12-Month Private Money Bridge Loan in San Francisco

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12-Month Private Money Bridge Loan in San Francisco

A pair of Bay Area home buyers used a 12-month private money bridge loan in San Francisco to acquire a duplex in the city, besting several “All Cash Offers” submitted over asking price they were competing against.

Anyone who has watched the white hot San Francisco housing market knows that the listed price is merely a starting point in the bidding war that sometimes results in all-cash offers going for $500,000 over asking price. Financed offers from even the strongest borrowers have been bypassed in favor of similar priced all-cash offers that can close in 5-10 days.

Our borrowers in this transaction were collectively probably the strongest borrowers we’ve worked with over the past couple of years. They had great income, credit, assets, etc and were instant approval borrowers for any jumbo bank loan that they would apply for. When realtors look for ideal buyer clients to work with, these buyers are exactly who a realtor would want to work with.

Except in the current San Francisco market. Their financed offers were continually losing out to the all-cash offers that were $250-$500K over asking price time and time again.

Their mortgage broker contacted Brett about getting the borrowers pre-approved for a 12-month private money bridge loan, which their realtor would submit with over 7-10 day close with an offer well over asking price. In many cases with sellers and listing agents, a private money bridge loan is considered “same as cash” since private money loans can close quickly due to the limited documentation requirements of the loans.

Within a month of being pre-approved for the 12-month private money bridge loan, they finally had an offer accepted on a beautiful duplex in San Francisco, which of course, went well over asking price.

The borrowers looked at the private money bridge loan as an added cost of doing business to finally break into the San Francisco housing market. Once they took possession of the property, they re-submitted their jumbo bank loan application to refinance out of the private money loan. Our estimate, along with the borrowers, their mortgage broker, and the private money lender who made the loan, was that they would make 1-2 payments on the private money loan before paying it off through the jumbo mortgage refinance.

12-Month Private Money Bridge Loan Terms

  • $1,200,000 — Loan Amount
  • 12-Month Term
  • No Prepayment Penalty
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