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» Choosing Investor Funded REITs or Institutionally
Posted on 1/15/2005
When searching for a hard money lender, you generally have two choices. You can choose an investor funded REIT or and institutionally funded REIT. Each type of REIT (stands for: Real Estate Investment Trust) is funded in different ways. But each will make loans based on the equity in real estate.
Investor funded REITS are funded by wealthy individuals who are presented with a prospectus on each loan they are asked to participate in funding. An institutionally funded REIT is funded by one or more institutions such as banks, retirements funds, etc.
The advanatge of an institutionally funded REIT is that the rates tend to be somewhat lower than investor funded REITS and they are able to fund extremely quickly, since the money is already waiting 'in the bank', so to say. The advantage of an investor funded REIT is that there are always investors willing to take on almost any risk for the right price. You may pay more to get your loan funded and you may have to wait while a prospectus about you and your loan request is developed and floated among investors until it finds people willing to fund it. But, for a price, you will probably find someone, somewhere, willing to take on the risk factors involved in your project. The 64 thousand dollar question is always, is this a price you will be willing or able to afford?
Posted in Miscellaneous
Investor funded REITS are funded by wealthy individuals who are presented with a prospectus on each loan they are asked to participate in funding. An institutionally funded REIT is funded by one or more institutions such as banks, retirements funds, etc.
The advanatge of an institutionally funded REIT is that the rates tend to be somewhat lower than investor funded REITS and they are able to fund extremely quickly, since the money is already waiting 'in the bank', so to say. The advantage of an investor funded REIT is that there are always investors willing to take on almost any risk for the right price. You may pay more to get your loan funded and you may have to wait while a prospectus about you and your loan request is developed and floated among investors until it finds people willing to fund it. But, for a price, you will probably find someone, somewhere, willing to take on the risk factors involved in your project. The 64 thousand dollar question is always, is this a price you will be willing or able to afford?
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