Commercial Hard Money Lenders and Their Unique Lending Options

Commercial hard money lenders offer a unique lending option for investors and real estate developers. They provide short-term, high-interest loans for fix-and-flip projects, construction projects, and other real estate ventures.

These lenders are often private companies or individuals with their own capital, allowing them to make faster loan decisions and offer more flexible terms. They typically lend between 50% to 70% of the property's value.

Their lending options are designed to meet the needs of borrowers who need quick access to funds for a specific project or opportunity. They often focus on the project's potential return on investment rather than the borrower's credit history.

With commercial hard money lenders, borrowers can expect to pay interest rates ranging from 12% to 18% per annum, and fees can add up quickly.

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P.S. Warehouses are one of the fastest growing sectors in the commercial real estate space. With the right financing, you can tap into this opportunity.

You can buy office space, warehouses, hotels, and industrial buildings with a hard money commercial loan. These asset classes come with an inherent level of risk which can be estimated with the asset classes' average "cap rate."

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You're looking for property to invest in? Warehouses are one of the fastest growing sectors in commercial real estate, making them a hot investment deal you won't want to miss. Commercial property loans for investors can be used to finance the purchase or building of warehouses, along with other commercial properties like apartment buildings, hotels, and office buildings.

You can use hard money loans to finance the purchase of a specific real estate asset, such as an improved property or platted land, which can be closed within weeks rather than months. Hard money acquisition loans can be a good option when traditional lenders can't react in time.

Commercial, industrial, and investment-grade residential properties all qualify for hard money acquisition loans, which can be used to purchase raw or underdeveloped land as long as it has zoning, platting, entitlements, and infrastructure already in place. This is because banks and other institutional lenders rarely approve loans to purchase raw, undeveloped land due to the risk involved.

You can buy a variety of properties with commercial hard money loans, including retail properties, gyms, restaurants, and office space, as well as warehouses, hotels, and industrial buildings. These asset classes come with an inherent level of risk, which can be estimated with the asset classes' average "cap rate."

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If you're considering renting out your commercial property, you'll want to understand the different types of tenants and the implications of each.

A Gross Lease is a type of lease where the tenant pays a lump sum and the landlord is responsible for all utilities, taxes, insurance, and any other expenses that come up.

You'll want to consider your investment style when deciding on a lease type. If you're more hands-off, a NNN lease might be a good fit, allowing you to collect a check each month with minimal involvement.

NN (Net Net Lease) tenants pay for utilities, property taxes, and a fixed rent schedule, with the landlord responsible for maintenance, repairs, and other essential fees.

A NNN lease can be a good option if you're looking for a hands-off investment, but it's essential to understand the terms and responsibilities involved.

NNN (Net Net Net Lease) tenants assume all expenses of operating the property, including utilities, property taxes, and rent, with the landlord responsible for structural repairs.

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Here are some common types of commercial leases and their characteristics:

It's essential to understand the specific terms and responsibilities involved in each lease type to make an informed decision.

Once you've submitted all necessary documentation, a commercial hard money lender will work with you to finalize loan terms. This process typically includes determining the interest rate, LTV ratio, down payment, points, closing fees, and your loan repayment schedule.

A commercial hard money lender will consider various factors to determine the interest rate, such as the property's value, your creditworthiness, and the loan's term.

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A Debtor in Possession (DIP) loan is a type of loan that provides an exit strategy for properties under chapter 11 bankruptcy.

This loan is similar to foreclosure prevention loans in that it's used to get real estate out of the jurisdiction of bankruptcy court.

At Taylor Made Lending LLC, we understand the importance of a smooth lending process. Our process begins with a formal loan commitment, known as a Standby Commitment Loan, which specifies the terms under which we agree to lend money to a borrower upon completion of a project's construction phase.

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We require this loan commitment from institutional lenders before they agree to do a construction loan, and it's often referred to as a takeout loan. This commitment outlines the terms, including interest rate, LTV ratio, down payment, points, closing fees, and loan repayment schedule.

We'll work closely with you to finalize these loan terms, ensuring you understand every aspect of your loan. We'll also help you determine a suitable loan repayment schedule that fits your needs.

Hard money loans, which we offer, typically have shorter loan terms compared to traditional loans. This is because they're often used as bridge financing, providing quick funding for projects with a clear cash flow plan.

Our hard money loans are quick and easy to obtain, taking less time than traditional loans. In fact, it's an easy and quick process that can help you get the funding you need in a short period.

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Note Purchase is a unique way to invest in real estate, where you purchase a Promissory Note from a bank at a significant discount.

Typically, banks are unwilling to underwrite this type of loan, making it a savvy move for astute investors.

By purchasing a Promissory Note, you're essentially lending money to the borrower, and the bank is willing to accept it as collateral.

This type of lending is formally known as "hypothecation."

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To qualify for a commercial hard money loan, you'll need to find a lender willing to look at your case. Taylor Made Lending LLC can help you from the very start, even with the documentation process.

A good hard money lender will assist you with the necessary paperwork. They'll guide you through the process and ensure you have everything you need.

To increase your chances of qualification, focus on having a solid business plan and identifying a strong property in an attractive market. It's also essential to have your paperwork ready to go and do your due diligence on potential questions.

Here are the key steps to prepare for a commercial hard money loan:

By following these steps and working with a reputable lender, you'll be well on your way to securing a commercial hard money loan.

Bad credit disqualification is a common concern for those looking to secure a commercial hard money loan. However, it's not as restrictive as you might think.

Going through bankruptcy doesn't disqualify you, and neither does having a tax lien out or a child support lien out. These factors are not deal-breakers when it comes to hard money loans.

Having a history of prior evictions or foreclosures also won't disqualify you. In fact, hard money lenders are often more willing to work with unique situations, even if they don't fit traditional lender preferences.

Little to no proof of income is also not a reason to be disqualified. Hard money lenders are more focused on the property's potential for generating income than on your personal financial history.

Here are the factors that don't disqualify you from a hard money commercial loan:

Prequalification is the first step towards securing a commercial hard money loan. It's a pre-screening process that helps determine if you're a suitable candidate for a hard money commercial loan.

To get prequalified, you'll be asked a series of questions by a member of the hard money lending team. This will help them assess your eligibility and guide you through the loan process.

A good hard money lender will walk you through the prequalification process and help you understand what's required. They'll also provide you with a clear idea of what to expect next.

Having a solid business plan is crucial for a successful loan application. This plan should outline your intentions for the investment and provide a clear vision for the project.

You can use online tools, such as a hard money loan calculator, to help you work out the financials of your deal. This will give you a better understanding of the loan terms and help you make informed decisions.

Here are some factors that successful loan applicants share:

Having a low FICO score shouldn't be a deal-breaker when it comes to qualifying for a commercial hard money loan. Commercial hard money lenders don't mind low credit scores in lieu of collateral.

This is especially true if you're willing to put up sufficient collateral to secure the loan. In fact, having little to no proof of income is also not a disqualifying factor.

If you're worried about your credit score, consider the following factors that don't disqualify you from a hard money commercial loan: