by ARTIS COMMERCIAL CAPITAL | Nov 29, 2022 | Blog
Commercial real estate financing can be overwhelming for new investors- primarily the multiple types of financing. One type of financing is bridge loans. A bridge loan offers investors a flexible source of short-term financing. In this article, we’ll explain more about how to use bridge loans for multi-family real estate.
What is a Bridge Loan?
A bridge loan is a short-term financing tool that investors can use until they can obtain long-term financing. Terms vary with bridge loans, from 3 months to 3 years. Permanent, long-term financing sources may take a long time to close- but a bridge loan closes more quickly.
Advantages of Bridge Loans
Speed is the primary advantage of bridge loans. When you apply for permanent financing on a multi-family apartment, the closing period can take 90 days or more. You can obtain a bridge loan in about 2 weeks. If you’ve got a time-sensitive deal on the table, this speed is critical to your success.
Additionally, lenders typically have stringent requirements on both the borrower and the property. For example, prior to closing, most lenders require that the property meet specific stabilized lease-up thresholds as high as 95%. A bridge loan allows you to avoid these requirements and close quickly, moving the property into service.
Disadvantages of Bridge Loans
Though speed and flexibility are significant advantages, it has some disadvantages as well- primarily cost. In return for those advantages, a bridge loan has a higher interest rate than permanent financing.
Depending on the deal and the borrower, bridge loan interest rates vary from 3% to 10% above market rates of permanent ones. In addition, the closing fees are often higher, which is another factor to consider when purchasing multifamily real estate.
As you can see, bridge loans can be a great financial tool for multifamily real estate, but you’ll need to weigh the advantages and disadvantages before you apply for one.
Reasons to Consider Bridge Loans for Multifamily Real Estate
When it comes to real estate investing, there are several situations where multifamily real estate developers and investors can use bridge loans. Three of the most common are:
- Time-sensitive deals
- Value-added multifamily real estate deals
- Cover delayed capital contributions
Conclusion
When it comes to commercial real estate, you have a variety of options, each one having its own advantages and disadvantages. Bridge loans are just one of them. Under the right circumstances, a bridge loan is a great way to make a deal happen- but that speed and flexibility come with a cost.
If you’re interested in learning more about your options for multifamily real estate deals, contact Artis Commercial Capital today. We can help you get the best financing for your situation to start or enhance your commercial real estate career.
by ARTIS COMMERCIAL CAPITAL | Nov 15, 2022 | Blog
Financing your real estate business can be done in a number of ways. One way to finance your business is to get a loan from a bank. You can also use your own personal savings to finance your business. You can also look into getting private money to finance your business. Private money is when you borrow money from an individual or group instead of a bank. This can be a good option if you are having trouble getting a loan from a bank. Whichever way you choose to finance your business, make sure you do your research and find the best option for you.
The Benefits of Real Estate Crowdfunding
Another way to finance your real estate business is through real estate crowdfunding. This is when you raise money from a group of people instead of just one person or institution. This can be a great option if you have a good idea for a real estate project but don’t have the funds to get started. There are a number of different platforms you can use to crowdfund your project.
Some of the best crowdfunding platforms for starting a real estate business include Kickstarter, Indiegogo, and GoFundMe. You can also look into getting a loan from a peer-to-peer lending platform like LendingClub or Prosper.
Other Real Estate Business Funding Options
If you have good credit, you may be able to get a business loan from a bank. You can also look into getting a line of credit from a home equity loan or HELOC.
You may also want to consider using your personal savings to finance your real estate business. If you have money saved up in an emergency fund or retirement account, you may be able to use it to start your business.
Another option for financing your real estate business is to find investors. You can look for angel investors or venture capitalists who are interested in investing in your business.
You can also look into getting a grant from the government or a private foundation. There are many grants available for businesses, so you may be able to find one that can help you finance your business.
Preparation Is Key
Whatever way you choose to finance your real estate business, make sure you are prepared. Make sure you have a solid business plan and that you know what you are doing. Financing your real estate business is a big decision and should not be taken lightly. Do your research and start by contacting Artis Commercial Capital for access to experts in the realm of business and real estate – we’ll help you make the best decision for your business.
by ARTIS COMMERCIAL CAPITAL | Nov 8, 2022 | Blog
It is commonly said that the best road to wealth is through real estate. One form of real estate investing is the acquisition of undeveloped land with the intent to sell it at a higher price or develop it.
Investing in Undeveloped Land
Raw land can be a great investment for two main reasons: there is a limited supply of it, and demand for it is almost always rising. Additionally, raw land does not require much, if any, in the way of upkeep.
