Commercial Rehab Loans have historically been the “territory” of either construction loans or commercial hard money.Neither option is ideal for the borrower.The negatives with hard money are obvious; they are expensive and often carry harsh terms.
From a traditional banks perspective Commercial Rehab Loans are essentially commercial construction loans.Banks normally require the same type of documentation on rehab financing (plans, permits, lien wavers, etc) that they do on ground up construction.Although the fees and rates are much better when compared to hard money, construction borrowers “pay” for these loans with their time and intense documentation/reporting requirements.
Rather than seeking rehab financing, borrowers can use equity from another property via our second lien positin loans to finance their project.Benefits of going this route are many.
No reporting to bank.
No waiting for capital/draws while city and bank approve work.
