Steps to Qualify for Hard Money Loans

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Hard Money Loans are asset based, here are the steps to get one.

  • Present a description of the property and the value or potential value of the property

Nothing drives lenders crazier than trying to figure out what a property is. As a potential borrower you should provide a description of the property, along with the size, number of units and a rent roll. If you have historical expenses those will be helpful as well.

Lenders don’t want to make bad loans, but they won’t even consider a loan without some idea of the value of the property as compared to the loan request. If you are looking for a hard money lender to finance a deal, you must present the lender with an idea of the value or potential value of the property before they’ll consider the deal. This is called the Loan to Value ratio.

 

  • Have a financial plan

Hard Money Loans are typically very short term (1-2 years), so Lenders always want to know the exit plan. Will it be a refinance? Sale of the property? Bringing in a new equity partner?

Lenders want to make loans, get paid off and recycle the money into a …

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$1,300,000 Refinance Loan – Automotive Assemblage – Long Island

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$1,300,000 Refinance Loan Automotive Assemblage (4 properties) – Farmingdale, NY

A family owned automotive business based out of Farmingdale, NY came to H&O Capital Funding looking for some help refinancing their property. Due to some mismanagement of the property after a death in the family, the company had to file bankruptcy to reorganize and regroup. With a pending bankruptcy, conventional financing really wasn’t an option. Luckily for the group, H&O Capital Funding was here to help them out with a $1.3m refinance of the property and give them some much needed time and breathing room to reorganize the management of the company.

For more information on loans that we offer, visit our website.…

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Property Types for Hard Money Loans

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Hard Money Loans can work for most property types including:

  • Multi-Family Properties – These are a lender’s dream as the perception is that housing is always going to be in demand, which helps ensure very low vacancy rates. Lenders only major concern is whether or not the income generated by the property can service the debt service.
  • Commercial Properties – Retail or office properties have the potential to generate large amounts of income, but they can also be extremely difficult to stabilize if “anchor” tenants are lost. Lenders generally look for stabilized properties with long-term leases in place. That being said, retail has been hit hard across the country and most lenders are being more cautious with this property type. The loan to value ratio lenders feel comfortable with is down as compared to recent history (10-30 years ago).
  • Industrial/Warehouse Properties – With all the recent development of apartment complexes across the country, some of which built in former warehouse/industrial zones, the warehouse/industrial market has seen a boom in pricing recently. Simply put, it’s difficult to find a good warehouse property that is centrally located these days. The few that still exist are bringing in some very high prices. Lenders
…

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$550,000 Unconventional Land Loan – Brooklyn, NY

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Land Loan – Brooklyn, NY  – $550,000

A Masonic group based out of Louisiana came to H&O Capital Funding looking for a loan on an approximately 4,000 SF parcel of land in Bedford-Stuyvesant. There were a few complications as the land was adjacent to a building that the group owned as well on a single tax lot. The subdivision wasn’t as easy to accomplish as they had hoped so H&O Capital ended up loaning on the entire parcel, with a caveat that once the subdivision was completed the building would be released from the loan.

For more information on loans that we offer, visit our website.…

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New Construction Loan in the Hamptons – $800,000

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New Construction Loan – East Hampton, NY  – $800,000

Nearly finished with their construction of a beautiful, 4,000+ SF single-family home in an exclusive East Hampton neighborhood, the borrowers had a small balloon payment coming due on their construction loan. With the project still yet to be finished many lenders were shying away from the deal. H&O Capital Funding stepped in and understood how far along the project was and immediately knew the value was not going to be a problem, even with potential construction delays. Three weeks later, the deal was done and the borrower had some breathing room to get the project finished up and sold.

For more information on loans that we offer, visit our website.…

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Bronx Mixed-Use Refinance Loan – $1,350,000

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Bronx Mixed-Use Refinance Loan  – $1,350,000

Due to some communication mix-ups and an aggressive lender, the borrower on this loan was facing imminent foreclosure. Add in some credit issues and this borrower was in need of a lender who could move quickly and overlook many of the detrimental factors that prevented a conventional lender from doing the deal. Enter H&O Capital Funding, who was able to step in and get the deal closed in a timely fashion to help the borrower save their property.

