Cash Out Bridge Loans

Cash Out Bridge Loans

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Trusted Hard Money Lender

Over 53 years of lending success.

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Solutions for all situations.

It is very rare that banks and other institutional lenders are willing to allow borrowers to increase their loan amount (or take out a new loan from the property’s equity) on commercial property unless all of the new funds will be used to improve that particular property. While banks are wary of the increased risk of this type of bridge loan, often called a cash-out loan, Montegra believes that borrowers should be trusted to decide how and where funds obtained from the equity in their commercial properties are spent.

Montegra is an asset-based, private capital bridge lender with a 50-year history of funding first-mortgage, secured loans on commercial and investment-purpose residential property located in Colorado (especially the Denver metro area). Montegra funds loans from $250,000 to $4,000,000 for short-term (one- to three-year) time periods with interest-only payments typically for up to 65% of a property’s appraised value.

Advantages of a Cash Out Bridge Loan

The cash-out bridge loans can be beneficial for borrowers who currently have a loan with an institutional lender at a very low loan-to-value (LTV) rate that they want to cash out. Montegra can offer them an increase of the loan principle to 65% of the current property value, and the borrower can then use the additional cash from the new bridge loan for other investment purposes. Montegra can also fund loans secured by properties that have already been paid off, allowing borrowers to take out a loan for up to 65% of that property’s value and put those funds towards the purchase of additional properties or improvements to other properties. As a private capital bridge lender, Montegra is dedicated to working with our borrowers to fund the loan that best meets their investment needs.

Unlike traditional lenders, Montegra is willing to allow second-position liens behind our first-position mortgages. While we do require that our loan always remains in the first position, we are open to discussing potential secondary financing allowances for our borrowers.

Montegra is a direct lender, not a loan broker. When borrowers meet with a Montegra representative, they are meeting directly with the decision-maker who has full authority to decide whether or not to fund a loan. As an asset-based lender, Montegra relies primarily on the value of your property as opposed to the more diverse focus that institutional lenders have, with their strong emphasis on a borrower’s cash flow and their “global financial picture.” In contrast, our underwriting process is simple and straightforward.

  • Loan Amounts: $250,000 to $4,000,000
  • Interest Rate: 9.5% to 11% on improved, income- producing property (land rates slightly higher)
  • Payments: Interest only with no amortization
  • Loan Term: Six months to 3 years with renewal options possible.
  • Loan Fees: 2% to 4%.
  • Loan to Value: Up to 65% on improved, income-producing properties (up to 60% on land)
  • Second-Position Liens: Montegra will consider second-position liens behind our first mortgage.  We do not have a second mortgage loan program.
  • Cash out Restrictions: None
  • Closing Time Frame: 30 days or less (from signing of Commitment Letter)

If we can be of help with your cash out requirements please contact Bob Amter or Kim Skari at (720) 513-2657 or email loans@montegra.com.

Things To Consider With Colorado Hard Money Acquisition Loans

As is the case with any real estate transaction, hard money acquisition loans carry some elements of risk. Before applying for one, you should think carefully about a few key points:

  • Interest rates. Because they’re short-term and rely less on credit scores and other personal financial data, hard money acquisition loans have somewhat higher interest rates than traditional mortgages. Montegra’s rates for hard money loans start at 10.25%, with typical loan fees between 1.5% to 2.5% depending on the loan term. Factor in these costs when you map out your repayment budget.
  • Term of loan. Hard money loans (sometimes called bridge loans) normally have terms between 12 months to 24 months. Montegra offers its borrowers the option to renew their loan after the expiration of its initial term.
  • Down payment. Hard money loans typically require a larger cash down payment than bank loans. This is why they can close much more quickly, and offer more flexible terms to their borrowers.
  • Property risk. Both hard money loans, and bank real estate loans, use the real estate you’re acquiring as collateral. Since your loan is secured by property, no matter which lender you choose you always have the risk of losing your property if you default on repaying a real estate collateralized loan. Think carefully about whether or not you’re willing to accept that risk. If you are not willing to accept this risk then your only option is to pay 100% cash for your real estate purchase.

The Top Source For Denver Hard Money Acquisition Loans

Montegra Capital Resources is Colorado’s most trusted hard money lender. Our business approach is based on quick approvals and funding, fair and reasonable interest rates and loan fees, total transparency, and no surprises. We’ve helped local real estate investors and companies for 50 continuous years with creative solutions to their short-term capital needs. Contact us today for more information about our hard money lending services.

What Information Should You Include In Your Request?

You can speed up your loan request by providing Montegra with the following information:

  1. What is the property’s address?
  2. What type of property is it?
  3. What are your plans for the property once you purchase it (i.e., hold onto it long-term or fix it up, retenant and resell it)?
  4. Do you have an executed purchase contract for the property? (If so, please submit a copy with your request.)
  5. If you have signed a contract to purchase the property, when is your closing date?
  6. What do you believe the fair market value of the property to be today?
  7. How much cash are you willing to use as a down payment on the property?
  8. What amount of money do you want to borrow?

We will also need other routine personal financial and credit information to complete the application process, but we would like to begin by gathering the basics about the property and your plans for it to better understand what you would like to accomplish and how we can best help you achieve those goals.

See our recent closings for examples of how Montegra helped other borrowers close their acquisition loans and realize their projects.