One of the biggest obstacles that most aspirant investors face when looking to invest in commercial real estate is down payment. Some of them borrow money from family members or friends while others save until they have enough money to make a down payment.
But the job’s not entirely done. Now comes the really challenging part: what about the remainder price of the property? The availability of so many options—or the lack thereof—makes it tough to determine which is the most suitable choice.
If you’re planning to buy a multi-family commercial property in Dallas, TX, and looking to raise finance, we suggest you go with bridge financing, especially if you want to close a deal quickly. Let’s find out more!
What is a bridge loan?
A bridge loan is a short-term financing arrangement where you gain access to loans in the short-term until you secure permanent funding. Most commercial real estate investors prefer this option due to quick processing time and added convenience.
A bridge loan can be obtained by securing your existing home or property. It’s often used by people who want to buy a new home before selling their current one, but it can be an excellent option for commercial investors as well.
You identify a profitable multi-family commercial property deal in Dallas, TX. Suppose you have the money to put as a down payment but don’t have a pre-approved loan or enough capital to fund the transaction. And, the property has a tight closing timeline.
Now opting for conventional financing can take several weeks or months, which will allow other investors to swoop in and close the deal before you can secure the funding. You can quickly assess the bridge financing by putting an existing property.
This way, you’ll be able to seal the deal and buy the multi-family commercial property quickly and capitalize on the lucrative opportunity. The bridge loan can be repaid in several months or years, which will give you plenty of time to seek long-term financing.
Fix and flip
A bridge loan is also an ideal financing choice for commercial investors. They can fix and flip multi-family commercial properties, i.e., purchase a property for a short period, make renovations, and sell it for a higher price, as the loan can be repaid once the property is resold.
Commercial investors with an existing multi-family commercial property in Dallas, TX, can use bridge loans to furnish their property, for example adding new floors, giving a fresh coat of paint, installing a new bathroom, etc.
Once the renovation is done, the investor can either sell the home at a higher price or increase the rental payments, which will allow them to recover their investment and increase their profitability in the long-run.
About Global Capital Partners Fund
Global Capital Partners Fund is a leading asset-based lender in the United States that provides convenient bridge financing solutions in Dallas, TX, to help investors capitalize on profitable multi-family commercial property deals available in the market. For more information about their services, call at +1-800-514-7350, or visit their website.