How can you get real estate financing if you do not have a long-established relationship with banks? Sadly, since the subprime mortgage crisis traditional banks have become over-whelmed with non-performing loans, numerous lawsuits and more government regulation. Honestly, how can anyone really expect these banks to take on more risk and offer real estate loans to new applicants with a questionable profile? As a result, borrowers are experiencing more paperwork, longer waits and more rejections with traditional financial institutions. That is why they are considering alternative financing mechanisms, like real estate mezzanine debt financing.
Real Estate Mezzanine Finance Solutions from Halo Capital
If you have been turned down by a traditional bank and don’t want to waste your time with that process again, consider our real estate mezzanine financing solutions. We have a great network of wealthy investors who offer flexible process for mezzanine real estate projects. We know that land development is one of the core foundations of all societal wealth, and strive to get you funded quickly with the most competitive rates and flexible terms in the industry. Pre-qualify today by filling out our easy-to-use form.
What is Mezzanine Financing for Real Estate?
Mezzanine debt for real estate allows for alternative lenders to provide capital in exchange for an equity interest and potential co-ownership. Investopia states that “Mezzanine financing is advantageous because it is treated like equity on a company’s balance sheet and may make it easier to obtain standard bank financing.” Think about some of the claims made by sub-prime debtors – “Banks mis-sold us mortgages.” Well, with real estate mezzanine financing, the lender might also have an equity stake in the property. Real estate mezzanine debt makes it so that the lender and debtor both have a financial interest in the success of the development.
Mezzanine Debt Lenders Offer More Flexibility
Traditional bankers expect loan applicants to fill out a lot of paperwork. Even local branches must still have applicants fill out the paperwork sent to them by corporate headquarters. The New York Times reported that Cinven banker, Matthew Sabben-Clare, admitted that banks are showing “a degree of selectivity” in loans. After these top banks received the government bailout, they were forced to add even more paperwork and become even more hesitant in giving people loans. The great thing about mezzanine real estate financing is that it is flexible. JFK said “a rising tide raises all boats.” The growing wealth of the capitalistic system has increased the number of real estate mezzanine funds available. Real estate mezzanine lenders have the capital to make your dreams come true, without the restrictions of traditional finance institutions.
Mezzanine Loans vs Traditional Bank Loans
Do you want to know another secret about modern traditional banks? Many of them already have extensive real estate holdings. When a traditional bank makes a bad loan, the financial institution might receive the property as collateral. Mezzanine real estate is a fresh look at property developments. Mezzanine real estate financing enables developers to add new condos, apartments or houses when their project is proving to be very popular. Mezzanine debt for commercial real estate can be a faster process that does not require as much collateral as a traditional bank loan.
To learn more about our commercial bridge loans, visit this page.