Apartments are hot commodities, as Americans are increasingly in search of apartment-style living—and they’re willing to pay more for them. The high demand for apartments shows no signs of slowing, compounded by a tight housing supply causing elevated home prices that dissuade would-be buyers. With interest rates rising and home purchases out of reach for many people, there is little indication that the need for apartments is going to slow down. Developing or acquiring an apartment complex amidst the high demand for units, then, could prove a profitable venture for those who act quickly.
“Commercial bridge loans can be turned around quickly and applied to a variety of projects,” said Kevin Wolfer, CEO of Kennedy Funding. “In the case of our nation’s apartment stock, acting quickly is key to capitalize on this lucrative opportunity. Commercial bridge loans are the right fit for many looking to capitalize on this opportunity.”
Commercial bridge loans, a flexible type of short-term funding, can help get you the financing you need without the red tape and hassle of working with a conventional lender. Speed is a key element of capitalizing on a thriving market, so when you can’t afford to wait for the banks to come through, look to a direct private lender for a commercial bridge loan.
Demand for apartments is booming
As already stated, there’s never been a better time in recent history to own an apartment building. Existing tenants are staying longer and paying more, while newly-constructed units are being rented out faster than ever. In other words, business is booming.
Apartment absorption, or the rate at which new apartment units are rented out, is at a three-year high, according to the US Census Bureau. That’s good news for landlords, because it is driving up the price of apartments. At the end of 2018, rent had risen an average of 4.6 percent across the country over the year before. Despite the increase, tenants are staying put. If you’re considering developing or rehabilitating an apartment complex, the market is on your side.
Capitalizing on the apartment craze
If you’ve decided it’s time to enter the market as a landlord, you have two options. You could acquire an existing complex or develop a brand-new complex from the ground up. Either way, you’re going to need capital. A commercial bridge loan can help you get your project started or finalize your acquisition quickly, enabling you to act while the market remains hot.
Here’s a look at some of the ways commercial bridge loans can help you with your project:
Revitalize an existing complex
There’s no need to start from scratch. There’s plenty of apartment stock out there that is underperforming or remains vacant despite the high demand. Redeveloping an existing property provides you with the foundation of your project already intact. Adding value to an old property and bringing it into modern times is a great way to turn a profit.
A commercial bridge loan could be used to help you quickly acquire an old apartment building, as well as begin construction on your redevelopment project. Why wait for a conventional loan — one that might not even come through — when you’ve found the perfect property for sale? A direct private lender can help you move fast in support of your vision, with flexible terms and rapid approval.
Develop a new complex
If you’d rather start from scratch, a commercial bridge loan could still be for you. You need materials, labor, professional services, zoning and planning board applications, and permits to get your project going. A commercial bridge loan from a direct private lender can get you the capital you need for these crucial services in a timely manner, which means you can begin to build sooner. Moreover, if you intend on developing a new complex but don’t currently have the land you need to build on, a commercial bridge loan is also an ideal form of funding for raw land acquisition.
Partner with a direct lender for fast and flexible funding
Direct private lenders offering commercial bridge loans provide an advantage over conventional lenders. Not only are they faster, but private lenders have the power to fund a project that banks won’t. Because the funding comes from a direct source, private lenders are looking for projects where they see potential—and as they say, no risk, no reward.
“Banks take much longer to approve a loan and are unwilling to invest in projects they deem risky,” Wolfer said. “We know that real value is created when you take a risk, and we have the latitude to invest in promising projects that other lenders won’t.”
Whether you need to acquire land or kickstart a redevelopment project, Kennedy Funding is willing and able to invest in the future value you plan to create. If you’re ready to explore a commercial bridge loan for your development project or acquisition, call Kennedy today.