quote:

---

Originally posted by KHufford

Commercial Lenders Aren't Making Many Residential Subdivision Construction Loans

Condo and Housing Projects Have the "Coodies"

If you're a commercial real estate loan broker, you shouldn't waste even five minutes working on a construction loan request for a residential subdivision or a residential condominium subdivision right now. These deals are almost impossible to finance in today's market. In the minds of most commercial real estate lenders, such constructions loans have the black plague or the coodies right now.

If you're a real estate developer, and you are the sponsor of a broken residential condo project or a stalled residential subdivision, you are going to need more equity. You only have a few more months before the last of your interest reserve is consumed. Don't waste time trying to find some commercial construction lender foolish enough to add another 50 homes to the current glut of unsold homes.

Instead, focus your energy on finding some wealthy private investors to help you de-leverage your land. Maybe you could cut a deal with the bank that has the existing first mortgage. "I'll reduce your loan balance, Mr. Banker, by 50% if you discount your total loan by 25%." Then you could use this discount to attract a new equity partner.

Your sales pitch to a new equity investor might be: "If you bring in $250,000 in equity, Mr. Investor, the bank will reduce it's current loan of $625,000 to just $500,000 - and we'll pay down that $500,000 to just $250,000. Then my development company will pay you a preferred annual return of 14% in three years when the land is once again ripe for development."

So where does a developer find a private investor to help him carry a stalled residential housing project. You should try advertising on LoopNet.com. Call their advertising department and tell them what you're looking to do.

---

quote:

---

Originally posted by cpruitt

For the same reasons they aren't funding those deals, if high rates of return convinced you to have retirement funds that exceed FDIC insurance in some of the small local banks that were financing residential subdisions, its time to get it moved.

---

quote:

---

Originally posted by rocky007

I am an account exec with C U Lending Partners and offer Super Jumbo Residential Funding. Still lending and doing deals! Commercial is very tough because the process drags on and there always seems to be a hitch. Much depends on: How many months of verifiable assets the borrower have, credit, income, property itself, amount brought to the table for commercial, etc. I can get a pre qualification usually in a week. Do you have a package and / or any documents already? Email me: Cary at wmgpromo@aol.com if I can be of service.

---

quote:

---

Originally posted by ComLender

One way I know what isn't working in the market is when I start getting tons of calls for deals we don't do. Let's just say I'm getting record call volume for residential subdivisions, despite the fact that we don't do anything residential...

---

quote:

---

Originally posted by PinnaclePeters

quote:

---

Originally posted by ComLender

One way I know what isn't working in the market is when I start getting tons of calls for deals we don't do. Let's just say I'm getting record call volume for residential subdivisions, despite the fact that we don't do anything residential...

---

Good point.

"A Clue! A Clue!"

Tons of development and construction scenarios all of a sudden.

---