As we near the end of 2023, the landscape of commercial real estate is witnessing a frenzied pace, with borrowers eager to finalize deals before the new year. Particularly for those seeking to close land deals in a market where credit is becoming increasingly scarce.
The financial world is in a state of flux. Inflation is climbing, and the banking sector is reeling, causing conventional lenders to tighten their purse strings and set rigorous lending criteria. Right now borrowers are looking for a lifeline and insight of how best to navigate through these turbulent waters.
So how do you set yourself up for approval success? If you are challenged by your credit history, look for lenders who focus on the real estate collateral’s current value and potential. This perspective allows a lender to see opportunities where others see risks, focusing on the positive aspects of land development rather than being constrained by the borrower’s credit history.
If you’re looking to invest in real estate beyond the borders of the United States make sure your lender has an in-depth understanding of local real estate markets, regulations and legal requirements. Regardless if it’s Canada, Europe, the Caribbean, and Central and South America your lender should have the expertise to navigate through the red tape of these real estate markets to ensure a seamless international funding solution.
Of course, when it comes to you, the borrower, preparation is key. To streamline the funding process, borrowers must have their ducks in a row, starting with essential documentation. This includes, but isn’t limited to, a clean title, a recent appraisal, and a comprehensive environmental report. Depending on the specific requirements, additional documents may also be necessary.
The significance of proper paperwork cannot be overstated, but there’s more to the process than just documents—proactive and clear communication between both parties is vital. This transparency will ensure that if any additional information is needed it will be supplied promptly, allowing for a swift and efficient review by the lending team.
As 2023 ends and the pressure is on to close, it’s important to remember, the current financial landscape is complex and challenging, but it also presents unique opportunities for those who are well-prepared.