Tag Archives: investment property loans

A Simple Guide to P2P Real Estate Lending

Have you ever imagined rather than walking into a bank for loan, you were lending out funds to borrowers? Through a reputable p2p marketplace lender, you can do just that.  A p2p lending club will allow you to invest your money by lending it to borrowers seeking investment property loans in exchange for attractive interest rates.

Some of the most reputable P2P companies will enable you get returns of over 9.6%, which is much higher than most investment options in the traditional markets.  In comparison to other investment types, you are able to manage your risks.  In this situation you are now the bank, lending out the money and the sole decision maker on the loans you wish to approve and reject.

To maximize your returns on commercial real estate investing, you need to have an investment strategy. Here is a checklist of things to keep an eye out for. Remember to do a thorough research prior to investing.

  • Credit Score — should be more than 678.
  • Debt Refinance — seek borrowers that will pay higher interest rates
  • Delinquencies in the previous 2 years— there should be none.
  • Government Job — preferred employment in the government
  • Interest Rate — all with preference to higher ones. Mix the loan grades to stabilize and increase returns.
  • Job Tenure — long record of employment, ideally 10 or more years.
  • Loan Purpose — you may want to seek a borrower going for a better rate and debt reduction
  • Loan Term — start with the 36 months and when you are conversant with the investment business, you can go for the longer 3-5.
  • Debt: Income ratio — preferably low
  • Several Small Loans — create a portfolio with a minimum of 200 notes. With more notes your portfolio will be more even and the performance will be better. You will spread the risk better in the event a default occurs. Hence, you will need a minimum amount of $ 5000 to invest and 800 notes which means $20,000 is an ideal amount to invest.
  • Minimum employment period: should be more than a year; the longer the period of employment, the better.
  • Reviewed by the P2P — It is preferable that you have the P2P check out the borrower and give their reviews. This will mean that there is a better chance of loan repayment.

Break into the Commercial Real Estate Market through Market Place Lending

The current credit market has shut out a lot of borrowers who are looking for investment property loans. Financial institutions that still invest in the residential and commercial mortgage market make it difficult for new investors to secure funding for their investments. Fortunately, peer to peer investment companies bring together investors and borrowers with shared interests to work together to achieve their financial goals.

Borrowing from a Peer to Peer Market Place

Peer to peer market places make it extremely easy for borrowers to find investors and borrow money for their real estate projects. With a few simple steps, it is possible to find and borrow from a market place lender and get good terms and interest rates.

Peer to peer market places also offer faster closing times. Working directly with a lender means that there is no bureaucracy and company policy involved, speeding up the process of actually receiving the money you need. A reputable market place also has transparent and honest lending processes and makes qualification quick and easy.

One such peer to peer market place is Blackhawk. Such companies are committed to fostering mutually beneficial relationships between lenders and borrowers particularly in the real estate market. Traditional financial institutions are no longer the only source of capital for people looking to get into the commercial or residential real estate market.