quote:

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Originally posted by coopercash

Over the past 2-3 months I have seen limited but welcome evidence that a number of commercial non-bank lenders are cautiously regaining their appetites for the RIGHT deal.

With regard to NEW commercial project construction, "State, zip code and location" are important keys. An independent Feasibility Study will be usually be requested on retail, office, hospitality and on Assisted Living projects as will an MAI Appraisal from a "Hallmark" provider.

Multi-family housing and student living projects are also of interest.

The game changer is that in today's environment the client needs to have at least 30% and sometimes as much as 40% of TOTAL PROJECT COST available in invest in their project. Mezz and equity "kickers" MAY be available for 5% of total cost.

Many developers are now having to "round up" private investors to come in with any equity deficiency and this has created a need for the developer to create a Private Placement Memorandum which in turn will be the subject of a Private Placement Offering.

One of my associates is a FL based SEC Registered Asset Management Company that can be commissioned to handle both the PPM and the PPO.

Success in commercial lending can be boiled down to three essential components: 1)A viable client; 2) A viable project or collateral; 3)As a broker/lo you need to have "control" over your client.

VIABLE CLIENT: In today's environment your client's personal credit history and ***et strength are vitally important. While a sub 600 mid FICO is not necessarily a major problem a lack of cash liquidity and reserves is a deal killer. In most cases, commercial lenders will be limiting their exposure to somewhere between 60% and 70% of project cost (if new construction or a development)and up to 75% LTV if a purchase or a refi.


VIABLE PROJECT/COLLATERAL: In the present uncertain economy ALL new "ground-up" projects whether a residential subdivision/master planned community, mixed use, commercial, retail, hospitality or resorts will be subject to intensive due diligence and our investment managers will be looking for a very solid Exit Strategy that is based on REALITY.

The prospects for lender support for sub-division and master planned community projects in 2009 will remain bleak until such time as the stringent home buyer mortgage lending guidelines are relaxed and certainly until consumers can regain sure-footed confidence that their jobs/incomes are not at immediate risk.

Once considered a "prime" sector... Senior LifeStyle Communities. The demand potential is there but a growing number of folks are unable to participate because they are unable to sell their present homes or are reconsidering their finances in the wake of major losses in the value of their stocks or 401K investments.

EXIT STRATEGY: This can be considered in one of three ways... 1)Sale of completed "units" (houses, offices, retail spaces etc)which will enable the client to fully pay-off the development/construction loan within an acceptable timeframe; 2) Leasing contracts or pre-lease L o Is for completed construction which will produce an income sufficient to meet all overhead costs and debt service plus an adequate margin; 3)Operating income in cases where the property will occupied by the client at completion as might be the case with a professional/medical center, or an automotive repair facility.

Multi-family projects (new development, purchase or refi of existing property) are evidencing strength given the fact that many victims of foreclosure will be seeking rental accommodation... in addition, to those folks who, 18+ months ago, would have been candidate for a sub-prime mortgage, are now resigning themselves to continue as renters unless they can qualify for a FHA or State Community HOusing Finance Program.

ENERGY related projects that make sense are also of interest provided that the fundamentals are solid and not based on "wishful thinking". In addition, clients need to understand that projects requiring DEBT financing must be backed by at least 20-25% cash invested by client.

In certain circumstances, UP TO 100% Project Financing can be provided for RENEWABLE ENERGY PRODUCTION and "Clean Tech" projects.

CONTROL OVER YOUR CLIENT: Without securing a commited relationship with your client your chances of achieving a successfully closed loan are dramatically reduced. YOU are the professional and you must be able to inspire and convince your client that YOU can secure their financing... ***uming of course that the client and their project is viable.

You need to secure a FEE AGREEMENT with your client BEFORE you start the search for funding. Your Fee needs to be reasonable because you will be seeking cooperation from the lender/investor in making your Fee Agreement a part of closing conditions. Believe me, if the lender is charging 1 - 3 Points you will NOT be able to charge your client 3, 4, or 5+ Pts and expect the lender to go along with that arrangement.

On a loan for $10-million or more be thinking in terms of 0.25% - 0.50% of loan amount!

Lenders do NOT like dealing with broker "daisy chains"! They will only communicate with their authorized "gatekeeper" who is the person ***igned to handle, review and present the initial intake information.