Securing the Parcel of Interest
Purchasing Land can be quite costly. Most folks need some form of financing to accomplish that. There are a number of alternatives to check out when looking for funds to acquire raw land. Some of these include:
Personal or Investment Savings. If you are fortunate enough to have a significant sum in personal savings, this can be used to purchase raw land, but most people don’t choose this because they haven’t enough available or wish to keep it for other goals such as retirement.
Loans from a Traditional Bank. A mortgage from a traditional bank is certainly an option to consider. However, it may take some time to get the funding or you may be denied if the bank considers raw land too risky for their tastes.
Bridge Loans. Obtaining a bridge loan from a private lending agency is a third alternative. In this situation, a short-term loan is provided to buy the land. The loans are often backed by using the land itself as collateral.
Bridge loans are usually more accessible than bank loans. Keep in mind that the repayment period tends to be shorter and interest rates are often higher than other forms of financing.
Partner with Artis Commercial Capital
Artis Commercial Capital offers bridge loans and other options for those desiring to purchase raw land as an investment. Give them a call today to discuss your specific situation in more detail.
by ARTIS COMMERCIAL CAPITAL | Nov 1, 2022 | Blog
Although some business owners panic at the thought of impending recession, others see it as an opportunity to grow. According to some analysts, recessions provide unique opportunities for starting up or expanding businesses. Here are some of the advantages of growing your company during periods of economic instability.
Become More Visible to Consumers
During periods of market growth so many businesses start up that it is easy to get lost in the crowd. However, if you demonstrate that you can continue to offer value during a recession, discerning consumers will look to you to meet their needs. Provide quality information about your products or services so potential customers are willing to place their trust in you.
Take Advantage of Decreased Competition
As other businesses pull back and fold, consider this as a further opportunity to grow. In continuing to remain strong and promote your company, you will stand out from the rest. This will enable you to grab a solid share of a market that has been vacated by the competition.
Recruit Talented Personnel
In the midst of a strong economy, talented employees are in demand and difficult to obtain. During a recession, though, even highly qualified people have been laid off and are looking for work. You can revitalize your workforce with top personnel for reasonable salaries and without the competition prevalent during boom periods.
Obtain Favorable Rates from Vendors
Recessions are difficult for vendors too, and to stay competitive they are often forced to reduce prices to attract and retain customers. This means that you are more likely to find reasonable prices and terms for real estate, equipment, technology, raw materials, and inventory. Many vendors may even be open to negotiation so that you can obtain the needs of your business for costs even below market rates.
For more advice on using a recession as an opportunity to grow, get in touch with Artis Commercial Capital.
by ARTIS COMMERCIAL CAPITAL | Oct 25, 2022 | Blog
Bridge financing is often a short-term loan used by a business to navigate a period of financial difficulties. A venture capital firm or investment bank often issues the loan. Below is a list of ways bridge loans can create new opportunities for your business.
Accommodating Seasonal Inventory Needs
Most retailers prefer using lines of credit when purchasing inventory. Unfortunately, most businesses have maxed out the line and cannot access the funding. Many retailers buy the needed inventory with a merchant cash advance, which is often costly, to prepare for sudden surges in sales. Business owners can opt for bridge loans rather than cash advances to purchase inventory and refinance the bridge loan with sales proceeds or conventional business loans.
Purchasing Equipment
Your business may require purchasing secondhand equipment at an auction that provides a discount. Such opportunities do not last long. You may not be sure about the model you want to purchase and its value, making it hard to secure conventional financing for the purchase beforehand. In this case, other assets can collateralize bridge loans to finance the new equipment. You can refinance or pay the loan later with a longer-term loan usually secured by the purchased equipment.
Improving Real Estate
Bridge loans are an excellent option for renovating a property. Many manufacturing, industrial, and retail companies must renovate, expand, and improve their property to develop new offerings or expand production. Securing a conventional term loan is usually tricky, primarily if the property is fully collateralized. Bridge loans can assist you when an opportunity to expand your facilities, refine product lines or add value to property arises. You can then refinance your property once the work is complete, which will be at a higher value.
Acquiring Foreclosed Assets
Visiting a sheriff’s auction enables you to purchase some significant assets, but you are not always sure what you will find. The lack of specifics makes it hard to arrange conventional financing before bidding at an auction. Most lenders require clients to pay for such assets through loans secured by other assets or cash. Bridge loans can be used to bid on assets or make an offer and proceed to make interest-only payments until you can refinance with the conventional loan.
