Why Is Commercial Real Estate a Good Investment?

By Brenda Sigurdson / June 10, 2021 / Leave a Comment

Choosing the right investment vehicle can prove to be quite the challenge. Everyone has their own opinions about what type of investments are best and which will be the most lucrative, the easiest to manage, the least risky, etc. And, with all that handy insight and advice, how could you possibly narrow it down? Well, that starts by taking the time to explore the options yourself, learn what each offers and then decide what combination of investment vehicle and strategy works best for you.

In this blog we’ll take a brief look at commercial real estate, including what makes it a good investment and why so many people choose it.

Return On Investment (ROI)

One of the biggest benefits of commercial real estate investing is that it garners a much higher ROI, on average, than other investments, even when compared to residential real estate. When the deals are bigger, so are the returns. Just like how people are always going to need housing, people will always going to need a space for their business. Covid may have tweaked some of the rules, but it didn’t rewrite them.

Diversification

Another big reason people choose to invest in CRE is because it …

What Is the Difference Between a Hard Money Loan and Bridge Loan?

By Brenda Sigurdson / February 23, 2021 / Leave a Comment

If you’re planning on using an alternative to conventional lending on a real estate investment, you may look into a hard money loan or bridge loan, but how do you know which one to choose? Find out the specifics ahead of time to know which is a better fit for your scenario.

Knowing the difference between a bridge loan and a hard money loan is almost as straightforward as exploring the definition of each. Once you understand how the two terms are explained, the distinction between a bridge loan and a hard money loan becomes much clearer.

What Is a Bridge Loan?

Similar to how a bridge closes the space between two points, a bridge loan is useful to fill gaps in financing. Many borrowers will select bridge loans for things like investments or property renovations. A bridge loan tides you over financially during the gap in time between the purchase of a property, the stabilization of said property, and arranging its long-term financing. Bridge loans usually have terms of between a few months and a year, although terms can sometimes exceed a year.

What Is a Hard Money Loan?

Short-term, conventional commercial mortgages are the closest comparison to hard …

Hard Money Loans Get Their Name Because Their Terms Are Hard to Negotiate or Approve

By Brenda Sigurdson / December 1, 2020 / Leave a Comment

This month’s blog is going to answer one of the most pressing questions people have about hard money loans: why are they called “hard”? No, they’re not going to hand you a pile of concrete cash – Hard Money simply refers to the fact that the interest rates charged are significantly higher than with a traditional lender. These loans, while useful, are more costly to borrowers due to the higher rates and fees, however, there are a number of advantages to a hard money loan vs. a conventional loan.

If It’s Hard, Why Bother?

In property investing of any kind, it can be a challenge to find financing outside of traditional sources. Unless you can fund all your own projects, you’re going to need help. For many investors, the best choice is a hard money loan.

The benefits to these loans typically outweigh the drawbacks. For starters, rather than focusing their attention on credit scores and personal financials, lenders base approval on the underlying asset itself and the likelihood that they’ll get their money repaid in full. Additionally, these loans are offered by private investors rather than traditional banks and lenders, which means they can offer more flexible terms, despite …

Myths vs. Facts: Hard Money Lenders Perform Very Little Due Diligence

By Brenda Sigurdson / September 28, 2020 / Leave a Comment

True or false: Hard money lenders look only at the property they are underwriting, and do NOT look at the investor?

In short, the answer to that question is “false.” For all lenders, even conventional lenders, the most important factor in any loan is the underlying asset to be mortgaged. This is especially true for hard money lenders. On a stabilized asset, with a good debt coverage ratio, a hard money lender will rarely, if ever, ask for any personal financials. The property secures the loan, and the lender typically lends to an entity, rather than an individual or group.

This structure, however, does not mean that the Lender ignores whether or not a borrower can repay the loan and make timely monthly payments. For example, a loan on vacant land would likely be a scenario where some sort of personal financial data may be requested as the property itself would not be producing any income to cover the monthly debt service.

Terms and Due Diligence

The terms of the typical hard money loan are simple: The amount given to a borrower is based on the value of the property being used as collateral. Generally, terms are NOT based on …

Myths vs. Facts: Hard Money Lenders are Unregulated

By Brenda Sigurdson / June 23, 2020 / Leave a Comment

Hard money loans are a great resource, but they are also one that is often misunderstood. One of the bigger misconceptions about this type of lending is that hard money lenders are unregulated or under-regulated, which increases the level of inherent risk for borrowers. The truth of the matter is that legitimate lenders are regulated, and they provide a reputable financial solution for alternative real estate investments that can’t benefit from traditional funding and home loans.

