One of the biggest challenges facing property investors is securing adequate financing for transactions and projects. As traditional lending channels tighten their requirements for loans, property investors are looking for efficient financing solutions that are designed with commercial real estate markets in mind. Stated income loans provide such a solution so property investors do not have to deal with prohibitively high requirements or the risk of loan turndowns to secure the financing they need.
The Truth About Stated Income Loans
Traditional lending channels have been raising the requirements on loans for years in order to protect their own investments and separate borrowers that are considered “high risk” from bankable clients. Traditional loans for real estate require near-perfect credit and proof of income from an employer. For property investors, this can pose an obstacle, because revenue in the commercial real estate market is generate when properties are sold or from tenants renting properties. Properties do not sell on a weekly or bi-weekly basis, and rent payments come from various sources. In either case, the lack of a steady source of income from an employer of one’s own commercial real estate company would not check the box needed for approval from a traditional lender.
Stated income loans take a different approach that’s designed with property investors in mind. Stated income loans have minimal paperwork, and are structured around – as the same implies – stated income. Property investors supply bank statements and their most recent tax returns to support the revenue they bring in from selling and renting commercial real estate. These loans do not hinge upon perfect credit, so they are accessible to property investors at almost every level. Stated income loans can be arranged quickly so property investors can take advantage of time-sensitive transactions.
Using Stated Income Loans
Stated income loans can be used for a wide range of purposes. Property investors use stated income loans for everything from purchasing commercial real estate to construction, renovation, and even refinancing. If you are looking for an alternative to the high requirements of traditional lender, contact The Capital Rams today, and ask our team about stated income loans.