In March 2015, the National Association of Realtors (NAR) called a random sample of 49,485 realtors who worked in commercial real estate to fill out an online poll. A total of 791 responses were received on the overall response rate of 1.6 percent. The survey inquired about the opinion of realtors on how to find the lending environment during the past year. Living and working in California, I find it interesting and useful to compare the general results of opinion polls in our state. I think you'll find it useful as well. Without further ado, here are the views of your brokers and lenders as stated by the state state:
Countries that have introduced difficult lending situations
The National Association of Realtors (NAR) found that 58% of investors prefer to approach banks but not all banks are willing to lend. Among these institutions, these traditional lending institutions have exacerbated the situation with clumsy procedures, timelines and annoying terminology, and lengthy lengthy processes. A few banks have also done their best to please their customers or to make the situation more comfortable for them.
A private lender in New York
Banks were very aggressive in financing deals.
Such a situation can be expected from a city like New York where banks have to be on their feet about delay and have to cut back on bad loans. In addition, New York is known for its aggressive and revealing environment. Lack of empathy with customers is one of the painful points.
More unexpected is the fact that the kind places like Louisiana are reporting the same difficulties.
A local agent said:
Banks work well but they make it difficult to do business, and it is difficult to move forward in such an environment. Louisiana
In North Carolina:
Money is cheap, but still very hard to get. – North Carolina
Apparently, banks will monopolize investors and act like infamous fraudsters. Other investors had this to say:
The rules for major banks are to bind regional and community banks. – North Carolina
Just refinance 3 properties from $ 150,000 to $ 1,000,000. Low loans for transaction value. – Colorado
The terms of trade finance in the secondary market are either too cumbersome to qualify for this process, or conditions so difficult that buyers do not see value in financing and pay only money for smaller business deals. New Mexico
Countries that have found a good lending environment
If you want to invest, you may want to consider moving to one of these areas. There is less chance than California. There may be a more disciplined market with stumbling stocks and perhaps less promise, but banks are more keen to help investors.
There is a lot of money available for qualified buyers of commercial real estate. Texas
Financing was not a problem with reasonable transactions. Massachusetts
States that provide a positive environment for Private commercial lenders to work in
Loan conditions for banks in most states in 2015 were frustrating for consumers, making them ideal for private money lenders such as fixed-rate lenders who thrive on frustrated investors. Fixed money lenders Step by step where banks fail promises of convenience, strong interest, customer convenience, fast delivery (thinking of getting a loan in the same week compared to 60 plus days for banks!) And much less than paperwork. All you need to do is register your name on some forms and fill in the details of the value of your property and / or your work and / or your experience and / or your credit history. Nothing major and easier than banks. In short, in short, is beautiful. Even the loan-to-value structures in some places (especially in California) have been picked up with private commercial lenders who are now offering higher to full rates.
The downside is high interest rates and balloon payments (think of payments that are double like banks). On the other hand, it may be unlikely that there are those who want investors.
Agents in Pennsylvania and Carolina praised the private lending market:
In general, entrepreneurs have a vision of progress on the cultural curve, while banks seem to operate in a closed cave and compensate for their lack of skill at aggressive rates and conditions, or an unrealistic client process. Pennsylvania
Carolina was more intense. One investor explained that he preferred the alternative sector because:
I think banks have failed the entire country. They are ruthless and have given up their role in the greatest economy. – North Carolina
These agents in Georgia, Carolina and Illinois, for example, who have been let down by their banks may have no choice but to look for commercial lenders especially if they want to invest.
Illinois: Trade finance is a problem. I have wonderful property in the market for one year and there are no detainees.
Another commented that the banks
Slow processing of loans. An unusual waiting time is being funded. – Illinois
North Carolina: Commercial mortgages are virtually nonexistent.
And Georgia. (Looks really cavernous):
When lenders start lending again, the demand backed by buyers is very high and the economy will grow with it. No money – no healing.
Agents in Wisconsin found a similar situation:
Banks have become more aggressive for owner-occupied transactions.
It seems that some private investors will find a ready market in Kentucky:
In general, only local banks provide commercial loans. It takes a double loan and subscription requirements more restrictive. – Kentucky
Finally, it seems as if in Ohio, small businesses have no choice but to approach solid money lenders:
Large banks are not offering loans to small businesses anymore … just for large companies.
Flip into your commercial lending environment in California …
The National Association of Realtors has found that private lenders run a thriving lending process in California. Join more brokers and more investment in this area. California private lenders have benefited from increased interest in short-term investment. 2015 was a good year with private lenders mainly serving entrepreneurs and small business owners. As we have mentioned, these are the ones who were expelled from the banks.
Over the past year, private lenders have also bolstered the appeal of their field by eliminating one of their problems: LTV. Originally, lenders only liquidated LTV rates ranging between 50 and 60% and are significantly lower for private equity. A growing number of agents felt comfortable enough to raise LTV rates to 80%. Some meet full ownership percentages. This has tightened government regulations to protect borrowers (especially resident borrowers) to make investors more willing to see private commercial lenders as an attractive alternative.
On the other hand, high prices and high interest rates for lenders have led to a high rate of defaults. The inexperienced and the new agents had more of this downfall than others. The defaults are expected to rise in the coming year due to the increase in interest rates. Government regulations have also intervened in a situation with troublesome and complex rules that force lenders to lengthen lending time, making the already attractive private lending situation even smaller.
However, these years seem to be a good time to enter your commercial lending market in California, especially if you know how to do it.
Here are some reports published by NAR:
Most people say they will talk to their bank for commercial loans. – California
Right. But then, the majority is removed. This is due in particular to the fact that:
Excessive regulation and government routine that imposes itself on banks have made commercial borrowing difficult for legitimate clients. – California
This causes many investors to turn to hard money lenders.
I think there is enough money, the problem is not in banks. Is the borrower's inability to qualify for funding. – California
Another private lender in the world said in California:
Many obstacles to getting a loan. Even experienced loan brokers are not sure of their deals until the end of the process. – California
This is why the steady lending boom in California …