A bridge loan helps businesses to bridge funding requirement gaps. Bridge loans are beneficial when purchasing secondhand assets or conducting real estate transactions. Contact us at Artis Commercial Capital to secure a bridge loan to finance your business needs.
by ARTIS COMMERCIAL CAPITAL | Oct 18, 2022 | Blog
Even before you launch a business venture, you need to plan. Once in business, the task of planning doesn’t stop. As your business evolves, its goals may change; your vision for its growth and profitability may change along with it.
Come Up with a Good Plan
A good plan accounts for a number of things, the foremost of which are goals for your venture. Good goal setting is a balance between being vague and simplistic versus being too far out of reach. The key is to make your goals and objectives specific, achievable, and moderately challenging.
Here’s an example. You have built a rare coin business and do most of your sales online. You are thinking of opening up a physical store location as well. That idea by itself is too vague. A specific achievable goal would be to find a good location and establish your business within it during the next six-month period. In order to do that you determine that you need about $50,000 in working capital to execute the plan.
Organize Your Human Resources
Don’t forget that no business person operated on an island. Seek out advice, opinion, and financial help from others as needed. Continuing in the example of a coin shop, check with professional numismatic organizations for people who have done the same. Visit shops in other cities to see how they run their operation. Find professional financial help as needed if you don’t have the capital your need.
Consider Your Financial Situation
An achievable goal such as opening up a brick-and-mortar store will require some funds to get the ball rolling. How are you set for that? Can you cover the rent and security that you will need? Are you planning on hiring any employees? How will you pay for your initial numismatic inventory?
Artis Commercial Capital
As your funding needs become clear, consider partnering with Artis Commercial Capital. They have a full suite of financing options for the small business person. They can suggest the best one for your business goals.
by ARTIS COMMERCIAL CAPITAL | Oct 11, 2022 | Blog
Bridge loans are financing options that provide short-term loans for a variety of purposes. Homeowners often use bridge loans to buy new homes while they are still awaiting the finalization of the sales of their previous homes. Companies in various industries use bridge loans so they can meet their expenses until customers pay in full. Here is some information to help you determine whether a bridge loan will meet the needs of your business.
The Basics of Bridge Loans
Bridge loans offer a short-term financing option of six to 12 months that bridges gaps in funding. For the purchase of real estate, they bridge the gap for homeowners so they can place a down payment on the new property before finalizing the sale of the previous home. For businesses, bridge loans keep cash flow strong while they complete projects or fill orders until they can then obtain final payments from their clients.
Uses for Bridge Loans
As a financing option, bridge loans make it possible for companies to continue to operate while they undertake large projects. For instance, you can use this funding to pay the salaries of your employees, obtain needed materials and inventory, purchase and repair equipment, upgrade technology, and bid on and prepare for future jobs. You can accomplish all this while keeping company cash flow strong.
Advantages of Bridge Loans
Whether you are purchasing real estate or completing company projects, bridge loans provide you with an effective method of meeting your expenses. Because they are generally provided by alternative lenders, you can have immediate access to the cash you require by means of a swift application and funding process. This will provide you with the finances you need to finish projects, handle any unexpected expenses, pay your personnel, and prepare for upcoming work.
For more information and advice on the financing option of bridge loans, get in touch with Artis Commercial Capital.
by ARTIS COMMERCIAL CAPITAL | Oct 4, 2022 | Blog
The disruption of supply chain distribution due to global events can be devastating for consumers and businesses alike. However, with ingenuity, planning, and a shift in focus, your company can survive and even prosper despite supply chain instabilities. Here are some strategies to help you accomplish this.
Research the Situation
When your business’s supply chain distribution becomes disrupted, find out exactly why this has happened. If only one vendor is affected, you may be able to find another that can fill the gap. However, if the problem is more widespread, it will take longer to resolve.
Share What You Know
Be sure to clearly communicate about what is happening with employees, shareholders, and clients. Share whatever details you know, acknowledge the hardship it has created for them, and apologize for any difficulties they might be experiencing.
Prepare a Plan
Instead of dwelling on problems caused by the disruption of your supply chain distribution, work on a plan that will minimize the negative impact and even help your company move past it and grow. Consider things you can do and resources you can allocate that will bring about swift improvement.
Emphasize Customer Service
If some parts of your company have been inevitably affected by supply chain difficulties, focus on other aspects. Consider improvements you can make in your business practices. One area you can zoom in on is customer service. Tending to the needs of your customers will help to inspire long-term loyalty.
