Traditional lenders and many private lenders are likely to reject all applications for international real estate projects. However, once you locate the rare direct private lender willing to work with you, that agency still may not be a good fit. In fact, the diversity of the international loan landscape is what scares so many away. The law, real estate landscape, and even your lender’s experience with local regulations will all vary by country.
Painting all international loans with a broad brush can thus pose challenges when you’re seeking a qualified lender. If you assume all international loans are the same, you might find yourself working with a lender that, though willing to offer international loans, isn’t properly versed in the regional regulations of the country in question. That said, you can easily avoid the obstacles that come with lumping all international loans together.
Why can’t you lump all international loans together?
“International” covers 194 other countries outside the U.S., and the diversity in regulations, real estate market outlook, ownership terms, and many other factors is certainly to be expected. Placing all non-U.S. based real estate transactions into one bucket, therefore, can be a pricey mistake.
First and foremost, the laws regarding real estate ownership and lending practices change between countries. Just like the United States and Mexico have different laws, for example, Mexico and Colombia will have different laws. Who can own property, how the proceeds from the loan can be used, procedures on transfer of ownership, and many more laws will vary tremendously. Therefore, the broad category of “international loans” can’t be regarded as one and the same.
Second, the conditions for real estate investing and lending depend greatly on the overall economic conditions of that country. The market may be favorable in one place and not in another, and taking those factors into account is an important part of the lending process. Additionally, certain countries may face issues with fraud and corruption which could complicate the choice to invest.
Finally, it’s important to remember that just because a lender says they have closed loans internationally doesn’t mean that they can do so in every country. A lender that has successfully closed loans in the Caribbean won’t necessarily have the same thorough understanding of the real estate, regulatory, and lending environment in the Philippines, for example. When talking with lenders who claim to have experience closing loans abroad, make sure you find out in which countries they have closed loans.
How Kennedy Funding navigates international loans
Kennedy Funding is a leader in international loans – and, in this case, “international loans” doesn’t just mean one specific part of the world. “We’ve closed more international deals than any other direct private lender,” says Kevin Wolfer, CEO of Kennedy Funding. “We have experience closing loans in the Caribbean, Central America, Australia, and many other regions, so borrowers can come to us with confidence that we can expertly navigate loans in virtually every corner of the world.”
Kennedy Funding is equipped with the infrastructure and personnel needed to adhere to the varying regulations and procedures of different countries. Borrowers know that Kennedy Funding is the go-to first stop for borrowers in need of international loans. With the international commercial real estate market booming at an unprecedented rate, there’s no better time to contact Kennedy Funding and explore your options for securing a loan for commercial real estate projects abroad.