Posted by John Corey on June 27, 2007 at 08:51:38:
You are really talking about a blanket lien or blanket facility. A bridge
loan is a temporary loan between two other loans or a short term loan
until a sale closes. You are bridging until something else is ready.
Maybe using hard money as your bridge until the property is fixed up
A blanket would be 1 lien placed on multiple properties. One loan
payment. Technically the lien is recorded on each property so call it 1
lien or all it multiple liens. The key is you have to pay off the full loan
to get the lien off. An exception is where you have a release clause.
Under pre-agreed terms you can take a property out from under the
lien. Normally if you pay down the loan by a certain amount. Common
when you sell a unit.
A blanket lien is common with development projects. Somewhat
common when an investor owns a portfolio of individual properties.
Generally the loan is a commercial loan with rates and terms that refect
commercial terms (slightly higher rate, shorter term so therefore
higher payment in many cases). Maybe lower closing costs when you
add or remove a property as some title paperwork might not be
A blanket lien has its purposes.
Why do you ask? How were you see such a facilty working for what you