Why yesterday’s “Capital Daydream” is reality for real estate investors today.
How would you like to work with a lender as eager to loan you money as you are to borrow capital for your real estate projects?
In today’s real estate market, that “daydream” for many real estate investors has become reality.
Real estate has always been an attractive asset class for investors wanting to diversify their portfolios with highly collateralized investments. Those investors have been making private and “hard money” loans for more than a century in the United States. However, in today’s uncertain economic times, real estate lending has become mainstream, and that has had some very positive ramifications for today’s active real estate investors.
Wondering how a real estate market that is increasingly competitive is good news for your ability to borrow large amounts of capital at low rates quickly and on highly custom terms?
Here’s your answer: The competition in the real estate lending market is heating up, and that is to your benefit because lenders – even those who prefer to acquire real property instead of lending on real estate deals – are finding themselves with far more capital than they are finding good acquisitions.
“Wait, how can too much money be a bad thing?” you may be thinking to yourself right now. Well, the truth is that when that money has been entrusted to a lender, it was entrusted to that lender with the goal of getting that money loaned out to earn interest! The goal was not for the money to sit “under the mattress,” so to speak.
For example, recently the New York State Teachers’ Retirement System allocated about $200 million to a North American direct lending fund. Do you think that in 10 years, NYSTRS is hoping to still have $200 million with that fund? Of course not! They’re hoping for substantially more. The only way that fund can deliver is to make the direct loans in which they specialize by finding projects that are a good fit for their loans. With allocations like this (both at this volume and greater) happening all over the country, the direct lending and hard-money sectors are really heating up.
Warning: Not All Capital is Good Capital
This hot lending market is great for real estate investors like you, who actively generate quality leads and do productive, profitable deals. However, a lot of lenders who are new to this industry can represent a pitfall to you instead of an opportunity – particularly if they do not appreciate the importance of timing and the finesse involved in real estate transactions.
Before you sign with just anyone lending out money, make sure they can meet your needs. Ask a few questions, such as:
- Can you fund my loan quickly?
- Are you flexible on credit requirements?
- How many steps are involved in your process?
A lender that is a good fit for your type of real estate will be able to accommodate your timing, have the flexibility to work with you on individual projects and requirements, and have a professional and fast application process that will not delay your transactions.
In today’s real estate market, real estate investors deserve and can insist upon the best lending programs possible.
Don’t settle for anything less.
To learn more about Universal Commercial Capital visit universalcommercialcapital.com.