Apartment Loans - Hard Money Funding

Large Apartment Loans

Financing for apartments $8 million to $10 billion. The large loan program is designed to finance loan amounts in excess of $100 million and is often structured with flexible terms to help the borrower meet their objectives.

Mid Size Loans

Financing for apartments worth $1 million to $8 million. The mid size loan program has been developed to serve the needs of your important multi-unit commercial assets offers apartment financing programs that serve the needs of investors with excellent delivery time and substantial cost savings.

Small Balance Loans

Smaller apartment financing and commercial loans for multi-family from $100,000 to $3 million are directly available from our preferred capital partners. Our small balance loans offer many lending advantages including less paperwork and faster closings than ever before.

" A2zBigLoans.com has become an integral part of our financial strategy. We have been actively dissolving numerous partnerships and consolidating our holdings into new acquisitions. We have been there every step of the way. They recently negotiated the acquisition of a significant multi-family property located in Los Angeles, CA, and continue to advise us on our financing strategies. Inevitably, in each deal, issues arise. Their preemptive approach to problem solving has proven to be extremely effective in getting deals done."

• J. Flanagan

Terms of a commercial mortgage

The majority of Commercial Mortgages in the United States, while requiring the borrower to simply make a monthly payment small enough to pay off the loan over a 20 to 30 year time frame, require a balloon payment (a total payoff) after a lesser time frame. The borrower most likely will attempt at that time to refinance the loan. Thus there are two elements generally to the term of a commercial mortgage loan: the length of time allowed until balloon payment (known simply as the term), and the amortization. The length of the loan can vary from 5 to 30 years. If a loan had a 30 year amortization schedule, but a 10 year term it would commonly be referred to as a 10/30. Since residential mortgages do not require this early prepayment, a 30 year residential mortgage could be referred to as a 30/30.

Lenders' criteria

Most banks and building societies offer commercial mortgages, but you must satisfy the lenders' criteria. The primary criterion is the debt service coverage ratio or the ratio of cash available to the required loan payments. Some lenders may accept applications where there is an adverse credit history, but most require a positive personal credit rating and clear evidence that your business is creditworthy. Most will apply a loan-to-value ratio and will expect you to invest a proportion of your own money into the purchase.

The lender's decision will also depend on your current business circumstances - a commercial lender will expect your business to be stable and profitable. They may ask to see your business plan and long-term financial projections, to assure themselves that your business has, and will continue to have, the ability to make repayments on the loan. Some lenders impose restrictions on the uses of commercial premises and certain business concerns may be excluded altogether. The terms of a commercial mortgage will depend largely on the type of business you're running and the type of premises or land you want to buy. This is a complex area and it's essential that you seek specialist advice from your solicitor and probably a chartered surveyor.

Apartment Complex Commercial Mortgage Loans

HardMoneyLoanFinancingBlog offers low rates on apartment complexes, condos, and duplex buildings and more. We offer loans from $50,000 to over 10 billion. We have funded over $1 billion dollars in commercial loans around the world.

Whether if you need financing for an acquisition, refinancing a currently property, pull out some cash for renovation, or other reason, we can help. With our proven track record, and fast loan process we have been the #1 choice for several prestigious brokers, owners, and lending firms.

A hard money loan is a specific type of asset-based loan financing in which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money is similar to a bridge loan which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.

Many hard money mortgages are made by private investors, generally in their local areas. Usually the credit score of the borrower is not important, as the loan is secured by the value of the collateral property. Typically, the maximum loan to value ratio is 65-70%. That is, if the property is worth $100,000, the lender would advance $65,000-70,000 against it. This low LTV provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.

Commercial mortgage rates can change daily and are dependant on asset quality and performance. Unlike rates from traditional lending sources, at HardMoneyLoanFinancingBlog our obligation is to you, the borrower. Since we are not limited by our affiliation with any one bank, we are able to present your loan to a broad spectrum of potential capital sources and secure the best terms and pricing that the market can offer.

We utilize several financial sources to get the right loan that meets your needs. We have access to hedge funds, wallstreet firms, private money, trust funds, insurance companies, joint venture capital, equity partnerships, bonds & cds, and more. We can provide funding for projects in all 50 states of the US, and as well as all overseas markets.

Our Main Goal is to close every deal for our customers with speed and flexibility. Each commercial project has its own requirements, constraints and timeframe. With that in mind, responsiveness is critical. We aim for solutions to precisely fit each situation: focused around your goals, you and your success.

What Is The Best Commercial Real Estate Loan?

This question came from Kiho Kim in Anaheim, California and, surprisingly, doesn’t have a straightforward answer.  When someone asks me that question, I know that they’re probably focused on one thing:  The loan with the lowest interest rate.  Unfortunately, in commercial real estate, this approach can end up costing you a lot of money.

When you get involved in commercial real estate, you become involved in a more sophisticated method of investing your money.  Commercial real estate and commercial real estate loans have a lot of “moving parts” and the approach that commercial lenders take is far different from those in residential lending.  When considering financing on a piece of investment property, you have to approach the process with ”commercial mortgage planning” in mind.

What is commercial mortgage planning?  It’s a process in which all aspects of the loan are considered in the context of the commercial real estate investor’s current portfolio, future portfolio goals, style of investment, and cash flow needs.  Let’s see how this works in a practical example and then use that example to further answer the original question in the first paragraph.

Which is the best loan?  A 3/1 ARM with a declining 3 year pre-payment penalty of 3%-2%-1%, a rate of 6.75%, a full amortization of 30 years, and a margin of 2.50% over 6 Month LIBOR, or a 10 year fixed rate loan due in 10 years, with a 30 year amortization, at a rate of 5.9%, with a Yield Maintenance prepayment penalty until 9.75 years have passed?

On the face of it, the 30 due in 10 is almost a full percentage point less in rate!  No brainer, right?  Let’s fill in a few more details and see if this analysis stands.

The investor contemplating the loan is an active real estate investor who purchases properties that have vacancies or month to month tenants that are slightly run down and in need of upgrades.  He holds properties until re-tenanted, renovated, and then sells them to generate cash for new purchases in a 1031 Exchange to preserve his buying power.

In light of this information, the 30 due in 10 would be a terrible loan.  It’s likely that such an investor would be ready to sell the property in the 3rd year to take advantage of the 1031 Exchange holding period and provide a stabilized leasing history to a new buyer.  He’d only face a 1% pre-payment penalty using the 3/1 ARM, something he could easily factor into his “costs.”  The fixed rate loan with its Yield Maintenance pre-payment penalty could literally cost him hundreds of thousands of dollars, depending upon market conditions, when he goes to sell the property.  In fact, it would likely contain a “lock out” clause completely preventing a payoff for up to 4 years.  That loan would have to be assumed by the new buyer and the difference made up in cash, limiting the potential pool of buyers for that property.

So how does this example answer our question:  “What is the best commercial mortgage?”  This way:  “The best commercial mortgage is the one that best fits the commercial investor’s short and long term goals, risk tolerance, investment style and the investment at hand.”  And as a side note, be sure to work with someone experienced not only in commercial loan brokerage, but who will take the time to consider all of the factors that could affect the current and future transactions.