"it is important to develope a relationship with your banker"
Cleveland, Ohio (PRWEB) September 16, 2013
The American Real Estate Investor’s Academy radio show conducted an interview with Ron Manges of First National Bank of Pennsylvania. Ron Manges, a banker with over twenty years of experience, covers his tips for how real estate investors can find the right bank to work with. Josh Caldwell of the American-REIA conducted the twenty five minute interview. Ron shared his insights of how to find, work with, and build a relationship with a banking institution.
Many real estate investors understand the value of having a team of professionals to work with. Many investors understand the benefits of having a lawyer, and an accountant that they work with. Other more sophisticated investors expand their team to include contractors, realtors, and virtual assistants. What most real estate investors overlook is the importance of having a banker on their team. The banker is the person who helps the investor acquire the money needed to buy real estate.
Novice real estate investors usually start off with some sort of conventional loan to buy their first piece of property. For real estate investors who have not been bitten by the real estate bug just yet, that first piece of property might be their personal home. Then as the investor grows his real estate business, the need for a strong banking relationship also expands. The first step in that evolution is to buy an investment property. This is when the relationship with a bank becomes important.
Banks don’t just lend money, they also evaluate the deal.The bank’s loan officer and underwriting staff act as transaction evaluators for the banking institution. These people are the gatekeepers who keep the bank from losing money. These are the same people who can help keep an investor out of trouble. The underwriters screen the transaction for financial viability. If the real estate purchase isn’t likely to generate enough cash to pay off the loan, then the bank will not fund the deal. This is a very powerful tool for the novice investor.
The investor has to learn to do exactly what the bank does. He needs to learn how to evaluate a commercial transaction the exact way that the bank does. Now this is where the relationship building comes in. An investor who has established a certain level of trust with the banker can then go back and ask why the loan wasn’t approved. Through this dialogue, the investor will either submit more evidence to support the loan’s approval, or he will learn about a flaw in his own business model. Either way, the investor learns something. The bank and the investor both move forward towards a mutually beneficial relationship.
Ron Manges covers all this and more. To hear the full recorded interview go to http://http://www.blogtalkradio.com/american-reia/2013/09/12/interview-with-an-investor-freindly-banker-ron-manges.
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