Many strangers, friends and clients ask me what is” Private Equity lending “, “Bridge Lending” or “Hard Money lending” and the general definition is
Private Equity/ Bridge Lending/ Hard money :
Private equity lending, Bridge lending AKA Hard Money – Lending on collateral value (Real estate). This capital is sourced from a syndicate of different sources- hedge funds, Family trusts, Investment REITS. This type of loan is used when speed is a factor on securing an asset (property) – Investors use this as a way to secure properties in distress. This type of financing is interest only, for 1-3 years. It is primarily used as a bridge between acquisition of an un-stabilized property (vacant or being renovated) and once property is “stabilized” and occupied, you would refinance with conventional commercial financing.
At HGRN we to keep it nice and simple and it means: loans that are based solely on the value of the property, no credit or income is necessary for approval. The maximum we will lend is 50-60% of the transaction. This is not bank financing and the rates are usually higher. Example- if you’re looking at a 100k property that may be worth 200k with some repairs. You would buy the property so you can resell the property, AKA “ fix and flip”
We will lend you 60k maximum no questions asked. No tax returns needed. We can close the deal in 7-10 business days.