Commercial Hard Money Lenders Are Getting Short of Funds

The Owners of Three Different Commercial Real Estate Hard Money Lenders Signaled Tighter Funds This Week

As the owner of a Commercial Hard Money . real estate loan company, I get to speak regularly with the owners of other Commercial Hard Money . shops.

The owner of the largest private money commercial real estate loan brokerage company in California mentioned to me a few days ago that he had to pass on a very nice construction loan this week. The reason he gave was that he didn't have enough private investors.

The owner of another very large hard money commercial mortgage company announced this month that they have reopened their mortgage fund to new deposits. This $300 million mortgage fund has been closed to new deposits for about six years. They used to have too much money.

The owner of another commercial hard money shop sent me an email this week asking if Commercial Hard Money . could fund a $4 million deal for them. Normally these guys could easily fund such a deal themselves.

So why are all of the traditional hard money commercial lenders running out of investors?

There are several possible reasons. First of all, subprime loans have gotten a lot of bad press recently. Probably at least some private investors have recently bailed out of subprime mortgage funds and fractionalized hard money deals, even though there is little evidence that commercial subprime loans have been materially deteriorating.

Another reason why Commercial Hard Money . lenders may be running short of money to lend is because the banks are getting out of the residential construction loan and land loan business. This leaves a lot more deals for hard money lenders to fund. Their ability to raise money is not unlimited.

But for right now there are still lots of Commercial Hard Money . lenders in the market. If you need a commercial construction loan or a land development loan, you can find hundreds of interested lenders using Commercial Hard Money .