Multi Family Real Estate Investing How To Use Bridge Loans

For the uninitiated a bridge loan is a short term obligation that leverages the equity in a property to complete the purchase of a new property.

Multi family real estate investing how to use bridge loans. Don t let the name confuse you. Multifamily and commercial real estate bridge loan terms are usually between 3 months and 3 years most landing in the 12 24 month range. Short term multifamily financing is a nonpermanent multifamily loan that includes both hard money loans and bridge loans with interest only payments. All loans are subject to borrower underwriting and credit approval.

These aren t loans for commercial properties such as shopping centers or big box store. Though bridge loans carry higher interest rates. Some investors might need a short term loan such as a hard money loan or bridge loan for flexibility. Corevest finance provides loans for real estate investors and brokers at competitive rates.

Loans are for investment purposes only and not for personal family or household use. Loan product availability may be limited in certain states. This is not a commitment to lend. Commercial mortgage bridge loans are short term usually six to 18 months high interest rate loans businesses use to bridge the gap when long term financing is needed to buy a property but not.

When using a bridge loan for a real estate transaction the buyer can immediately use the equity in their existing house to buy a new home without having to wait until the old home sells. Bridge loans are ideal for repositioning a property so as to get competitive permanent financing or sell the asset after the project is managed to stabilization or the issues at hand are addressed. Here are three reasons to consider investing in multi family real estate. Short term multifamily financing loans are right for investors who want to season renovate or increase the occupancy of a multiunit property to meet the stricter requirements for transitioning to a permanent multifamily loan.

Most of the same opportunities exist with commercial real estate bridge loans in general outside of fannie mae and freddie mac permanent financing options. Multifamily bridge loans can be taken out with fannie and freddie loans cmbs financing or other bank loans. But the truth is that a multi family property is more likely to be approved by a bank for a loan than the average home.