Direct lenders and debt funds represent the fastest growing sources of real estate finance capital. Borrowers are drawn to these lenders due to their high flexibility and quickness in making their credit decisions while investors are often attracted to the relative ease of investing, potentially higher yields and the ability to own investments tied to real estate without acquiring an overabundance of real estate risk.
A potential pitfall for the lender is the cost of effectively servicing each loan. Often these lenders are highly successful at finding capital sources and identifying superb investments opportunities but are not as experienced or equipped to service sophisticated loans after they close. To further complicate matters, due to the higher risk of most often associated with loans originated by these lenders, heightened collateral surveillance is required. This is where we can help.
Essex Financial Services collaborates with you to determine the level of service that meets your objective of cost effectiveness while complementing your firm’s existing strengths in managing its risks. We bill borrowers, collect payments, remit and report to investors, account for each loan (and investor split) on our servicing system, monitor insurance, property taxes and UCCs, strictly enforce borrower loan covenants, analyze operating statements and rent rolls, assess collateral condition, administer escrows, reserves and lockbox activities and report the progress of lease-ups, rehabs and PIPs. We communicate regularly with the borrower and execute the lender’s unique portfolio- and loan-level risk management plan daily.
Regardless of the size of your portfolio or the complexity of the loan structures we assist you by keeping your cost of servicing on as variable of a basis as possible. Essex Financial Services allows dealmakers to make deals by handling the day-to-day matters of each loan.