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Hard Money California Apartment Loans

Posted September 23rd, 2010 in Mortgage Loan Insights

While many multi-family property owners know us for our traditional CA apartment loans, we specialize in low-rate hard money apartment lending as well. In fact, private money apartment loans make up a large part of our fundings today, since commercial banks are less than willing to loan on apartments that fail to meet certain minimum debt-service coverage, vacancy, location, owner credit, and other standards.

And, while it’s definitely true that financing is once again starting to open up in select markets for A-Grade, metro apartments and commercial office and retail properties, keep in mind that is primarily traditional Fannie Mae / Freddie Mac / FHA product for loan amounts over $1M, and there are very specific requirements involved to qualify.

For the California apartment property owner who needs CASH, but has a traditional 1st loan that he/she wants to leave in place, we fund equity second mortgages (and occasionally even 3rd mortgages) on apartments! These apartment 2nd mortgages can be structured as Lines of Credit or closed-end, or fixed-rate loans. Rates vary by combined LTV, location, debt-service, etc, and are the ideal solution for low-hassle improvements, liquidity, or even personal debt consolidation or cash for investment purposes.

Commercial banks HATE making equity loans on multi-family properties, and when they do it’s only in the form of a new 1st lien. Debt against commercial income property has a negative effect on value, but a commercial hard money lender recognizes the value of a low-LTV equity proposition and the need for cash in today’s times. Don’t expect low rate, low-cost terms for a 2nd mortgage, though. Even though you may have the “best building in the state”, privately-funded junior liens are risky business on ANY property type in today’s market, and the investor willing to assume the risk of making a cash-out loan subordinate to a sizable 1st lien will expect a premium for use of his money, just as you expect a certain return on your real estate investment (known as a “cash-on-cash yield”). As with all hard money loans, one must weigh the benefit-to-cost to know whether a private equity loan makes more sense than a refinance of existing debt at bank terms.

We also offer superior rates on hard money purchase and rate/term 1st mortgages on California apartments, starting in the 7.00s for qualified apartments. Bridge loans on apartments — those with terms of 2 years or less — are of particular usefulness to apartment owners who need to close on an apartment purchase transaction quickly, or renovate / lease-up / stabilize a property prior to refinancing into a traditional apartment loan.

Rate/term hard money refinancing allows for fast closing on a maturing or ballooned note, and of course we’re open to refinancing past-due apartment notes, including NOD (default) and NOTS (trustee foreclosure notice) situations. If the apartment has minimal equity but a viable exit strategy for repayment of our loan, we can also cross-collateralize other real property with sufficient equity as additional security to make the transaction work.

We offer hard money apartment equity loans from $50,000 to $5M, with rates starting in the 7.00s. Call for more information or a quote on your particular hard money commercial loan — we fund apartments, offices, retail, medical, mixed-use and other income properties throughout CA and the western U.S. (800) 644-8829 or inquire online.

Call now for a free no-obligation home loan consultation:
Valencia / Santa Clarita / Los Angeles: (661) 255-9824 | Toll-Free: 1 (800) 644-8829   Inquire Online  
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Disclaimer: The advice and opinions expressed herein do not constitute legal advice and are intended for general informational purposes only based on the working experience of the author only. The author is not a licensed attorney. The opinions contained herein are made exclusively by the author and not those of Augusta Financial Inc, it's ownership, management, or other employees. No guarantees as to the validity or legal aspects of the information contained herein are made, express or implied. Accuracy of this information is subject to change per market conditions or the author's experience in the industry. No guarantees are expressed or implied as to the viability of real estate as an investment. Personal credit issues are subjective. Real estate, finance, investment, and landlord-tenant laws and regulations vary state-by-state. You should consult with a licensed real estate attorney in your area for all matters pertaining to the legal aspects of selling, purchasing, financing, investing in, or rental of real estate whenever legal and/or financial implications are (or should be) a consideration. Page copy protected against web site content infringement by Copyscape
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