Where is Value Added?
On hard to fund transactions such as large construction multi-phased projects or problem situations such as a short fall of funds or bankruptcy, speed may mean the difference between project success and failure.
Fast decisions and lending criteria based on property values and not the borrower's credit is where the Hard Money and Hard Equity Lenders come to the rescue.
However, be prepared to pay for this service. Expect rates to begin at 12% and a minimum of 3 points and a 5-8% exit fee on Hard Money and Bridge Loans.
Is it worth it?
The answer is maybe. Each situation is different and Hard Money and Bridge Loans are extremely useful when getting the project completed is more important overall than the cost of capital.
Keep it that way! Plan for things to go wrong and they will be cheaper and easier to control when they do.
For example, do not wait to seek financing on that Multi Family or Raw Land property which you just entered into contract. Call Ryon Capital early enough so that we both have options on the type of lender to approach.
Also, lenders are not mind readers and it is critical to have your executive summary prepared before approaching them. You will be taken much more seriously with prepared numbers. Regardless, you should allow up to 120 days to obtain financing for many projects. Each on is different and some will be funded in 30, 60, or 90 days, but be prepared!
