Private Lenders Fill The Gap: Dollars And Sense
Category : Blogs
Focusing On What Makes Dollars And Sense
About a decade ago, bank closings were front page news. There were 140 closing in 2009 alone according to the brief put out by the FDIC. Because of the banks failure to adapt to the changing market, private lenders prospered. Consequently, our company became a private lender after spending decades doing the what we now lend others the liquidity to do: renovate residential and commercial properties in D.C., Virginia, Maryland, etc.
A Private Lenders Experience Matters
It takes experience and knowledge to create substantial real estate value. Renovating under budget and on time, environmental hazards, new zoning, etc. all present a broad swath of challenges. Resolving those challenges may seem simple to a well versed property flipper, but they’re also the issues that can lead a traditional lender or inexperienced private lender to refuse funding. Someone unfamiliar with the ins and outs of real estate is likely to have a faulty valuation of the securing asset. Thus, they would not be able to conceive of and optimize a mutual beneficial deal. The metrics they use to ascertain whether or not you have the ability to pay them will be inefficient and in many cases arbitrary. All that matters to competent private lenders is that borrower has sufficient equity in the property/portfolio to balance the deal at an agreeable LTV.
Food for thought,
Nathaniel S. Fulford
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