How Hard Money Lenders Can Help Borrowers In Ways Banks Simply Can’t or Won’t
The right hard money lender can help borrowers make their projects successful in ways that banks simply can’t or won’t.
Why? For two principal reasons. First, if you borrow from a hard money lender who has developed dozens of projects in the City and funded dozens more, you have the opportunity to get help from a lender who is a true subject matter expert when help is needed to make your project a success. Second, most bank officers simply don’t have the time or the experienced developing real estate needed to help borrowers with their projects other than to simply provide them capital. Is this bad? It’s not bad for every borrower, as there are many borrowers who don’t need or want help from their lenders on their projects. However, there are also many other borrowers who do need help along the way and that is when having the right hard money lender can be of tremendous benefit to borrowers.
We take great pride in being a resource for borrowers who can call upon our experience when needed to help them navigate the many issues that can arise in the development process. So, I tell borrowers to call anytime when help is needed and many of our borrowers do call upon us for help when needed.
How do we help our borrowers on regular basis?
Reviewing floorplans. We regularly are asked to review floorplans and provide feedback to borrowers, which we gladly do. We use our experience to help identify layout issues in the planning stage to help save our borrowers time and money, while ensuring a better final product they can put on the market.
Framing walk throughs. We walk properties after framing with our borrowers when they ask for our opinion of how the space functions whether we have a loan on the property or not. We recently did this with a borrower of ours on a property that we weren’t funding and moved a bathroom and made other layout changes that vastly improved the space.
Consultant referrals. After many years as a developer and lender in Washington, we have used numerous good consultants over the years like engineers, architects, lawyers, interior designers, etc. and are always happy to connect our borrowers with them. For example, one of our borrowers recently needed a surveyor to finish the condo plat process, as his surveyor was inexperienced at that process, and we referred him to the surveyor we use who took care of the job.
Conventional Lender Referrals/Analysis of Terms. We have relationships with several local banks and are happy to connect our borrowers with banks as needed so that they can find the right bank to meet their needs. We also are asked by our borrowers to review terms from conventional banks and provide our thoughts based on our market knowledge, which we gladly do.
Strategy sessions for projects. Borrowers often ask our opinion about how they should develop a property, including unit mix and how to proceed through various approval processes. We recently sat with a borrower as he worked through the BZA process to analyze whether he should remove his BZA application due to opposition and proceed with a “by right” project. The math said to proceed with a by right project, so he changed course and will be better off for it.
Help with finish selection. Borrowers often ask our opinion on tile and countertop stone selections, paint colors and cabinet styles, which we gladly provide. We develop so many projects and lend on so many others that we know what buyers want in particular markets often better than our borrowers do.
Construction Professional Referrals. We are always happy to connect our borrowers with a plumber, electrician, sprinkler installer or other construction professional as needed. We routinely do this for our borrowers, which gives them access to subcontractors who we have used for many years whom we know are reliable people.
As you can see, we take great pride in using our experience developing and lending in the City to help our borrowers. For borrowers who want and need help with their projects, whether it’s because they are relatively new to development or because they are developing a more complex project than usual, our knowledge can be a tremendously valuable resource to help their projects be as successful as possible. Ultimately, picking the right hard money lender can be incredibly important in ensuring the success of your project, so please call us today to start the process of working together on your next project.