Bay Area Capital Commercial

Transitional / Soft Money ? better than hard money

This is not a bank product ? this is a program from a private company. The loan is far less expensive than private or hard money, and it is perfect for investors who desire a more reasonable rate and cost structure during a purchase or refinance or period of transition. This loan is not available for construction, but it will allow some rehab expenses. It will consider the ?after-completion? value, and it will work usually for properties which are vacant and non-income producing. This product is available in California. Eligible asset classes include multifamily and apartments, office, retail, hotel and hospitality, student housing, some industrial, possibly others.

This is a very powerful product for investors with property that does not meet the strict guidelines of the banks and Fannie Mae for issues that include:

  • Property condition, including construction completion
  • Inability to season income or demonstrate debt coverage
  • Property in transition or Re-configuration (example old retail building now apartment)

Rates and cost can vary, depending upon class of property, strength of property performance, and strength of sponsor; however rates can be as low as 9.0% and generally are not higher than 10%. The fee structure is usually 3 points total (2 lender 1 broker), with a short three month prepayment penalty.

Note that this product requires tax filings, but tax filings are not used to debt service the loan. This is a critical distinction.


  • Purchase or refinance (expedited purchase OK)
  • 2-5 year term ? interest only payments or flexible amortization term
  • Up to 65% loan to future value and 60% loan to current value
  • Property should demonstrate a good exit, but it does not need to be income producing right now.
  • Three month prepayment penalty
  • Can close as fast as 18 days


  • $300,000 minimum loan size
  • Appraisal to support future value, future income, future exit strategy
  • Good sponsorship including strong resume and decent liquidity
  • Full financials and documentation (not stated income)
  • First liens only



Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question