Construction Financing
by Terry Stidham
Financing for commercial development and construction has
been greatly suppressed since 2008. After a long sleep, it’s starting to wake
up from the dead. According to National Real Estate Investor, there’s been an
increase in rezoning applications and new construction for apartments, hotels
and senior housing, to name just a few property types.
Top Financing Complaints for Commercial Real Estate Developers:
- There are no commercial construction loans available
- Banks are only lending on the best projects
- The investment banks only want $20 MM and up projects
- Many of the bridge loan lenders offering this type of financing are offering financing terms that are simply unacceptable
Where are developers of new commercial
construction going for their loans?
Many are
turning to private money sources, including bridge loan lenders and hard money
lenders. For the next few years, many developers will have no choice but to
finance their projects, in part or whole, using private money and bridge
financing. There is a range of pricing available for private money loans. There
are loan programs out there with interest rates as high as 18%. These high
rates are reserved for the highest risk projects with the lowest borrower
equity.
The large banks are starting
to lend again on commercial construction projects. The private money arena is
expensive. Bridge loan lenders are eager to make commercial construction loans
in 2013.
We have sourced a major
bank that is making 100% loans on new construction projects with a 10%
refundable deposit upon project completion. Contact me for more details if you
have a ready to go project that needs funding.
No comments:
Post a Comment