Recently bridge loans have started to gain popularity especially in the real estate industry. These loans help borrowers get the necessary capital infusion before the financing they applied for with banks pushes through. Since there are inherent risks to these types of loans private money lenders like Montegra Capital Resources Ltd., prefer to give out what are known as first-position loans. What this simply means is that should the borrower ever default on the loan, they get first priority on the payment.
As with any lender, Montegra Capital has different options for a borrower depending on the property. One reason is that different types of real estate can have different LTVs. When it comes to property types, Montegra Capital has different categories.
The first is known as income producing properties. This is a type of property that is either developed or bought and is expected to earn income either by lease, rent or appreciation in the price. Unlike other private money lenders out there, Montegra Capital offers up to 65% LTV for any property under this category. Say for example office properties. Montegra Capital can offer an investor said LTV. Even if the company has a first-position, it is still difficult to collect if the borrower defaults. Thus as an added condition the borrower must be able to show that it has the capacity not just to manage to property but also be able to cover for any expenditure that may arise with regards to the property, particularly in the final phase of construction.
Though Montegra Capital offers a rather high LTV, is still wants the borrower to cover 25% of the cost. However if an investor wants to buy property priced lower that the market value, then Montegra will offer to increase the LTV in order to cover a maximum of 85% of the price. Tell me, do any of the private money lenders you know give such offer?
Another category is known as investment-purpose residential property. This is typically for real estate that is expected to be utilized for business purposes and is often non-owner occupied. One good example is known a flipping or “fix and flip.” What happens is that an investor will purchase a particular real estate, fix it to increase its market value, and then sell it to earn a profit. In this case, the company will offer a hard money loan. Montegra will also want assurance that the owner will never occupy the property even if only a small part of it.
There are still many types of property that Montegra Capital is willing to finance. Suffice to say that it is indeed one of a kind when it comes to lending. To know more about what other types of properties Montegra Capital is willing to finance and what the different terms, visit their website at www.montegra.com. It’s not every day that you get to do business with a lender that looks after you. Then again, Montegra Capital in not just one of the many private money lenders, it is truly ahead of the pack.