Commercial Lending Blog — Page 3 of 11 — Houlihan & O'Malley Commercial Services

$16,700,000 First Mortgage – Development Site – Bronx, NY

Rich Salinaro / January 5, 2021 / Leave a Comment

$16,700,000 First Mortgage – Bronx Land

H&O Capital Funding recently closed on a $16,700,000 first mortgage for the purchase of an approximately 59,000 SF site with R9A zoning and a C2-4 commercial overlay. The site is currently occupied by the purchaser, who had an option to purchase the site in his lease. Talk about being in the right place at the right time! The owner plans on flipping the property to a developer to take advantage of the huge amount of as-of-right buildable square footage. There were a few hiccups along the way, but H&O Capital was able to close the loan in just under a month despite having to work around the holidays.

H&O Capital Funding has helped countless real estate buyers, sellers, lessees and lessors achieve their goals. Our legacy is unwavering commitment to the communities we serve. Houlihan & O’Malley Commercial Real Estate Services specializes in four distinct, yet overlapping, areas of business: Commercial Brokerage services, Private Mortgage services, Appraisal Services and Advisory services.

For more information on loans that we offer, visit our website.

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Hard Money Loans Get Their Name Because Their Terms Are Hard to Negotiate or Approve

Brenda Sigurdson / December 1, 2020 / Leave a Comment

This month’s blog is going to answer one of the most pressing questions people have about hard money loans: why are they called “hard”? No, they’re not going to hand you a pile of concrete cash – Hard Money simply refers to the fact that the interest rates charged are significantly higher than with a traditional lender. These loans, while useful, are more costly to borrowers due to the higher rates and fees, however, there are a number of advantages to a hard money loan vs. a conventional loan.

If It’s Hard, Why Bother?

In property investing of any kind, it can be a challenge to find financing outside of traditional sources. Unless you can fund all your own projects, you’re going to need help. For many investors, the best choice is a hard money loan.

The benefits to these loans typically outweigh the drawbacks. For starters, rather than focusing their attention on credit scores and personal financials, lenders base approval on the underlying asset itself and the likelihood that they’ll get their money repaid in full. Additionally, these loans are offered by private investors rather than traditional banks and lenders, which means they can offer more flexible terms, despite …

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$2,000,000 First Mortgage – Private School – Queens, NY

Rich Salinaro / November 10, 2020 / Leave a Comment

H&O Capital Funding Closes $2,000,000 First Mortgage

In this deal, the school sits on a large, valuable piece of land that has had a lot of interest from a number of well known developers. The school has no plans of relocating, but due to the size of the lot, there is a real opportunity to subdivide the property and sell off a portion in the future. Unfortunately for the school, there were not enough free funds in the budget to allocate towards investigating and possibly pursuing this scenario. Enter H&O Capital Funding to give the school the breathing room (aka the money) needed to explore their options without the budget constraints of the past. H&O Capital was able to close the loan in just over two weeks.

For more information on loans that we offer, visit our website.

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$350,000 Second – Mixed-Use Property – Queens, NY

Rich Salinaro / October 13, 2020 / Leave a Comment

H&O Capital Funding Closes $350,000 Second Mortgage

Second mortgages can make some lenders nervous. That was not the case for H&O Capital Funding, who had the experience and know-how to close on this mixed-use property in the Rego Park section of Queens. The borrowers came to H&O Capital Funding looking for a small 2nd mortgage so they could use the cash to close on another deal in Florida. The borrowers had a TOE closing for the end of October and they needed a lender who knew the market and could close quickly. H&O Capital Funding exceeded their wildest expectations when they were able to get the deal closed in under two weeks.

For more information on loans that we offer, visit our website.

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$550,000 Blanket First Mortgage – Mixed-Use Property and Single Family Investment – Waterbury, CT & New Britain, CT

Rich Salinaro / October 5, 2020 / Leave a Comment

H&O Capital Funding Closes $550,000 Blanket Mortgage

H&O Capital recently closed a blanket $550,000 loan on two properties in Connecticut. The first property was a mixed-use building with 10 apartments and two stores in Waterbury, CT and the second property was a single-family home in New Britain, CT. The borrower had run into some issues with his previous lender on the Waterbury, CT property and needed a bridge loan to bail him out. He threw in the small single-family invest property as a way to keep the LTV down. There were numerous delays as the municipalities are working at half staff and title docs were hard to come by, but H&O stuck with it and got the deal closed.

For more information on loans that we offer, visit our website.

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$550,000 Blanket First Mortgage – Mixed-Use Property and Single Family Investment – Waterbury, CT & New Britain, CT Read More »

Myths vs. Facts: Hard Money Lenders Perform Very Little Due Diligence

Brenda Sigurdson / September 28, 2020 / Leave a Comment

True or false: Hard money lenders look only at the property they are underwriting, and do NOT look at the investor?

In short, the answer to that question is “false.” For all lenders, even conventional lenders, the most important factor in any loan is the underlying asset to be mortgaged. This is especially true for hard money lenders. On a stabilized asset, with a good debt coverage ratio, a hard money lender will rarely, if ever, ask for any personal financials. The property secures the loan, and the lender typically lends to an entity, rather than an individual or group.

