Private Equity & Money
Sometimes loan requests don’t meet the standards of traditional bank lenders. When that happens we have a number of private equity lenders that often times are willing to make private equity loans. These private equity lenders are funded by private money looking to get an alternative fixed rate of return by providing private equity loans against properties or projects instead of investing in the stock and bond markets. These funds are looking for solid private equity loan requests that don’t quite meet what the traditional banks are looking for, but that still have a high probability of repayment. Private money lenders are often times willing to fund these private equity loans at rates higher than traditional bank rates due to the higher level of risk associated with private equity loans.
Small Balance Hard Money Investment Real Estate Loans
Commercial Lending X (“CLX”) has partnered with Myriad Capital to bring a new hard money private lending fund to the market. CLX has identified that there is a hole in the marketplace specifically related to small balance hard money investment real estate driven loans. This new fund is focused on hard money / short-term bridge loans for loan amounts under $1 million with an even further focus on deals below $500,000. Below are some initial highlights of the fund:
- Minimum loan amounts of $50,000 and maximum loan amounts of $1,000,000
- Real estate secured loans only with loan to values not to exceed 70%
- Terms of 6 to 12 months with potential for renewal options beyond those terms
- Loans are interest only or interest at maturity
- No minimum credit score required and will consider properties in transition and borrowers in difficult situations
- Will only lend on investment properties including multi-family, mixed-use, industrial, office, retail, some special-use (special-use properties likely at lower loan to value’s) and non-owner-occupied residential investment properties
- Will consider limited construction or rehab money, but not ground up construction
- Pricing depends on size of the deal and loan to value, but we can get creative on pricing
- Primary market the greater Chicagoland area
The goal of the fund is to bring a solution to many borrowers in difficult situations that just do not have the need or access to the larger fund providers. You can expect to get the same value and treatment from the fund as you will experience with CLX, with quick decisions and a straight-forward approach.
Sample Small Balance Loans Funded
Apartment Building with Past Due Real Estate Taxes – Client with poor credit owned an apartment building free of debt. However, the building had four years of sold taxes. Due to concerns over credit and the past due taxes, conventional financing just was not an option. The small size of the loan request at $83,000 also presented another obstacle for most lenders. We were able to step in and provide a bridge loan solution on a six-month term with another four months of extension options to pay the past due taxes and give the Client time to sell the property.
Single-Family Fix & Flip Financing – Client had acquired a single-family home to complete a fix & flip. The original lender was not comfortable with the project due to the size of the site and would not give the customer the funding they needed to complete the project. We were able to provide a hard money loan solution for $176,000 to take out the existing acquisition lender that was at a high rate and provide roughly $90,000 in funds to complete the rehab of the home for an eventual sale. The loan is on a 9-month interest only term to provide the borrower time to complete the project and effect a sale of the home.