How To Make Money With A Commercial Bridge Loan

Commercial bridge loans can be a sound investment in the future, not just as a businessman in need of one, but as an investor looking to make his money grow without taking on too much risk.

You just got a nice bonus at work. As tempting as it would be to waste the money on a sports car, luxury vacations, or the most impressive home theater system ever built, you know you should do the smart thing and try to make your money grow. Make the right investment decisions and you can still have the vacations and home theater system after you retire and have time to use them.

But your buddy lost his shirt in a recent investment, and you are a little paranoid about suffering the same fate. What should you do? What has a limited amount of risk, but still has a decent gain?

Maybe you should get involved with a commercial real estate lender who approves commercial bridgeloans!

Why Commercial Bridge Loans?

What is a commercial bridge loan? It is not unusual for a business to need cash to keep from going into foreclosure or to cover costs while waiting for long-term financing to be approved. In those situations, a commercial bridge loan can be obtained. Since they are short-term and do come with a little more risk than a mortgage, the interest rate will be a little higher. So why should you invest in them?

If you allowed your money to be used for a commercial mortgage, you wouldn’t see it all again for a very long time. Commercial bridge loans, however, are short-term loans (often from as little as two weeks to three years) so you will see your money again a lot quicker than the 10-30 years it would take to get it all back from a commercial mortgage.

Loans are secured by commercial assets so should the borrower default your investment is safe. Your broker will have the loan placed in First Position, so a default does occur when the property goes up for auction you are paid first.

As the borrower makes payments, you will receive monthly payments as well a 6 percent yield. Most lenders will likely have no problem reinvesting it so that your money can keep working for you.

Is Investing In CommercialBridge Loans Worth The Risk?

If there were an investment that did not have some level of risk, it would have people waiting in line to get in. Everyone wants to earn money while not taking a chance on losing it. However, there is no such thing. Every investment will have some percentage of risk.

With a commercial bridge loan, your investment is secured by the commercial property the borrower used as collateral, but that does not mean the borrower is going to make every payment. Business could fall off, demand could slip, a scandal could taint the product or company, someone could embezzle money—there is a host of things that could go wrong.

Yes, there is the collateral that will be sold at auction, but there is no guarantee on how it will sell. So—is the risk worth the reward? Only you can answer that question.

 

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.