If your most appropriate source of financing is an Investment Bank, a Hedge Funder or a Hard Money Lender you will need to EDUCATE your client with regard to the need for them to pay DUE DILIGENCE fees to the investor.

Normal course of events is that if the investor expresses interest in the opportunity a conference call with the client will go in depth on the project. The investor may well be prepared to issue a provisional Term Sheet and a conditional L o I following that conference call. The L o I is 48-hours time-sensitive and requires that the client sign and return along with wiring their Due Diligence Fee.

Those Due Diligence fees cover the investor's costs for appraisal (or appraisal review), environmental and geologic reports, Title research, and in most cases travel costs because the investor will want to physically "kick the tires" and meet the client.

Those Due Diligence fees are NOT refundable to client if the investor declines the loan as a result of negative discoveries. In some cases the deal may be "saved" if the client agrees to changed loan terms.

Deals can also be considered in Mexico, Costa Rica, Panama, Belize, USVI, Dominican Republic and the Western Caribbean.

HARD MONEY APPRAISED VALUES: While HMLs will advertise lending "Up to 70% LTV" it is absolutely essential that you explain to your client that does NOT mean actual appraised fair market value! The appraisal will be "adjusted" by the HML underwriter to a price that the lender believes a buyer could be found within 90-120 days if the loan goes into foreclosure.

The HML will then base their loan on a percentage of that REDUCED value. Example: Property appraises at $1-million. "90-120 day" sales price 20% LESS = $800,000. 65% LTV = loan amount of $520,000.

I am available to review your deals and I will give you some insights as to which of our investors would have interest. If the client and the deal make sense, we'll get it done!

My contact information provided below.

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quote:

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Originally posted by ALBY

As somebody once said..."neither a borrower or lender be"... nothing good is happening anywhere is real estate these days and it doesn't look like it will improve for some time.

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quote:

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Originally posted by coopercash

The 2nd Quarter of 2009 indicated limited but welcome evidence that a number of commercial non-bank lenders are cautiously regaining their appetites for the RIGHT deal.

However, the impact of failed loan distress on Capmark Financial, one of the Nation's largest commercial lenders with a reported $2.2-BILLION of first Q '09 losses caused by borrowr defaults (2nd Q evidenced close to another $700-million of defaults)has already cautioned most lenders to exercise extreme caution in how they evaluate risk.

Only the best "quality" deals will be approved and commercial brokers would do well to take time to really evaluate the opportunities they are presented with BEFORE submitting to a lender. Do not provide your client, whether seeking to finance a purchase, obtain a refi or secure a commercial construction loan with an unrealistic "opinion" with regard to % LTV or % LTC... rates or points until you know the FACTS.

Today, "He who has the gold REALLY DOES R-U-L-E" as never before. Also, many clients still believe that an existing appraisal conducted in 2008 or early '09 will be accepted by a lender. WRONG! Most lenders want a current MAI Certified appraisal and, at best, MAY agree to having a 4-6 month old appraisal re-certified by the originating appraiser IF that Company is on their approved list.

In most metro markets, values established in 2008 will have fallen by between 20%-30%. Commercial income producing properties (office and retail) are mostly reflecting 10%-25% vacancy factors which of course means that ability to achieve the debt to income ratios
required by lenders is impacted.

"I am looking for a non-recourse loan!" Forget it. 99% of commercial lenders will be requiring personal guarantors on their loans.

"I want bank terms on my loan!" Forget it. Educate your client about today's realities which means Prime plus 3+ on EXCELLENT deals and 2+ lender points.

"I won't pay any front fees!" Forget it. 99% of commercial lenders will require a "lock fee" of between 0.15% and 0.25% payable when the client accepts the LOI.

"I need 90% LTV!" Forget it. 60% - 75% LTV is the new reality. On construction-to-mini perms think in terms of 60%-65% of cost. Maybe the possibility of a 5% "equity / mez" kicker which will cost the client around 18% + 4-5 Pts.

With regard to NEW commercial project construction, "State, zip code and location" are important keys. An independent Feasibility Study will be usually be requested on retail, office, hospitality and on Assisted Living projects as will an MAI Appraisal from a "Hallmark" provider.

Multi-family housing and student living projects are also of interest.

The game changer is that in today's environment the client needs to have at least 30% and sometimes as much as 40% of TOTAL PROJECT COST available in invest in their project. Mezz and equity "kickers" MAY be available for 5% of total cost.

