7 Unexpected Things you Might Not Know About Life Company Lenders

Life Company lenders are interested in more than just squeaky-clean deals!

Here are 7 things you probably didn’t know about Life Company lenders

1. Life Insurance Companies make loans. All the time.
In hot markets; in downturns. In low cap-rate environments; in high cap-rate environments. In January; in December. Life companies have monthly cash flow (from Uncle Ned’s premiums) and a future liability (when Uncle Ned becomes Uncle dead). Therefore, life companies often act like a finance version of Dory; “Just keep lending..”

2. Life Company Lenders make small loans, too.
Most real estate investors know the life companies make $150m loans to large institutions. Did you know they also make $1.5m loans to Uncle Ned as well?

3. Life Insurance Companies like new investors.
Of course, they’d like you to have some amount of experience. But you don’t have to have your name on a bunch of buildings to get them to give you lots of money, and since they love new relationships they’d sure like to meet you also.

4. Life Company Lenders like old and ugly properties, too.
Sure, they like the prettiest belle at the ball like everyone else and will do anything to beat the competition and win her affection. But they’ll also court those with “great personalities,” as well. Try them

5. Life Insurance Companies love long-term loans.
This makes sense right? Banks like short term because they have deposits. Life Company Lenders like long term because they have whole life policies. “Care for a 20-year fixed, good sir?”

6. Life Company Lenders give out cheap rates and flexible prepayment premiums.
Yep, they are often the cheapest and best lenders for the deal, and although they’d love to keep you as their customer forever, they can give you ways to pay them back early if you want, like declining prepay premiums.

7. Multifamily and Retail and Office (oh my…) Warehouse and Flex and Mobile Home Parks (Oh My…) Gas Stations and Self-Storage and Senior Care (OH MY!!)
Do they love large Multifamily? Of course! But they also like many others just as well and may even have a specific hunger for one or more of these often-forgotten asset types.

So, what did we learn? 

Life Companies make loans, and do it pretty well. If you don’t have a commercial mortgage banker on your side, maybe you should think about getting one.