Case Studies
Below are some of the more common types of properties grouped in categories. In addition to this, we have taken the time to provide you with a brief overview of what lenders look for and what should be addressed in a loan proposal.
The Borrower must remember the following:
With the above in mind, we hope you will find the following helpful.
The Borrower must remember the following:
- Every deal is unique and the actual presentation will vary from deal to deal.
- Prevailing market conditions must be addressed because they can impact the outcome of the loan.
- Lender appetites vary considerably, even among similar lenders (e.g., Bank X vs. Bank Y).
- Not all loan proposals are created equally.
- Just because you can approach a lender directly, doesn't mean you should.
With the above in mind, we hope you will find the following helpful.
Multi Unit Residential
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Multi unit residential real estate focuses on properties that serve as dwellings. As you can imagine, these types of properties can come in a variety of setups and include traditional apartment buildings, seniors housing and student housing.
While each of the above properties have unique characteristics, their main purpose is a primary residence for a certain number of people. Factors to consider with these properties include:
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Investment Properties
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Investment properties are acquired and can be thought of as a way for an entity can deploy their capital with the goal of earning a return.
While any property can be thought of as an investment, the term "Investment Property" typically refers to office buildings, retail buildings, mixed use buildings and apartment buildings because the pimary cash-flow stems from the rented or leased space as opposed the operation of a business. Somce of the factors to consider include:
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Real Estate for Business
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This category involves real estate that is acquired by the Borrower for the operation of a business. The primary source of revenue, therefore, is the ongoing success of the business.
As can be seen in the images, there is a wide variety of business' that can acquire real estate for the purpose of establishing a business. Each type of business has its own unique characteristics and key drivers. Because of this, loan proposals in this category have an added layer of complexity because a thorough analysis must be completed on the actual business and its industry. Put another way, loan requirements for the purpose of establishing a business straddle the world of real estate finance as well as the world of corporate finance. Some of the points that lenders will need to review include:
Borrowers need to be prepared to answer multiple questions as lenders look to understand the loan request as well as the business' ability to repay the loan. With this in mind, our role is to anticipate the questions and present with a fulsome package that will help us negotiate a competitive deal that meets the Borrower's requirements. |
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Construction / Renovations
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Construction and renovation projects introduce a variety of risks that a lender must understand and accept. For example:
The Loan Proposal must address the above construction related risks as well as analyze the end result and take into account what the end project will be. For example:
In addition to requiring construction specific analysis, the Loan Proposal must reference various consultant reports that will need to be ordered. The Borrower should remember that selecting a reputable consultant is key and like mortgage brokers, they are not all the same. To begin working on a construction project, we require the following basic documents:
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