Who do you turn to when looking for funding for a new real estate investment? This was the question asked during a survey of around 287 investors. It yielded divergent responses.
The survey has shown that investors are approximately three times more likely to use a direct, non-bank lender and 16 times more likely to employ a hard money lender, despite being lower in the overall rankings.
On the other hand, direct non-bank lenders are drawing in borrowers’ interest and are taking market share away from brokers and other sources of finance for investment properties. This is also true in the home loan market.
Previous connections frequently influence the selection of a financing partner. However, some investors with cash deposits and strong credit histories are more inclined to consider a large bank. Given the normally lower rates offered by banks, this comes as no surprise. Marques is responsible for providing the best fit mortgage program for clients, which is made easier if the investors meet the necessary underwriting requirements.
However, because of the inherent risk, banks frequently have a limited selection of properties, investors, and enterprises that they can fund. 35 percent of commercial real estate loans are turned down for a variety of reasons. This is according to a 2017 poll by the National Association of Realtors who are interested in commercial real estate loans. On the other hand, this is a great opportunity to draw in more clients. This 35 percent who don’t often qualify for bank loans can be offered services that meet their need as independent real estate investors and small-time entrepreneurs.
Small firms find it challenging to obtain capital for several reasons. Banks want to lend to small companies, but the regulations are a bit unfavorable. Minor difficulties such as an irregular personal income, a low debt-to-income ratio, or fewer than two years’ worth of business tax returns are some of the reasons why they do not qualify. With this business owners acquire capital somewhere else- from hard money lenders, wherein funds are released quickly but of higher interest. Since this is a costly option for investors, they quickly reapply for financing from banks once their concerns are resolved and they qualify.
Marques Commercial Direct offers a clear advantage over hard money lenders. Thanks to its cheaper interest rates and more extended payback period, thus appealing to mortgage brokers. When borrowers are unable to be approved by the bank, Marques Commercial Direct can help their clients to accomplish the goal of purchasing a property. Marques can then work with their clients to resolve any concerns that stopped them from receiving a lower-interest bank loan in the first place and switch loans when the time is right for them. With this, the client will be able to purchase the property at a lesser cost and then further reduce it by switching to a loan from the financial banking institution. Besides giving their clients a positive business solution, Marques can also obtain the prospect of offering mortgage programs to the same client
Marques Commercial Direct always takes further steps to deal with direct non-bank lenders since they can already penetrate the investment property market. Marques has an advantage offering conditional approvals for loans using software solutions which provides a conditional loan approved all in minutes through a portal. An advantage the borrower/investor will maximize!