Different types of loans we use

Understanding the variety of loan types available on Landa properties is crucial for making informed investment decisions. Below, we explain the different loan types you may encounter on our property pages.

Long-Term Mortgage (Refinance Note)

The long-term mortgage, also known as a refinance note, is a lasting financial commitment, typically extending beyond a year. This type of loan is often structured as interest-only, meaning the series LLC pays only the interest monthly to the lender, with the principal amount due at the end of the term.

Acquisition Note

Upon acquiring a property, the series may take an acquisition note from Landa Holdings to cover initial expenses, including the purchase price, improvement costs, acquisition fees, and a cash reserve. This loan carries a 4.5% interest rate and is paid back to Landa Holdings by the series. Once the long-term mortgage is in place and all IPO shares are sold, the acquisition note is fully repaid.

Bridge Loan

Bridge loans are short-term solutions used during the title transfer to the series LLC. These one-year loans, provided by third-party lenders, bridge the gap until a long-term mortgage is obtained. Typically, the interest on these loans is covered by Landa Holdings Inc., the manager.

Operational Loan

Operational loans address immediate operational needs, such as property improvements or vendor payments. For instance, if a property requires a $10,000 improvement but only has $6,000 available, a $4,000 operational loan can be taken to cover the shortfall. These loans are paid back over time, including principal and interest.