Biscayne Beach condominium in Downtown Miami's East Edgewater neighborhood

MIAMI—Foreign buyers still abound in the South Florida market—but not all of them have the cash down ratio many developers require. While that could slow the market, new niches are forming in the lending market instead.

GlobeSt.com sat down with Jim Fried, president of Sandstone Realty Advisors in Miami, to discuss the role of private lending in today's real estate market in part two of this exclusive interview. You can still read part one: What Conventional Lenders Can't Do Today.

GlobeSt.com: Many condo buyers from Latin America paid 50 percent deposits for units that are now more expensive due to the strengthening of the dollar. Is there financing available for those international buyers who may struggle to find the money to close on their condo purchases? If so, what are usually the loan terms?

Fried: There are bank loans available for foreign buyers but the lenders are becoming very selective. This depends on factors such as the use of the unit: will the owner be a full-time residence or will the property be rented to an unrelated third party?

Some banks may extend loans up to 50% of appraised value. The loan amount and interest rates vary for each transaction based on the building, the building's submarket and the borrower.

Some private lenders, including us, have developed a niche of granting loans to foreign investors purchasing residential units, hotel condos and office condos. We also offer private loans to borrowers who may not qualify for a bank loan.

GlobeSt.com: You often work with mortgage brokers as they pursue financing for their clients. What should brokers expect from lenders in the coming months based on the real estate cycle and possible upcoming deregulation?

Fried: They should expect to receive more calls from clients with “special situations” who cannot obtain financing from their bank. There is very limited construction and bridge financing available from banks and other institutional lenders. The role of a private lender, well-versed in a specific market segment and connected to dependable private lenders, is increasingly helping to fill this gap.

Some banks may extend loans up to 50% of appraised value. The loan amount and interest rates vary for each transaction based on the building, the building's submarket and the borrower.

Instant Insights /

Where Foreign Investors Ae Turning for Condo Loans Now

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