Just as there are numerous types of property classes, there are even more variations and types of loans. When we consider Hard Money, Bridge Financing , Perm Financing, Venture Capital Financing, Mezzanine, Conduit financing and the many combinations and variations, it can be quite confusing.
It all boils down to basically 4 main types of financing.
1. Acquisition Financing
As the name implies, Acquisition financing is any type of financing to “acquire or purchase a thing”. In this discussion, the thing being purchased is real property. Real property is property that can be touched.
This includes buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other things.
Real property includes unimproved properties like raw land. Improved properties are developed properties like buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other things.