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ffstrategies
20 Posts |
 Posted - 03/19/2008 : 3:02:44 PM
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I have 3 deals that I am working on and need financing for. (Here's the kicker!) Each of the 3 clients wants a 'no up-front fee' loan! Hard money or conventional doesn't matter, as long as there are no up-front fees. Here are the details:
Deal 1: The client is looking for ~$20M for this development. The property consists of 273 acres of land with existing improvements including water and electricity. The property is going to be developed into a senior housing community. The purpose of financing will be for paying off the existing lien, buying out partners, completing final entitlements and operating capital for the development process. The current conservative value of the property is ~$42,000,000, with an improved value of ~$64,000,000. There is an existing 1st lien in the amount of $3,475,000. More information is available for your review.
Deal 2: This client is looking for an equity investor to put up ~$6M for this project, for a share of 50% of the project. If an equity partnership/investment is not available, they will consider a loan. Project is 92 acres, entitled MXD-1 COMMERCIAL PUD. Conceptual site plan is in the package and includes 20 acres multiple family, 14 acres commercial retail, 12 acres hospitality, 26 acres office park, and [4] one-acre pad sites. Can provide phase one environments, appraisal, conceptual site plan, zoning and annexation approval regarding the 92 acres. This project has up to $250 million of vertical building potential or $15 million in land sales.
Deal 3: The client wants to purchase some land to develop into 525 senior condos. The land is valued at close to $65M. The client needs a loan for ~$21M to include closing costs and fees.
More information is available for lenders to review/discuss.
Please no brokers-I really want to hear from lenders only!
I had these deals placed and LOIs issued and when I presented them they were shot down because of the up-front due diligence fees. 1 Client was burned by a comapny who took the money and ran. He passed the word on to the other 2 clients and now none of them will deal with lenders who charge upfront fees! |
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djmarvin
190 Posts |
Posted - 03/20/2008 : 10:53:07 AM
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Raw Land and Improved Land Financing
This is a true Asset Based Private Portfolio Lender.
Here are the basic guidelines:
• Private Portfolio Lender
• Loans not sold on Secondary Market
• Raw Land to 55% LTV
• Improved Upon Land to 70% LTV
• LTV Based Upon As-Is Fair Market Value, not "Fire Sale Value".
• Closing in 7-15 Business Days
• No Credit Check Required
• Approvals based primarily on the equity in the property.
• All 50 states
• Investor Points 3-6%
• Broker and Intermediates can charge the same Points charged by the Investor.
• Interest Rate 12%
• Max Terms of 20 Years
• $30MM Max Loan Amount, No Minimum Loan Amount
• Can be used for Construction Financing, Existing Construction, and any other Real Estate Backed transaction other than a pure "Land Deal" as well!
• Can structure Interest Only Payments
• Interest Reserve account up to 12-18 months allowed.
• All points and fees can be paid out of loan proceeds (loan amount not to exceed max LTV's)
• Exit strategy is required, but since this is Private Money we are flexible on the type of exit strategy.
• Lender Advance Fees are: $1500 Legal Fees for Attorney to draw up the Loan Commitment Letter (due prior to issuance of Letter of Commitment), $30K Due Diligence (Covers All Expenses) (due at acceptance of Final Loan Commitment by Investor).
