This prestige squeeze is bad; not only are many banks not lending at-all, but the ones that are lending are being ultra conservative. Ltv (loan-to-value) ratios have dropped significantly; it is nearly impossible to get a loan for more than 75% of a properties value now-a-days, and underwriting standards have tightened across the board.
To have any hope of securing funding from a bank or other conventional, institutional lender a commercial real estate deal must posses all of the following attributes, good location (not in a particularly economically depressed area), good quality (not a-lot of deferred maintenance), low Ltv, good sponsor (borrower must have a net worth at least equal to the loan number and must have a track article of success in commercial real estate), and good cash flow. (Underperforming buildings, raw land and construction deals need not apply.) The primary lenders (banks, Wall street & guarnatee companies) are worried about their own survival. Regardless of what their ads say, they will not fund your loan unless they are certainly sure they can sell it into the secondary shop if they need to.
Commercial Loan Lender
So where can investors seeking commercial mortgage loans go to get the financing they so desperately need? The best occasion a commercial property owner, investor or developer has of securing an approval and ultimately windup a deal is with a "portfolio" lender.
!1: Now is the time The Commercial Real Estate Tsunami: A Survival Guide for Lenders, Owners, Buyers, and Brokers Order Today!
Great Deal : Date Created :Mar 27, 2011 19:12:24
An in-depth look at why a commercial real estate collapse is inevitable, and how to survive it
The Commercial Real Estate Tsunami is the first book to address the phenomenon of the pending wave of commercial debt maturities coming due in the next five years, and the impact those maturities will have on the commercial real estate markets when combined with the historic economic crisis the world is experiencing at this time.
Drawing on the knowledge of recognized experts in the commercial real estate industry and financial markets, as well as lessons learned from the commercial real estate downturns of the 1980s and 1990s, author Tony Wood fills a void in our understanding of the causes of the crisis and what to expect in the future.
- Sends a warning to the commercial real estate industry, and offers concrete solutions to mitigate the risks and hazards that lie ahead
- Contains the insights of a group of experts from various sectors of the commercial real estate industry
- Helps market participants, including investors, developers, lenders, and brokers, gain a vitally needed perspective on where we might be going next and how we will get there
Heeding the advice and guidance of the contributors in this book will benefit anyone navigating these turbulent waters and help lead them to higher ground.
- After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade
- The Success System That Never Fails
- The Fundamentals of Listing and Selling Commercial Real Estate
- The Six-Figure Second Income: How To Start and Grow A Successful Online Business Without Quitting Your Day Job
- The 4-Hour Body: An Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman
A portfolio lender is a unique funding source that certainly lends its own money for its own inventory and holds the loans is makes in its own portfolio. A portfolio lender need not be involved with the Cmbs (commercial mortgage backed securities) shop or with the day to day swings in the mortgage debt prices. portfolio lenders are not constrained by any lack of liquidity in the overall prestige market; they are not dependant on any markets for their liquidity.
Most lenders borrow money, using their depositors' assets as collateral, and then lend the borrowed money to you. They then sell the loan to the secondary mortgage shop in-order to recover their capital and pay their bills. That's how a bank with ,000,000.00 in it can make ,000,000.00 worth of loans. They need a liquid, flowing prestige shop to survive. portfolio lenders, on-the-other-hand, only lend money they have on deposit; no leverage, no selling of paper, no securitization, just plain old-fashioned lending.
Many portfolio lenders are underground financial firms set up to make a profit by lending money against commercial real estate assets. These lenders can be organized as Llcs (limited liability companies), Lps (limited partnerships), corporations or trusts. Some are certainly hedge funds or underground equity firms. Other portfolio lenders are certainly divisions or subsidiaries of regional and community banks or smaller guarnatee companies.
Portfolio lenders will charge a higher rate and more points than conventional lenders do, but they tend to be more flexible and more responsive to their borrowers. For many borrowers, private, portfolio lenders have come to be the only game in town and, when faced with the possibility of losing a construction to foreclosure or missing out on a great deal, the cost of the loan is a secondary concern.
The key to getting funded is looking the right lender for your loan. The big banks and other primary funding sources are virtually out of the picture; they just want to make it straight through this. Identifying a lender that still has the capacity to lend and presenting your loan box in the most advantages manner possible, recite your last best occasion of getting a loan closed.
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