Have the Credit Markets Dried Up Completely? That Depends Upon Where You Are Looking!


Back in October of this year a BiggerPockets regular, Rich Weese, posted a web site that provided a graded scale of the overall health of every bank in the nation.  While his post did not get a lot of response, the Bank Tracker Web site must be visited by everyone who is currently or hopes to be dealing with a bank in the next 12 months. 

As a result of Rich’s post and looking at the bank tracker site for my state of Maryland, I started paying a lot more attention to what is happening with our banking system, and regrettably the news is not great!

At last count there were 124 bank failures so far this year.  And, while that may not seem like a big number,  the number of banks on the FDIC watch list has climbed to over 400, and that number is most likely not going down any time soon.  Also, you will see that the FDIC is fast running out of funds to insure depositors in these failed banks, and there is talk of a bailout.

To add to all of this comes the news that everyone of us should be keenly aware of: credit is tight across every sector of our economy and it is having a stifling effect on job growth and business expansion.  No news here!

I think this Wall Street Journal article illustrates the point that lending amongst every lending institution is down; that said, the biggest drop has occurred with the large banks, where the amount of loans issued has been curtailed by 75%.

While this may seem like a disaster for real estate investors, and it could be depending how you borrow money, this news actually helps us to focus our efforts on those lenders who are still in the game.

And, in keeping with my attempt to find the positive in this mess we call our economy, here is where the opportunity lies for each one of you.

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Small commercial banks in your respective communities are still lending, though!

Many of you have seen me write post after post about the importance of creating relationships with small local lending institutions.  These relationships have always been important, but today they are critical!  Why?

Because based on the article I mentioned above, small local lenders are the only ones making any loans.  They can’t survive on just deposits and other transactional fees alone.  They have to be lending to stay alive, and they are right in your back yard.

If you haven’t made the time to start building relationships with one of more small local lenders in your market, I believe it is imperative that you start that process right now!

In case you were wondering how to start, simply pick up the phone and calling the commercial lending department.

Photo: Hadassah28

About Author

Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching program focused on local coaches helping investors to perfect their game.


  1. I wonder if you might do a follow-up on how to actually build up relationships with local lenders. Do you need to have deals ready to go to get started? If not, will they even take you seriously?

    • Linda,

      Perhaps the best way to do this follow-uup would be to discuss this topic during my next radio show which will be this coming Thursday.

      Also, if you go to my blog, at the bottom of the colored bar on the left hand side is button which will allow you to get a report I put together that deals more specifically finding lenders and creating relationships with them.


  2. Nice article Pete,

    My boss Dave Lindahl is a full time investor and from what he has taught me I couldn’t agree more. Banks are now lending on whether or not they know a property can perform and if you are going to invest in property you need to do your due diligence and make sure the numbers will work to the banks liking as well as you and your investors. Great article!

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