Bank Lending Money for Real Estate Investments
At what points do banks stop lending money to a borrower? Like if the borrower keeps paying his payments, would the bank just keep lending money out to him? For example, if a guy bought a 1 million dollar apartment building, and received 100k in net income per year, as long as the guy keeps making his payments to the bank, would the bank keep giving him money, since they're making money off of his interest? Could this guy theoretically build a 50 million dollar portfolio in 20-30 years?
They stop lending when the guy runs out of collateral. Banks don't just throw money at people because they make loan payments.
Depends on his liquidity, net worth, contingent liabilities (non-recourse financing helps here), and the performance of the properties he wants to finance.
Not making your payments is a great way to ruin your relationship with the bank so they never lend you money again.
I thought this would be a thread started by a Nigerian scammer from the way the title was written
Aut corrupti voluptatem ut rerum omnis asperiores quia. Harum aut id ipsa quasi. Aut repellendus sint fuga accusantium.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...