Using Bridge Loans for Multifamily Properties in Miami, FL

by HMLS

When considering commercial investment opportunities in Miami, Florida, do not overlook the enormous potential of multifamily properties. Investors consider multi-family units an evergreen trend because of the number of people migrating from suburbs to cities and towns. The migration also involves out-of-state residents looking to retire in Florida.

At HML Solutions, we like to stay on top of real estate trends. Because of our vast knowledge of the Florida real estate market, our portfolio includes several commercial real estate loan options, including short-term solutions. Not every investor is looking for a long-term commitment to a property, or they are and want a way to secure a new property fast. Our bridge loan program might be exactly what you are looking for.

How Bridge Loans Work for Multifamily Properties

A bridge loan is typically for temporary capital limitations. For example, an investor might want to buy a multifamily property, but their funds are tied to another project. A bridge loan can provide the financing necessary to make a property purchase before the sale of an existing property.

Commercial real estate loans usually start at around $1,000,000. We are willing to work with borrowers whose budgets are smaller or larger, depending on their qualifications. A standard term for short-term commercial loans is between six months and two years. Depending on the circumstances, we may extend loan terms, but that is on a case-by-case basis.

Because short-term loans come with more significant risks and less financial interest to lenders, the rates are usually higher. A borrower’s credit history, income, down payment, and existing property will all contribute to the rate and terms of the loan.

Pros and Cons of Bridge Loans for Multifamily Units

Like all loans, a bridge loan comes with pros and cons. Before applying or completing loan terms for a multifamily property, consider your financial standing. Sometimes, qualified candidates should not borrow a short-term loan; it all depends on their current financial situation. However, if you do decide to apply for a bridge loan, there are several advantages, including:

  • Loan amounts determined by project costs and projected value, not income
  • Fast application, approval, and funding process
  • Availability, regardless of market conditions

Despite the significant advantages of a bridge loan, there are also several disadvantages. Some of the primary cons of this type of loan include:

  • High-interest rates
  • Short terms

Ultimately, a borrower should perform a cost-benefit analysis before applying for a bridge loan. However, with the competitiveness of the Florida real estate market, a bridge can offer investors a significant competitive advantage.

Securing a Loan for Investment Properties

Regarding loans for multifamily properties, we must use caution with applicants. While we like to do away with frivolous application processes whenever possible, a bridge loan for an investment property is a little risky. Therefore, we do ask that all prospective applicants provide the following documents:

  • Profit and Loss statements for the last two years of the property, with clear distinctions between profits and expenses
  • Current rent rolls for the property, painting a clear picture of existing rental rates
  • Personal financial statements of the borrower

Depending on the borrower’s qualifications, we may ask for more information before making a final decision about loan approval. We may also approve a loan without all the above requirements, but the discretion is ours.

HML Solutions has the privilege of being flexible because we are a private lender. Therefore, we are happy to hear from prospective borrowers. Do not throw in the towel because you do not believe you can meet all qualifications. Sometimes, the right plan pitched by the right individual is all we need.

Contact Our Team for More Information

Investing in a multifamily property is an excellent idea in Miami or in Florida in general. The real estate market in the great state is currently flourishing, and it is primed for investor interest.

HML Solutions manages a diverse portfolio of financial products. Our experts can help you find the right loan program or financial solution for your needs.

Are you ready to take the next steps into the Florida real estate market? If so, contact one of our capable representatives to discuss your project and learn more about our loan programs and application process.

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