If you’re familiar with Lending Club, then you already have a general idea of what Blackhawk Corp. is.
There is however, one notable exception – where Lending Club is a peer-to-peer (P2P) lending platform for personal loans, Blackhawk is a P2P strictly for real estate borrowers and lenders. And not just any real estate, but commercial real estate, and residential investment properties.
The platform acts as an intermediary between borrowers and lenders, and provides an alternative to traditional banks. That’s especially important now that banks have largely withdrawn from commercial real estate lending. Blackhawk bills themselves as the Champions for the democratization of commercial real estate financing.
How Blackhawk Investments Corp. Works
When you go to the Blackhawk site, you can open an account, which is free to do. This allows both real estate borrowers and investors to connect directly with one another to find and fund loans for both commercial real estate, and for non-owner occupied residential properties.
Borrowers present loan requests, and once enough investors have expressed interest in the loan, the loan is removed from public view to give investors time to get the necessary information to determine if they are prepared to commit actual funds to the loan.
If both borrower and investor agree on the terms, investors will earn interest income on loans that are fully secured by real estate. The loan funds will be dispersed by a national title company to the borrower from an escrow account. In exchange, investors are granted a trust deed or a first lien securing the loan to the property.
In effect, borrowers and investors meet on the web platform, establish the details of the loan, and then close the deal. There is no bank or other intermediary involved in the process, which means that traditional bank type underwriting guidelines do not apply.
Lending Through Blackhawk Investments Corp.
Here’s how Blackhawk works from an investor/lender perspective:
Investor qualifications. In order to lend on Blackhawk, you must be over 18 and qualify as an accredited investor as defined by the SEC. You must also be registered with the proper governmental agencies, and maintain proper licenses in good standing where required.
Investor registration. You must register as a peer investor with Blackhawk. Once you do, you will be automatically matched with loan opportunities that meet your stated investment criteria. Once you find a successful match, you can reserve all or a part of the loan amount requested. Once that reservation is made, then all of the necessary documents will be prepared by the required third parties for your review.
Cost to investors. There are no fees charged to investors.
Property types. Commercial and residential investment property only. That means no first or second mortgages on owner occupied primary residences, or vacation homes.
Bird’s Eye View. This is a feature offered on the platform. It is a one page executive summary that contains the main facts about a loan opportunity. It will provide both the quantitative and qualitative analysis of the loan for your review.
Loan quality. Borrowers can be individuals, partnerships, or companies. Blackhawk reviews each borrower and each property, putting each through a vetting process. During the process, they validate key up-to-date financial information, as well as qualifying the integrity of each loan request posted on the site.
Borrower verification. Blackhawk gives a simple credit risk rating for each borrower. Credit reports, property title search and other Internet sources are used to carry out a comprehensive screening. Blackhawk will also use third-party services from licensed appraisers, title companies, attorneys, and credit reporting agencies.
Interest rates and loan amounts. Interest rates typically range between 6% and 12.5%, while loan amounts range from a minimum of $25,000 up to maximum of $50,000.
Borrowing Through Blackhawk Investments Corp.
If you own or are looking to invest in commercial property or in residential investment property, and have had difficulty getting loans from banks, Blackhawk may be the right choice for you. Here are the summary points on using Blackhawk from a borrower prospective:
Types of borrowers. It can be an individual, partnership or company, as long as the entity holds title to the real estate that will be used to secure the loan.
Loan amounts and terms. The minimum loan amount is $25,000, and the maximum is $200 million, which will of course require multiple investors. Loans are fixed rate, interest only, for terms between one and three years. The loan is secured by the property, and the loan amount cannot exceed 65% of the property value.
Interest rate. You get the maximum interest rate you request or lower. At Blackhawk, the rate you pay is always determined by matching profiles.
The Blackhawk process. You register as a borrower on the platform, and submit your loan request. Blackhawk will then follow up with a quick interview, as well as a request for supporting documentation. They will make a determination if your application can be approved. If it is, the request will be matched with all of the peer investors on the platform or looking for loan terms that match your request. You’ll be notified if one or more lenders express interest in your request.
Required documentation. Documents typically requested will include:
- Form 1003 (credit application)
- Borrower’s Authorization
- Broker Opinion Letter and or Property Valuation
- Rent Rolls
- Copy of Tenant Lease Agreements
- Company Financials
- Company Operating Agreement
- Subject Property Pictures
- Construction and/or Rehab Budget (if applicable)
Finding a willing investor. Once your loan has gone through and integrity screening, it will go live on the website. If a match occurs you will be required to submit all necessary documents, you can then receive the loan proceeds in as little as five business days.
How you’ll be informed of investor interest. Once your loan request becomes “fully reserved”, you’ll receive a Letter of Intent expressing interest from a potential investor. You will then have five days to accept the terms of the proposed loan.
Making changes in your loan details. Once your loan request is been submitted, you cannot change the details of your loan.
Borrower fees. It’s free to register on Blackhawk. But if you do secure a loan, the platform will charge you a fee equal to 2.5% of the loan amount ($5,000 minimum) upon loan closing.
Payments. The lender will set the payment and terms, since Blackhawk does not provide any advice in this area. All payments will be spelled out by the loan contract agreed upon by borrower and investor.
Will Blackhawk Investments Corp. Work For You?
Given how difficult it is to obtain a loan on a commercial property or a residential investment property, a P2P platform like Blackhawk may be the only loan source for most borrowers. In addition, the nature of the platform eliminates many of the rigid and arbitrary requirements that banks have in making loans for such properties.
Blackhawk Corp. can provide a real estate investor with borrowing flexibility that’s needed in order to make the venture successful. Meanwhile, lenders/investors can earn high rates of return on fully secured loans, acting as a direct lender. Check out the platform and see what’s available. It’s free register, so you have nothing to lose by trying – and everything to gain by finding or funding the loan of your choice.