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» How to Meet Minimum Equity Requirements for a Comm
Commercial hard money bridge lenders, Avatar Financial Group being no exception, require that borrowers have a minimum percentage of equity in each project. Usually this number is 20%. If you are purchasing a $1,000,000 property, expect to put down $200,000 in cash or other collateralized real estate.
If you don't have the cash to put down, you can meet this requirement if you own other real estate. Take a look at the hypothetical scenario below to see how it might work:
purchase price of subject property $1,000,000
value of additional real estate you own $1,000,000
TOTAL real estate to collateraliz $2,000,000
65% Avatar Loan $1,300,000
You must pay off a lien on the add'l property -$300,000
Your loan proceeds $1,000,000