The investor is a personal friend of ours. |
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mvitasa
63 Posts |
Posted - 03/20/2008 : 10:57:05 AM
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hello,
please email me at starliteprocessing.com i will forward you a client info sheet. normall up front fee is $3500, will see if that can be worked around. |
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Mnlender
40 Posts |
Posted - 03/20/2008 : 11:11:54 AM
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| Here a reality check. No real lender does not offer a no up front fee, there is money always needed for Due Diligence. |
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mortgagemessiah
8003 Posts |
Posted - 03/20/2008 : 11:24:26 AM
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| I agree. No lender is going to do a A&D deal without any upfront fees, especially with these market conditions. |
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lexycris
35 Posts |
Posted - 03/20/2008 : 11:25:03 AM
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CAll me on theses scenarios
631 255 2383
Susana |
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privatelender4u
173 Posts |
Posted - 03/20/2008 : 11:47:27 AM
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| Call me or email the location of the properties. We are direct lender and should be able to help. If the properties are in MD/?VA/DC & FL. please email the detail to privatelender4u@gmail.com. Thank you. |
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ffstrategies
20 Posts |
Posted - 03/20/2008 : 2:29:41 PM
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quote:
Originally posted by privatelender4u
Call me or email the location of the properties. We are direct lender and should be able to help. If the properties are in MD/?VA/DC & FL. please email the detail to privatelender4u@gmail.com. Thank you.
Sorry but the deals are in Tx, NV and CA. Thanks anyway. |
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ffstrategies
20 Posts |
Posted - 03/20/2008 : 2:32:17 PM
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quote:
Originally posted by Mnlender
Here a reality check. No real lender does not offer a no up front fee, there is money always needed for Due Diligence.
I understand that there are certain 3rd party reports that need to be paid upfront like appraisal and title and such. But it doesn't take $30,000 to say if you are going to fund a loan or not. And most of the time the fee is non -refundable so (just like it has already happened) a lender can charge what they want upfront and then take the money and run. This is what i am trying to avoid. |
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EMScommercial
5138 Posts |
Posted - 03/20/2008 : 2:48:04 PM
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just some advice.... i know you won't use fellow brokers for your deals and that's your choice.....
no upfront costs and commercial loans..... they don't co-exist.... (for the most part).....
good luck and i wish you well....
have a nice day.... |
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djmarvin
190 Posts |
Posted - 03/20/2008 : 3:06:24 PM
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quote:
Originally posted by ffstrategies
quote:
Originally posted by Mnlender
Here a reality check. No real lender does not offer a no up front fee, there is money always needed for Due Diligence.
I understand that there are certain 3rd party reports that need to be paid upfront like appraisal and title and such. But it doesn't take $30,000 to say if you are going to fund a loan or not. And most of the time the fee is non -refundable so (just like it has already happened) a lender can charge what they want upfront and then take the money and run. This is what i am trying to avoid.
The up front money has only a small relation to the fees incurred. The main reason for up front money is to get commitment from the borrower. There are so many shoppers, so many non-real clients, that this weeds them all out. 30K is minimal from what else you find out there. All in all if the client cannot pay the fee then they need to work with a bank. Chances are the bank won't do there deal. So then what ends up happening is that the deal goes south and the developer starts waiting tables. |
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coopercash
2714 Posts |
Posted - 03/21/2008 : 04:31:01 AM
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Tynisha.... hopefully the responses that have been provided by Douglas, Chris and Steve (all long time contributors to B/O as well as being very experienced commercial loan strategists) has convinced you that your clients have two options: 1: Wait out the present "development depression" (= banks and conventional lenders backing way off, and out of, these opportunities) ; 2: Grit their teeth and face the fact that with private and portfolio investors and Hedge Funders THERE WILL BE FEES PAYABLE FOR DUE DILIGENCE.
Even when such fees are paid there is NEVER any assurance that the loan will be approved and funded because until "every stone is turned" with regard to the project AND the applicant the investor cannot make the appropriate decision.
Tynisha, in the residential context would YOU be willing to pay for the appraisal and the home inspection report for your home buyers? If not, WHY NOT? That's what you and/or your clients are expecting from the commercial lending community only on a much larger and more complex scale.
Another tip... you MUST gain complete control over your client and educate/guide their decision making process. If they are not willing or able to meet the requirements of the FEW investors still in the "game" then you may as well wish them well and focus on deals that CAN be done.
Final point...do not fall into the trap of "shopping" these (or any deal of similar size). Very quickly the opportunitiy will cross the SAME investors desk from multiple sources at which point they will "trash" the opportunity.
