(SB) Financing is tough to find in Missouri real estate market

My family's real estate business is feeling the pinch of the lackluster housing market as we have struggled to secure project funding. It may be a buyer's market, but that seems true only for those who can pay cash for property.

My husband and I own ELS Properties, a small, 3-year-old real estate business in Union, Mo., that buys and manages rental properties. Although we only have two employees on our payroll, ELS owns a breadth of properties and is always looking for more.

We have been doing business with The United Bank of Union, a local bank that offers construction loans. These loans don't require a down payment on new projects, which is ideal for a start-up business such as ours. However, the bank recently told us we had borrowed the maximum allowed by FDIC regulations. It also stopped offering construction loans because so many people in this economy have defaulted on them.

So my husband searched for new funding. He hoped to move a $275,000 commercial building loan to a new bank, thus freeing up funding with United Bank. Representatives from National City, Legends Bank and Heritage Bank turned him down, saying our loan appeared to be too risky.

The owners of a great building recently accepted a low offer from our company. But because The United Bank of Union isn't doing construction loans, and we didn't have the down payment for a $300,000 loan, we had to look for an investor. It is unlikely we'll find more people willing to invest in real estate right now, though. And when an investor does sign on, that only strips money from our profit.

My husband is still looking at other banks, but if he can't find one, we may sell some of our properties. I doubt we would receive a decent price on anything, though, with the current real estate market.