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How to Use A Bridge Capital Loan to Increase the Cap Rate on Your Next Multifamily, Retail, or Office Building Acquisition

Bridge Capital Loan | Comments Off
How to Use A Bridge Capital Loan to Increase the Cap Rate on Your Next Multifamily, Retail, or Office Building Acquisition

A Bridge Capital Loan allows you the investor, an opportunity to offer a quick close of 30 days or less to the seller, in return for a better buy price and/or terms. Acquiring an asset at a discount will have a positive impact on your cap rate (determined by dividing the sales price by the asset’s net operating income) this buying strategy will in effect increase your overall return on investment & easily allow you to see low-to-mid double digit cap rates.

With distressed Multifamily, Retail, and Office Buildings currently trading for pennies on the dollar, now may be the time to get your capital off the sidelines and in to the game!…especially if you have the experience to manage and stabilize them. Investors find it is often difficult to get a traditional lender to give them permanent financing on the purchase of these assets due to the occupancy rates falling below 90%. Bridge Capital allows you to “bridge the gap” giving you the ability to acquire the property, and ramp it up to maximum efficiency within 1 to 3 years…at which point you can then qualify for a permanent financing piece.

Benefits Of a Bridge Capital Loan: – 70% to 80% Loan to value, Interest rates between 9% and 12% – Interest Only – No upfront, application or due diligence fees – No personal guarantee (a non-recourse loan). We can close in 30 days or less.

Minimum loan size is $1,000,000 with a maximum loan amount of $10,000,000. The terms are typically 12 to 36 months with a balloon payment at the end.

 

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