- Joined
- Aug 22, 2007
- Messages
- 2,005
Financing Rules Continually Changing and subsequently your tactics must change!
Yes this has been a fact of life for the last 20 years as the pendulum swings from easy financing to difficult. As we are in a tougher financing atmosphere, it 'literally' pays investors to get back to the basics of financing. You must know the rules, you will be using a combination of Banks, Credit Unions (very good option right now!), Brokers (who many banks are making it more difficult to work with brokers), secondary lenders etc.
And time to get back to focusing on how to pitch your deal. That is why we invented the Sophisticated Investor Binder - for times JUST like this. Sure you may have been able to get new and renewal financing quite easily over the last 7 years (even without your Sophisticated Investment Binder), but not for much longer. Time to step up your game! (that is if you actually want results - some do enjoy that banks say no to them so they have an excuse for inaction)
September is the month of renewal - and I implore you to take this month to renew/revitalize your Sophisticated Investment Binder so that banks, even in this tighter lending atmosphere will want to do business with you. Yes, it takes some time, but so does most important business structure actions.
This week Scotiabank (a long term friend of investors) made the following announcement:
Scotia Bank Rental Property Financing:
- We are no longer doing a 70% rental offset to calculate debt service for rental properties being purchased or already owned. Going forward, we will calculate debt service by adding 50% of the rent to income and we will debt service the P&I payment. This applies when the subject property is a rental and also when there are existing rentals owned. We will still need the Rental Worksheet completed, but the offset will not be applied to debt service.
You will note that this policy also affects personal residence approvals (if the applicant owns rental properties)
What I am witnessing right now is those investors who understand that financing (and the many options available to them) is critical to their business - have stepped up their game. They understand that you have to put a strong business case together to help the financial institutions get to yes. The old strategy of hope and just relationship isn't working as often.
Preparing your Sophisticated Investor Binder forces you to take an honest look at your current position - just like the banks will be doing when you walk through their door. Here is the link to the file titled "How To Prepare Your Sophisticated Investor Binder" (Members' section). Your time is now!
Also, because of the rapid changes, we will also be going into great detail on financing at the upcoming ACRE Events (Edmonton and Vancouver). CYA there - but don't wait until then to get your Financing Binder together, the longer you put it off, the more financing NO's you are at risk of hearing.
.
Yes this has been a fact of life for the last 20 years as the pendulum swings from easy financing to difficult. As we are in a tougher financing atmosphere, it 'literally' pays investors to get back to the basics of financing. You must know the rules, you will be using a combination of Banks, Credit Unions (very good option right now!), Brokers (who many banks are making it more difficult to work with brokers), secondary lenders etc.
And time to get back to focusing on how to pitch your deal. That is why we invented the Sophisticated Investor Binder - for times JUST like this. Sure you may have been able to get new and renewal financing quite easily over the last 7 years (even without your Sophisticated Investment Binder), but not for much longer. Time to step up your game! (that is if you actually want results - some do enjoy that banks say no to them so they have an excuse for inaction)
September is the month of renewal - and I implore you to take this month to renew/revitalize your Sophisticated Investment Binder so that banks, even in this tighter lending atmosphere will want to do business with you. Yes, it takes some time, but so does most important business structure actions.
This week Scotiabank (a long term friend of investors) made the following announcement:
Scotia Bank Rental Property Financing:
- We are no longer doing a 70% rental offset to calculate debt service for rental properties being purchased or already owned. Going forward, we will calculate debt service by adding 50% of the rent to income and we will debt service the P&I payment. This applies when the subject property is a rental and also when there are existing rentals owned. We will still need the Rental Worksheet completed, but the offset will not be applied to debt service.
You will note that this policy also affects personal residence approvals (if the applicant owns rental properties)
What I am witnessing right now is those investors who understand that financing (and the many options available to them) is critical to their business - have stepped up their game. They understand that you have to put a strong business case together to help the financial institutions get to yes. The old strategy of hope and just relationship isn't working as often.
Preparing your Sophisticated Investor Binder forces you to take an honest look at your current position - just like the banks will be doing when you walk through their door. Here is the link to the file titled "How To Prepare Your Sophisticated Investor Binder" (Members' section). Your time is now!
Also, because of the rapid changes, we will also be going into great detail on financing at the upcoming ACRE Events (Edmonton and Vancouver). CYA there - but don't wait until then to get your Financing Binder together, the longer you put it off, the more financing NO's you are at risk of hearing.
.