Many developers are now having to "round up" private investors to come in with any equity deficiency and this has created a need for the developer to create a Private Placement Memorandum which in turn will be the subject of a Private Placement Offering.

One of my associates is a FL based SEC Registered Asset Management Company that can be commissioned to handle both the PPM and the PPO.

Success in commercial lending can be boiled down to three essential components: 1)A viable client; 2) A viable project or collateral; 3)As a broker/lo you need to have "control" over your client.

VIABLE CLIENT: In today's environment your client's personal credit history and ***et strength are vitally important. While a sub 600 mid FICO is not necessarily a major problem a lack of cash liquidity and reserves is a deal killer. In most cases, commercial lenders will be limiting their exposure to somewhere between 60% and 70% of project cost (if new construction or a development)and up to 75% LTV if a purchase or a refi.


VIABLE PROJECT/COLLATERAL: In the present uncertain economy ALL new "ground-up" projects whether a residential subdivision/master planned community, mixed use, commercial, retail, hospitality or resorts will be subject to intensive due diligence and our investment managers will be looking for a very solid Exit Strategy that is based on REALITY.

The prospects for lender support for sub-division and master planned community projects in 2009 will remain bleak until such time as the stringent home buyer mortgage lending guidelines are relaxed and certainly until consumers can regain sure-footed confidence that their jobs/incomes are not at immediate risk.

Once considered a "prime" sector... Senior LifeStyle Communities. The demand potential is there but a growing number of folks are unable to participate because they are unable to sell their present homes or are reconsidering their finances in the wake of major losses in the value of their stocks or 401K investments.

EXIT STRATEGY: This can be considered in one of three ways... 1)Sale of completed "units" (houses, offices, retail spaces etc)which will enable the client to fully pay-off the development/construction loan within an acceptable timeframe; 2) Leasing contracts or pre-lease L o Is for completed construction which will produce an income sufficient to meet all overhead costs and debt service plus an adequate margin; 3)Operating income in cases where the property will occupied by the client at completion as might be the case with a professional/medical center, or an automotive repair facility.

Multi-family projects (new development, purchase or refi of existing property) are evidencing strength given the fact that many victims of foreclosure will be seeking rental accommodation... in addition, to those folks who, 18+ months ago, would have been candidate for a sub-prime mortgage, are now resigning themselves to continue as renters unless they can qualify for a FHA or State Community HOusing Finance Program.

ENERGY related projects that make sense are also of interest provided that the fundamentals are solid and not based on "wishful thinking". In addition, clients need to understand that projects requiring DEBT financing must be backed by at least 20-25% cash invested by client.

In certain circumstances, UP TO 100% Project Financing can be provided for RENEWABLE ENERGY PRODUCTION and "Clean Tech" projects.

CONTROL OVER YOUR CLIENT: Without securing a commited relationship with your client your chances of achieving a successfully closed loan are dramatically reduced. YOU are the professional and you must be able to inspire and convince your client that YOU can secure their financing... ***uming of course that the client and their project is viable.

You need to secure a FEE AGREEMENT with your client BEFORE you start the search for funding. Your Fee needs to be reasonable because you will be seeking cooperation from the lender/investor in making your Fee Agreement a part of closing conditions. Believe me, if the lender is charging 1 - 3 Points you will NOT be able to charge your client 3, 4, or 5+ Pts and expect the lender to go along with that arrangement.

On a loan for $10-million or more be thinking in terms of 0.25% - 0.50% of loan amount!

Lenders do NOT like dealing with broker "daisy chains"! They will only communicate with their authorized "gatekeeper" who is the person ***igned to handle, review and present the initial intake information.

If your most appropriate source of financing is an Investment Bank, a Hedge Funder or a Hard Money Lender you will need to EDUCATE your client with regard to the need for them to pay DUE DILIGENCE fees to the investor.

Normal course of events is that if the investor expresses interest in the opportunity a conference call with the client will go in depth on the project. The investor may well be prepared to issue a provisional Term Sheet and a conditional L o I following that conference call. The L o I is 48-hours time-sensitive and requires that the client sign and return along with wiring their Due Diligence Fee.

Those Due Diligence fees cover the investor's costs for appraisal (or appraisal review), environmental and geologic reports, Title research, and in most cases travel costs because the investor will want to physically "kick the tires" and meet the client.

Those Due Diligence fees are NOT refundable to client if the investor declines the loan as a result of negative discoveries. In some cases the deal may be "saved" if the client agrees to changed loan terms.

