There is no doubt that the Coronavirus Pandemic has impacted practically every facet of society, and the financial markets are not immune. As a result, manyhard money lenders are re-assessing their risk tolerance and making modifications to their loan programs in accordance with market fluctuations.
Fix-and-Flip Bridge Loans
If you are relatively new to real estate investing, a fix-and-flip bridge loan, which is also commonly referred to as “bridge financing” or “gap financing,” are essentially short-term loans offered by hard money lenders that are used to assist investors in financing the purchase and renovation of specific properties. A typically fix-and-flip bridge loan will have a duration of between 6 and 24 months.
Due to the finite nature of these loans, some hard money lenders offer a special bridge loan product that enables a borrower to pursue cash-only deals and “close as cash” on a property purchase. Bridge loan funding can also be utilized to help bridge the proverbial gap between the time of a completed fix-and-flip project and the actual sale of the property.
There are many benefits associated with fix-and-flip bridge loans. Here is just a sampling:
- Bridge loans can provide a viable cash flow solution to a borrower in need of liquidity to complete a fix-and-flip project
- Bridge loans can serve as an invaluable “buffer” against unforeseen problems related to COVID-19 issues (e.g., rent moratoriums, state-wide lockdowns, etc.).
- Most borrowers can apply for, and secure, a bridge loan very quickly. Depending on the amount sought and the project you are working on, you could potentially receive bridge funds in a matter of days.
Qualifying for a Fix-and-Flip Bridge Loan
To qualify for a fix-and-flip bridge loan, there are some tried-and-true metrics that will always carry weight with hard money lenders in Los Angeles, including a good credit score, a strong financial portfolio, a track record of paying back prior hard money loans, and any documented success with past flips.
If you are brand new to real estate and need a bridge loan for your very first fix-and-flip project, you may encounter more difficulty in securing funding because some hard money lenders have scaled back their offerings to fledgling flippers. In fact, some hard money lenders have temporarily stopped lending to first-time flippers in response to the pandemic and associated market fluctuations. Nevertheless, even if you are new to real estate investments, it is important to stay positive and be proactive. There is a wide range of risk tolerance for different hard money lenders so you may still be able to secure a bridge loan depending on the unique aspects of your project.
In Need of Hard Money Loans in Los Angeles? Contact PB Financial Group Corp Today
If you are looking to secure a hard money loan for a real estate venture, take action by contacting PB Financial Group today. PB Financial Group is a premier direct hard money, private money and bridge lender, who has been providing quick funding since 2006 and have funded over 2700 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner. To schedule a consultation please contact PB Financial Group at 877.700.3707 or visit www.CalHardMoney.com for further information.
PB Financial NMLS #357614/DRE #01522495