STRATEGY
PRIVATE LENDING
Talking Loudly: MoreDreamDeals
THE LENDING KNOWLEDGE YOU NEED TO UNLOCK MORE FUNDS FOR MORE DEALS
by Nathan Trunfio
S
earch Google for information on private lending in real estate. You’ll get 127 million results. Wow! Thanks to the digital age, real estate entrepreneurs have access to a wealth of information for free. That’s a wonderful thing. As a private lender, I place a heavy emphasis on educating our real estate investor clients. Part of this education includes painting a picture of how lenders analyze borrowers and structure loans. After all, though the industry has more uniformity than before, lenders still vary in how they structure key attributes of a loan. This can confuse borrowers. It can make it hard for them to compare one lender’s offer with another and get maximum leverage and the best rates and terms. So, let’s sift through that confusion and add some clarity to exactly what you need to know: how lenders analyze borrowers and how they structure loans. If you grasp those two things, you’ll know how to get the best loan for your real estate operation.
HOWLENDERSANALYZE BORROWERS Because there’s no governing body like our residential mortgage counterparts, there’s no standardized approach to analyzing borrowers or deals. For instance, residential mortgages through Fannie Mae and Freddie Mac must adhere to certain guidelines and criteria. With many variables in private lending, it can be difficult to understand what you need to do to get the right loan. But for the most part, all lenders look at these three factors, with varying levels of importance, in a borrower’s profile:
• Experience
• Credit
• Liquidity
66 | think realty magazine :: april 2020
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