10-16-13 - BankAs a real estate investor, I find it difficult to understand why banks make it so complicated for real estate financing, especially when real estate investors have to prove themselves to the bank that they are a good financial risk.   In fact, the bank should be looking for real estate investors who have strong portfolios.  Banks should actively seek good investors to lend their money to, instead of waiting for customers to come to them, they should come to us, the real estate investors.  What the bank should actually do is to come  to the investors proactively, ask what they need in their upcoming project, and lend them more mortgage funds to facilitate their investments.

For instance, I have been with a number of banks and financial institutions for years, some of them even as much as 30 years. I have been putting money in there, why can’t they come to me and say can we lend you more money to make more money.  What I think is that nowadays, the banks should change and do something different for the real estate investor.

The bank should trace the people who are making money for them, partner with them on their projects, figure out how much money they need for their next project. Then the bank should be able to get a mortgage broker involved and do the mathematics to see whether the investors are able to make money or not.  Actually, there are three parties involved, they are the mortgage broker, the banker and the real estate investor.  And they should talk as a unit, the mortgage brokers know the financial situation of their customers who have cooperated with them  for years.

The mortgage broker can prove to the bank that their customers are a good financial risk by reviewing the investors portfolio and  from past  performance.    Therefore, it will become easier for real estate investors to borrow money from banks.  If someone has been losing money and has declared bankruptcy in some cases for more than one time, how can the bank possibly lend them money? On the other hand,  investors who pay their debts on time have proven themselves to be good investors, why wouldn’t the bank want to lend them  more money?   Where is the logic in that?

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