Q1 2020 began strong, continuing an unprecedented 11 year bull market. Rapid changes within capital markets due to the cornovirus (COVID-19) crisis demands investors change or alter their strategies with regard to financing fix & flips and long term rentals.
Hard Money and Private Lender changes due to market changes:
- Approximately 70% has ceased lending activity completely
- Active lender are more conservative
- Lower leverage
- Higher rates- 50bps to 300bps
- Higher fees
- Require payment reserves- 6 to 12 mos
- Long term and rental loan programs have come to a halt
- Expect slowdowns in processing times
At Financing Growth, we’re still working with the remaining active direct lenders to fund projects. Unlike investors that have relied on direct lender relationships that are no longer funding, our clients remain active in the marketplace.