Frequently Asked Questions

Brookmont Capital Ventures is a commercial real estate capital advisory firm. We help real estate investors, developers, and sponsors secure debt and equity financing for acquisitions, developments, refinances, and recapitalizations. We are not a direct lender—we act as your advisor and advocate, connecting you with the right capital sources and negotiating on your behalf.

No. Brookmont is a capital advisory firm, not a direct lender. We maintain relationships with banks, debt funds, agency lenders, CMBS conduits, private lenders, and equity providers nationwide. Our role is to identify the best capital sources for your specific deal, prepare your loan package, and guide you through closing.

We work with sponsors and capital sources nationwide. While our team is based in the Washington, DC metropolitan area, we structure financing for projects across all 50 states. Our lender relationships span regional banks, national institutions, and private capital sources with broad geographic coverage.

We work on transactions ranging from $500,000 to $50 million+. Our sweet spot is deals between $1 million and $25 million, though we regularly work on larger transactions for experienced sponsors. For smaller residential investment loans (DSCR), we work on deals as small as $100,000.

Our compensation structure varies by transaction type but typically includes a success-based advisory fee paid at closing. This fee is usually a percentage of the loan or equity amount, ranging from 0.5% to 2% depending on deal size and complexity. We're incentivized to close your deal—not just generate quotes.

For most transactions, we do not charge upfront fees. Our compensation is success-based, paid only when your financing closes. For highly complex transactions requiring significant upfront work (detailed underwriting, extensive lender outreach, etc.), we may require a modest engagement fee that is typically credited against closing fees.

To evaluate your deal, we typically need: property address and description, purchase price or current value, your acquisition or refinance goals, rent roll or income summary (for income-producing properties), renovation or construction budget (if applicable), brief sponsor background and experience, and desired timeline. You don't need a complete loan package to start a conversation. We can advise on what additional documentation will be needed based on your specific situation.

Timeline varies significantly by loan type: DSCR loans take 2-4 weeks, bridge loans take 2-4 weeks, bank loans take 30-60 days, construction loans take 45-90 days, agency loans (Fannie/Freddie) take 45-75 days, CMBS loans take 60-90 days, and SBA 504 loans take 60-90 days. These are typical ranges—actual timelines depend on deal complexity, borrower responsiveness, and lender capacity.

After you submit your deal: (1) Initial review (24-48 hours) - We evaluate the opportunity and determine if it's a fit. (2) Discovery call - We discuss your goals, timeline, and questions. (3) Strategy recommendation - We advise on optimal financing structure. (4) Term sheets (3-10 business days) - We present preliminary offers from lenders. (5) Lender selection and underwriting - You choose a lender; we coordinate the process. (6) Closing - We support you through closing, resolving issues as they arise.

Yes. We regularly work with sponsors who've been declined by banks or other lenders. Often the issue isn't the deal itself—it's lender fit. A bank might decline a deal that a debt fund would eagerly finance. We can assess why you were declined and identify alternative capital sources that may be a better match.

Yes, though financing options may be more limited for borrowers without real estate experience. For first-time investors, we typically recommend DSCR loans for rental property acquisitions (no experience required for most lenders), fix & flip loans from lenders with first-time flipper programs, and partnership structures with experienced co-sponsors for larger deals. We're happy to discuss your situation and advise on realistic options.

A bridge loan is short-term financing (typically 12-36 months) used to "bridge" the gap between acquisition and permanent financing, sale, or refinance. Bridge loans are commonly used for value-add acquisitions, properties in lease-up, time-sensitive purchases, and situations where traditional financing isn't available or can't execute quickly enough.

Bridge loan rates typically range from 8% to 13%, depending on property type and condition, borrower experience and credit, loan-to-value ratio, loan size, geographic market, and lender type (bank vs. debt fund vs. private). Rates are higher than permanent financing because bridge loans are shorter-term and often used for transitional properties with higher risk.

Bridge lenders typically offer 65-80% of purchase price or current value (LTV), and up to 85-90% of total cost including renovation (LTC). Maximum leverage depends on property type, borrower experience, and the specific lender's appetite.

It depends on the lender and deal profile. Many bridge loans are available non-recourse (no personal guarantee) for experienced borrowers and stabilized or near-stabilized properties. Transitional deals with higher risk may require full or partial recourse. We can help you find non-recourse options if that's important to your investment strategy.

Bridge lenders are more flexible than conventional lenders, but credit still matters. Most bridge lenders require minimum credit scores of 650-680. Some private lenders work with lower scores but at higher rates and lower leverage. If credit is a concern, we can help identify lenders with more flexible requirements.

Most construction lenders require a minimum credit score of 680-700 for the guarantor(s). Some lenders may go lower for experienced developers with strong track records and significant liquidity. Credit score alone doesn't determine approval—lenders also evaluate experience, net worth, liquidity, and project fundamentals.

Construction loans typically require 20-35% equity (sponsor cash plus any subordinate capital). Loan-to-cost ratios generally range from 65% to 80%, depending on project type and risk profile, sponsor experience, pre-leasing or pre-sales, market conditions, and lender appetite. More speculative projects require more equity; well-sponsored projects with pre-leasing may achieve higher leverage.

