Bridge Loans in California
The name bridge loan accurately describes what it actually does. It essentially bridges the gap from point A to point B. It is short-term and can be used in both commercial and residential real estate. Bridge loans are most often used until an individual or entity is successful in getting permanent financing with a conventional lender or eliminates the need by selling their property. Bridge loans typically have higher interest rates than traditional loans and are designed to be short term.
- Direct lender, not a broker
- Pre-approval typically in less than 24 hours
- Funding times typically 7 to 9 days
- Loan amounts up to $20 million
- Corporations, LLCs and Foreign Nationals OK
Hard Money Loan Request
We often get requests from borrowers who have located a property to purchase but won’t have all the money they need for the purchase until they sell their property. The property they’re selling may already be in escrow with a new buyer. But if they’re fearful the close of escrow won’t coincide with the new purchase they will often opt for a bridge loan to assure they won’t lose the opportunity to buy the new property.
What is The Definition of a Bridge Loan?
A bridge loan is a type of short-term loan, typically taken out for a period of two weeks to 12 months. It can also be referred to as a swing loan. A bridge loan is typically used until an individual or entity secures permanent financing or removes an existing obligation. Bridge loans have somewhat higher interest rates and are collateralized by real estate. Bridge Loans help property owners and real estate buyers lock down funding allowing for a gap in time while selling one property and buying another. Below we will outline some of the main aspects of a bridge loan.
- Collateral: Any property you own with excellent equity can be used
- Term: 3 months to 12 months on average
- Interest rate: 9% to 10.5% on average
- Pre-Payment penalties: Flexible depending on the scenario
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LENDING AREAS |
Almost anywhere in California |
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CLOSING TIME |
Typically 7 to 9 days |
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LOAN SIZE |
$50,000 to $20,000,000 |
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LOAN TERM |
3 to 24 months |
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INTEREST RATES |
8.5% to 10.5% |
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ORIGINATION FEES |
1 to 4 points based on many factors. Call for a quote. |
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AMORTIZATION |
Interest-only payments |
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LIEN POSITION |
First Trust Deeds Only For Bridge Loans |
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PRIVATE MONEY BRIDGE LOANS in California
At California Hard Money Direct we underwrite our files. You’re not dealing with a middleman. You’re dealing directly with the source. As such, we can provide fast answers and quick closings. We can help you with your purchases, refinances, or fix-and-flips. We are a direct private money lender financing bridge loans for commercial and residential real estate. We offer bridge loans almost anywhere in California from $50,000 to $20,000,000.
Top Reasons to Get a California Bridge Loan
- Bridge loans offer fast turnaround financing: This type of short-term loan enables businesses to secure and renovate properties before acquiring permanent financing. Bridge loans also make it possible for businesses to take advantage of unexpected discounted investment opportunities. Bridge loans also help businesses take advantage of limited-time offers to prevent them from missing out on attractive business opportunities.
- Auction purchases: Depending on whether you attend a private auction or a courthouse auction having money in hand can help put you in the driver seat. If you attend a private auction they will require on average 10% deposit to secure the property. The remainder will need to be paid within a short specified time frame. Unfortunately, conventional lenders most often can’t be tied down to short time frames. With a bridge loan, you can pay cash for the property while you wait for your conventional mortgage approval. Once you are fully approved with your conventional loan you can use the funds to repay the bridge loan.
- Unexpected bills arise: There are times when businesses receive bills they were not expecting. It could be tax bills or a myriad of other expenses. Worse yet, there very well may be a deadline which if not met could cost penalties. A bridge loan could very well be a quick and easy remedy.
- Working capital: Most of us are not able to predict the future. As such cash flow can go up or down depending on a multitude of factors and fluctuations. Oftentimes the businesses need quick short term capital. Money might be necessary to buy inventory, pay employees, buy equipment, or many other business operational needs. Bridge loans are often used to keep businesses moving forward. When things turn around the bridge loan can be repaid.
- Purchase a property before an existing one is sold: One of the most common reasons why people apply for a bridge loan is, they are certain that having access to capital is imminent, just not this second. They want or need to purchase another property but can’t because they still haven’t sold an existing property. They use bridge loans to purchase the property they selected. Then immediately after the sale of their existing property, they repay the bridge loan.
- Purchase properties in need of rehab: Traditional lenders are very particular about the quality and condition of the properties they lend on. Properties that require a decent amount of rehab or those with higher than normal vacancy rates will be good enough reasons conventional lender will deny you financing. Bridge lenders such as California Hard Money Direct have the ability to structure deals regardless of rehab needed or vacancy limitations.
- Credit score not important: Being an asset-based lender virtually means credit is the last thing we look at. Our determination to lend is based on the real estate. It can be a commercial property, multi-family, investment, or mixed-use. For us, these factors make a lot more sense than focusing on a borrower’s credit and debt to income ratio
- Buy rental properties: Let’s say you’re buying a vacant rental property. This alone might be a reason a bank would turn you down. If you use a hard money bridge loan for the purchase most often, vacancies will not be an issue.
Read what other borrowers have to say about working with our bridge loan lenders
Laurence Stewart
There are times when a “hard money loan” makes sense. When it does, the last thing you want to do is chase your tail with an unscrupulous vendor that will charge too much and may not be able to close the loan. I needed to pull equity out of a condo for a couple of rehab projects I have going and I’m very happy with my results from California Hard Money Direct. I would absolutely use them again.
Thomas Zacharia
Thank you Judy for acquiring funding for our Purchase of a luxury condo. Judy was able to get me a $1.785 million loan, 65% LTV, with very little docs as it was an SFR investment property. This was a celebrity client with many demands. I would highly recommend Judy to anyone needing a loan fast and with the utmost professionalism.
Liz Carnes
After spending 8 months in an effort to get reasonably priced financing I lucked upon Judy at California Hard Money Direct. Judy connected me with the right people at the perfect time, all at what I would consider “bargain” hard money pricing for both the origination fees and the loan interest rate. Judy is responsive, straight and direct in her approach, easy to reach, and overall a pleasure to deal with. Judy, thanks for making it happen!
There Are Several Advantages of a California Bridge Loan
- Closing time: Getting approval for a hard money bridge loan can literally take days rather than months. California Hard Money Direct’s typical closing times are between 7 and 9 days.
- FICO score is significantly less important: Our emphasis is on loan to value. We are looking at the asset rather than the credit. It doesn’t matter if it’s an investment property, commercial building, or mixed-use. Debt-to-income ratios are even less important.
- Vacant properties or properties in need of rehabbing: Simply put, conventional lenders don’t like funding vacant properties or properties in need of significant rehabbing. Bridge lenders such as California Hard Money Direct know how to structure transactions to allow investors the opportunity to purchase vacant properties for the sole purpose of rehabbing and selling or renting.
Looking for a bridge loan? Communicate with a loan officer via email or call us at 800-571-0887.
