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Primary Underwriting Consideration: Value of the Property
We primarily rely on our relationships with existing and former borrowers, real estate investors, banks, real estate brokers and mortgage brokers, attorneys and web-based advertising to originate loans. Many of our borrowers are “repeat customers.” When underwriting a loan, the primary focus of our analysis is the value of a property. Prior to making a final decision on a loan application we conduct extensive due diligence of the property as well as the borrower and its principals. In most cases, we will also make an on-site visit to evaluate not only the property, but the neighborhood in which it is located. Finally, we analyze and assess selected financial and operational data provided by the borrower relating to its operation and maintenance of the property.
Factors for Loan Consideration
Ultimately, our decision is based primarily on our conclusions regarding the value of the property, which takes into account factors such as the neighborhood in which the property is located, the current use and potential alternative use of the property, current and potential net income from the property, the local market, sales information of comparable properties, existing zoning regulations, and the borrowers experience in real estate ownership, construction, development and management.