Practice Self-Care
When your company is going through a crisis, it is easy to lose sight of your personal needs. However, it is imperative that you should get enough rest, exercise, and recreation so that at work you are functioning at full strength.
Look to the Future
Besides dealing with present difficulties, use this experience to better prepare your company for future disruptions. Acquire effective software for supply chain management and inventory tracking. In addition, be on the lookout for discounts so you can increase your inventory, and seek out alternatives to your present suppliers.
For more advice on growing your business despite disruptions to your supply chain distribution, contact Artis Commercial Capital.
by ARTIS COMMERCIAL CAPITAL | Sep 27, 2022 | Blog
There’s a common misconception among business owners that loans are good and leases are bad. In reality, there are many factors you need to consider before deciding which option is right for your business when it comes to equipment. Both loans and leases are financial tools with different pros and cons. You may be surprised to know that in many situations, equipment leasing can be the better choice for your business.
Factors To Consider When Deciding Between Equipment Leasing and Equipment Loans
One factor that can affect your decision is the amount of available working capital you have every month. Another factor is your credit score. You also need to consider how long the equipment you need will stay current. Will you need to upgrade it in a few years?
Finally, think about the value of owning that particular piece of equipment. Is it something that is going to last for 20 years or more, providing decades of high-quality service?
Down Payments
One of the biggest differences between equipment loans and leases is the size of the down payment you need. Many equipment leasing options provide 0% money down or a small down payment. You can get the equipment you need with minimal hassle and money investment.
With loans, you often need to plan for a down payment of 10–20% or more to get the best interest rates. For a piece of equipment worth $150,000, that would mean having between $15,000–$30,000 ready to go.
Upgrades
Equipment leasing is often the financing method of choice for technology. If your business wants to buy equipment that is constantly changing, you have to consider when it will be worth it to own the item after 5–10 years.
With a lease, you can upgrade at the end of every lease term, or every 2–3 years. When looking for high-tech software, computer equipment, and other state-of-the-art equipment, leasing is often the way to go.
Working Capital
Few things are as important to small businesses as working capital. It’s literally money in the bank for a rainy day. Your working capital helps you keep your business running smoothly, purchasing inventory and handling payroll.
If you have cash flow issues, equipment leasing is better because the monthly payments are generally much lower. That helps you put your capital where you need it without problems.
Whatever type of financing you choose, it’s obvious that your business needs equipment. Using all of your company’s savings to purchase equipment isn’t a wise idea because it leaves you without funds for emergency needs.
by ARTIS COMMERCIAL CAPITAL | Sep 20, 2022 | Blog
Every startup comes from humble beginnings, even corporate entities that are now globally recognized. New ventures must focus on business growth to rise to the next level. By engaging in methods proven to put young ventures on solid footing, expansion and heftier profits become more likely.
Be Humble
Humility is a quality that every business leader needs. Hubris can only get you into trouble. The moment you start assuming you know everything, your growth potential turns limited. Treat your job performance like you would any other employee’s. Allow staff to weigh in on your performance, assuring them you’re open to frank assessments. Another methodology is using anonymous comment cards. What matters is that you open avenues of communication. Also, don’t be afraid to seek advice from colleagues or occasionally reference an introductory business manual. There’s no shame in brushing up on basics.
Stay Consistent
Customers want uniformity with the products and services they purchase. Any change may worry them that the positive experience they’ve previously enjoyed will never repeat. Provide reassurance they can trust your company to deliver exactly what they desire, time after time. When training sales representatives, stress the importance of performing each task the same and craft standard operating procedures that facilitate this goal. Precede product rollouts with informational campaigns to increase customer comfort levels.
Promote Online
Advertising campaigns are always important. Without promotional efforts, you can hardly expect new customers to find you. Traditional outlets, such as radio and television, are generally too expensive for green operations. Thankfully, there’s the internet. Make use of social media and design posts that spread the word far and wide about what you offer. Not only is it affordable, but it’s easy, too. Should you feel uncomfortable with the technological aspect of online promotion, draft a tech-savvy person to helm the project or assist you with tips and tricks.
Get Frugal
How much profit you make comes down to subtracting what you spend from the dollars you take in. Reducing spending always increases your bottom line. Examine your operations with a critical eye for needless expenditures. For instance, replacing supplies with less expensive brands can save thousands over extended periods. Pay attention to every line item, even those that are seemingly insignificant.
The business growth your company experiences depends on how much energy you invest into making it happen. Pay attention to these vital business concerns when building your brand.