Douglas, Chris, Steve of myself are well qualified to work with you in structuring these opportunities and present to our respoective investor groups. Take your pick and good luck! |
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lenderben
1073 Posts |
Posted - 03/21/2008 : 3:56:55 PM
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I concur with my learned colleagues, compared to most lenders our application fee is minimal but always has to be charged. The borrower will have an executed commitment in their hand before the fee goes hard.
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djmarvin
190 Posts |
Posted - 03/21/2008 : 5:42:31 PM
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quote:
Originally posted by coopercash
Tynisha.... hopefully the responses that have been provided by Douglas, Chris and Steve (all long time contributors to B/O as well as being very experienced commercial loan strategists) has convinced you that your clients have two options: 1: Wait out the present "development depression" (= banks and conventional lenders backing way off, and out of, these opportunities) ; 2: Grit their teeth and face the fact that with private and portfolio investors and Hedge Funders THERE WILL BE FEES PAYABLE FOR DUE DILIGENCE.
Even when such fees are paid there is NEVER any assurance that the loan will be approved and funded because until "every stone is turned" with regard to the project AND the applicant the investor cannot make the appropriate decision.
Tynisha, in the residential context would YOU be willing to pay for the appraisal and the home inspection report for your home buyers? If not, WHY NOT? That's what you and/or your clients are expecting from the commercial lending community only on a much larger and more complex scale.
Another tip... you MUST gain complete control over your client and educate/guide their decision making process. If they are not willing or able to meet the requirements of the FEW investors still in the "game" then you may as well wish them well and focus on deals that CAN be done.
Final point...do not fall into the trap of "shopping" these (or any deal of similar size). Very quickly the opportunitiy will cross the SAME investors desk from multiple sources at which point they will "trash" the opportunity.
Douglas, Chris, Steve of myself are well qualified to work with you in structuring these opportunities and present to our respoective investor groups. Take your pick and good luck!
Very to the point. We need more postings like this on Outpost. |
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ffstrategies
20 Posts |
Posted - 03/24/2008 : 4:29:40 PM
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I thank you all for your help and advice. For all those who've requested more information, I will be responding to you as soon as I can. I have residential deals that are driving me bananas right now because the lender base is so small. Much success to everyone!
Loan long and prosper! |
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ffstrategies
20 Posts |
Posted - 03/24/2008 : 4:32:32 PM
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Very wise! The bad part is I know a lot of what you are saying but I was just hoping on a wing and a prayer for a miracle!
quote:
Originally posted by coopercash
Tynisha.... hopefully the responses that have been provided by Douglas, Chris and Steve (all long time contributors to B/O as well as being very experienced commercial loan strategists) has convinced you that your clients have two options: 1: Wait out the present "development depression" (= banks and conventional lenders backing way off, and out of, these opportunities) ; 2: Grit their teeth and face the fact that with private and portfolio investors and Hedge Funders THERE WILL BE FEES PAYABLE FOR DUE DILIGENCE.
Even when such fees are paid there is NEVER any assurance that the loan will be approved and funded because until "every stone is turned" with regard to the project AND the applicant the investor cannot make the appropriate decision.
Tynisha, in the residential context would YOU be willing to pay for the appraisal and the home inspection report for your home buyers? If not, WHY NOT? That's what you and/or your clients are expecting from the commercial lending community only on a much larger and more complex scale.
Another tip... you MUST gain complete control over your client and educate/guide their decision making process. If they are not willing or able to meet the requirements of the FEW investors still in the "game" then you may as well wish them well and focus on deals that CAN be done.
Final point...do not fall into the trap of "shopping" these (or any deal of similar size). Very quickly the opportunitiy will cross the SAME investors desk from multiple sources at which point they will "trash" the opportunity.
Douglas, Chris, Steve of myself are well qualified to work with you in structuring these opportunities and present to our respoective investor groups. Take your pick and good luck!
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