Strategies for the Current Lending Squeeze

Bring more cash to the table- if you want 75% to 80% LTV’s, you are going to have to pay for it. You can get better pricing at 60% to 65% LTV.

Work with portfolio venders that don’t face Wall Street conduits’ loan risks and are less likely to retrade an initial rate quote.

Assume existing debt in purchasing the property.  

Avoid yield threatening clauses or agreeing to so-called “material adverse event” clauses that some conduit lenders are pushing which allow lender to boost quoted interest rates if capital markets conditions change suddenly before the note gets securitized.

Wait it out - borrower’s that require high leverage to make a deal work and aren’t facing immediate deadlines are waiting on the sidelines for several months until the market stabilizes.

Source: Sperry Van Ness/RealSite Commercial Group