As we head into the main construction season, this is going to be a very common call I get from people who do not have enough funds available to complete the project they are currently in the middle of.
There could be a number of reasons for not having the money to complete the work.
We could probably add considerably to the list, but it doesn’t really matter.
Your short and you need more money.
Usually when a project gets to this point, there is no time to waste as their are contracts to honor and sub trades to keep engaged to complete the work.
The good news is that there is typically a way to solve the problem through what we call a construction bridge loan.
Your ability to acquire a construction financing bridge loan is going to be relative to the amount of work completed and the amount in value the property has increased.
For instance, if 80% or more of the work is completed, you can typically get 75% to 80% of the completed fair value of the property.
If completion is lower, the amount of money than can be arranged as a percentage of the property value will be less.
The source for construction bridge loans are basically private mortgage lenders that advance construction loans and have the ability and experience to quickly assess the work completed in order to make a lending decision, hopefully in your favor.
And because this is coming from private lending sources that are used to this type of request, the turnaround time can be as quick as two to five business days.
Of course you understand that fast, short term funding is going to come at a higher cost that a bank loan or mortgage, it still likely going to be cheaper than the costs you’re trying to avoid if your project stalls out.
The construction bridge mortgage would be registered behind the mortgages in place and would be paid out either from the proceeds from resale of the finished project, or through funds provided by the take out mortgage if the property owner is planning to self occupy.
If you’re in the middle of a residential or commercial construction project that requires additional capital in a hurry to get finished, I suggest that you give me a call so we can quickly assess your situation and provide relevant construction bridge financing options for your consideration.