North Dakota Commercial Hard Money Loans

In order to acquire a new commercial building for his business, Julio looks to Allstar Funding to fund his purchase with a commercial private money loan since he cannot secure a commercial mortgage from a bank. The price of the building is $1,150,000 and the lending company agrees to contribute 75% of the purchase price (the loan-to-value / "LTV"), or $862,500. The other $287,500 will have to be contributed by the borrower when the sale is closed. The deal also includes a 2 year term, a 14% rate of interest, interest-only payments paid each month with a final payment when the note expires (without a pre-payment penalty), and a 4 percent origination fee. Julio can eliminate the loan at any time by paying off the $862,500 in principle, but he will must pay $10,063 /month interest payments ($862,500 principle value x 14% interest rate / 12 months in a year) in the meantime, or up to the point the note expires. Because there is no pre-payment penalty, the only additional expense he would have to pay is the $34,500 origination points which he will contribute when the loan closes.

Corey owns a small business in West Fargo, ND and needs to acquire a new warehouse for his operations. Because he is unable to secure a conforming loan from a bank, he turns to Credence Lending for a commercial private money loan. The property is listed for $1,500,000. Corey will have to put 45% down, or $675,000, since the lender will fund only 55% of the transaction (the loan to value or "LTV"). Accordingly, the principle amount on the loan will be $825,000. The deal also includes a 3 year length, a 12% rate of interest, interest only payments paid monthly with a balloon payment when the note expires (without a pre-payment penalty), and a 1 percent origination fee. Corey may eliminate the note at any time by paying off the $825,000 in principle, but he will must make $8,250 monthly interest payments ($825,000 principle x 12% interest / 12 months in a year) in the interim, or up to the point the note expires. Since there isn't a pre-payment penalty, the only other expense he will have is the $8,250 origination cost which he will contribute at the closing.