Private Equity Groups And Insurers Taking Care Of Commercial Real Estate Loans UK Banks Not Willing To Touch

When the banking crisis hit the UK in 2008 many banks were hit hard because of the commercial real estate loans they had taken on. In the years since many banks have been reluctant to re-enter the market leaving private equity groups and insurers to pick up the slack.

Hollywood recently made a feature film about the housing crisis that hit the United States in the mid-2000s. What many people may not know is that banks were making costly mistakes in other parts of the world as well. When the crisis hit banks in the UK in 2008 many that were heavily invested in commercial real estate loans were hit the hardest.

When the smoke cleared, the government ended up cracking down on banks in the years following the collapse by mandating tougher regulations and requiring lenders to have more capital on hand.

As a result, many banks are not as involved in commercial real estate loans as they once were leaving a door open for another entity or entities to fill the void.

Private Equity Groups And Insurers Filling The Void with Commercial Real Estate Loans

In the UK last year, there were over $76 billion in new loans issued (£54bn). This amount was 19 percent higher than the amount issued in 2014 and 80 percent higher than 2013. Of the loans issued in 2015, only about 34 percent of them came from banks and building societies.

This was the highest amount of new commercial real estate loans issued in a given year since the bank collapse in 2008, and the lowest percentage issued by banks since De Montfort University began studying the market.

Someone had to step in to pick up the slack while banks dealt with all the new regulations. Private equity firms and insurance companies were more than happy to fill the void. Insurance lenders made the biggest gain in the last year by increasing their share of the market to 10 percent.

According to Peter Cosmetatos, chief executive of the Commercial Real Estate Finance Council for Europe the dramatic increase in new loans was due in large part to lenders being very eager to approve commercial real estate loans in 2014 and the first six months of 2015.

However, since then the market has begun to stabilize, lenders have begun to take risk into consideration more than they were. Officials do not feel that the high amount of debt could be setting the economy up for another fall because this time it is more equity driven than it was back in the mid-2000s.

Not All Banks Are Out Of The Commercial Real Estate Market

While it may not be easy, there are some banks that are still willing to get involved with commercial real estate loans. Last year the Lloyds Banking group approved its largest commercial real estate loan since the banking crisis, a $262 million loan (£185m) to finance a designer outlet mall near London’s O2 Arena.

 

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
 
About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.









          

Technorati Tags: commercial real estate loan,commercial lending,commercial loans

Private Money Lenders VS. Commercial Hard Money Lenders

We know that commercial hard money lenders aren’t banks or other traditional institutions that are in the business of loans, but are they private money lenders? Moreover, if hard money lenders are not private money lenders, then you may just be asking yourself, well who are they?

There are often so many interchangeable terms when it comes to the world of commercial lending that it is easy to forget that not all interchangeable terms always mean the same thing. For instance, it is not uncommon to hear the phrase private money lenders and naturally think non-bank lenders. Moreover, when people think of commercial hard money lenders, they are also inclined to think non-bank lenders. Are you confused yet? Well, it is okay if you are because you are definitely not alone.

The reality is both private money lenders and commercial hard money lenders are traditionally not banks. But, that doesn’t mean that both of these non-bank lenders are the same nor do they offer the same loan options. So, now that that’s a little clearer, let’s go over just how these two particular commercial money lenders are different.

For starters, you will learn very quickly that hard money loans meet a very specific need. For example, let’s say you are a house flipper or a commercial developer and you need quick, short-term financing without a lot of red tape. These two instances are generally when you want a hard money loan. In fact, these instances really make up the bulk of hard money loans. Moreover, it is because of this fact that hard money lenders appeal to a certain niche market. Private money lenders, on the other hand, are more relationship-based and offer loans for real estate transactions—plain and simple. In other words, there really are not any specific scenarios where you absolutely need to contact a private money lender to provide financing rather private money lenders are basically just another non-bank financing outlet.

Understand the Differences

To truly understand the differences between these two money lenders, you have to understand how they each operate. For instance, private money lenders lend short-term financing at a premium based on a combination factors such as the borrowers background, the quality of securing property and likelihood of repayment. Hard money lenders offer short-term financing at a much higher premium based upon securing asset value. Thus, the real difference between these lenders is not only in how they operate (agenda, post-closing flexibility, etc.) but also what they focus on (philosophy, property, and location).

