lending, you can miss out on poten - tially lucrative deals. Therefore, you should prepare ac - cordingly. Only consider deals after careful analysis and when you have adequate cash on hand and reliable access to capital. LESSON #2 TAKE GREATER CONTROL OF YOUR ACCESS TO CAPITAL With all this said, lucrative oppor - tunities still exist in the real estate space. For instance, single-family homes saw incredible rises in 2020, defying the pandemic. At the end of August 2020, the median home sale
Research published by the Financial Times notes Wall Street investors in the $1.4 trillion commercial-backed mortgage securities market are bracing for losses. Investors across all real estate sectors must exercise more caution than ever before. Fewer funding sources and tighter lending requirements Such developments have created a problem: funding gaps. With Wall Street taking losses, lending require- ments have become more strict. This means more is required from
investors in order to obtain capital. You must embrace the new norm lenders have taken to mitigate risks themselves. As a borrower, you should expect: Lower leverage and the need for more cash out of pocket Higher rates and a higher cost of capital A need for more cash reserves Tighter borrower requirements The fact is, many lenders have become much more conservative in their underwriting. If you don’t come ready to meet these new norms in
22 | think realty magazine :: december 2020
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