good week !! Need help I had a long discussion with an American partner about accepting ...
Original publication date on the United States Real Estate Forum on Facebook:
2019-01-27T08:15:56+0000
good week !!
Need Help
I had a long discussion with an American partner about getting funding for a multi-family project.
He claims that every transaction with financing must have a personal guarantee - with high credit, payment ethics, salary, etc ..
I argue (from what I have read and heard over the past year) that in financing a multi-project, it is important for the developer to present a resume, but the funding can be appropriated based on cash flow and potential and not just on the person (for that matter, most of us entrepreneurs have no credit, salary, etc. Get funding ..
Right ?
Who is right and how does this actually happen ??
It's really important to embark on a big project.
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This is the second loan I've talked about
Hey
It is very dependent on the bank, there is a non recourse loan where they will not ask you for anything but a good credit and establish a loan based on cash flow but interest rates will be 7 percent and north by market today and you have full doc loan where it should show everything, taxes, income, good credit , Where the interest rates will be in the 5 percentage according to the market today, usually want to see an experience for any type of loan here but I got to talk to a bank that was willing to baste it on cash flow only plus a good credit card.
And by the way, your American partner is right! Especially when you are at the beginning.
Hello Alon,
I am a licensed mortgage broker in Washington, Oregon, California, and Texas. In these countries, I can help legal residents of the United States with traditional (residential or investment) loans based on credit and income ratings. In it, there are also paths that allow alternative documentation of self-employment income, for example with 12-24 new bank account pages (personal or business).
Investors also have mixed avenues that are based on combining personal credit ratings with specific transaction parameters.
In addition, I am currently working on the development of business loan routes, which hardly look at the details of the investor - even in countries where I am not licensed for conventional loans.
It is important to understand that the terms of the loan, including the interest rate, are derived from the level of risk taken by the lender. This means that, alternatively, alternative routes come at the cost of one or more of the following:
1. Higher interest rates
2. Lower financing rate (higher down payment)
3. Short-term loan (instead of 30-40 years, 15, 10, 5 years with or without a "balloon", 6-24 months for "hard" money substitutes, 1-6 months for "hard" money)
4. Higher closing costs.
If you have a specific project, I'd love to hear, and see if I have a suitable solution.
Each loan comes at the end of the underwriter underwriter who goes over the data and decides what the terms are.
One of the most important parameters is what will happen to the investor if the transaction fails. Loss of credit for an American is critical, it can stop his life! Even if the loan is non-recourse, the debtor's credit will still be damaged, so this is the banks' strongest lever! Banks have no desire to foreclose assets, so they prefer to go for the credit.
In the case of foreign investors who do not have credit, the bank will look for other leverage options on the investor. The more the bank sees more assets, the more activity and more revenue it will make.
There is such and there is such a thing…
Depends on all sorts of factors… Property… Scope…
What I have learned so far from correspondence with lenders and brokers for a large multi-transaction: there are accompaniers that will be accompanied on the basis of previous experience of the developer and especially on the basis of examination of the property. They announce at the beginning of the process that the percentage of financing depends on the asset itself. The interest rates that I encountered in the 5.5-5.3 range can be a little lower. Again, depending on the deal.
Hi Alon. From a lot of experience you are both right. It is definitely important for the bank to have an excellent borrower with a high income and an impeccable history of payments and credit and dozens of other tests as I presented in my lecture that you are welcome to watch and that person is the one who personally guarantees the loan and is the one the bank will follow. In the case of a loan that is recourse under $ 5 million. Non-recourse loans also have Bad Boy Carve rules which follow the developer in certain cases, for example in case of negligence towards the property. Beyond that the bank examines the management record and asset portfolio of the same American entity. This is by the way exactly the service I give among other things to investors who purchase a multi-family with me. After all, you are right that compared to residential loans where you check if the borrower can personally pay the mortgage from his salary, commercial properties of 30 units or more check the property itself in terms of property condition and cash flow and each bank has different criteria - for example the cash flow will be at least XNUMX percent above all Spending so that there is a safety space left - so you're right too - is a combination of the two. I work on all of this in detail in a lecture I gave as part of the forum on Multi-Family - you can fill out this form and it will be sent back to you: https://info.www.forumnadlanusa.com/multi. Successfully!
Every lender works differently, do they know how to work with non-American entrepreneurs? Not everyone knows ..
Have you heard about the subprime crisis? Banks used to give loans to everyone. There is no such thing today…
I am a returning resident from the United States who currently lives in Israel with excellent tax credit and also a liquid money that is happy to cooperate with you have an interesting deal
Funding in the United States has three major avenues
1 . Called full doc This is the conventional channel where the borrowers come with neat credit and taxes that show a repayment option here You can get financing from any bank
2. Stated. That this is a second channel that is someone who lacks a part in the equation or taxes and does credit here the loan is more rigid and with lower financing rates at slightly higher interest rates than the market
3. Hard money loans This is a private loan channel - here a private investor chooses to lend to you as well as much higher interest rates but here the investor chooses on the basis of what to usually lend if you purchase the
The land and investor will only give you financing for the construction phase only after you have completed sections to avoid risk