud have pending judgments, liens and bank rejections these may be why he’s opting for a Commercial Hard Money Loan.
Our best advise on any kind of Commercial Hard Money Loan transaction is that you must know and understand ALL the reasons and variables that can come into play as why does your client, the borrower need that Commercial Hard Money Loan.
Once you understand your client’s situation you can start to look at all the other factors.
First : The property must have equity.
The industry standards are 70% LTV on residences, 65% on apartment complexes, and 50% LTV on land.
Very rarely you will see an investor doing Commercial Hard Money Loans over owner occupied, industrial or special use properties.

Equity is what makes a Commercial Hard Money Loan possible, therefore the appraisal will be the main factor to obtain a Commercial Hard Money Loan for your client and he must know that the LTV will determine the risk to the investor, your job is to obtain the must accurate appraisal for the sake of both parties and your reputation as a Commercial Hard Money Loan Originator.
Now that the equity and the LTV has been determined comes the exit strategy or how the borrower will repay the loan, this is of great concern for a commercial hard money lender. They will make sure that the borrower has a realistic plan for repaying the loan, otherwise you've wasted everybody’s time.
This all should be explain on a very detail presentation and be submitted to the private investor, partnership or corporation.
These private parties will demand of you to be diligent in providing precise information and paperwork on behalf of your client. Most of them have a list of documents you must provide along with credit check, income garnered from the property, current title, expenses of the property. This step is key, a well presented Commercial Hard Money Loan package will help you earn a good reputation and get the loan for your client.
Go the extra mile, offer investors to inspect the property personally, give them the demographics of the location, traffic, access and information about similar businesses in the area, and always get environmental reports.
Each investor has its own guidelines but you must go into every loan with the mentality that this must be a win - win situation for everybody otherwise, move on to the next Commercial Hard Money Loan.

Great Falls Commercial Lending
1 Howe Ave, Suite 303
Passaic, NJ, 07055
Tel. 973-767-2850
Fax. 1-877-767-2150 

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