Hard Money Note Purchase Financing
Since 2008, banks have faced unusual pressure from Federal bank regulatory agencies such as the Federal Deposit Insurance Corporation (FDIC) and the Office of Comptroller of the Currency (OCC) to reduce their portfolio of commercial real estate loans or reconcile themselves to an increase in the bank’s capital requirement that can be imposed on the bank by Federal regulators. As a result, banks are more willing to sell off commercial real estate notes at significant discounts. These notes may be non-performing or may simply be loans that the bank would like to get off of their books for one reason or another. Regardless, this situation often results in good opportunities for real estate investors to purchase notes on distressed properties at a steep discount. Since banks require prompt action on the part of note purchasers, working with an experienced Colorado private capital direct lender such as Montegra can help investors to better leverage their note purchase.
Montegra offers buyers of first-mortgage, real-estate-secured Promissory Notes and Deeds of Trust the opportunity to finance their purchase through Montegra’s bridge loan program. This bridge loan program is another example of Montegra’s Colorado Hard Money lending programs that assist its borrowers with taking advantage of current opportunities to pick up assets at discounted prices today.
Summary of Terms for Note-Purchase Bridge Loans
- Montegra finances up to 60% of purchase price of Promissory Note and Trust Deed. The note must be a first-position mortgage secured by commercial or investment residential real estate located in Colorado.
- Montegra approves financing to purchase either performing and non-performing notes.
- Montegra consider applications for both stabilized and non-stabilized properties.
- Montegra offers loan terms of one to two years with a possible option to extend the loan another six to twelve months.
- Montegra offers interest rates between 10% to 11.5% payable interest only.
- Montegra provides additional funding for property improvements, leasing commissions, and tenant finish if necessary.
- Montegra charges loan fees between 2% and 4%.
As a direct lender, Montegra has more flexibility in our underwriting process than banks and other traditional lenders do, allowing us to fund loans in short time frames so that investors don’t have to worry about missing out on deals while they wait for their loan application to be approved. For more information, contact us today at 303-377-4181.