It's difficult but not impossible. Most construction lenders require sponsors to have completed 2-3 similar projects. First-time developers can access construction financing by partnering with an experienced co-sponsor who provides the track record and guarantees, starting smaller with projects under $2-3M where some regional banks are more flexible, or using hard money or private lenders who may accept less experience at higher rates.

Loan-to-Cost (LTC) is the loan amount divided by total project cost (land + hard costs + soft costs). Construction loans are typically sized based on LTC. Loan-to-Value (LTV) is the loan amount divided by the property's appraised value. Permanent loans are typically sized based on LTV. Example: A project costs $10M to build and will be worth $12M upon completion. 75% LTC = $7.5M loan (based on cost), while 75% LTV = $9M loan (based on completed value).

Yes. Since the property doesn't generate income during construction, most construction loans include an interest reserve—funds set aside to cover interest payments during the construction period. This reserve is built into the loan amount and drawn monthly to pay accruing interest.

A DSCR (Debt Service Coverage Ratio) loan is investment property financing that qualifies based on the property's rental income rather than the borrower's personal income. If the property generates enough rent to cover the mortgage payment, you can qualify—regardless of what your tax returns show.

Most lenders require a minimum DSCR of 1.0 to 1.25, meaning the property's rental income equals or exceeds 100-125% of the monthly mortgage payment (principal, interest, taxes, insurance, and HOA if applicable). Example: Monthly rent of $2,000 divided by monthly PITIA of $1,600 equals a DSCR of 1.25. Some lenders offer "no-ratio" or sub-1.0 DSCR programs for strong borrowers willing to accept lower leverage or higher rates.

Most DSCR lenders require minimum credit scores of 640-680. Borrowers with 700+ scores receive the best rates and terms. Some lenders work with scores as low as 620 but at reduced leverage and higher pricing.

Some DSCR lenders finance short-term rentals, but policies vary. Lenders that allow STR financing typically require 12+ months of rental history (or use market projections), apply more conservative income calculations, require higher reserves, and limit to certain markets or property types. We can connect you with lenders who actively finance short-term rental properties.

Unlike conventional financing (limited to 10 mortgages for most borrowers), DSCR programs generally have no limit on the number of financed properties. If each property qualifies independently based on its cash flow, you can continue acquiring. Some lenders cap total exposure to a single borrower, but most investors never hit those limits.

Yes. In fact, most DSCR loans are designed for LLC or entity ownership. You can close in your LLC from day one—no need to purchase in your personal name and transfer later. This is a key advantage over conventional investment property loans.

A CMBS (Commercial Mortgage-Backed Securities) loan is commercial real estate financing that gets pooled with other loans and sold to investors in the bond market. This securitization model allows lenders to offer competitive terms, including non-recourse structures, fixed rates, and relatively high leverage for stabilized properties.

Typical CMBS requirements include: loan size of $2 million minimum (some lenders start at $5M), stabilized multifamily, retail, office, industrial, or hospitality property types, 85%+ occupancy for most property types, DSCR of 1.25+, sponsor net worth at least equal to loan amount, and sponsor liquidity of 10% of loan amount in post-closing liquidity.

Non-recourse means the borrower has no personal liability for repaying the loan. If the property fails and goes through foreclosure, the lender can only recover from the property itself—not the borrower's other assets. However, non-recourse loans include "carve-out" provisions (sometimes called "bad boy" carve-outs) that trigger personal liability for specific actions like fraud, misrepresentation, voluntary bankruptcy, or environmental contamination.

Yield maintenance is a prepayment penalty structure common in CMBS and agency loans. If you prepay the loan before maturity, you must compensate the lender for lost interest income. The penalty is calculated based on the remaining loan term and the difference between your loan rate and current Treasury rates. Yield maintenance can be substantial—sometimes 10-20% of the loan balance or more—making early prepayment expensive. This is why CMBS loans work best for borrowers planning to hold through the full loan term.

Defeasance is an alternative to yield maintenance for prepaying CMBS loans. Instead of paying a penalty, you purchase a portfolio of Treasury securities that replicate the remaining loan payments. The securities are held in trust and make payments to bondholders, effectively replacing your property as collateral. Defeasance can be more or less expensive than yield maintenance depending on interest rate movements. It's complex and requires specialized consultants to execute.

Mezzanine debt is a loan secured by a pledge of the ownership interests in the property-owning entity. It sits behind senior debt but has foreclosure rights via UCC filing. Preferred equity is an equity investment in the ownership entity with priority returns ahead of common equity holders. It has no lien or security interest in the property. Key differences include: structure (equity vs. loan), security (unsecured vs. pledge of ownership), foreclosure (control rights vs. UCC foreclosure), and tax treatment (partnership income vs. interest expense).

Use preferred equity when your senior lender (especially Fannie/Freddie) prohibits subordinate debt, you want flexibility in payment timing, partnership tax treatment is preferred, or you're willing to give up some control rights. Use mezzanine when you want interest deductibility, secured creditor position matters, your senior lender permits subordinate debt, or you prefer debt-like documentation.

