A delayed purchase loan, also known as a bridge loan, is a type of short-term financing that enables investors to purchase commercial real estate with the intention of refinancing the loan or selling the property within a short period of time.
The primary advantage of a delayed purchase loan for commercial real estate investors is that it allows them to move quickly and acquire a property that may not otherwise be available. This can be especially useful in a competitive market where properties are in high demand and multiple buyers are vying for the same properties.
Investors can also use delayed purchase loans to leverage their capital and acquire multiple properties at once, with the goal of refinancing or selling the properties within a short period of time.
However, delayed purchase loans typically come with higher interest rates and fees than traditional long-term financing options, which means they can be more expensive in the long run. As such, investors need to carefully evaluate the potential return on investment and their ability to repay the loan before taking on this type of financing. It's also important to work with a reputable lender who can provide competitive terms and help guide investors through the loan process.
If you have any questions about this article or would like to discuss a scenario of your own with our team, please feel free to contact Colin Dubel at colin@harborwestcommercial.com or 949-735-6415.