What are the new real estate lending options you need to know right now? What are the things you can leverage to our advantage to secure your capital? In today’s #Highlights episode, we look back at our conversations with Ian Walsh and James Eng who provided us with great insights about real estate lending.
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Ian gives us a glimpse into a private lender’s mind, why it is crucial to keep the potential risk in focus throughout the process, and why remaining slightly skeptical is wise. Meanwhile, James provides an overview of how the lending landscape has changed due to COVID and recent rate changes, and he also reveals that while the cost of deals is the same, the cost of debt has gone down. Listen now and learn about real estate lending today!
Key Points From This Episode:
- Thoughts on how a private lender should analyze and consider a project.
- Be careful not to overthink and overcomplicate a deal.
- Guidelines to ensure you are not overpaying on a property, including studying the data.
- Avoiding speculation and guessing as a private lender.
- How COVID and recent announcements have affected real estate lending.
- Hear James’s perspective on how deals have been returning to normal.
- Cap rates versus interest rates and the connection between the two.
- New options that have opened up; getting a floating rate loan with an interest rate cap.
- Why you should care about the rates that banks use to trade with other banks?
“A lender, you know, a private lender, I can’t speak from a bank’s perspective. If you go to a bank, there’s nothing wrong with banks, banks are fantastic but usually when you go to a bank as a borrower, the bank is really – we’re all asking how much are we risking. We’re all saying risk. That’s all we’re concerned with, we’re not concerned with profit, we’re concerned with risk.” – Ian Walsh
“Minimizing risk is what our game is about.” – Ian Walsh
“True private lenders are going to be focused on the asset.” – Ian Walsh
“The problem with the fixed rate is that if interest rates don’t move, or they go down, your debt product, nobody wants to assume your debt product, your loan.” – James Eng
Links Mentioned in Today’s Episode:
About Ian Walsh
Ian Walsh has been a full-time real estate investor since 2008. He entered the industry by building WeSellHomes2Fix. From there he built a property management company that was sold in 2014. During his time in the Philadelphia investment market, he partnered with Hard Money Bankers and has since underwritten all of the loans in Eastern Pennsylvania, New Jersey, and Delaware markets.
About James Eng
James Eng serves as a Senior Director for Old Capital. James is actively involved in financing commercial real estate with a focus on multifamily in Texas. He has financed over $500 million in multifamily properties. Before joining Old Capital, James underwrote over $750 million in loans over 8 years for the acquisition or refinance of commercial properties at GE Real Estate.
Prior to his work at GE Real Estate, he completed GE’s Financial Management Program (FMP) at GE Capital with rotations in Connecticut, Colorado, and Texas across multiple businesses. He received his undergraduate finance degree from the McCombs School of Business at The University of Texas at Austin. He is currently invested as a limited partner in 21 multifamily properties totaling over 6,000 units.
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