For more information on loans that we offer, visit our website.…

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What are Commercial Bridge Loans and How Do They Work?

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  • What are Commercial Bridge Loans?
    A Bridge Loan is typically used to purchase commercial real estate quickly or refinance a property to forestall foreclosure or retrieve a property from foreclosure. Bridge loans are typically short-term loans used to “bridge” the gap between the transaction and the date long-term financing is secured. Bridge loans are almost always interest only and have a short time frame (6 months – 2 years).

 

  • How Do Commercial Bridge Loans Work?
    Just like any other commercial mortgage, the difference being the speed with which the loan can be closed and the terms. Commercial Bridge Loan providers generally require a minimum deal size, which varies from lender to lender. The loan amount will be determined by a combination of variables, i.e. value of property, cash flow it generates and net worth of the borrower(s).

 

  • What do they work best for?
    Commercial Real Estate deals that need to close ASAP. Conventional loans will take at least 60 days to accomplish. A bridge loan can usually be accomplished in 2-3 weeks.

Commercial bridge loans can be used for the purchase or refinance of office buildings, hotels, retail property, multifamily housing including apartment complexes, and even for raw …

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Bronx-Manhattan North Board of Realtors – Yankee Outing

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Thursday June 8th – NY Yankees vs. Boston Red Sox – Yankees Win 9 – 1

On a beautiful Thursday evening in the Bronx, Houlihan & O’Malley joined many other members of the Bronx-Manhattan North Board of Realtors for their annual NY Yankees outing. Liz Genovese and Steven Manela of the appraisal group, as well as Rich Salinaro and Dan Houlihan of the private lending division were on hand to see the game and connect with their peers to discuss the real estate industry and, of course, talk a little baseball.

The outing was a great way to for the realtor board members to connect in a low-key setting. Between the hot dogs, burgers and beers it was a fun night out for Liz, Steven, Rich and Dan. The icing on the cake was the Yankees win over their dreaded rival the Boston Red Sox!…

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Hard Money Lenders vs. Crowdfunding

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What is a Hard Money Loan and how does it work?

A hard money loan is similar to a mortgage from a conventional lender (a bank, an insurance agency, a trust), however the three biggest differences are the speed with which a loan can be closed, the loan term, and the interest rates.
Hard Money interest rates vary and can be anywhere from 7% up to 15% (and sometimes higher) depending on the Lender’s perceived risk.
Loans can be closed as quickly as 1-2 weeks depending on the project that needs funding, which is extremely quick as compared to the 60-90 days with a conventional lender.
Loan terms are generally short-term (1-2 years) as borrowers do their best to either sell or refinance their properties with a conventional lender so as to avoid the higher interest rates.
The last difference, although this does vary from hard money lender to hard money lender, is that your average hard money lenders do not do much background investigation into their borrowers. Unlike a conventional lender or a crowdfunded lender, credit scores and personal finances typically aren’t taken into account as long as the property itself produces enough income to service the debt.

What …

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$400,000 Multi-Family Acquisition Loan – TWO DAYS TO CLOSE – Yonkers, NY

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Two Days to Close – Yonkers, NY 7-Unit Residential Building – $400,000 Acquisition Loan

The borrower, with whom H&O Capital Funding has worked with in the past, came to H&O about two weeks prior to the date of his TOE closing for an acquisition loan. H&O was interested in the deal but the borrower found an equity partner and decided he didn’t need the loan after all.

Two days prior to the closing the borrower came back to H&O when his equity partner got cold feet at the last moment. Thankfully the property was clean and there were no issues upon inspection so H&O Capital Funding was able to salvage the deal and provide the borrower with the $400,000 needed to close on time.

For more information on loans that we offer, visit our website.…

$400,000 Multi-Family Acquisition Loan – TWO DAYS TO CLOSE – Yonkers, NY Read More »

Phone No:

914.620.6432

Email:

commercial@hom-realestate.com

Address:

133 Parkway Rd., Bronxville, NY 10708

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