Things to consider when choosing Between the Two

Ultimately, it is clear that private money lenders and hard money lenders are different in a lot of ways. But, they both offer the required, creativity (example: loans with prepaid interests), simplicity (not regulated by banking policies) and quick turnaround time i.e. quick cash that most commercial borrowers need. Nevertheless, now you can say with certainty that you know the difference between these two lenders, which in the long run should make it much easy to decide which particular kind of money lender is right for you.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444

Texas Tel:      (512) 516-1177 

Dennis@level4funding.com

www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Commercial Hard Money Lenders: What You Need To Ask

 

You’ve done the unthinkable and narrowed down your potential options for commercial hard money lenders. But, do you know just what to ask your future lender to make sure they are the right lender for you?

This may not be your first time looking for commercial hard money lenders and it may not even be your first time using these particular kinds of lenders. But, that doesn’t mean you can’t hone your hard money skills. In other words, you could very well be missing out on great commercial financing simply because you haven’t asked the right questions or even asked the top questions. With that being said, let’s go over what to say to these commercial hard money lenders once you get your foot in the door.

Of course, you always what to figure out what the process is for hard money loans and what your potential interest rate will be as well as what loan-to-value your potential lenders are looking for. But, these three specific things you really need to know before even meeting face-to-face with your potentials. Nevertheless, if these things are not on your list of questions they should definitely be in the top 5.

Other useful things to inquire about when dealing with hard money lenders include finding out what the actual term or timeframe for the loans, the costs for additional loan related matters (title policy, appraisal, insurance and so on), if a draw request is applicable i.e. can you receive money pay for repairs, if putting any money down is require, how much of impact your credit have and if you have the option to deferred interest after the term of the loan. Ultimately, these particular questions allow you and your lender to be on the same page regarding your commercial loan.

How to Evaluate Your Hard Money Lender?

Once you’ve gotten to the bottom of all the terms and requirements of your loan, it is important to evaluate your actual lender. Yes, some of the above-mentioned questions will give you a good sense of who you are about to do business with. But, you should also make sure that your lender is the right lender. This means finding out about your potential lender’s funds availability, getting good references from other borrowers as well as confirming that your lender is licensed, bonded and insured. These few steps will make sure that your lender is not only the right lender for you but also the best lender for your investment.

Commercial Hard Money Lenders who are there when you need them

Lastly, consistency matters i.e. you want a hard money lender that you can truly count on. Consequently, your potential hard money lender, in no shape or form, should be afraid to answer your questions or be unclear on any of the details regarding your loan. Remember, at the end of the day, you need a lender that will be there when you need them and not just financially. So, take your time in reviewing their responses. Moreover, take note your potential lender’s overall openness and/or willingness to help you succeed with your future investment.

 

 

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177 www.level4funding.com
Dennis@level4funding.com
www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Commercial Real Estate Loans: Which Loan Is Right For You?

There are a multitude of commercial real estate loans. Are you sure you found the right loan for your business venture?

If you haven’t done your research yet, it may behoove you to know that there are several different types of commercial real estate loans. However, our focus will be on joint venture loans, participating mortgages and your standard real estate purchase loans. These particular commercial loans tend to be the most common choice when it comes to business ventures. Thus, with that being said, let’s go over what each of these loans can do for you and your next business venture.

For starters, a joint venture loan is what you want when all parties (generally two partners) are willing to share equally in the losses and profits of the property. Moreover, this particular commercial loan is extremely beneficial to those parties that cannot or may not be able to qualify for financing separately. A real estate purchase loan, on the other hand, requires one party or rather one borrower with excellent to near perfect credit along with the saving to back it up. Additionally, when it comes to collateral, in general, lenders tend to expect more with these purchase loans.

Lastly, participating mortgages, in essence, are when your joint partner is actually your lender. In other words, the lender receives the standard monthly payment plus interest, but because the lender is also a partner they ultimately share in the commercial property’s proceeds or income. This third option is definitely something to look into if you have potential tenants with financial stability and long-term goals.

How to Decide What Commercial Real Estate Loans You NEED!

So, now that we’ve gone over some of the commercial loan basics, it’s time to see what works best with your business plan and overall goals. Of course, additional research is always key to finding out which type of commercial loan will ultimately work best. But, nevertheless, when it comes to picking and choosing between the above-mentioned commercial real estate loans clearly the best course of action is to sit down and go over your credit score, your available capital or rather collateral and what your long-term purpose is for your future commercial property. Obviously, if you do not qualify on your own a joint venture loan would be in your best interest or you may even consider a participating mortgage, especially if you are interested in an office park. Ultimately, If your credit score is well into the 700s and you’ve got extra savings just laying around well then you have no reason to fear the all mighty real estate purchase loan.

Is Rotten Credit a Factor?

