The vast world of commercial real estate lenders is in for a few changes in the New Year. For many this may not come as surprise, but as a potential borrower or an investor, you are going to need to know how these pending changes and new trends will affect you.
Working with traditional commercial real estate lenders has always been a rite of passage for most business people. However, in the coming months that may no longer hold true. The reason you will see more and more people shying away from traditional commercial real estate lenders is due to the uncertainty will recently implemented regulations. Thus, this climate has opened the doors for more non-bank lending or rather non-traditional lending.
Of course, as a potential borrower or investor this is not necessarily bad news. As you may already be aware, most traditional avenues of lending were often stingy with their approvals. But, one potential consequence of this trend is that non-traditional lenders will now up their requirements and criteria either now that they are dealing with a wealth of potential borrowers and investors or they will become so unregulated that another lending crisis occurs. One pending change that definitely adversely affects everyone is the increased rates, which though minimal in percentage still make it that much harder for borrowers to meet the terms of their commercial loans.
Yet, another predicted trend in 2017 is the decrease of foreign investments. For instance, it is has been predicted that China and other foreign countries are making it a point to not invest as much as they have done in previous years. This trend is one more issue to add to an already uncertain climate, thus as most of the country watches and waits for what is to come so too are players in the commercial real estate industry. Unfortunately, with so much uncertainty, you as a borrower or an investor may not know if this year is the right time to make your business venture a reality. Therefore, it is highly recommended that you reach out to local lenders and see what your real options are amidst all of the possible confusion that is to come with this current presidency.
Advice for the Future from
These above-mentioned changes and trends may or may not stand the test of time, thus as a savvy business person you should take stock in your plans. This is why there are brokers, lenders and a whole host of people in your corner. Nevertheless, if you are more of the do-it-yourself kind of business person then it never hurts to do your research and seek advice of counsel before making any major decisions.
On the Verge of a Commercial Real Estate Deal
On a final note, if you are on the verge of getting approved or have submitted a dozen plus loan applications already, then it is important that you stay on top of the current changes and trends. But, remember, if you already started the lending process, then you will likely have nothing to worry about, at least until the next business venture.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.