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Financing Handcuffs Real Estate Investors

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Mortgage Professional America | 07 Oct 2012, 02:15 PM Agree 0
First-time homebuyers aren’t the only ones struggling to get financing. The small real estate investors with whom they compete for starter homes and distressed sales face limits imposed by lenders and federal regulators that are tougher than what owner-occupants have to deal with.
  • Financing Handcuffs Real Estate Investors | The Ni | | 07 Oct 2012, 10:29 PM Agree 0
    [...] See the original post here: Financing Handcuffs Real Estate Investors | The Niche Report [...]
  • Financing Handcuffs Real Estate Investors | The Ni | | 08 Oct 2012, 12:27 AM Agree 0
    [...] here to read the rest: Financing Handcuffs Real Estate Investors | The Niche Report Posted in Finance, Loans | Tags: 2011-survey, 59-5-percent, cost, face-limits, finance, [...]
  • Financing Handcuffs Real Estate Investors | The Ni | | 08 Oct 2012, 05:54 AM Agree 0
    [...] See the rest here: Financing Handcuffs Real Estate Investors | The Niche Report [...]
  • Pravat Joshi | | 08 Oct 2012, 05:55 AM Agree 0
    Hello,

    Nice to read your truly unique and informative blog and bookmarked it for future updates. However I shall love to explore more about the overall market conditions of real estate, and the advantages of the investment in various properties. Hope you will fulfill my burning desire by posting another blog!

    Keep it up!
  • Chris Clothier | | 08 Oct 2012, 08:06 AM Agree 0
    I think the OCC's regulatory update and the desires of today's real estate investor actually match up. There are more investors who are not necessarily "real estate" investors, but market timing investors who realize this is a great time for buying distressed priced properties. They are willing to under-go a higher level of scrutiny and higher down payments in order to get access to more financing.
  • Joshua Dorkin | | 08 Oct 2012, 08:25 AM Agree 0
    Good insight, Steve & Chris. The bottom line is that real estate investors are willing to pony up substantial funds in order to purchase repeat investments. The large down payments that investors would put down should assuage any fears from lenders and politicians.

    While there should certainly be lending standards, perhaps we think about these standards a little more with an eye on allowing investors to continue helping the housing recovery, provided they aren't acting like the speculators of old.
  • Andrew Waite | | 10 Oct 2012, 10:39 AM Agree 0
    This is really surprising article given the fact that there are a number of lenders very specifically focused at the Individual Real Estate Investor.

    The problem begins with many of these investors assuming they can attract conventional mortgage terms for what is essentially a business. This is an unreasonable expectation.

    The problem has been made worse by some turn key companies selling over priced properties that cannot appraise for a bank mortgage. They then require cash which also gets around seasoning laws with investment properties. Conventional lenders have backed away from these deals.

    Look to lenders and investment grade property resources like CFAM/Rescap, HomeVestors and National Bank of Arizona all of who have investor mortgages. non-recourse mortgages and foreign investor mortgages going up to 65% LTV all at mezzanine, not hard money rates.

    Real investors understand that deal flow and net yields are vital. CFAM/Rescap provides mortgages to turn key vendors and their clients based on capitalization rate and predictable property management standards that assure market rental revenue and a real net yield. Some turn key vendors do not meet those standards thus are crying about their inability to get to lenders with their over-priced "forever rentals."
  • Steve Cook | | 10 Oct 2012, 12:01 PM Agree 0
    Andrew;

    Thank you for your comment.

    Should any of the lenders you mention be federally chartered, they might check out this bulletin from the Office of the Comptroller of the Currency, especially the paragraph under mortgage underwriting. http://www.occ.gov/news-issuances/bulletins/2012/bulletin-2012-27.html
  • Jonathan carrie | | 17 Oct 2012, 12:19 AM Agree 0
    Nice information posted here. Thanks to the author for sharing such information. Keep posting.
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