If you are like most business savvy people and do not have the credit scores that dreams are made of that’s perfectly okay. The reality is you still have other options, even more than we’ve covered. So, do not let rotten credit keep you from reaching your dreams or from taking your business venture to the next level. Remember, your goal is to pick a commercial real estate loan that works for you!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Commercial Real Estate Loans and Lenders: What You Need To Know

Selecting the right lender for your commercial real estateloans is never easy. But with a few key questions you can narrow down your options and ultimately choose the right lender for you.

Find the right lender for any commercial real estate loan is a big deal. It’s a big deal because these particular kinds of loans are truly not your everyday kind of loans. In other words, most lenders have ample experience in residential loans as everyone needs a home. But, of course, not everyone needs a business or an investment property and to each its own. Nevertheless, the point is that the majority of big lenders are better versed in all things residential.  Therefore, it is your best interest to find a lender that has a substantial amount of experience with commercial real estate loans.

Well, at this point, you may be wondering, just how exactly are you going find a lender that specializes or rather has the right amount of commercial loans underneath their belt? The trick is to ask the right questions. Asking the right questions may sound like a simple solution to ensure the future financial security of your company or business venture, but, the truth is it’s all in the details.

For instance, you may find a lender that has extensive experience with commercial real estate loans, which is great. But, stop and ask yourself, does this lender know my market.  In other words, your potential lender has extensive experience with commercial or rather non-residential loans, but in what market? You see details, they matter. Thus, with that being said, let’s go over a few more key questions that will help you find the right lender for you and your specific market.

Helping to Narrow Down Your Lenders

Once you determine if there are lenders that have the right experience in your particular market, it’s on to the tougher questions such as how much capital does your potential lender have?  This matters because you do not want to be just another number to your lender i.e. you want a lender you can work with who remembers your name and your business idea. 

Additionally, you should ask your potential lender about their borrower requirements and commercial loan services offered. Know what’s expected of you as a borrower (how much collateral do you need, what’s the policy on late payments, etc.) and what you can expect of your lender (Are revolving lines of credit available? Are there multiple locations and are they FDIC insured? ) is what it’s all about. Moreover, if you like what you hear you are that much closer to your future lender.

Risk Less with Commercial Real Estate Loans

Lastly, if you are a small business make sure that you are in the best the position financial before you decide on a lender for your non-residential loan. It may sound repetitive, but, for you to be seen as less of a risk to your lender and for your commercial property to truly be profitable for you, it helps to be financially stable or to have investors that are financially stable.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Top 2 Reasons Why A Commercial Hard Money Lender Is Right For YOU!

Ready to move on with business, but your traditional bank loan officer may not be? A Commercial Hard Money Lender may just be the right solution for you. Find out why this is the real deal.

So, you’re ready to move on with business, but in need of a timely loan? Let’s go as far as to say that you’re ready to make your move and acquire that piece of commercial real estate, and are hard-up for funding? The good news is that you don’t have to be hard-up for hard money. A Commercial Hard Money Lender is a very viable, attainable option for you and here is why.

1) Commercial Hard Money Lenders are able to provide commercial hard money loans in a timely and efficient manner. They have the depth of understanding that the time to act on your piece of potential real estate is now, while others like yourself are competing with dueling bids. You simply may not have time for the traditional bank loan application approval process and funding that can sometimes take up to several weeks.

2) If you’re concerned about being denied a traditional bank loan or have currently been denied one, Commercial Hard Money Lenders are likely more willing to work with you than other banking institutions. While there are many reasons why you may have been denied a bank loan, a Commercial Hard Money Lender will often let your history of denial be just that, history. They deal with you in the “here and now”–meaning, equity invested and will the loan be repaid.

What Are Other Things To Consider When Contemplating Using A  Commercial Hard Money Lender?

You understand that the commercial real estate opportunity of a lifetime could be passing you by as you wait and wait for a potential bank loan approval and related funding. In addition, you should know that Commercial Hard Money Lenders aren’t what they used to be. They are on the up-and-up, helping folks like you on a daily basis. Long gone are the days of risky loan practices and extraordinary interest rates. Today’s Commercial Hard Money Lender wants to work with you and see that you succeed! Your success is their success!

For A Successful Loan And Funding Process,
A Commercial Hard Money Lender Is Something For You To Research And Consider

At the end of the day, your goal to secure a potential commercial real estate property is a loan. Because Commercial Hard Money Lenders are willing to work with you, focusing on the value of the property and not on your history and credentials, researching and considering this type of lender may be just right for you. You will stand a much better chance of reaching your goal, so get started now!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.