Lenders stalling investor plans
Tuesday, 22 July 2014 03:39
Written by Grainne Burns
In the face of increasing wait times for lending approval and fearful of missing out on big deals, more investors are switching to the commercial side
As lenders sit on finance applications for longer, frustrated landlords are taking more proactive steps to avoid missing out on opportunities.
“Many investors have been finding that the approval process is slower and so it’s a
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case of having to do something now,” says Richard Danby, investor and owner of Rich Ottawa Investments. “Many are moving to the commercial lending side as it can often be easier to get finance. Obviously, every case is different but that is what we are seeing on the ground.”
Michael Dominguez, investor and Realtor from Durham, says sourcing finance for joint-venture deals is proving troublesome for many landlords, with lenders looking for an increasing amount of information and figures.
“Investors have to really work on the deal structure to ensure they get that finance,” he says. “And even the shortest of delays can lose a deal, especially when you are buying properties like multi-family buildings.”
Many investors have complained that the approval process has worsened during the summer months.
“Such delays can really create a stressful situation for all members of your investment team,” says Danby, adding that lenders seem to be exercising more caution when considering residential investments.