Tampa Multifamily investors love finding great deals on properties that are under performing. Whether you are looking to acquire, repair, or sell a property with multiple units, most investors need financing to move forward.
The problem is that it can sometimes be a struggle to find funding for investment opportunities when your cash is already held in other commercial properties, or you are in between selling and closing on a current property. Whatever the reason, your assets are not available when you need them most. Multifamily bridge financing could be the solution.
Multifamily Bridge Loans
Multifamily bridge loans provide capital for a wide variety of purposes. Typical bridge loan terms are six months up to 3 years, with most at around 18-24 months. When it comes to financing the acquisition of multifamily properties, investors often need additional funds over the purchase price to handle renovations. Multifamily bridge loans can provide the necessary funds for both acquisition and improvements.
Advantages of Bridge Loans for Multifamily and Commercial Properties
There are several potential advantages of multifamily bridge loans. Many offer interest only payments, reducing the cost of carry as improvements are made to the property. Some offer a conversion to a permanent loan when the term ends. Bridge loans are also perfect for investors who plan to purchase, make construction improvements, and sell the property. For those who plan to keep the property, bridge loans provide the funds to renovate and increase equity making permanent financing easier to obtain.
The underwriting of bridge loans also can be advantageous as the primary consideration is the property itself. Permanent financing is heavily based on cash flows, the financial strength of the investor, and other factors that take time to review which can delay approval. Bridge loan underwriting is relatively fast with quick closings occurring within 20 – 30 days. Finally, many lenders focus on providing bridge loans as they prefer shorter-term lending. For more information about current rates, visit our rates page.
Potential Disadvantages of Bridge Loans
There are also potential disadvantages for the borrower including higher interest rates than permanent financing. As the conversion to permanent financing is not always built into the loan, investors will also need to apply for longer term financing to pay off the bridge loan at maturity.
Can a Multifamily Bridge Loan Work for You?
When investors acquire distressed or outdated multifamily properties, a bridge loan can be an excellent choice. If you are considering a property, click the “Request Funding” button located on the upper right of the menu bar above or click here. Answer three quick questions to get started.
(Note: Manatee Mortgage Consultants provides loans for investment properties and cannot lend to owner occupied properties).