DR collateral for US financing - little help

arg1118

New member
Mar 11, 2010
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I am starting a real estate fund to invest in US real estate but most of the principal's assets/cash flow (i.e. credit supporting assets) are in the DR and Mexico. We are seeking to secure competitive rates in the US using our income/assets from abroad as these would establish our fund as being creditworthy.

Does anyone have any experience with this? Do you know of any lenders that would accept our DR assets as collateral in conjunction with our earnings as proof of our strong credit?

Just to fill in some blanks that might be helpful:
-We are looking to raise approx. $1 million in order to lever up 4-5x
-Target properties would be west coast ( CA, TX foreclosures and Tri-State (NY, NJ, CT) multifamily properties below 400k-1,000k
-Looking to invest 25-40% downpayment on properties to hold for long term
-Principals are all finance professionals and MBA's with understanding of Real Estate
-DR, Mexico, West Coast assets are not liquid but cash flow positive, prominent businesses, including substantial real estate holdings

Any help would be greatly appreciated and can be discussed via PM.

Sincerely,
ARG1118

P.S. Just to disclose so this post is not erased, this is an inquiry for advice/help and not solicitation of investors.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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I doubt you'll find many banks willing to use collateral in a foreign country, especially in the current environment. It's just too costly and complicated to foreclose and convert to cash to cover the loan.

Good luck.

If the principals are all finance professionals and MBA's as you claim, you'd know this already.
 
May 29, 2006
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Try Find that money .com. They are like a matchmaking service between entrepenuers and investors. I think it's $150 a year for a membership but they are a great source for contacts. As with anything, you have to be careful who you do businesss with. There are a lot of "investors" who want make high interest loans, but some look pretty good. Real estate is popular.
 

arg1118

New member
Mar 11, 2010
74
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thanks for input

Thanks for input. More is welcome.

Being in finance or having an MBA, "as I claim", does not make one omniscient. That it is an unlikely and complicated transaction is obvious. I was asking if anyone had worked with lenders in this niche or have encountered similar scenarios and successfully received market interest rates.
 

ExtremeR

Silver
Mar 22, 2006
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I am starting a real estate fund to invest in US real estate but most of the principal's assets/cash flow (i.e. credit supporting assets) are in the DR and Mexico. We are seeking to secure competitive rates in the US using our income/assets from abroad as these would establish our fund as being creditworthy.

Does anyone have any experience with this? Do you know of any lenders that would accept our DR assets as collateral in conjunction with our earnings as proof of our strong credit?

Just to fill in some blanks that might be helpful:
-We are looking to raise approx. $1 million in order to lever up 4-5x
-Target properties would be west coast ( CA, TX foreclosures and Tri-State (NY, NJ, CT) multifamily properties below 400k-1,000k
-Looking to invest 25-40% downpayment on properties to hold for long term
-Principals are all finance professionals and MBA's with understanding of Real Estate
-DR, Mexico, West Coast assets are not liquid but cash flow positive, prominent businesses, including substantial real estate holdings

Any help would be greatly appreciated and can be discussed via PM.

Sincerely,
ARG1118

P.S. Just to disclose so this post is not erased, this is an inquiry for advice/help and not solicitation of investors.

No idea how to pull this one off, but good idea, now is the perfect time for that. I wish you good luck.
 
Jan 9, 2004
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It is not likely.....

but not impossible that you will find a "bank" to lend to you. You just may have to rethink the competitive rate portion of your post...as any non-US real estate/non US cash flow is likely to be heavily discounted and require heavy downpayments. By heavily discounted I mean at least 75%. By heavy downpayments, I mean 50%.

As already outlined to you in an above post, any bank that would make such a loan is concerned about the process/expense/laws of foreign jurisdictions relating to foreclosure/seizure in the event of your default.

Additionally, you and/or your investors will need to show strong ties to the US, and additional real estate/assets located there (you indicate west coast in your post). Be aware the bank will probably (99.9%) not loan to the "fund," but would seek personal guarantees of the principals (thus the tie to the US AND US assets would be helpful).

As to a bank, it is highly unlikely that any bank without a strong international presence would even consider this undertaking, so stick with the majors...or find a "hard" money lender (only if you are desperate or convinced that you have an iron clad foolproof business plan).

My observation is that your strategy to acquire should be in one of the areas you outlined, not a property in Texas, one in California, etc. Just way too hard to manage and control costs with properties all over the place (at least initially).

Now that I have rained on your parade so to speak, let me also say you are on the right track imho. Opportunities like these (current real estate conditions) appear about once every twenty years or so. Unless you believe the US economy will never recover, the time to position yourself in US real estate is now.

Good Luck.


Respectfully,
Playacaribe2


I am starting a real estate fund to invest in US real estate but most of the principal's assets/cash flow (i.e. credit supporting assets) are in the DR and Mexico. We are seeking to secure competitive rates in the US using our income/assets from abroad as these would establish our fund as being creditworthy.

Does anyone have any experience with this? Do you know of any lenders that would accept our DR assets as collateral in conjunction with our earnings as proof of our strong credit?

Just to fill in some blanks that might be helpful:
-We are looking to raise approx. $1 million in order to lever up 4-5x
-Target properties would be west coast ( CA, TX foreclosures and Tri-State (NY, NJ, CT) multifamily properties below 400k-1,000k
-Looking to invest 25-40% downpayment on properties to hold for long term
-Principals are all finance professionals and MBA's with understanding of Real Estate
-DR, Mexico, West Coast assets are not liquid but cash flow positive, prominent businesses, including substantial real estate holdings

Any help would be greatly appreciated and can be discussed via PM.

Sincerely,
ARG1118

P.S. Just to disclose so this post is not erased, this is an inquiry for advice/help and not solicitation of investors.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
Thanks for input. More is welcome.

Being in finance or having an MBA, "as I claim", does not make one omniscient. That it is an unlikely and complicated transaction is obvious. I was asking if anyone had worked with lenders in this niche or have encountered similar scenarios and successfully received market interest rates.
I have an MBA, and another advanced degree in Econ.

Fundamental in the educational process is a clear understanding of how banking systems, from the IMF/World Bank, to CB's of foreign countries, to the US Fed, right down to your neighborhood FDIC Insured bank, work and interact.

It's clear banks aren't Venture Capitalists. They are asset lenders. Their concern is two fold:
1) What's in it for them based on underwriting algorithms
2) How difficult is it to repossess the collateral

The answer to your initial inquiry should be obvious.

You don't need to be looking for an institutional lender. You need to be looking in the Venture Capitalist market for an "angel" who specializes in exotic real eatate deals. He'll want a % of the deal, a premium over prevailing interest rates, some personal guarantees AND an easy foreclosure methodology.