For decades, and perhaps even longer, HNW and UHNW (ultra-high-net-worth) individuals have used real estate bridging loans as a “secret” tool to access liquidity quickly, easily, and with the reliability few loans other loans can provide. This “tool” is now known and available to everyone, regardless of their net worth.
When it comes to real estate, having quick access to cash can often be the key to success. Whether you’re a seasoned real estate investor with a diverse portfolio or just stepping into the world of real estate, this article is tailored to address the benefits and requirements of asset-backed or asset-based lending.
What is Asset-Based Lending?
Asset-based, also known as asset-backed or bridge lending, is the practice of loaning money in an agreement that has been secured by some form of collateral – in this case, real property. The terms of asset-based loans depend on the value of the assets that are being offered as security and the type of assets they are. In essence, you are putting future revenue on the line in order to get access to money in the present. Asset-based lenders will typically provide funds on an agreed-upon percentage of the asset’s value, typically ranging between 70% and 75%. These loans are often funded by private lenders who don’t have the same requirements that are typical with banks.
Accessing Liquidity to Take Advantage of Market Conditions
In the dynamic world of real estate, staying ahead often requires access to immediate liquidity. When market conditions are favorable, seizing opportunities quickly can make a significant difference in your investment journey.
Bridge loans stand out as the preferred funding option for various purposes, including:
- Highly structured transactions
- Discounted note payoffs
- Lease-up stabilisation
- Redevelopment of existing properties
- Repositioning of a tired or underperforming asset
- Property acquisitions with a short closing timeline (or challenges on the property or sponsor)
- Recapitalisations/Debt Restructuring or Partner Buyouts
- Other uses on a case-by-case basis depend on borrowers’ specific funding needs, where traditional funding sources like banks or insurance companies will have difficulty approving such loan requests.
- Buying real estate with a “same-as-cash” basis
How Do You Qualify for a Bridge Loan?
Bridge loans are a valuable tool for investors seeking short-term financing solutions. But how do you qualify for one?
Our most popular terms are as follows:
- Loan term: 1-3 years Interest Servicing Only (Interest-Only)
- Interest Roll-up (Interest payments are taken out of loan proceeds)
- No U.S. credit required
- Minimum loan amount: $1,000,000 (Residential Bridge Loan) and $3,000,000 (Commercial Bridge Loan)
- Up to 75% Loan-to-Value
- 24-36 hour approval
- Funding in 1-2 weeks
Which Countries Are Bridge Loans Available In?
For investors with global interests, it’s crucial to know where bridge loans are available. America Mortgages and Global Mortgage Group specialize in providing bridge lending solutions in countries such as the United States, Canada, Singapore, Thailand, Philippines, Hong Kong, Australia, Dubai, U.K., and various other EU countries. These loans are tailored to meet the unique needs of our clients worldwide.
How Accessible Are Bridge Loans?
Bridge loans’ accessibility depends on various factors; Geographic location, lending options, property type, loan-to-value ratio, exit strategy, and market conditions all influence the structure of a bridge loan. At America Mortgages, we specialize in helping U.S. expat investors and foreign nationals navigate these complexities. We find the most accessible bridge loan solutions tailored to your specific needs and circumstances.
What’s Needed to Qualify?
The higher your free equity value, the more cash you can unlock! When you’re applying for a bridge loan, the value of your property is one of the most important factors lenders consider. That’s because bridge loans are secured against your property, a true asset-backed solution. At America Mortgages, the minimum property value to qualify for a bridge loan is $500,000. But if your property is worth more, you could be eligible to borrow even more cash, which can be used for a variety of reasons. In most cases, there is not a requirement for use-of-funds.
Why Would People Use Bridge Loans to Get Liquidity?
Bridge loans provide quick access to cash when needed. They’re handy when you need funds fast, whether for seizing investment opportunities or renovating properties without delays. At America Mortgages and Global Mortgage Group, we understand the importance of acting quickly. We’ve successfully closed bridge loans in 3 days to help investors like you maximize their real estate potential.
The U.S. real estate market holds promise for investors who are well-prepared and informed. Bridge loans are just one tool at your disposal, but they can make a significant impact when used strategically. With our expertise, we can help you maximize your investments and reach your financial objectives.
If you have any questions or need assistance with your mortgage goals, please reach out to us at America Mortgages. We’re here to assist you in reaching your real estate investment goals.
Investors, it’s time to seize the opportunities available to you. Don’t hesitate! Contact us today at [email protected] to learn more. We’re here to help you secure the financing you need to achieve your real estate investment goals.