What is a Bridge / Hard Money Loan?
A bridge is used to connect one location to another, typically over or around an obstacle like water, a ravine, or dangerous terrain. The are typically not long structures, but are short in length help reduce the time to travel between locations. In financing terms, a Bridge Loan works similarly. A Bridge or Hard Money Loan is used in-between transactions and is temporary in nature. They are typically simple, interest-only loans and are used to acquire property that is not yet stabilized (90% occupied and generating profitable cash flow) enough for a long-term lender to be comfortable providing a conventional loan [provide link to this page]. Bridge Loans are also known as a Hard Money Loan because they are secured by a "hard", tangible, physical real estate asset. These types of loans are characterized by a shorter term and higher interest rates given the increased risk inherent in unstable properties.
What kinds of scenarios are Bridge / Hard Money Loans a good fit for?
- Rehab projects
- Fix/Flip Residential Properties
- Opportunities that are time-sensitive or have limited availability
- Properties that have less than 90% tenant occupancy
Vista Commercial Capital can help you with your Bridge / Hard Money Loan needs
If you have an opportunity that you'd like to review with us where a hard money loan might be a good fit, we'd be happy to set up some time to have a discussion.