If you are in the real estate field in Turks and Caicos, selling property or building new homes, you know the challenges. Although the bulk of your clients are cash buyers, your prospect pool would grow substantially if borrowing money was as cheap and easy as it is in North America. Well, spoiler alert, we can’t offer money that cheap, but we can still help you grow your business.
Let’s Have a Frank Discussion about the Banks
I have talked to a number of real estate professionals on island who do not deal with non cash buyers. Why? They don’t want their deal to go sideways after dealing with the banks. Long delays, excessive documentation requests (often more than once), difficult qualifying criteria that never seems to be consistent; we have all heard the stories. It is understandable why deals often fall apart during the financing phase.
In fairness to the banks, their deals need to be approved off island, often in places like Canada or Barbados where they don’t know the island or don’t have expertise in underwriting files for residents of other countries. This causes delays which are out of the hands of the local branches. Regardless, you only have so many weeks to remove your conditions so the reason behind any delays is irrelevant to you and your prospective buyer.
We Are Different
As a private mortgage lender, we are different from the banks on a number of fronts. The first thing you will notice are the interest rates, we can’t compete with the banks on rate. Our rates are often 2-3 points higher (not much of a sales pitch so far, I know). However what we do well is approve and fund deals quickly. For many buyers, this is an emotional purchase, they want to live the dream. So rule number 1 of sales, ‘don’t assume to know what your client wants‘.
I say this because your client may be more than happy to pay a couple extra points on the mortgage to get their new vacation home. Remember what I said about growing your prospect pool? If you are turning prospective clients away because you assume they won’t pay 7.75% (our rate for an existing property), you could be throwing money away.
Let’s do a quick comparison of a typical bank mortgage and one of our private loans:
Bank loan:
Rate 5.5%
20 year amortization
500k loan size
Payment = $3439/month
G&P loan:
Rate 7.75%
Amortization – interest only
500k loan size
Payment = $3229/month
Now obviously I am not trying to say our loan is cheaper than the bank loan, but typically our payments are less or similar to the banks due to us not requiring any principal repayment. Many clients are less concerned with the interest rate than the monthly carrying cost of the property; remember they are buying the dream!
Supersize it!
Do you have clients who are debating between two properties, one they can afford and one that is just out of reach? Why settle when we can top them up with a small mortgage that will more than likely be carried by the rental income of the property. We want to help you sell more property!
What Type of Properties do we Want?
We are looking for highly marketable properties. This basically means, properties that are in the highest demand and would sell quickly if we ever had to force a sale. In Turks and Caicos, this generally means properties in Provo, in areas that have short term rental properties.
Property Types we will Lend on
We will lend on existing homes (villas and condos), land, commercial spaces (income producing) and multi-family. We will also consider construction financing.
Turnaround Times
We generally take 3 to 4 days to complete an approval. If an appraisal is required, this can stretch the process out to a couple of weeks. We approve deals right on island with our lending committee of directors. Funding the mortgage can be done in 3 to 4 weeks, depending again on how long the financing takes to put together and how quickly the client can sign documentation (this does not include land titles).
Can Your Client Move to the Bank Later?
Yes, our loans are tailored for your clients specific situation. So, if they feel they only need a year to get their mortgage moved over to the bank, we will accommodate.