Get An Equity Loan Through Us

At Gap Investors we specialize in brokering collateral-based real estate loans. These loans fill a need for funding when banks won't lend for any reason, or there isn't time to obtain conventional financing to secure a purchase or get cash from the equity in a property. These types of loans are sometimes referred to by different names such as private money loans, private equity loans, or bridge loans.

An equity loan is a mortgage lien placed on real estate in exchange for cash to the borrower. For example, if you own home worth $250,000, but does not currently have a mortgage or other lien on it, you can get an equity loan at 60% loan to value (LTV) or $150,000 in cash (minus closing costs) in exchange for a lien on title placed by the lender of the equity loan.

Many lenders will only require the borrower to pay the interest on the loan each month. The borrower can apply any surplus funds to the outstanding loan principal at any time, reducing the amount of interest to pay each month. Some loan products also allow the possibility to re-draw cash up to the original LTV, potentially perpetuating the life of the loan beyond the original loan term.

The rate of interest applied to equity loans is lower than that applied to unsecured loans, such as credit card debt. The reasoning behind this is that equity loans involve collateral, and credit card debt does not. Since it is a debt against your own property, which you are in actual possession of, a home equity loan is a secured debt. In the event of non-payment of interest or principal, while Gap Investors will look into the possibility of refinancing, the creditors may ask for their money back and you may be asked to liquidate.

Bridge Loans

A bridge or gap loan is defined as a short-term equity loan that gives the property owner time to complete a task, such as remodeling a home or commercial building. A typical bridge loan will have a term of 6 to 36 months. Gap Investors looks at all types of properties, big and small, from single homes to large development projects.

Bridge loans are more expensive than conventional bank loans, but they are typically paid off when the owner places permanent financing on the property, after the improvements are completed. For example, say you have inherited a large parcel of land in Costa Rica and you want to take advantage of the tourism and construction boom by building homes for sale.

Your bank wants to provide you with a long term commercial mortgage once the construction is complete, but is not interested financing you now because of the income requirements for servicing a bank loan. So a construction loan is required from a separate lender to finance the construction period. In essence, the construction loan is bridge financing, providing you a bridge to the long term commercial mortgage you desire.

Normally, banks will provide loans only if the borrower has excellent credit and a large financial statement. If the borrower cannot meet the income requirements to service a bank loan for a large-scale development, he may have to find an investment partner (with all associated downsides) or go to a hard money bridge lender. Hard money bridge lenders are lenders who loan primarily on the equity in the property.

At Gap it's a win-win situation for both parties.

Some Basic Requirements For Developers

Development permits must be secured prior to applying your project to Gap Investors, for two reasons: permits can be time-consuming to secure, and it's possible that they may be denied (i.e. for environmental reasons). You will need to have the following permits wherever applicable:

1. Updated survey of the property registered with the Registro Nacional
2. Full appraisal of the property and development project by a well-known (preferably internationally) service
3. Master plan (including landscape architecture)
4. Preliminary design and drawings
5. CFIA (Engineers and Architects Federated Colleague) permits. Contract services with architectural company.
6. INVU (Dwellings Board Chairman)
7. SETENA (Enviromental Impact Office)
8. AYA (Water Board Chairman)
9. ICE (Electrical Board Chairman)
10. Municipality building permits
11. CFIA, to approve specific construction projects.
12. Development and construction of a sewage plant if necessary.
13. Permits to cut trees (MINAE and SETENA)

Permit verification is also required from other institutions such as the Public Registry; the Ministry of Public Works (Ministerio de Obras Públicas y Transporte / MOPT) for further road construction projects; the Ministry of Health (Ministerio de Salud); the National Institute of Housing and Urban Development (Instituto Nacional de Vivienda y Urbanismo / INVU); and the Municipality where the property is located (Municipalidad). The approved permit will be issued from the corresponding Municipality once the permit taxes (set by the Municipality) have been paid.

In summary, project development sequence and professional services can be divided into the following phases:

Phase 1: Architectural Concepts / Design Development / General Site Planning

Phase 2: Construction Plans and Permits

Phase 3: Construction and Inspection