Choosing the right realtor is a daunting task. For those who are savvy in business or investing, dealing with a ‘rooky’ realtor can be frustrating and time consuming. To save both time and sanity, do your homework on your realtor as you would a property. Here are a few things to look for when seeking out a realtor to represent you on your next deal:
Please include attribution to Scott Maizlish | Park City Realtor with this graphic.
Non bank lenders, sometimes called hard money lenders, are stepping up to finance many FHA loans in limbo. The recent government shutdown, FHA loans have come to a screeching halt. While those FHA loans already with a firm funding date are still scheduled to close, borrowers who were waiting for FHA to give them a closing date may continue to wait. For this reason, many of those in waiting are seeking other options for financing such as bridge loans from hard money lenders.
For private and hard money lenders, this FHA slowdown presents an opportunity to provide loans for new acquisitions and refinances. But what are the types of properties that hard money lenders will be financing? All types of commercial property from multifamily property to office buildings, and particularly any new purchases with strict settlement deadlines. Because every real estate investor knows a good deal won’t stick around long, many borrowers in waiting for FHA financing are motivated to search for bridge financing alternatives such as hard money lenders and private money lenders.
Even for borrowers who can qualify for the low interest rates loans offered by FHA, having to pay the higher interest rates charged by hard money lenders is better than losing the opportunity to purchase a property at a tremendous value. If you’ve never used private money loans to finance your real estate, the government shutdown may be enough of a motivation for you to investigate this option. Our blog called ‘Hard Money 101’ shares important information such as how to avoid lending scams in hard money when searching for alternative sources of financing. If you are seeking bridge financing or a hard money loan for an acquisition or a refinance loan, take a look at our programs here.
Although sub prime loans all but disappeared after the crisis, the hated sub-prime loans are now being offered by private money lenders. Borrowers who are unable to qualify for a bank loan have had limited alternatives since the onset of the crisis. With banks having shut down lending, particularly on investment properties, private money lenders are stepping up to the demand for sub-prime loans. For new home purchases, investment purchases, and refinances, those who only qualified at the sub-prime level before, have been unable to obtain loans post crisis. Because private money lenders are now funding most of the sub-prime loan products these days, many of these types of borrowers can now obtain financing.
But what is a sub-prime loan? A sub-prime loan depends on substantial equity in the property being used as collateral for a loan. This typically demands a larger down payment on a purchase and substantial equity in the property on a refinance. A sub-prime loan offered by private money lenders usually comes with a higher interest rate as well. Although some borrowers complain about the interest rates charged by private money lenders on sub-prime loans, most of them are just content to be able to get a loan. For more information on our sub-prime loans, inquire at this link: http://privatemoneyutah.com/loan-request-form/
The increased demand for commercial bridge loans this year is the result of many factors. The bottom line? Banks are not excited about issuing new paper on investment properties, and in fact, Deutsche Bank is selling off it’s commercial paper as fast as it can. The biggest complaint of commercial real estate investors is the scarce supply of bank financing. But for those who have never taken down a commercial bridge loan before, understanding the ins and outs of commercial bridge financing can be confusing. Here’s a few things you’ll need to close a commercial bridge loan in a matter of weeks:
- Property Photos: Have plenty of color photos of the property available, both interior and exterior photos.
- Property Financial Information: Have the property financial information readily available, which is typically Profit and Loss and Statements (Income Statement) for the last 2 years for the property. A profit and loss statement for the year to date is also required. If the property is vacant, have comparables for value readily available.
- Title Report: Have a preliminary title report ready and free of all liens or any other bad marks that may need to be cleaned off.
- Purchase or Refinance Loan? If a purchase have the purchase contract available. If a refinance, have a timeline of the property available, which is an overview on when purchased, how much, any improvements to date, etc.
- List of Repairs: If repairs or tenant improvements will be required, have an itemized breakdown of repairs or improvements.
- Leased or Vacant? If the property is leased have the rent roll and individual leases available as a condition to close.
By having all of these items readily available, you will have the best chance of getting your commercial bridge loan closed in a matter of weeks. Although each lender has different documentation requirements, these are the basic items you need to get your commercial bridge loan on a fast track with your chosen lender.If you’ve never used private money loans before, check out our blog on hard money called ‘Hard Money 101.’ Or if you are ready to take a look at our commercial bridge loan programs, click here.