WHAT IS THE DIFFERENCE BETWEEN A HARD MONEY LOAN, A BRIDGE LOAN, AND A PRIVATE LOAN?
The terms "bridge loan", "hard money loan", and "private loan" can be confusing as they are often used together or interchangeably.
Bridge loans and hard money loan have similiar lending criteria and cost to borrowers. Interest rate are higher than those offered on longer term loans. Both focus more on the underlying real estate asset as opposed to the borrower. They are classified as asset-based loans.
A bridge loan is a short-term loan used when additional capital is required to stabilize an asset before cash flow or an exit strategy is acheived. For example, if you wish to purchase a distressed property that must be rehabilitated before you are able to rent it out and generate cash flow, you might seek bridge financing to cover the financing needs between purchase, rehabilitation and stabilization, at which time, you could seek conventional long-term refinance options.
Bridge financing has traditionally been available from conventional lenders, but regulation and credit restrictions have tightened considerably in recent years. As a result, many borrowers who might have sought conventional bridge loans in the past now seek hard money loans.
A hard money lender uses private capital to make loans. Since the funds come from private investors rather than deposit institions, the credit requirements for hard money loans are not as restrictive. Typically, a hard money loan is asset based and the borrower may have a number of circumstances which prevent access to conventional sources of financing.
WHERE DO YOU LEND?
Holt Investment Capital funds loans on properties in the greater Houston Metropolitan area.
WHAT PROPERTY TYPES QUALIFY FOR HOLT INVESMENT CAPITAL FINANCING?
We provide hard money and rehab loans for single family homes and 2-4 unit multi-family. All loans are commercial and only available on non-owner occupied properties.
DO YOU HAVE PRE-PAYMENT PENALTIES?
We typically collect a minimum interest period at the time of the initial advance.
WHAT ARE YOUR LENDING LIMITS?
$50,000 to $1,000,00
WILL HOLT INVESTMENT CAPITAL FINANCE MY CLOSING COSTS OR CAN CLOSING COSTS BE INCORPORATE INTO THE LOAN?
Yes, if the asset supports the amount.
Will HOLT INVESTMENT CAPITAL LEND IN SECOND POSITION?
No. We only lend in a first-lien position.
DO YOU OFFER 100% FINANCING OR AM I REQUIRED TO CONTRIBUTE CAPITAL?
Borrowers must contribute capital or pledged collateral with equity. Incentives are best aligned when everyone has a stake in the project's success.
IS THERE A MINIMUM BORROWER FICO SCORE?
No. This is an asset based loan.
DO YOU MAKE OWNER-OCCUPIED RESIDENTIAL LOANS?
No. Holt Investment Capital only makes commercial loans on non-owner occupied properties.
HOW LONG DOES IT TAKE TO CLOSE A LOAN?
We will move as quickly as possible on our side. With an available pool of existing capital we don't need to seek out investors for the capital to lend. The borrower can speed the process by promptly providing necessary documents.
DO YOU WORK WITH BROKERS?
DO I PAY INTEREST ON THE UNUSED REHAB FUNDS?
No. You'll only pay interest on the outstanding loan balance. Undrawn rehab funds are not included in this balance.
IS HOLT INVESTMENT CAPITAL A HARD MONEY OR EQUITY BASED LENDER?
Both, HIC makes hard money and bridge loans backed by real estate assets.
WHAT IS THE MAXIMUM LOAN-TO-VALUE?
HOW DO YOU DETERMINE THE PROPERTY VALUE?
HIC values the property in-house utilizing available information regarding comparable sales, market activity, discounted cash flow (rental properties), etc. However, we will require an indendent appraisal before making a loan.
ARE YOU A DIRECT LENDER OR DO YOU BROKER DEALS TO INVESTORS?
HIC is a direct lender backed by investor funds. If a deal meets our criteria we do not need to find an investor for that specific deal. We will use our existing capital pool to close the transaction.
CAN I HOLD TITLE AS PART OF A TRUST, LLC, OR CORPORATION?
Yes, but we will require a personal guarantee from all title holders in order to lend on a property owned jointly.
DO YOU LEND ON PROPERTIES WITHOUT CASH FLOW?
Yes, but only if there is a high probability of cash flow in the very near future and significant equity exist as-is.
WHAT LOAN TERMS DO YOU OFFER?
Loans are up to 12-months with the possibility of an extension, at HIC's discretion. Approved loan extensions will result in additional fees.