Deals can also be considered in Mexico, Costa Rica, Panama, Belize, USVI, Dominican Republic and the Western Caribbean.

HARD MONEY APPRAISED VALUES: While HMLs will advertise lending "Up to 70% LTV" it is absolutely essential that you explain to your client that does NOT mean actual appraised fair market value! The appraisal will be "adjusted" by the HML underwriter to a price that the lender believes a buyer could be found within 90-120 days if the loan goes into foreclosure.

The HML will then base their loan on a percentage of that REDUCED value. Example: Property appraises at $1-million. "90-120 day" sales price 20% LESS = $800,000. 65% LTV = loan amount of $520,000.

I am available to review your deals and I will give you some insights as to which of our investors would have interest. If the client and the deal make sense, we'll get it done!

My contact information provided below.

---

quote:

---

Originally posted by coopercash

The 2nd Quarter of 2009 indicated limited but welcome evidence that a number of commercial non-bank lenders are cautiously regaining their appetites for the RIGHT deal.

However, the impact of failed loan distress on Capmark Financial, one of the Nation's largest commercial lenders with a reported $2.2-BILLION of first Q '09 losses caused by borrowr defaults (2nd Q evidenced close to another $700-million of defaults)has already cautioned most lenders to exercise extreme caution in how they evaluate risk.

Only the best "quality" deals will be approved and commercial brokers would do well to take time to really evaluate the opportunities they are presented with BEFORE submitting to a lender. Do not provide your client, whether seeking to finance a purchase, obtain a refi or secure a commercial construction loan with an unrealistic "opinion" with regard to % LTV or % LTC... rates or points until you know the FACTS.

Today, "He who has the gold REALLY DOES R-U-L-E" as never before. Also, many clients still believe that an existing appraisal conducted in 2008 or early '09 will be accepted by a lender. WRONG! Most lenders want a current MAI Certified appraisal and, at best, MAY agree to having a 4-6 month old appraisal re-certified by the originating appraiser IF that Company is on their approved list.

In most metro markets, values established in 2008 will have fallen by between 20%-30%. Commercial income producing properties (office and retail) are mostly reflecting 10%-25% vacancy factors which of course means that ability to achieve the debt to income ratios
required by lenders is impacted.

"I am looking for a non-recourse loan!" Forget it. 99% of commercial lenders will be requiring personal guarantors on their loans.

"I want bank terms on my loan!" Forget it. Educate your client about today's realities which means Prime plus 3+ on EXCELLENT deals and 2+ lender points.

"I won't pay any front fees!" Forget it. 99% of commercial lenders will require a "lock fee" of between 0.15% and 0.25% payable when the client accepts the LOI.

"I need 90% LTV!" Forget it. 60% - 75% LTV is the new reality. On construction-to-mini perms think in terms of 60%-65% of cost. Maybe the possibility of a 5% "equity / mez" kicker which will cost the client around 18% + 4-5 Pts.

With regard to NEW commercial project construction, "State, zip code and location" are important keys. An independent Feasibility Study will be usually be requested on retail, office, hospitality and on Assisted Living projects as will an MAI Appraisal from a "Hallmark" provider.

Multi-family housing and student living projects are also of interest.

The game changer is that in today's environment the client needs to have at least 30% and sometimes as much as 40% of TOTAL PROJECT COST available in invest in their project. Mezz and equity "kickers" MAY be available for 5% of total cost.

Many developers are now having to "round up" private investors to come in with any equity deficiency and this has created a need for the developer to create a Private Placement Memorandum which in turn will be the subject of a Private Placement Offering.

One of my associates is a FL based SEC Registered Asset Management Company that can be commissioned to handle both the PPM and the PPO.

Success in commercial lending can be boiled down to three essential components: 1)A viable client; 2) A viable project or collateral; 3)As a broker/lo you need to have "control" over your client.

VIABLE CLIENT: In today's environment your client's personal credit history and ***et strength are vitally important. While a sub 600 mid FICO is not necessarily a major problem a lack of cash liquidity and reserves is a deal killer. In most cases, commercial lenders will be limiting their exposure to somewhere between 60% and 70% of project cost (if new construction or a development)and up to 75% LTV if a purchase or a refi.