Who Regulates and Monitors Hard Money Lenders?

They must have a member of the organization that has a valid and current Real Estate Broker License to function as a lender within the guidelines of the law. Any businesses claiming to offer these loans that aren’t registered with the state are not operating within the law and should be avoided at all costs.

In addition to the Department of Real Estate, hard money providers may also be registered or involved with other industry groups and professional organizations. Most lenders understand that they are in a higher risk industry, and therefore may need to offer their potential borrowers more incentive and assurances. They may belong to organizations like the National Hard Money Association or the …

$225,000 Second Mortgage – Mixed-Use Building- Bronx, NY

By Rich Salinaro / November 19, 2019 / Leave a Comment

$225,000 Second Mortgage – Mixed-Use Building – Bronx, NY

H&O Capital Funding was contacted by an investor who needed some quick funds for another transaction. He knew that he had some equity in his mixed-use property with two apartments and a store in the Morrisania section of the Bronx. H&O Capital was able to close the deal is less than two weeks, allowing the investor close on his other deal without a hitch.

H&O Capital Funding has helped countless real estate buyers, sellers, lessees and lessors achieve their goals. Our legacy is unwavering commitment to the communities we serve. Houlihan & O’Malley Commercial Real Estate Services specializes in four distinct, yet overlapping, areas of business: Commercial Brokerage services, Private Mortgage services, Appraisal Services and Advisory services.

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

…

$1,700,000 Blanket First & Second Mortgage – Mixed-Use Property & Development Piece – Westfield, NJ

By Rich Salinaro / August 2, 2019 / Leave a Comment

$1,700,000 Blanket First & Second Mortgage – Mixed-Use Property & Development Piece – Westfield, NJ

The borrower in this deal is a developer who has done a lot of work in Northeast New Jersey. Having hit a few roadblocks with his conversion of a vacant property from office to residential use, he needed some funds to pursue the issue with the town. A vacant property without the approvals for redevelopment isn’t very marketable and most lenders were stymied trying to underwrite the deal. H&O Capital, however, was able to determine that there was enough equity behind a first mortgage on a mixed-use property the borrower owned in the same area. H&O did the deal as a blanket to make it work. There were a number of moving pieces here, but H&O was still able to get the deal closed in just three weeks.

For more information …

$550,000 First Mortgage – Mixed-Use Building – Brooklyn, NY

By Rich Salinaro / July 26, 2019 / Leave a Comment

$550,000 First Mortgage – Mixed-Use Building – Brooklyn, NY

In this deal, the borrower came to H&O Capital Funding needing some money to finish up some renovations he was doing to his property in the Clinton Hill . The property consisted of two apartments and one commercial space that was divided into 3-4 smaller spaces for separate tenants. With plenty of value in the property, the loan was a no-brainer for H&O Capital Funding. Despite a few legal hurdles, the loan closed in under three weeks.

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

…

H&O Capital Funding Closes Bridge Loan in Brooklyn, NY

By Rich Salinaro / February 21, 2017 / Leave a Comment

Brooklyn Social Club Bridge Loan – $1,420,000

From the beginning, this was not your typical deal. A group of borrowers approached H&O Capital Funding looking for some funds to get an old/defunct social club up and running again. Having been turned down by multiple lenders who “didn’t understand our vision”, club members turned to H&O Capital in a last-ditch effort to secure the financing they needed. Thankfully for the club members, H&O Capital Funding DID understand the vision and were able to provide them a bridge loan and close the deal within three weeks.

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

Mezzanine Capital Funding Loan – Westchester County, NY

By Rich Salinaro / February 15, 2017 / Leave a Comment

H & O Capital Funding would like to announce a recently closed loan in Westchester County, NY.

Blanket Mortgage Loan of $5,000,000

This borrower came to H&O Capital Funding looking for a quick cash infusion for their business. H&O was able to provide a $5 million blanket loan with a first mortgage on a warehouse property in Bedford, NY and a mezzanine loan on a retail shopping center near White Plains, NY. This deal closed in under three weeks.

For information on our services, contact us at 914-620-6432.…

bridge loan