The Music City is in the news again for its fast-selling homes, ranking second in the nation with the average house in Nashville selling in just 11 days. The competition is tense, and experts suggest that real estate investors should rely on hard money loans in Nashville to win.
One of the most commonly availed types of short-term financing solutions that real estate investors go for is bridge financing. Investopedia defines bridge financing as an interim financing option used to solidify the short-term position until a long-term financing option is arranged.
However, many investors get blindsided by the benefits of bridge financing and end up making common mistakes. So, if you’re interested in bridge financing for a real estate opportunity in Nashville, TN, make sure you avoid these mistakes:
1. Providing Incomplete or Incorrect Information
When applying for a commercial real estate bridge loan in Nashville, you will be asked to provide numerous details regarding your finances. Depending upon the specific purpose and needs of your loan, you’ll submit documents to give the firm a clear picture of your finances.
It’s important that you pay attention to the required documentation and get started on preparing all the essential documents in advance. The firm you go with for bridge financing should be fully aware of your needs so they can structure the loan in such a way that it benefits all parties involved.
2. Choosing the Wrong Financing Firm
One of the rookie mistakes that investors make is borrowing from the first firm or lender they find. It’s important to do your research and ensure that the firm is authentic, reputable, and reliable.
Pro tip: Take a look at the recent deals they’ve done to better understand their operations and make sure they specialize in bridge financing.
3. Lack of Budget Planning
It’s crucial that you have a budget plan ready as you will have to pay the remaining balance once the loan is drawn. Make sure you plan for the budget in advance to help you stay in control. You should have a clear road map of how you will use the short-term bridge financing to help you get to your long-term goals.
4. Not Having Enough for the Down Payment
When you’re going for a bridge loan, you will also have to pay attention to the down payment. Make sure you know how much down payment you have to make to be able to secure the bridge loan.
These details should be ironed out before the agreement so make sure you discuss them with a senior part at the financing firm. If you’re looking for a bridge financing option in Nashville, TN, GCP Fund is a great choice!
Global Capital Partners Fund offers numerous short-term financing options, including bridge financing for real estate investors in Nashville. Get in touch with a senior partner today to discuss your bridge financing needs.