VIABLE PROJECT/COLLATERAL: In the present uncertain economy ALL new "ground-up" projects whether a residential subdivision/master planned community, mixed use, commercial, retail, hospitality or resorts will be subject to intensive due diligence and our investment managers will be looking for a very solid Exit Strategy that is based on REALITY.

The prospects for lender support for sub-division and master planned community projects in 2009 will remain bleak until such time as the stringent home buyer mortgage lending guidelines are relaxed and certainly until consumers can regain sure-footed confidence that their jobs/incomes are not at immediate risk.

Once considered a "prime" sector... Senior LifeStyle Communities. The demand potential is there but a growing number of folks are unable to participate because they are unable to sell their present homes or are reconsidering their finances in the wake of major losses in the value of their stocks or 401K investments.

EXIT STRATEGY: This can be considered in one of three ways... 1)Sale of completed "units" (houses, offices, retail spaces etc)which will enable the client to fully pay-off the development/construction loan within an acceptable timeframe; 2) Leasing contracts or pre-lease L o Is for completed construction which will produce an income sufficient to meet all overhead costs and debt service plus an adequate margin; 3)Operating income in cases where the property will occupied by the client at completion as might be the case with a professional/medical center, or an automotive repair facility.

Multi-family projects (new development, purchase or refi of existing property) are evidencing strength given the fact that many victims of foreclosure will be seeking rental accommodation... in addition, to those folks who, 18+ months ago, would have been candidate for a sub-prime mortgage, are now resigning themselves to continue as renters unless they can qualify for a FHA or State Community HOusing Finance Program.

ENERGY related projects that make sense are also of interest provided that the fundamentals are solid and not based on "wishful thinking". In addition, clients need to understand that projects requiring DEBT financing must be backed by at least 20-25% cash invested by client.

In certain circumstances, UP TO 100% Project Financing can be provided for RENEWABLE ENERGY PRODUCTION and "Clean Tech" projects.

CONTROL OVER YOUR CLIENT: Without securing a commited relationship with your client your chances of achieving a successfully closed loan are dramatically reduced. YOU are the professional and you must be able to inspire and convince your client that YOU can secure their financing... ***uming of course that the client and their project is viable.

You need to secure a FEE AGREEMENT with your client BEFORE you start the search for funding. Your Fee needs to be reasonable because you will be seeking cooperation from the lender/investor in making your Fee Agreement a part of closing conditions. Believe me, if the lender is charging 1 - 3 Points you will NOT be able to charge your client 3, 4, or 5+ Pts and expect the lender to go along with that arrangement.

On a loan for $10-million or more be thinking in terms of 0.25% - 0.50% of loan amount!

Lenders do NOT like dealing with broker "daisy chains"! They will only communicate with their authorized "gatekeeper" who is the person ***igned to handle, review and present the initial intake information.

If your most appropriate source of financing is an Investment Bank, a Hedge Funder or a Hard Money Lender you will need to EDUCATE your client with regard to the need for them to pay DUE DILIGENCE fees to the investor.

Normal course of events is that if the investor expresses interest in the opportunity a conference call with the client will go in depth on the project. The investor may well be prepared to issue a provisional Term Sheet and a conditional L o I following that conference call. The L o I is 48-hours time-sensitive and requires that the client sign and return along with wiring their Due Diligence Fee.

Those Due Diligence fees cover the investor's costs for appraisal (or appraisal review), environmental and geologic reports, Title research, and in most cases travel costs because the investor will want to physically "kick the tires" and meet the client.

Those Due Diligence fees are NOT refundable to client if the investor declines the loan as a result of negative discoveries. In some cases the deal may be "saved" if the client agrees to changed loan terms.

Deals can also be considered in Mexico, Costa Rica, Panama, Belize, USVI, Dominican Republic and the Western Caribbean.

HARD MONEY APPRAISED VALUES: While HMLs will advertise lending "Up to 70% LTV" it is absolutely essential that you explain to your client that does NOT mean actual appraised fair market value! The appraisal will be "adjusted" by the HML underwriter to a price that the lender believes a buyer could be found within 90-120 days if the loan goes into foreclosure.

The HML will then base their loan on a percentage of that REDUCED value. Example: Property appraises at $1-million. "90-120 day" sales price 20% LESS = $800,000. 65% LTV = loan amount of $520,000.

I am available to review your deals and I will give you some insights as to which of our investors would have interest. If the client and the deal make sense, we'll get it done!

My contact information provided below.

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