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WHAT IS BROKEN IN TODAYS MARKET
BRIDGE DEBT (HIGH COST)
BRIDGE DEBT (HIGH COST)
BRIDGE DEBT (HIGH COST)
Bridge Debt is utilized to purchase properties that do not qualify for a conventional loan. These loans were a great tool with low rates in recent years. Now they can cost 10-16% + fees and they are difficult to obtain.
SBA 7A LOAN (HIGH COST)
BRIDGE DEBT (HIGH COST)
BRIDGE DEBT (HIGH COST)
The SBA 7A loan is an adjustable rate loan that is used to purchase commercial businesses and real estate with 10-15% down. Unfortunately, current rates are over 10% and the loan has high fees and a prepay penalty. It is also difficult to obtain.
WHAT WORKS IN TODAYS MARKET
SELLER FINANCING
CASH OUT FINANCING
CASH OUT FINANCING
Seller Financing is a tool that works well when capital markets are locked up. They require little paperwork, have favorable terms, require less insurance, and often require a low down payment. These loans can be closed quickly when a seller wants out quick.
CASH OUT FINANCING
CASH OUT FINANCING
CASH OUT FINANCING
If you stabilize a property with cash, local banks typically allow you to take out 70% of the value in a cash out refinance. This is a great tool that can be used to return investor capital after the property is stabilized.
CASH
ASSUMABLE DEBT
ASSUMABLE DEBT
When properties sell at auctions or require a quick sale, cash can be a good tool. When you pay cash, you can secure financing at a later date after you have stabilized the asset.
ASSUMABLE DEBT
ASSUMABLE DEBT
ASSUMABLE DEBT
Assumable debt is when you take over an existing loan from a seller. In some cases, you can do this without a bank if the original lender was the previous seller. This is common in hospitality.