Determining Real Estate Asset Value | Riverdale Funding

Determining Real Estate Asset Value

Sep 21, 2016

Is your credit score low? Financial history not so clean? While traditional lenders might deny you for a loan based on those two factors, there is still hope.  Commercial hard money lenders like Riverdale Funding, LLC do not base loan decisions on financial statements or credit scores.  Instead, we base our decision to lend on the value of your commercial real estate.  We don’t believe a less-than-perfect loan application package should stand in the way of business, and we don’t hold your past against you.  


So how do we determine the value of your property?
We get two opinions of value done to cover all bases, an appraisal, and a broker’s price opinion. We trust only the most credible and accredited companies to perform these real estate service assignments.

Most lenders choose to order an appraisal on the property. This is to determine the property’s value or discover any issues that would decrease the value. Property value is based on factors as location, amenities, condition and recent comparable sales of similar local properties. The appraiser visits the property, walks-through, takes interior and exterior photos, and makes notes of the properties condition. The appraiser also provides exterior photos and property value information on the most similar properties. Sometimes the demographics of the area are also included, for example, the climate, population, poverty level, crime rate, estimated per capita, median household income, etc. These factors can play a large role in determining property value. The size of the property determines how long the visit takes the appraiser and the fee for their services. Our appraisers are certified by the states they serve and are registered with the Appraisal Institute. Because we only provide loans to businesses or corporate entities, our appraisers cannot be SRA designated only, which means they only have expertise in residential property analysis and evaluation. The appraisers we work with are MAI designated (Member of the Appraisal Institute). The MAI designation is the highest achievement that is available to an appraiser and is earned through essentially double the requirements set forth by a general appraiser.

Riverdale chooses to order a BPO or a broker’s price opinion as well as an appraisal. Also known as a broker’s opinion of value (BOV). This is another tool to confirm and determine the property’s value. This report is less detailed and much briefer than an appraisal. While an appraiser provides all a properties details, a broker knows the current real estate market conditions. A commercial real estate broker or qualified realtor will provide these reports. Our brokers hold a broker’s license and are registered with the National Association of Real Estate Brokers and realtors with the National Association of Realtors. The BPO will include a suggested listing price and offer different values depending on the amount of time the property sits on the market. The report will also include similar properties in the area and how long they were on the market, plus what they sold for.

Riverdale uses both of these evaluations to make sure we get the most accurate estimate of your property’s value, which will ultimately determine the amount we will lend. As an asset-based lender, we offer you a non-traditional solution to your funding needs. Don’t let your credit or finances stand in the way of making a purchase, refinancing a mortgage, or improving your business.

Call Riverdale Funding today to see if you qualify for a real estate backed private money loan.