How to Buy in Cash (When You Don’t Have it)
The current market is hyper competitive, but there are still good deals to be acquired. It simply requires patience and diligence. In the current environment, the quality of the buyer is just as important as the offer itself. This means that cash is king! Of course, not every buyer has six, seven or eight figures sitting around, just waiting to be deployed into the next deal. Rather than lose out to all-cash buyers, you can turn yourself into one thanks to a bridge loan.
Also known as private money loans, a bridge loan can inject the kind of cash you need to compete for today’s deals. These funds essentially act as a short-term cushion that helps prepare you for long-term financing option.
With a bridge loan, a seller doesn’t have to worry about securing financing, which can kill a deal. Instead, they can close on Day One, leave the table flush with cash and move onto their next deal. This is why cash buyers often secure the winning bid on a property even if they’re not the highest bidder.
ADVANTAGES OF PRESENTING YOURSELF AS AN ALL-CASH BUYER:
- Puts you in the driver seat when negotiating a deal with a seller (you can make an offer with a 14–day close)
- Credit isn’t a factor because you’re not seeking loan approval
- Certainty that your transaction will close with no issues
- A leg up on the competition, which is a huge advantage in today’s market
SECURING BRIDGE FINANCING
Though bridge financing can be used to purchase a variety of assets, in this housing-driven market, many investors are taking advantage of this “quick money” to purchase real estate properties – multifamily assets in particular.
Thankfully, the process to get a bridge loan is pretty simple. Fidelity Bancorp Funding (FBF) offers bridge loans with interest-only options, no prepayment penalties, no bank statements and no income verification. The loan-to-value on bridge financing is up to 75%, with an interest-only term of up to 36 months.
Investors with equity in other properties can also procure the bridge funds before they submit a new offer. Alternatively, FBF can cross-collateralize other properties, which leaves you with funds for repairs and improvements.
FBF knows you’re in a time crunch if you’re looking to come in as an all-cash buyer, which is why we close loans in as little as 14 days. Loans range from $250,000 to $5 million. FBF lending territory includes California, Arizona, Texas, Washington, Utah, Nevada, New Mexico and Colorado.
If you’ve identified an investment opportunity that you can’t pass up, or if a conventional loan just isn’t right for you at the moment, bridge financing may be the key to securing that deal. FBF understands time is of the essence in these deals, which is why we’ll work quickly and effectively – with no bank statements and no income verification – to get your money secured.
Curious if you qualify for a bridge loan? Give us a call today to get started.