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

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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.

Ian Axelrod, Esq, Senior Counsel

Ian is an accomplished attorney with over 10 years’ experience representing private lenders, financial institutions, investors, developers, and domestic and international high net worth individuals and investment groups in all facets of lending, borrowing, acquisitions and other real estate matters.  Ian has represented prominent lenders, developers, property operators, business owners, and investors for both residential and commercial property development projects. Ian provides counsel on the acquisition, renovation, and lease of multi-family, mixed use, condominium and various other real estate projects.  Prior to joining the firm, Ian was the Managing Attorney at The Shiponi Law Firm, P.C. and, Associate at The Law Offices of Frederick J. Giachetti, P.C.

Ian graduated from SUNY at Buffalo in 2007 with a Bachelor of Arts degree in Political Science, Public Law Concentration.  He earned his Juris Doctor degree from Touro College, Jacob D. Fuchsberg Law Center in 2010, and was admitted to the New York Bar Association in 2011.