NUTS & BOLTS
One of our borrowers was doing a condo conversion project, and we knew that the permitting and condo regime approvals would take some time. The solution was a loan in two tranches which allowed the borrower to minimize interest expenses by not incurring construction expenses until he gained all entitlements and approvals.”
Insight Matters: When Lenders Provide More than Just Capital
This is where creativity in lending comes into play. Some lenders are able to use their creativity and flexibility to fund deals that others can’t, enabling investors to land the deal as well as creatively structure deals to save borrowers additional money.
In order to have the confidence to be creative in their businesses, companies need knowledge and insight. Some- times, that insight can come from unexpected places, like your private lender. In the private lending arena, a strong foundation of knowledge and experience in actual “boots-on- the-ground” building is a key differentiator in the ability to be creative while funding deals. For example, truly creative loan originators truly under- stand the up- and downsides to the deals that they encounter because they have been on the investor side themselves for hundreds of successful deals. For example, one borrower came to us in desperate straits because unforeseen construc- tion costs had derailed his project and his prior lender was threatening foreclosure. He was worried that his retirement account might even be at risk. Because our loan originators were familiar with the specific construction issues he had encountered, we were able to estimate the cost to finish the project more accurately than the other lender had, make a loan within 48 hours, and recommend a reputable stager with great prior success with that type of property and an experi-
REAL ESTATE INVESTORS KNOW THE VALUE OF CREATIVITY
Real estate investors know that creativity matters because the successful ones use it in their own businesses every day. From figuring out how to best outmaneuver the competi- tion and land that great deal to determining the smartest renovations to invest in for each property based on budget, trends, and neighborhood demographics, creativity rules the real estate investing world. It’s not just real estate investors and lenders who understand the value of creativity to their businesses. A recent national study conducted by Adobe and Forrester Consulting found that 82 percent of companies across all industries think that there is a strong connection between creativity and business results.
CREATIVITY IN LENDING COMES FROM A STRONG FOUNDATION OF KNOWLEDGE AND EXPERIENCE.
by Robert “Bobby” Montagne
hen real estate investors are looking for capital to fund their deals, the only thing as important as speed is creativity. Most real estate investments don’t fit into the neat credit boxes of traditional lenders. By their nature, real estate investment, devel- W
opment, and fix-and-flip projects require loans that are tailored to fit each project in amount of money loaned, timeline, and scope. Builders, developers and investors need financing that is not only quick but provides them flexibility and “out of the box” thinking.
96 | think realty magazine july :: august 2017
thinkrealty . com | 97
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