Preferred equity returns typically range from 10-18%, depending on deal risk profile, position in capital stack (how much cushion below), sponsor experience, investment term, and current market conditions. Returns may be structured as current-pay (monthly/quarterly), accruing (paid at exit), or a combination.

An SBA 504 loan is a government-backed financing program for owner-occupied commercial real estate. It combines a conventional bank loan (50%), an SBA-backed CDC loan (40%), and borrower equity (10%) to provide below-market fixed-rate financing with low down payments.

To qualify for an SBA 504 loan, you must: operate a for-profit business in the United States, have a net worth under $15 million, have average net income under $5 million (after taxes, prior two years), meet SBA size standards for your industry, occupy at least 51% of an existing building (60% for new construction), and use the property for business operations (not investment).

The standard down payment is 10% of the project cost. Some situations require 15% down: new businesses (less than 2 years operating) or special-purpose properties (single-use buildings). Start-up businesses combined with special-purpose property require 20%. Even at 15%, this is significantly lower than the 20-30% typically required for conventional commercial mortgages.

SBA 504 loans typically take 60-90 days from application to closing. The process involves: (1) Bank approval of the first mortgage (50% portion), (2) CDC underwriting of the SBA-backed portion (40%), (3) SBA final authorization, and (4) Closing coordination between bank and CDC. The timeline is longer than conventional loans but the favorable terms are worth the wait for qualifying borrowers.

Fix & flip loans provide short-term financing (6-18 months) to purchase and renovate residential properties for resale. The loan combines acquisition capital and renovation funds in one facility. You receive purchase funds at closing; renovation funds are held in reserve and released through draws as work is completed.

Typical fix & flip leverage includes Loan-to-Cost (LTC) up to 90% of purchase price + renovation, and Loan-to-ARV up to 70-75% of after-repair value. Lenders use both metrics and will limit the loan to whichever produces the lower amount. First-time flippers typically receive lower leverage than experienced investors.

Not necessarily. Many lenders offer first-time flipper programs, though terms are typically more conservative: lower leverage (75-85% LTC vs. 90%), higher rates (+0.5-1.0%), larger reserves required, and lower maximum loan amounts. As you build a track record, you'll qualify for better terms.

If your renovation exceeds the original budget, you'll need to fund the overage with your own capital—lenders don't increase the loan amount mid-project. This is why experienced flippers build 10-15% contingency into their budgets and maintain cash reserves beyond the required down payment.

Consider refinancing when: your current loan is approaching maturity (12-24 months out), interest rates have declined significantly since origination, your property has appreciated and you want to access equity, your property performance has improved (better DSCR = better terms), you want to move from recourse to non-recourse, or you want to lock in a fixed rate from a floating rate. We can help you evaluate whether refinancing makes economic sense given prepayment costs and current market conditions.

Cash-out refinancing allows you to access your property's equity without selling. The new loan is sized larger than your existing debt, and you receive the difference as cash (minus closing costs). Example: Property value of $5,000,000, existing loan of $2,500,000, new loan at 70% LTV of $3,500,000, cash to borrower of approximately $1,000,000. Cash-out proceeds are not taxable income, making this a tax-efficient way to access appreciation.

Commercial refinance closing costs typically include: origination fee of 0.5-1.5% of loan amount, appraisal of $3,000-10,000+, legal fees of $5,000-15,000, title insurance (varies by loan size), and environmental/property reports of $3,000-7,000. Total is often 2-4% of loan amount. Additionally, you may owe prepayment penalties on your existing loan (yield maintenance, defeasance, or other prepayment provisions).

Credit requirements vary by loan type: DSCR requires 640-680, Fix & Flip requires 650-680, Bridge requires 650-680, Bank/Construction requires 680-700, Agency (Fannie/Freddie) requires 680+, CMBS requires 680+, and SBA 504 requires 680+. These are minimums—better credit scores receive better terms.

Yes, depending on how long ago and the loan type. Bankruptcy typically requires 4-7 years since discharge. Foreclosure typically requires 3-7 years since completion. Short sale typically requires 2-4 years. Private lenders and debt funds are often more flexible than banks. DSCR and bridge lenders typically have shorter seasoning requirements than agency or CMBS.

Recourse means the borrower personally guarantees the loan. If the property defaults and sale proceeds don't cover the debt, the lender can pursue the borrower's other assets. Non-recourse means the lender's only recourse is the property itself. The borrower has no personal liability (except for "bad boy" carve-outs covering fraud, misrepresentation, etc.). Non-recourse is generally available for CMBS loans, agency loans (Fannie/Freddie), some bridge loans (experienced borrowers), and life company loans. Bank loans and construction loans are typically recourse.

DSCR measures whether a property's income can cover its debt payments: DSCR = Net Operating Income / Annual Debt Service. NOI = Gross income - Operating expenses (before debt service). Debt Service = Annual principal + interest payments. For DSCR investment loans (1-4 unit residential), the calculation is typically: DSCR = Monthly Rent / Monthly PITIA (Principal + Interest + Taxes + Insurance + Association dues). Most lenders require DSCR of 1.20-1.35 for commercial loans and 1.0-1.25 for DSCR investment loans.