12A — July 13 - 26, 2018 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
Kennedy Funding Financial Securing funding for properties in less-than-ideal locations
S
o you've finally found that perfect piece of real estate – but unfortunate-
what will happen in the event a borrower defaults on their loan. For properties in and around cities, lenders presume that that they can easily recuper- ate their money in the event of a defaulted loan. In rural areas, however, if a borrower defaults and the bank fore- closes, the property could wind up on the market for months or years before a buyer comes along, devaluing it and creating a headache for the financing institution. The intended use of land in a rural area also impacts conven- tional lenders' considerations.
For example, financing institu- tions face limits on foreclosing on a farm if the owner derives their primary income from the property. That can add 12 months from the date of default before foreclosure proceedings can even begin. The risk of getting tied up in years of re- cuperating efforts is enough to discourage most conventional lenders from issuing loans to these types of properties. Some lenders simply don't see the value of extending financing to properties so far away from highly-traveled areas. For commercial proper-
ties in particular, conventional lenders fall into the trap of thinking that the lack of a mass market means the lack of a market altogether. Conventional lenders' reti- cence aside, there are alterna- tive financing solutions, chief among them direct private lenders, who can work around these stringencies if they see the value of the property or the potential of the deal. They are not beholden to the same strict procedures as conventional lenders, so they can make exceptions to the rules that a traditional financing institu-
tion cannot. This gives them the latitude and the flexibility to extend loans to a property far from a population center. However, direct private lend- ers aren't in the business of handing out money. There has to be true potential in or- der to fund a deal far from a major population center. Fac- tors such as housing, major highways, competition, and other commerce in the area are all brought into account. If you articulate the great value and potential you envision for the property, a direct private lender can share in your vision. “When a borrower comes to us with an opportunity in a remote location, we always ex- amine it to see the merits of the deal,” said Kevin Wolfer, CEO of Kennedy Funding Financial. “Oftentimes, there are factors which indicate that this deal will be successful and profit- able – and those are deals we are happy to fund for qualified borrowers.” Partnering with experienced lenders that can point to proven successes is key to a positive working relationship. Ken- nedy Funding Financial has a track record of supporting investments with tremendous potential because we see the value of the investment, just like you do. Progress Capital Funds $2.3M for acquisition of vacant Jersey City gas station site TINTON FALLS, NJ — Kathy Anderson , managing partner of Progress Capital ,
ly, the bank doesn’t seem to agree be- cause it’s not located near a population center. Traditional financing in- stitutions are
Kevin Wolfer
not willing to fund deals outside of cities or other major popula- tion center, citing risk aversion. Banks and other conventional lenders are concerned about
T H E M I D A T L A N T I C R E A L E S T A T E J O U R N A L P R E S E N T S T H E ANNUAL COMMERCIAL BROKERAGE DIRECTORY Deadl i ne Ju l y 13
approved a $ 2 . 3 m i l - lion Bridge Loan, funded by Progress Capital’s di- rect lending p l a t f o r m , ‘Progress Di- rect’, for 350
Kathy Anderson
Contact Marisol Chase for more information on Pennsylvania 781-740-2900 mchase@marejournal .com or Kim Brunet for more information on New Jersey 781-740-2900 kbrunet@marejournal .com
Pavonia Group, LLC to the acquire the gas station at 348 Baldwin Avenue in Jer- sey City. At the time of the acquisition the gas station was vacant with approvals to construct a 45-unit multifam- ily building. The interest-only Progress Direct loan represents a 90% loan to current “as-is” property value. The term of the loan is 12 months accompanied by a fixed-rate of 12%.
Made with FlippingBook - Online catalogs