Lenders, Watch Out for Real Estate Investors

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As the market moves into the post-refibum era, loan officers face stiff competition for purchase loans. As a result, many creators are looking for other places to expand their business. HousingWire recently spoke with William Tessar, President Civil financial servicesabout the space for private lending and how fixed assets can benefit from serving real estate investors.

HousingWire: What are the current outlook for private lending as the market shifts from a refinancing boom to a flooded shopping market?

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William Tessar: Once interest rates rise (and they are growing), traditional originators will flood the purchasing market at the same time – and with all-time low inventory levels, there will be fierce competition for the same loan. However, right now there is an often overlooked source of business that has potential for brokers and initiators: the real estate investor channel.

As investors buy multiple properties per year, this can contribute to more sustainable growth. Outside of the refinancing period, the typical buyer will renovate or buy a new home every three to four years, while real estate investors buy an average of four homes each year.

However, to serve real estate investors, you will need more instruments than conventional or government loans, especially in a hot market where the “closing rate” rule is in effect.

HW: How important is the channel for real estate investors in our market after renovation?

WT: Roughly 15% of the average LO’s database is a potential client looking to purchase or refinance investment property, so if you outsource this business and someone else fills the void, this new lender will have future opportunities to serve that client, which means not will be.

Putting it all together, the typical investor can make four to six loans to a lender in one year. There is not a single homeowner who will refinance their loan many times a year, which is why lenders are looking for private cash loans to thrive in a post-refinancing environment.

HW: What misconceptions do people have about the private lending space?

WT: I have been in conventional lending for over 30 years. I joined CIVIC in 2017 because I saw the enormous, untapped potential of the company. as well as the private lending industry as a whole. The perception of hard money and private lending in general was hazy, full of mystery, complexity and instability.

We have taken the initiative to change this by increasing the transparency and transparency of private cash lending through securitization and alignment with some of Wall Street’s largest financial companies in the field.

HW: What impact has the securitization of CIVIC had on the private money sector as a whole?

WT: By successfully closing the securitization of the top three private cash loans, business loans (which excluded multi-family real estate as well as long-term leases), we have shifted the structure and discipline of conventional lending to the private money sector. This has increased the confidence and confidence of institutional capital market partners in the effectiveness of CIVIC loans, and has opened up new opportunities for all private lenders.

The quality, quantity and consistency of our lending have brought Wall Street’s institutional capital seeking higher returns into the space, while at the same time clearly understanding the risk associated with this lending channel.

Institutional private lending is no longer an unusual source of finance today. CIVIC is bridging the gap between conventional and traditional hard-cash lenders by acting as an institutional private lender and offering affordable access to capital to investors, brokers and correspondent partners.

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