Website design By BotEap.comIn March 2015, the National Association of Realtors (NAR) invited a random sample of 49,485 real estate agents working in commercial real estate to complete an online survey. A total of 791 responses were received for an overall response rate of 1.6 percent. The survey asked real estate agents’ views on how they found their credit environment to be over the past year. Living and working in California, I find it interesting and informative to compare the overall results with the opinion of the surveys in our state. I think you will find it informative too. Without further ado, here are the opinions of private brokers and lenders as mentioned state by state:
Website design By BotEap.comStates that provided difficult credit situations
Website design By BotEap.comThe National Association of Realtors (NAR) found that 58% of investors preferred to approach banks, but not all banks were willing to lend. Of those that did, these traditional lenders compounded the situation with clumsy procedures, cumbersome timelines and deadlines, and lengthy processes. Few banks also made an effort to please their customers or to make their situation more comfortable.
Website design By BotEap.comSaid a private lender in New York
Website design By BotEap.comBanks have been very aggressive in getting deals financed.
Website design By BotEap.comYou can expect such a situation in a city like New York, where banks have to stand up to delays and have had to cut due to bad loans. In addition, New York is known for its aggressive and abrasive environment. The lack of empathy towards clients is one of his sore points.
Website design By BotEap.comMore unexpected has been the fact that posh places like Louisiana are reporting the same difficulties.
Website design By BotEap.comSaid a local agent:
Website design By BotEap.comBanks are doing well, but it’s difficult for them to do business and it’s hard to move forward in an environment like this. – Louisiana
Website design By BotEap.comAnd in North Carolina:
Website design By BotEap.comMoney is cheap, but it is still very hard to come by. – North Carolina
Website design By BotEap.comApparently, the banks place the monopoly on investors and act like vile disgusting. Other investors said the following:
Website design By BotEap.comThe rules established for large banks are handcuffing regional and community banks. – North Carolina
Website design By BotEap.comJust refinanced 3 properties from $ 150,000 to $ 1,000,000. Low loan for value offerings. – Colorado
Website design By BotEap.comSecondary market trade financing terms are so burdensome that it is not worth the process, or terms so strict that buyers do not see the value of the financing and only pay cash for smaller trade deals. – New Mexico
Website design By BotEap.comStates that considered the credit environment good
Website design By BotEap.comIf you want to invest, you can consider moving to one of these areas. There are fewer opportunities than in California. There may be a flatter market with distressed and possibly less promising inventory, but banks are more willing to help investors.
Website design By BotEap.comThere is a lot of money available to qualified buyers of commercial properties. – Texas
Website design By BotEap.comFinancing has not been a problem with reasonable transactions. Massachusetts
Website design By BotEap.comStates that provide a positive environment for
commercial private lenders work in
Website design By BotEap.comBank credit conditions in most states in 2015 have been frustrating for consumers, making it an ideal situation for private lenders, such as hard money lenders who thrive on disappointed investors.
Hard money lenders step in where banks fail with promises of convenience, solid care, customer comfort, fast turnarounds (think about getting a loan in the same week vs. 60 days or more from banks!) and a lot less paperwork. All you would have to do is sign your name on some forms and fill in the details about the value of your property and your work, experience and / or credit history. Nothing important and much smoother than banks. The subscription, in short, is beautiful. Even loan-to-value structures in some places (particularly California) have recovered and private commercial lenders now offer higher or full rates.
Website design By BotEap.comThe downside is high interest rates and balloon payments (think payments that are double that of banks). On the other hand, those eager to be rejected investors may have no alternative.
Website design By BotEap.comPennsylvania and Carolina agents praised the private loan market:
Website design By BotEap.comEntrepreneurs are generally visionary and well ahead of the cultural curve, while banks apparently operate in a closed cave and make up for their lack of skill with aggressive rates and terms, or an unrealistic customer process. – Pennsylvania
Website design By BotEap.comCarolina was more severe. One investor explained that he preferred the alternative sector because:
Website design By BotEap.comI think the banks have let the whole country down. They are mindless lemmings and have abandoned their role in the biggest economy. – North Carolina
Website design By BotEap.comThese agents in Georgia, Carolina, and Illinois, for example, who were defrauded by their banks, may have no choice but to seek out private commercial lenders, especially if they want to invest.
Website design By BotEap.comIllinois: Business financing is a problem. I have a large property on the market for 1 year and there are no buyers.
Website design By BotEap.comAnother commented that banks are
Website design By BotEap.comSlow in loan processing. Abnormal waiting time to be financed. – Illinois
Website design By BotEap.comNorth Carolina: Commercial land loans are almost non-existent.
Website design By BotEap.comAnd Georgia. (Sounds very caustic):
Website design By BotEap.comWhen lenders start lending again, buyer-backed demand is very high and the economy will keep going. No money, no recovery.
Website design By BotEap.comAgents in Wisconsin encountered a similar situation:
Website design By BotEap.comBanks have become much more aggressive for owner-occupied transactions.
Website design By BotEap.comIt seems that some private investors would find a ready market in Kentucky:
Website design By BotEap.comGenerally, only local banks make business loans. It takes twice as long to get a loan and the underwriting requirements are too restrictive. – Kentucky
Website design By BotEap.comFinally, it seems that in Ohio, small businesses have no choice but to reach out to hard money lenders:
Website design By BotEap.comBig banks no longer lend to small businesses … only to large businesses.
Website design By BotEap.comSwitch to the private business loan environment in California …
Website design By BotEap.comThe National Association of Realtors found that private lenders run a booming loan business in California. More runners have joined and more are investing in the field. Private lenders in California have benefited from a growing interest in investment that followed the crisis of the recession. 2015 was a good year in which private lenders primarily served entrepreneurs and small business owners. As mentioned, these were the ones that were rejected by the banks.
Website design By BotEap.comOver the past year, private lenders have also made their field more attractive by eliminating one of its problems: the low loan-to-value (LTV) rate. Originally, lenders only distributed LTV rates that ranged from 50-60%, which is hugely low for the value of private property. A growing number of agents felt comfortable enough to increase their LTV rates to 80%. Some meet full ownership percentages. This and the tightening of government regulations to protect borrowers (especially residential borrowers) have made investors more willing to view private commercial lenders as an attractive alternative.
Website design By BotEap.comOn the other hand, rising prices and high interest rates from lenders led to a growing percentage of defaults. New and inexperienced agents had more of these collapsed rebates than others. Defaults are projected to rise next year in large part due to rising interest rates. Government regulations have also intruded on the situation with cumbersome and cumbersome rules that force lenders to lengthen the time to acquire loans, making the original private loan situation less attractive.
Website design By BotEap.comNonetheless, these years seem like a good time to enter the California private business loan market, especially if you know how.
Website design By BotEap.comThese are some of the reports published by NAR:
Website design By BotEap.comMost people say they will talk to their bank to obtain business loans. – California
Website design By BotEap.comCertain. But then most are rejected. This is particularly due to the fact that:
Website design By BotEap.comExcessive regulations and self-imposed banking bureaucracy have made business lending difficult for legitimate clients. – California
Website design By BotEap.comThis causes many investors to turn to hard money lenders.
Website design By BotEap.comI think there is enough money available, the problem is not the banks; It is the inability of the borrower to qualify for financing. – California
Website design By BotEap.comAnd another private lender who lives in California said:
Website design By BotEap.comMany, many obstacles to obtaining a loan. Even seasoned loan brokers are unsure of their offers until the end of the process. – California
Website design By BotEap.comThat’s why hard money loans in California are thriving …
