Private Lenders: Evolving Market Means a Renewed Lending Focus in 2021

With the economy in an unprecedented state of flux, it’s essential for private lenders to concentrate and migrate to markets that offer the highest potential return on investment.

Real estate investors are seeking private financing across a wide range of investments including fix and flip loans, long-term rentals in SFR and multi-family, ground-up construction as well as commercial and industrial loans.

It is essential for private lenders to be active nationwide covering a diversified portfolio with flexible and accessible funding options. Here’s an overview of what market conditions to keep an eye out for that indicate growth in the coming year.

Traits to Look For

Federal Reserve Bank President Raphael Bostic stated recently, “Every city has its unique narrative as to why it got to where it got. I don’t think there is a general formula that if you hit each point at a certain level you guarantee an outcome.”Bostic’s insight highlights the need to analyze basic market data and trends.

Moreover, the below criteria are a guideline to housing markets that may see increased demand for private lending.

  • Educated Employee Base: Areas that have an above-average percentage of workers with advanced education experience tend to be more stable. This resonates with a lower foreclosure rate and reduced risk of mortgage payment delinquencies.
  • Corporate Headquarters: These hubs of business activity and projected expansion offer a significant return on investment with a lower risk profile compared to more isolated areas
  • Youthful Workforce: A younger employee population is positively correlated with robust private lending activity. Millennial workers tend to migrate to areas where there are employment opportunities and high accessibility to desirable amenities. These drawing factors lend themselves to increased real estate valuation. As such, this suggests that increased demand for private lending for projects in these areas.

We’re Here to Help

Regardless of where you plan to lend, the private lending attorneys at Andelsman Law are here to assist you in the coming year and beyond.

We have the requisite experience and know-how to offer you the personal attention and flexible solutions you need to compete in this competitive industry. Contact us today to learn about how we can assist you.

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