Secrets To Deal Structuring
Everyone who has set foot in the real estate investing arena has been exposed to the crazy forms of structuring a deal with lots of fancy contracts, terms and lingo. What most people come to realize after being in the business is that creative structuring of a deal can have a lot more to do with who you know than what you know. One advantage to working with a good local hard money lender is that many times they can provide a perspective or angle you have not thought of. If your lender is good, they should have the creativity and experience to see possibility in a real deal that you overlooked. The deal should still remain fairly simple in nature, but the pieces that the lender can make fit are very valuable.
A good hard money lender isn't afraid to tell you that their money might not be the best use for a particular deal. I frequently look at deals that I recommend to the client to try a different kind of money for funding. This happens because I know what kind of deals our money is good for and what kind of deals it is not.
A good hard money lender can take a deal that might lack a piece of the underwriting process and connect the dots for you. Recently there was a transaction where a borrower had a property under contract but it was very hard to determine if he had the ability to complete the size of the project. I was able to put him in touch with another borrower of ours that had a lot of experience in that kind of work. Low and behold, they formed a partnership and were able to close on the deal.
It is always worth placing a deal in front of a good local hard money lender, if for nothing else just a second opinion. You don't want to sell short or walk away from a good deal. Your lender should be able to provide you good feedback .
Ian Walsh
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