Economic experts have identified July 1, 2019, as the date on which the U.S. economy officially marked its longest economic expansion in the country’s history. It may seem counterintuitive to plan for a recession or slowdown in the midst of expansive economic conditions. Savvy investors, however, should keep in mind that every expansion eventually ends. Understanding what an economic slowdown could mean for the commercial lending marketplace can help you make the most practical and positive decisions when financing and funding your construction projects, your property acquisitions, and other activities in the commercial real estate (CRE) marketplace. Here are some key points to keep in mind when planning for the future in the real estate investment industry.
Perform the Right Due Diligence
Investment analysts recommend taking a step back before making any major moves in the CRE market. Many experts believe that the current price points for commercial properties are at their highest levels and are due for a downturn. If this occurs, it could result in increased competition for certain properties. This does not mean that you should stop investing in CRE. Instead, you should look for bargains and consider the intrinsic value of the properties you are considering. By being more selective regarding the investments you make during this potential period of transition, you can make the right moves for your investment strategies and your ongoing profitability.
Managing Your Funding Process
Finding the right commercial lending arrangements will help you manage the funding aspects of your real estate acquisitions more effectively. Traditional lenders may be reluctant to lend at low-interest rates, which could make it difficult for you to acquire the financial support you need to acquire new properties, renovate your current holdings and construct commercial buildings and facilities. As interest rates creep upward, however, you will pay more for capital in the lending marketplace. You may benefit from exploring alternative sources of funding to ensure that you have the cash on hand when you need it. This can allow you to take advantage of short-term opportunities and snag bargains where they are available in the CRE marketplace.
The Benefits of Alternative Lending Arrangements
Alternative lenders offer a number of real benefits for CRE investors, including the ability to make loans that traditional lenders are unwilling or unable to handle. Your alternative lending company can also provide you with faster turnaround times for your applications and quicker disbursement of your funding, which is critical in the fast-paced CRE field. Finally, alternative lenders can be more creative in the way loans are structured and in the payment configurations for these financial arrangements. This will typically allow you to enjoy a loan tailored to your needs and your financial situation. At ReProp Financial, we specialize in creating practical solutions for our customers throughout the western side of the United States. We are a direct lender, which allows us to make the most practical and efficient commercial lending decisions on your behalf. Our team can provide you with the fast turnaround and the practical support you need to manage your CRE funding requirements and to access the most flexible financing options for your needs. Call us today at 1-800-444-2948 to discuss your company’s financial requirements or to submit a loan application to us. ReProp Financial is here to serve you.