lending companies for real estate investors -...
TRANSCRIPT
Lenders for Real Estate Investors
learn about the lending companies that exist specifically for real estate investors
what they are how they can help investors with financing why they might be a good option
Lesson
Agenda:
What is a lending company for real estate investors?
These are companies who lend only to real estate investors
(rentals, flips, commercial, new construction)
Lending Companies for Investors
They are not the Bank of Americas or BBTs that we typically see as the
traditional banking institutions
These companies exist to lend to investors and have different guidelines
and underwriting processes than a traditional bank
While traditional banks have bank guidelines and federal guidelines they
must follow when qualifying and underwriting loans…
How they are different than traditional banks?
…these lending companies underwrite each potential new loan based off of
the cash flow it produces (not the income)
How they are different than traditional banks?
When you take out a mortgage with a traditional bank they are qualifying you based off of your personal income vs.
your person debt.
For example…
They are qualifying and underwriting the loan more as a business based off
of the cash flow it will produce
With these lending companies…
Let’s see an example of terms…
-financeofamerica
If you have issues qualifying based off of personal income and debt-to-income ratios with a traditional
bank…this may be an option for you
Why would you use one of these lending companies?
If you’ve reached your max number of loans that you can hold with traditional banks (10) and you’re still looking to use financing to acquire properties…this
could be an option
Why would you use one of these lending companies?
Investor Lending Companies
Pros and Cons
Pros
Enables you another option to obtain financing when
you can’t get it from a bank
Pros
No limit on how many loans you can have
Pros
Underwrites the loan based off of cash flow not
personal income
Pros
Allow you to purchase new properties or cash out
refinance current properties
Cons
You’ll have a higher interest rate than you would with a
traditional bank
Cons
You may have to have an LLC for them to lend to you
(some, not all)
Cons
Will require a minimum loan amount
The reality is that it does give another option for investors to take advantage of when it comes to
financing
Conclusion
There may be some more flexibility with one of these lending companies than a traditional bank as they keep the loans in house and don’t have the red tape requirement hoops like big banks.
Conclusion
Offer various loan products for investors (rentals, flips, new construction, etc.)
Conclusion