Commercial Real Estate

Financing the Investment Project: Leaving Nothing To Chance

Expertise:
18 Articles Written
The importance of financing is so great it pays to leave nothing to chance and assumption. Knowing the local lenders and what they like to invest in is critical to finding the right lender for your investment project. Also, presenting a compelling case to the lender is important. These two aspects lay the foundation for [...] View the full article: Financing the Investment Project: Leaving Nothing To Chance on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

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    Mike Farmer
    Replied over 11 years ago
    Thanks Mark. A compelling presentation based on real numbers goes a long way.
    Mike Farmer
    Replied over 11 years ago
    Thanks Mark. A compelling presentation based on real numbers goes a long way.
    John
    Replied over 11 years ago
    We are a private lender in Sarasota Florida and have done a few hundred million in loans over the last 18 years. But I can tell you that the underwriting has changed quite a bit in recent years. In the glory days before this housing crisis we would write loans and had some comfort knowing that even if the borrower makes a mistake the market appreciation would most likely bail them out. And for the most part that was the case. But now more than ever the “exit strategy” is a crucial part of the underwriting for us. Basically we have to ask ourselves… “How are we going to get out?”. And a sale of the property is no longer a good enogh exit strategy. Even at a very low loan to value, we still have a lot to consider when writing a loan. And 80% of all the loans we wrote in 2007 have gone sideways and we have foreclosed, or taken deeds in lieu on them. And all of those borrowers look GREAT on paper. Its a challenging time for lenders. So the only advice I can give is… make sure you put yourself in the lenders shoes and ask yourself if you would do the loan if you were the lender. And then be absolutely sure you have a legit exit strategy if you are looking to refinance, or sell. Reply Report comment
    John
    Replied over 11 years ago
    We are a private lender in Sarasota Florida and have done a few hundred million in loans over the last 18 years. But I can tell you that the underwriting has changed quite a bit in recent years. In the glory days before this housing crisis we would write loans and had some comfort knowing that even if the borrower makes a mistake the market appreciation would most likely bail them out. And for the most part that was the case. But now more than ever the “exit strategy” is a crucial part of the underwriting for us. Basically we have to ask ourselves… “How are we going to get out?”. And a sale of the property is no longer a good enogh exit strategy. Even at a very low loan to value, we still have a lot to consider when writing a loan. And 80% of all the loans we wrote in 2007 have gone sideways and we have foreclosed, or taken deeds in lieu on them. And all of those borrowers look GREAT on paper. Its a challenging time for lenders. So the only advice I can give is… make sure you put yourself in the lenders shoes and ask yourself if you would do the loan if you were the lender. And then be absolutely sure you have a legit exit strategy if you are looking to refinance, or sell.
    John
    Replied over 11 years ago
    We are a private lender in Sarasota Florida and have done a few hundred million in loans over the last 18 years. But I can tell you that the underwriting has changed quite a bit in recent years. In the glory days before this housing crisis we would write loans and had some comfort knowing that even if the borrower makes a mistake the market appreciation would most likely bail them out. And for the most part that was the case. But now more than ever the “exit strategy” is a crucial part of the underwriting for us. Basically we have to ask ourselves… “How are we going to get out?”. And a sale of the property is no longer a good enogh exit strategy. Even at a very low loan to value, we still have a lot to consider when writing a loan. And 80% of all the loans we wrote in 2007 have gone sideways and we have foreclosed, or taken deeds in lieu on them. And all of those borrowers look GREAT on paper. Its a challenging time for lenders. So the only advice I can give is… make sure you put yourself in the lenders shoes and ask yourself if you would do the loan if you were the lender. And then be absolutely sure you have a legit exit strategy if you are looking to refinance, or sell.
    Mike Farmer
    Replied over 11 years ago
    Thanks, it’s good to hear directly from a lender.
    Glenn Fydenkevez
    Replied over 11 years ago
    Securing a commercial mortgage approval is key to any project. Without financing your deal is just a dream. A professional loan agent, broker or other intermediary can really help get a deal done. They speak the language of the lenders and know who’s funding loans and who’s not. MasterPlan Capital LLC – Commercial Real Estate Investment Bankers http://www.masterplancapital.com/ Commercial Mortgage Lending (from $1MM) Equity Financing (from $10MM) Asset Management
    MoneyMan
    Replied over 11 years ago
    Your best way of obtaining financing is by putting some of your own money into the deal! Its amazing to see the number of people trying to borrow 100% with nothing down and no where withall!