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Double-Digit Returns with Leverage , pg . 42
“ old-school ” said otherwise . Fortunately , this puts the USA is in an enviable position and if true , may prove an opportune time for investors to carefully reexamine their portfolios and asset allocations .
For astute investors seeking an alternative tool or means to invest in real estate , the availability of non- TRID loans can be prove to be the good news you seek . Why so ? Because the non-TRID loans provide a much-needed means to expand existing lending parameters beyond the standard loans instituted by the conventional lending market . Non-TRID loans can often help solve investor questions and liquidity concerns that today ’ s more restrictive rules and regulations – Dodd-Frank – often dramatically slows or even stops the movement of money .
Money needs to flow to have a vibrant economy . Even more , there are often times when the question of loan availability is overshadowed by the question of timing , the number of days-to-close . Non-TRID loans can prove the alternative in helping keep success moving forward .
Here are few particular examples where non- TRID loans can prove to be the solution : 1 ) More flexible limits as to the number of financed properties you may own at the same time . 2 ) Ability to loan to entities such as LLCs or partnerships . 3 ) Foreign owners / investors , and this of particular interest as we look to Europe , even China , investing in America . 4 ) More room to resolve and work around certain credit issues .
Within these many benefits , there are two particular issues not to be overlooked . First , the overall condition of the property is critical ; and secondly , there is the lender concern about the marketability of the asset . Both are of prime importance .
HERE ARE A FEW SPECIFICS
TO NON-TRID LOANS : 1 ) The same basic loan test – Income , Credit , Assets and Property . 2 ) Banks / lending institu- tions are the loan providers and thus obligated to address certain compliance rules and regulations – i . e , audits . 3 ) Loans are amortized over 25 – 30 years , with the flexibility of fixed rates for the first 1 , 3 , 5 , 7 or even 10 years , before becoming adjustable . 4 ) Availability of a 30-year fixed loan is limited . 5 ) Similar to commercial , these loans are kept on the lender ’ s books and not bundled and sold . 6 ) Yes , some include an interest-only options , for a fixed period of time , often with pre-payment . 7 ) As to “ no-income ” loans , this will be for a future article or by giving us a call or email , today .
Non-TRID lenders in this marketplace are limited to perhaps dozens , versus hundreds of providers in the conventional market . Why so ? Because such lenders do not sell these loans to another party and thus do not replenish their pool of money available for other lending . As a result , this “ balance sheet effect ” limits the amount of lending each bank can lend . Their ‘ pool ’ of money is counted across all forms of lending : residential , commercial , business , construction and such . Having a lending expert available to keep you on top of these complex layers of lending , is key to success .
Bottom line : When you find the banks doing this type of lending , enjoy , but don ’ t hesitate . Often the availability of non-TRID funds may be relatively small , meaning the door can close quickly . In addition , with these loans on their own books , most lenders will likely limit the amount of “ individual ” exposure , either by the number of loans or the overall dollar amount . Keep in mind , as conventional markets are subject to change , so too , our alternative – portfolio and non-TRID – lending partners .
In summary , I am a proponent of purchasing and diversifying into US real estate as an excellent investment . The “ buy ” signal of an improving and strengthening economy continues . Moreover , the needed pressure to ease overly restrictive , even constrictive , lending is increasing . Further , Europe is sending out teasers to invest , build , and expand their investment in America . Money tends to seek safe havens and secure places . All said , this will bring “ new ” money into our economy , grow our labor force with higher paying jobs , and bring about ancillary growth as well . The question may be : Can we build fast enough and can builders fill the need ? If so , double-digit returns on invested capital , will be confirmed and verified , and investors will the beneficiary . v
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