Understanding Bridge Loans – Episode 066

Summary:

Why are bridge loan investments profitable, and what documentation should you have before starting? What are the risks of bridge loan investments? Find out the answers to these questions and more as Kim Butler and Todd Strobel discuss bridge loan investments, both from the perspective of an investor and a realtor.

Also, please keep sending us all the good questions and feedback. We’d love to answer your questions in one of our upcoming shows and we appreciate your support!

Show Notes:

00:00 Intro

00:44 What Is A Bridge Loan Investment?

02:49 Why Do Bridge Loans Make Sense?

05:14 Three Different Sections of Documentation for Bridge Loans

06:11 1. Documentation Section 1: The Borrower

  • loan application for each borrower
  • resumes and background for the borrower
  • entity validation
  • list of projects the borrower has already completed
  • written management/disposition strategy for project

07:09 2. Documentation Section 2: The Property

  • an appraisal report
  • title insurance
  • a survey of the property
  • sales contract
  • hazard or builder’s risk insurance

07:54 3. Documentation Section 3: The Construction

  • full set of construction plans
  • copies of building permits
  • itemized cost breakdown of all construction phases
  • full building/material specs
  • structural engineering report
  • construction contract
  • contact information for everyone involved

09:26 Looking at Bridge Loans from the Perspective of a Realtor

To find out what rate of return your property should be earning:

  • visit truthconcepts.com for Todd Langford’ss calculator system w/ real estate calculator OR
  • ask Kim for fillable pdf, email it back to her, and she will do the calculation for you
  • (full disclosure Todd Langford is Kim Butler’s husband)

12:15 Recommendations on Specific Bridge Loans and Investments

14:01 All Bridge Loan/Mezzanine Financing Are Not The Same

16:34 Outro

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