Traditional and Hard Money Lenders
Lending in the traditional sense is heavily regulated. If the institution is insured or acting in accordance with federal requirements the lender is required to order the appraisal. Some participants may require valuation consultants due to the fact the appraiser, even though the borrower commonly pays, has a fiduciary duty to the client, which is the lender (not the buyer or seller). If you seek free consultation on this matter call us (312-558-1478) we might be able to help. On the other end are hard money lenders. They are gaining market shares in recent years. In fact, so many choices exist it is hard to know who has your interest at heart. Loaning on properties without appraisals was done in the past. Invested interests in this practice are cautioned. The US commercial real estate market has crashed twice in the past 30 to 40-years. Billions have been lost. The first (1985-1993) was attributed to unregulated loans where about 90 percent had no appraisals. The second (2009-2013) experienced the longest economic expansion in US history afterward. Notice the first was twice as long (without these extraordinary benefits) but the latter cut twice as deep financially. Reportedly, much of this improvement is due to systems in place, which mandated commercial appraisals on most properties. In-between federally regulated banks and hard money lenders cover the vast majority of other lending vehicles. Understand most appraisal and/or consulting fees are a very low-cost assurance securing the overall investment. Let us help.