With the single family rental market saturated, many commercial real estate investors are shifting their gaze to multifamily investments. After all, multiple units means more revenue, and more people are looking for multifamily rentals because of their convenient locations to work, school, shopping, and entertainment. However, the initial capital requirements of multifamily investments typically exceeds what most CRE investors have on hand. Fortunately, there are a number of financing options available for multifamily investment projects of all sizes.
How Bridge Loans Work for Multifamily Investments
There are times when large financing is in the pipeline, but funds are not available to cover immediate costs. Bridge loans help to fill in those gaps in funding to take care of time-sensitive expenses, such as closing costs, full inspections, and other things, while the larger financing is being processed for disbursement. Bridge loans can be arranged quickly and tailored to fit the financial needs at hand.
Mezzanine Financing is Also Used for Multifamily Investments
Mezzanine financing is usually used for time-sensitive investment opportunities, and are based on the profitability of the property being purchased. Since multifamily investments are extremely profitable in the current market, mezzanine financing can be used to purchase, renovate, and rent out units in short order. Most mezzanine lenders will work directly with CRE investors because they have vested interest in making the property as profitable as possible. Keep in mind though, that mezzanine loans use the property as collateral, so if borrowers default on their loans, the properties become owned by the lenders.
Construction Loans are Even Available
There are numerous short-term construction loans available through commercial finance companies that are designed for multifamily investments and owner-occupied apartment buildings. There are small construction loans for rehab projects in the $100L to $200K range on up to ground-up construction loans for turning undeveloped land into multifamily dwellings for $500,000 and beyond. Terms and rates are extremely competitive, and funds are made available quickly to get investors from the point of purchase to generating revenue with tenants easily and efficiently.
As Well as SBA Loans
There are SBA Loan Programs specifically for purchasing and building out multifamily investments. Normally, SBA Loans can take some time to process, so the trick is to utilize SBA Preferred Financial Services company. Lenders with this title can fast track loans on commercial properties and get funding disbursed quickly at competitive terms and rates, in order to get multifamily real estate up to code and able to generate revenue.
If you have a multifamily investment property in your sights, and you need extra capital to turn it into a profitable piece of real estate that generates a healthy stream of revenue – contact Perfect Alliance Capital at 847-851-2223. We work directly with commercial real estate investors to get them the funding they need acquire and renovate profitable properties.