Montegra offers a wide range of commercial hard money loan solutions in Colorado. Private money loans are available for income producing residential and commercial real estate. Hard money loans are offered for a variety of scenarios when commercial banks are unable to underwrite a loan.
Hard Money Acquisition Loan:
A loan used to purchase a specific real estate asset; typically improved property or platted land.
Use: When traditional lenders cannot react in time, hard money acquisition loans offer borrowers funding options and can be closed within weeks rather than months. Another use of acquisition loans is when a property’s quality is not up to institutional standards and/or when borrower’s credit or liquidity does not match bank’s requirements. Commercial, industrial, and investment grade residential properties qualify.
Value Added Loan:
- A specialty of Montega – A Loan used to purchase a building with higher than normal vacancy rates and to provide funds to renovate a property to increase the cash flow.
Use: When a property is generating below market rents because of high vacancies or poor management, value added loans can also be used to renovate and improve a property. This is useful when a property has potential to generate more income than it is currently producing. A value added loan is a method to maximizing cash flow or can be referred to as helping “stabilize” a property.
Hard Money Land Acquisition Loan:
A loan used to acquire land. The almost total lack of financing for land by banks and institutional lenders has created some of the best buying opportunities on commercial land in a generation.
Use: At the present time, few commercial or even private capital real estate lenders are willing to fund loans on land. Montegra’s hard money loans are the exception to this lack of land loan availability. Montegra is willing to fund loans on land in the metro Denver area that is zoned and has all entitlements.
Bridge Loan:
Also known as interim financing, gap financing, short term financing or swing loans. A bridge loan is used to provide immediate cash for quick closings, to make an advantageous purchase, or to help a borrower avoid a default or foreclosure.
Use: Bridge loans have numerous applications in real estate. While traditional underwriting processes typically take months, hard money bridge loans can be reviewed in days and close within weeks. Montegra’s focus on the real estate as collateral being the primary determinate of funding for a loan avoids all of the red tape and restrictions of institutional lenders.
Construction Pay Off Loan:
A loan that relieves spec home builders of their construction loans when their property has not sold within an anticipated time frame.
Use: With the recent upheaval in the commercial real estate market it is harder than ever to close the sale of a property within the time frame originally estimated by the construction lender. The use of a hard money loan based on equity in the property to pay off the construction lender helps the developer avoid losses by being forced to sell their property at fire sale pricing.
Foreclosure Prevention Loan:
A loan that allows a borrower’s property to avoid going into foreclosure. For a hard money loan, little red tape is involved and the process can be expedited.
Use: Often a hard money loan is the only option when this scenario arises. The process of foreclosure can be messy and have far reaching effects on personal credit. Foreclosure prevention loans are a good option to use when the actual filing of a foreclosure may make it almost impossible to sell a property at a fair market price.
Debtor in Possession (DIP) Loan:
A loan that provides an exit strategy for properties under chapter 11 bankruptcy.
Use: Similar to foreclosure prevention loans, debtor in possession loans are used to get real estate out of the jurisdiction of bankruptcy court.
Foreign National Hard MoneyLoan:
A loan designed for foreign nationals interested in purchasing real estate who are not able to secure funding from traditional banks.
Use: Foreign national loans are used to purchase both commercial and residential investment properties to people who do or don’t have green cards, yet are still interested in owning American real estate. These mortgages are very difficult to obtain from traditional sources but relatively easy to get from a private capital lender.
Standby Commitment Loan:
A formal loan commitment from a private capital (hard money) lender specifying the terms under which it agrees to lend money to a borrower upon the completion of the construction of a project.
Use: These loans are frequently required by institutional lenders before they agree to do a construction loan. These loans are also known as takeout loans.
