Credit Markets and the Risk of Borrowing

To be a successful, long-term investor, you must understand the impact of credit shifts and rate cuts on the markets. Joining the show today is Chris Litzler, Senior Director at commercial real estate financing corporation Marcus & Millichap. Chris is well versed in the credit cycles and one of my barometers for credit shifts and how banks adjust to the current economy.

Listen in as Chris gives insight into the current credit markets affecting real estate investors and the basics of due diligence when evaluating an investment’s financing. On the backend, you’ll hear my thoughts on what it takes to be successful as a long-term investor.

Minute Markers:

2:02 – How the Federal Reserve influences the credit and real estate markets.
5:24 – Defining credit cycles.
9:56 – Possible impacts and outcomes relating to loan costs and interest changes.
12:10 – How to anticipate bank loans and extensions criteria changes.
14:43 – The financial pressures today and how financial regulations take shape.
17:52 – How long-term hard assets like real estate will be a good play.
21:54 – Why financial markets are not the way to go and the truth about investing in real estate.

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Featured on the Show:

#chrislitzler #ratecuts #recession #marketstatus #marketshifts #realestatemarket #stabilization #longterminvesting #investments #financing

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Power Concepts:

“To the extent that an extension is built into the loan, regardless of covenants to qualify for that extension, the lenders are generally being flexible—to an extent.” – Chris Litzler

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“That’s where the pressure would start to come from: the warehouse lenders. The non-bank lender would really need to buy the loan out of that securitization to satisfy their warehouse lines.” – Chris Litzler