This structure, however, does not mean that the Lender ignores whether or not a borrower can repay the loan and make timely monthly payments. For example, a loan on vacant land would likely be a scenario where some sort of personal financial data may be requested as the property itself would not be producing any income to cover the monthly debt service.

Terms and Due Diligence

The terms of the typical hard money loan are simple: The amount given to a borrower is based on the value of the property being used as collateral. Generally, terms are NOT based on …

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$750,000 Second Mortgage – Two 3-Family Investments – Queens, NY

Rich Salinaro / September 25, 2020 / Leave a Comment

H&O Capital Funding Quickly Closes $750,000 Loan

In this deal, the borrower needed to pull some cash out of two 3-family homes he owned as investments in the East Elmhurst neighborhood of Queens. The borrower needed to close on the purchase of a gas station in Detroit, MI with a TOE closing and needed the cash to complete the deal. There were small balance mortgages on the homes, so H&O Capital did a blanket second mortgage on both properties behind the conventional first mortgages. H&O Capital closed the loan in two weeks.

For more information on loans that we offer, visit our website.

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$550,000 First Mortgage – 2-Family Investment – Queens, NY

Rich Salinaro / August 17, 2020 / Leave a Comment

H&O Capital Funding Closes on $550,000 Loan

The borrower in this deal was doing a favor for a business partner of his who ran into some financial trouble. The borrower agreed to purchase the home and lease one of the units back to his partner to allow the partner quick access to some cash. While a simple deal on the surface, there were a number of legal hoops that needed to be jumped through to make the deal happen. H&O Capital persevered and were able to get the deal closed. Despite the legal hurdles H&O Capital closed the loan in under four weeks.

For more information on loans that we offer, visit our website.

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Myths vs. Facts: Hard Money Loans are Very Expensive

Brenda Sigurdson / August 5, 2020 / Leave a Comment

There is a lot of misinformation out there on Hard Money lending, and a lot of it comes from the way the loans are marketed by the competition. Many traditional lenders will advise against hard money loans because they are “too expensive” or supposedly have too many fees or additional charges attached. This is far from the reality of the situation.

Typically, hard money loans cost more than traditional loans, however, they typically have shorter terms and the high interest rates encourage the temporary nature of the loan. Ultimately, the lenders know that you need the investment capital for your real estate endeavors, but they also have to protect their assets, so they offer this alternative. Unlike traditional loans, most hard money loans are interest-only, so there is no principal paid down each month. Because of this, monthly payment amounts do not differ all that much from traditional sources.

Fact: Some hard money loans will have interest rates of 10% or more, while others will have rates slightly more comparable to traditional loans in the 6-8% range depending on the exact circumstances that are presented to the lender. If you are working with a reputable hard money lender, they will …

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Myths vs. Facts: Hard Money Lenders are Unregulated

Brenda Sigurdson / June 23, 2020 / Leave a Comment

Hard money loans are a great resource, but they are also one that is often misunderstood. One of the bigger misconceptions about this type of lending is that hard money lenders are unregulated or under-regulated, which increases the level of inherent risk for borrowers. The truth of the matter is that legitimate lenders are regulated, and they provide a reputable financial solution for alternative real estate investments that can’t benefit from traditional funding and home loans.

Who Regulates and Monitors Hard Money Lenders?

They must have a member of the organization that has a valid and current Real Estate Broker License to function as a lender within the guidelines of the law. Any businesses claiming to offer these loans that aren’t registered with the state are not operating within the law and should be avoided at all costs.

In addition to the Department of Real Estate, hard money providers may also be registered or involved with other industry groups and professional organizations. Most lenders understand that they are in a higher risk industry, and therefore may need to offer their potential borrowers more incentive and assurances. They may belong to organizations like the National Hard Money Association or the …

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$16,700,000 First Mortgage – Development Site – Bronx, NY

$16,700,000 First Mortgage – Bronx Land

Hard Money Loans Get Their Name Because Their Terms Are Hard to Negotiate or Approve

$2,000,000 First Mortgage – Private School – Queens, NY

H&O Capital Funding Closes $2,000,000 First Mortgage

$350,000 Second – Mixed-Use Property – Queens, NY

H&O Capital Funding Closes $350,000 Second Mortgage

$550,000 Blanket First Mortgage – Mixed-Use Property and Single Family Investment – Waterbury, CT & New Britain, CT

H&O Capital Funding Closes $550,000 Blanket Mortgage

Myths vs. Facts: Hard Money Lenders Perform Very Little Due Diligence

$750,000 Second Mortgage – Two 3-Family Investments – Queens, NY

H&O Capital Funding Quickly Closes $750,000 Loan

$550,000 First Mortgage – 2-Family Investment – Queens, NY

H&O Capital Funding Closes on $550,000 Loan

Myths vs. Facts: Hard Money Loans are Very Expensive

Myths vs. Facts: Hard Money Lenders are Unregulated

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