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Are you sure that's how CRE lending works? It's definitely not how residential investment loans work. There's no mechanism for a lender to periodically check yo
by ryanwaggoner 9y ago
Are you sure that's how CRE lending works? It's definitely not how residential investment loans work. There's no mechanism for a lender to periodically check your leases and decide that they're going to call your loan because you're charging less. And if there was, why wouldn't they be terrified that you're charging $0?
- dmurray 9y agoI've heard a similar story in Ireland, when the bank had already repossessed a property. If they rented it out, they would have to mark down the asset value on their books. If they left it vacant, well, some vacancy rate is expected, so keep marking it to the last price it rented for.
- abandonliberty 9y agoThis was the explanation given to me by a top analyst from a CRE firm. There can also be tax considerations that offset gains from other properties, further reducing the incentive to rent out.