While we are currently leaning more and more to equity based transactions there is still a need for Hard Money or Commercial loans in today’s market. We can typically structure loans in excess of 80% LTV.  One thing you MUST understand that loans of this type are typically collateral intensive and sometimes based on personal assets. 

LTV means ‘loan to value’. When seeking hard money or commercial bridge loans, you will consistently read that the loan will be based on a percentage of loan-to-value.

How do you determine the value of the property you wish to collateralize? The first thing to note is that hard money lenders require that they send their own appraisers to assess the value of the property. Do not waste your money on an appraisal; you will pay for it twice.

To estimate the value of property, use the selling price (the actual price you will pay for the property) if you are requesting a loan for a purchase. Very few people buy commercial or investment property at the appraised value - everyone is looking for a ‘good deal.’ Therefore, for the purpose of a hard money loan, the actual value of real estate is the ’street price’, the price the property will sell for today. If you are refinancing a property, get a realtor to provide you with an estimate using ‘comps’ or comparative properties in your area with the prices they sold for recently. If no recent sales are available, you can still get a rough idea from a realtor as to what to expect your property would sell for on the open market today. Also please do not include the value of the business, the furnishings or other properties other than the buildings and improvements to the real estate.