Construction Financing Bridges Required

“Construction Financing Bridge Loans Can Be A Savior To Getting Your Project Completed”

The most common construction financing bridge loan requirement is for the property fix and flippers that are trying to improve an older home in poor condition and flip it for profit in a short period of time.

You have seen some of the horror stories on the reality tv shows where people are desperately trying to renovate an older home and everything keeps going wrong the further they get into the project. While these may seem like unusual or extra ordinary cases, they are more common then you might think.

The typical story goes something like this. Property is purchased for a bargain price. A renovation plan and budget are put together and used to secure construction mortgage financing. The project doesn’t go according to plan for whatever reason, including the renovator changing their strategy on the fly. The project runs over budget and the owners run out of money before the work can be finished and the property re-marketed for sale.

When the construction mortgage funds run out, the owners will leverage credit cards, lines of credit,and anything else they can get their hands on to finish the project, which still might not be enough, and even if it is, they can end up destroying their credit in the process if it takes a while to sell the property and pay down the outstanding debt.

One way to help stop the bleeding or at least allow the project to get completed in a more orderly and lower stress fashion is to secure a construction bridge loan.

Construction bridge financing is based on the work completed to date and the lenders assessment of the remaining work. In most cases, these loans are under $100,000 and are typically provided by a private lender who is prepared to re-market the property themselves if required.

But in most cases, privates will do these deals because they see the quality of work done to date (which in many cases is the underlying problem in that the work is too good or too extensive compared to what is actually called for) and feel comfortable with the local real estate market.

The trick is to find this type of construction bridge financing as its not commonly provided by most private lenders. And while the cost of bridge financing is not going to be cheap either, it pales in comparison to credit card rates or the loss of profits from lender foreclosure if you can’t find enough money to complete the project.

If you’re trying to locate and secure a construction bridge loan for a residential or commercial property, give me a call and I’ll quickly determine what options may be available to you.

Click Here To Speak With Mortgage Broker Joe Walsh