Real estate investors looking to transition into commercial real estate could be surprised to learn that they may not have the credit or meet the requirements necessary to qualify for a traditional commercial real estate loan. This is where hard money loans come in to play; you may not meet the bank’s criteria, but you do, most likely, own property.
Assets Become as Valuable as Credit
Hard money commercial loans are based on property as collateral instead of traditional lending criteria, such as credit scores and history. They are far more interested in the value and value potential of the commercial property that you already have in your portfolio than your credit history. As private lenders are not held to the strict federal regulations that the traditional lenders are, this enables private lenders to lend money based on criteria not available to banks. Hard money commercial loans can be an excellent option for growing your portfolio, whether it’s at the beginning of your investment career or deep in to it. Your assets become as valuable as your credit while building your commercial investment portfolio.
Roles of Lenders
You will often hear different titles for hard money lenders: Agents, Loan Officers or Brokers, Hard Money Lenders, or Private Money Lenders. In traditional lending, the Loan Officer’s primary role is to gather the up-front information: the application, financial and asset documents, credit reports, and other qualifying information. Your file is then passed on to processing, underwriting, and closing departments. Financial lenders are provided by the traditional bank or lender that they work for.
Personal Touch of Private Money Lenders
Hard money lenders, however, coordinate the entire transaction and are often the ones funding the investment. Their in-depth knowledge of private lending is essential in providing you with the best type of loan for your specific needs.
Hard money lenders manage, and often perform, the following procedures in order to bring your loan to closing:
• Creating the loan package, including your loan application and all the necessary financial and asset documents necessary.
• Ordering and coordinating of the title of the property.
• Verifying payoff and reinstatements of loans, as needed.
• Advising on the best hard money loan for your specific need.
• Providing federal and state disclosures within the required time frames.
• Ordering real estate appraisals, as hard money loans are based on the value of your assets.
• Determining the loan servicer of the loan.
• Coordinating title and escrow services.
• Creating the loan documents.
• Managing the loan closing.
Private loans don’t come in a “one size fits all” package, they are fully customizable to fit the specific needs of your investment. As the actual lenders are involved in the loan process, they are personally invested in your success.
At Vintage Real Estate Fund, we want to help you grow your commercial real estate investment portfolio. We offer hard money commercial loans between $1M – $8M, up to $12M for specific cases. We can typically have your loan closed in less than 30 days. To speak to a loan specialist, call 415-938-7331 or Contact Us here. We look forward to helping you grow your commercial investment business.