Asset Based Commercial Real Estate Loans
Asset based commercial real estate bridge loans from $500,000 - $100,000,000
Q: Why does an asset based commercial real estate loan require personal and other information?
A: The lender will request tax returns, a trip merge credit report, and other personal information in order to determine if there are any liens, judgements or other similar items as it regards the client as these liens and judgements will affect their ability to get a clean title and 1st lien position at closing.
Typically if it’s a cash out refinance and there are enough funds, these items must be paid at or just before closing so the loan can close.
Q: Why do commercial real estate bridge loans have such high interest rates?
A: A bridge loan can be used to either stave off a problem or allow a client to take advantage of a real estate opportunity quickly.
Since these loans close in as little as a few weeks you are paying for that speed and perhaps in lieu of a clients’ bad credit or other circumstances deemed undesirable by most main stream lending institutions.
Most bridge loans are interest only for periods varying from a few months to perhaps a year or two with extensions available for perhaps 6 months (for a fee) and most have no prepayment penalty after a minimum interest period usually at around 6 months.
Asset Based Commercial Real Estate Loans
Q: Why do bridge lenders require a deposit along with a signed term sheet?
A: Commercial real estate bridge loans require that the lender allocate and set aside the funds to be loaned when terms are accepted by a client. They must perform due diligence and require a deposit to cover items such as appraisal or BPO, background check, environmental studies and similar items which are paid for by the client. Typically any leftover deposit monies are applied to the loan or returned to the client in one fashion or another.
Typically a term sheet must be executed and returned with the due diligence deposit within 3-5 days. Once a term sheet expires a lender will only rarely reissue it.
Q: Why won’t a potential bridge lender use the appraisal I just paid for?
A: Lenders will almost always require an arms length appraisal, void of any influence or direct interaction with the client. Therefore the only time a lender might use a client supplied appraisal is if that particular appraiser is on the lenders approved vendors list or as a basis for a 3rd party BPO to be performed at additional expense to verify and corroborate the appraisal.
There are instances where a lender may be able to rectify an appraisal for a small fee if the lender feels comfortable with the appraisal company and / or appraiser.
Q: How much would a due diligence fee be?
A: Generally speaking a deposit might be anywhere from a few thousand for smaller loans up to as much as $30,000 or more for multiple properties.
Typically a loan under $50,000,000 will only require a deposit in the $10,000 - $50,000 range depending upon lender, MSA, property type, risk and client experience or credit. Bear in mind that an appraisal for a 100 key hotel for example might cost anywhere from $5,000 - $10,0000 alone.
Q: What size commercial real estate bridge loans can you facilitate?
A: Our minimum bridge loan size is $500,000 and our typical maximum is $100mm but our sweet spot preferred bridge loan size would be between $2,000,000 and $40,000,000.
Q: Do you take loan submissions from brokers?
A: We do work with commercial real estate brokers and their clients. We prefer to work with the principal. Some principals want us to work through their real estate broker, CPA or attorney.
We will accept loan scenarios from commercial real estate loan brokers but we will need unfettered access to the client in all instances without exception.
Asset Based Commercial Real Estate Loans
If you want to submit a loan scenario or have questions regarding a commercial real estate acquisition, refinance, construction or bridge loan contact us:
info@michaellewisgroup.com
info@michaellewisgroup.com 440-637-5646
We offer access to a variety of permanent and construction financing options to suit most client needs.
We can facilitate commercial real estate bridge loans
from $500,000 to $50,000,000 as well as acquisition
& refinance loans to $500,000,000.
Acquisition loans for single properties or entire
portfolios from $250,000 to $500,000,000 for
U.S.A. commercial real estate. We can facilitate loans
for non- U.S.A. residents in most situations.
Refinance loans for obtaining a lower interest rate and / or to leverage equity in your property to get "cash out" for property improvements or other purposes.
