Real estate investors everywhere are inundated with information leading them to the conclusion lenders simply aren’t interested in them. This has led to many throwing up their hands, waiting for ‘the recovery’. Apparently this will be when lenders will send them personal invitations to scoop their share of money then earmarked for the investors they’ve missed so much. It’s like they’re lookin’ for a sign.
This week alone Brown & Brown closing about a dozen transactions, all of them investment properties. All of them part of multiple purchases by investors. Half of them using 90% loans. How can that be true?! They must’ve paid monster loan fees, right? Nope, same as everyone else. Well then, they surely paid higher interest. No again. Depending upon individual lock dates, they all paid 6-6.5% interest rates, on fully amortized loans.
This leads to more questions.
For instance, with underwriting now based in the Marquis de Sade school of ‘What’d'ya mean yer not Warren Buffett?’, guess how cool the properties must be when they do bless an investor with a loan or two.
Think lenders are makin’ investment loans in declining markets with 10% down? Don’t answer — it’s a rhetorical question.
I suspect some of those control freaks are thinkin’ just how they’re gonna force us to give income properties their own credit scores. “Oh, I see earlier this year the tenant living in 4B was late on their rent two months in a row. Just what do you have to say for yourself?” The building will then hang their head in shame, offering only silence for an answer.
Also, and please don’t tell anyone, looks like Brown & Brown clients are soon to tie into some limited but gorgeous portfolio programs. 10% down, no mortgage insurance. No property limit per client/investor. This brings up a thought about lenders. Maybe you’ve heard it before somewhere.
BawldGuy Axiom: Lenders Lend — They don’t know anything else. In times like these they look in the mirror one day. In horror, they notice the 3 inch letters tattooed on their foreheads are beginning to permanently disappear. That’s when their phones begin doing double duty as doorstops, and they imagine fillin’ out Outback Steakhouse job apps.
The Takeaway: Real estate investors can now effect a tax deferred (1031) exchange into some pretty nice stuff. (Note: ‘nice stuff’ is a RE investment technical term.) Lenders will lend to you, if you know where to go, and who to talk to. I’m not sayin’ it’s like fallin’ off a log, but if you know what yer doin’, and we do, it just ain’t the impossible dream some would lead you to believe.
Do ya win every time out? ‘Course not. But not winning doesn’t by any stretch mean you lose. It just means you keep lookin’ for the right stuff, and match it with the right lender. Oh, and speaking of those lenders — After all that’s happened the last few years, do ya wonder if they’re doin’ their homework before they pull the trigger on a loan? Ya think?
I love it when a good Purposeful Plan comes together.
And so will you. But it’ll be a moot point ’till we talk. Here’s how we get started. You click this cool Contact BawldGuy dealie right here. Then we’ll figure out how we skin the cat. Have a good one.
Related posts:
- The Difference a Lender Can Make — Real Estate Investment Savvy
- Empirical Evidence Real Estate Investors Are Still Gettin’ The Loans They Need
- 10 Ways Real Estate Investors Can Ensure An Abundant Retirement
- Some Definitions For Beginning (or not) Real Estate Investors
- Real Estate Investors Movin’ Capital From California To Texas
About BawldGuy
Just hung up the phone with a newbie from SF area inquiring as to KC. Thought she had to have 25% down on IPs.
Here in Kansas City you have to have 25% down on 3+ properties but duplexes and SFH (including townhomes) 10% will do just fine for the right borrower and the right property.
I keep shouting this and I’ve even written about it. But people are still getting the wrong information. We’ll just have to keep after it.