5 Reasons to Refer your Client to a Private Mortgage Lender

For many business owners and real estate investors, qualifying for a traditional bank loan can be an uphill battle. The strict underwriting requirements and long underwriting periods don’t help investors and business owners conduct business at the speed they need.

Many investors find themselves without the loan approval they need, or if they get approved, funding takes so long that they lose out on the opportunity to invest in the property.

Private money lenders are often the preferred option, but how does that help mortgage bankers and other CRE professionals?

Believe it or not, you can benefit too. By partnering with a hard money lender, bankers have more resources to offer their clients, helping to further the banking relationship with your clients rather than turning them away.

If you are wondering how a private money lender and a CRE professional could benefit one another, read on.

Want to Know When to Refer your client to a Private Hard Money Lender?

Knowing when to refer your client to a private hard money lender is important. Here are 5 key factors to consider.

Your client does not fit the bank’s credit box.

Banks have stricter mortgage guidelines and regulations leaving borrowers with less than perfect credit without the funding they need. Private hard money lenders don’t focus on credit. Instead, they focus on the property value and understand the complexity of real estate investors’ income streams.

By referring your client to a reputable hard money lender, you still serve your clients even when their financials don’t meet what your bank requires. When clients feel supported, they’re more likely to remain loyal and apply for business credit cards, business lines of credit, and deposit accounts at your bank.

Your client wants to do a fix and flip.

Real estate investors are in the business to make money. This often means buying undervalued properties, fixing them up and selling them for a profit. Banks aren’t in the business of lending money on homes that don’t pass an appraisal, and this is where most real estate investors focus their efforts.

Private money lenders focus on these types of loans and can help your customers get the funding they need fast, while you provide them with the referral to get the funds.

Your client has a seasoning issue.

Real estate investors have a constant need for capital. They may often need to refinance properties to get their hands on the equity, but traditional banks have seasoning requirements. If an investor hasn’t owned a property for long enough, it could be hard to get them financed.

Commercial hard money lenders don’t have these requirements and can usually help borrowers in this situation get the capital they need.

If real estate is a team sport, than ensure you have all the right players on your team      – John Reid

 

Your client needs a short-term bridge loan.

Banks usually aren’t in the business of offering bridge loans or short-term loans that bridge the gap between when they sell one property and buy another. Sometimes they need cash fast to snag a great buy while they wait for another property to sell.

Hard money loans are for the short-term and can help investors scale up their investments, buying properties they would otherwise miss out on while they waited for other properties to sell.

Your client needs fast financing.

Real estate is a fast-paced market and sometimes investors need funding immediately, so they don’t miss a deal. Even if they know they’ll pay higher fees or interest, sometimes the cost is worth it so they can close the loan and the deal as quickly as possible.

How REID Lending Partners can Help?

Customers look to their mortgage bankers to develop a long-term relationship, not just to get a one-off loan. If you can’t provide the funding a real estate investor needs but have the references to send them to a reputable private hard money lender who can help, you will still benefit by securing the relationship.

REID is a premier private hard money lender that serves borrowers throughout the Mid-Atlantic. We offer a variety of financing options including short-term bridge loans and small balance commercial financing. We are the lender you can trust. Call us today at 888-720-7343.