Realty411 Magazine Featuring Brad Sumrok | Seite 97

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 con-
cerns that today’s more restrictive rules and regula-
tions – 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 prop-
erties 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, invest-
ing 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 condi-
tion 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-
Realty411Guide.com

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 adjust-
able. 4) Availability of a 30-year fixed loan is lim-
ited. 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 lend-
ing: 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 relative-
ly 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 mar-
kets 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 invest-
ment. The “buy” signal of an improving and strength-
ening 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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