For investors, bridge loans can offer an important opportunity to help them make their money go farther when investing in real estate or other areas. To name just one example, imagine an investor wanting to invest in a certain region. When two adjoining properties suddenly become available at the same time, the investor might be able to use a bridge loan for each purchase, and thus make an offer on both of the properties (instead of just one).
Below, we offer a quick look at what bridge loans are for investors, and how they can potentially help investors for their long-term financial plans.
What are Bridge Loans?
Bridge loans are short-term loans (12 months and under) that give people the financing they need to make a down payment on a property while waiting for another home to sell. This can allow the person to move into your new home while their old home is still on the real estate market. While this can be a risky move for people trying to sell in places where the housing market has fallen, it is usually considered a safe investment move if you live in high equity areas of if you feel your home will sell in a relatively short time period.
Benefits of Investing in Bridge Loans
Short term commercial bridge loans are said to offer investors fixed returns that approach six to ten percent each year. Junk bonds rarely ever go above 2% each year. Thus, the financial incentive to investing in bridge loans is that you might be able to garner a straight 6% annual return. These relatively high returns are possible because of the short-term nature of the loans. People do not usually default on these types of loans because they need them to secure other forms of long-term financing.
Furthermore, bridge loans usually have fewer requirements that other bank loans with a quicker close time. While there certainly are risks that come with investing in bridge loan in Los Angeles, the financial reward is often reason enough to apply.
You can consider investing in a bridge loan in Los Angeles, Orange County, San Diego, San Francisco, and Sacramento with the expert hard money lenders at PB Financial Group. For further information or inquiries about how we can help you achieve your goals please contact PB Financial Group at 877.700.3703 or visit www.CalHardMoney.com.