“For this reason, they tend to go the private money route,” says Lorentsen. “U.S. credit scores, experience, and sourcing of funds are usually lacking with the international buyer — these requirements are relaxed with an asset-based private lender like us.”
Comfort in working with international buyers follows a learning curve, with those clients taking a while to understand the nuances of the U.S. banking industry and to establish key relationships in the market.
Private lenders often provide that key bridge financing role.
Oftentimes, international investors simply pay all cash for their target investment property.
“Here’s an example: a recent international investor worked with us to acquire a commercial property primed for redevelopment into a mid-sized multifamily project,” says Lorentsen. “Because they had a strong 50% cash down payment, we were able to close quickly, bringing them time to work with architects and contractors for a construction loan. Not to mention finding a more traditional construction lender was then significantly easier, having established a prior relationship with us.”
What the international investor has in common with the domestic commercial property investor is that they are a part of the same cyclical markets.
“Those factors include currency exchange, foreign stock market volatility and home country controls,” says Lorentsen.
It needs to be understood that international buyers don’t usually check all the boxes for traditional banks, says Ron Lorentsen, senior loan underwriter at Seattle Funding Group, which opens the door for private lenders and originators.