Monday, February 23, 2009
Money
There are Banks in a position to lend. However some of the "new" guidelines amke LLPs and LLCs almost undoable. Some of the new guidelines require 100% personal guaranties from all members of either and the ability to pay in case of default. It makes no sense if the Loan to Value is good and the property is marketable.
Subscribe to:
Post Comments (Atom)
I'm guessing this is in response to the many non-paying professional investors (Doctors, etc) that walked away from their development projects. I personally know of a few that got in too deep and walked away -- hard to blame the banks -- more so the "loser" non real estate investors that should have never gotten in the game in the first place. Maybe now they'll all stay away and we can get back to a normal real estate market (from the investment side).
ReplyDeleteIn part I agree. When the dot.com stock boom went sour they sold out took the money and invested in over priced Real Estate, buying at CAP rates that were absurd taking a solid market and inflating prices. It lead appraisers to find comps to justify any inflated purchase price. Then when vacancies rose they realized too late. Now the prudent investors are suffering and Banks just do not look at the skills and experience of the potential investor. I don't think they will stay away but I do hope they become a minority partner with a solid managing partner. The cash influx into the system and hopefully the Banks getting wiser will help every one.
ReplyDelete