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Blackbear
7 Posts |
 Posted - 06/16/2009 : 10:02:40 AM
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| I have a loan I am working on through a broker, they (the lender) is requesting a $7,000 DD fee for a $33 million commercial loan. This is not due until after the pre-qual letter and given the size of the loan I didnt know if it was typical. I am trying to get more information on the lender but I am told it is a group of private investors from overseas, I am skeptical but I cant find any bad (or good) information on the mortgage broker or anyone else. They did send me a list of deals completed however there isnt any way of verifying those. I am working on setting up a conference call so I can get some more answers before moving forward. |
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Quicksilver
5940 Posts |
Posted - 06/16/2009 : 10:09:29 AM
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| If they can't prove transactions that can be verified I wouldn't bother, but it's up to you/borrower if they want to take that risk. What is the 7k for, does it break down uses? Sounds more like an application fee as depending on the type of deal the appraisal alone could be quite more then that, plus travel cost if they are flying in to inpsect themselves, 3rd party etc. |
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cosh400
19 Posts |
Posted - 06/16/2009 : 10:48:27 AM
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| you can tell us who the lender is and see if anyone has dealt with them on here. or you can take the risk of dragging yourself into a time sucking vortex of B.S. which won't do either of you any good. FYI: "Private investors from overseas" sounds kind of sketchy to me unless we are talking about institutional quality Borrowers or Real Estate. I have heard of money coming overseas as equity in large deals with big returns but not for a run of the mill commercial loan. |
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shakeytime
73 Posts |
Posted - 06/16/2009 : 11:59:03 AM
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Appraisal, Survey, Site Inspection, Mail Fees, Legal, Environmental, Processing and Underwriting all cost money...make sure that's whet it is going to.
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Blackbear
7 Posts |
Posted - 06/16/2009 : 12:35:12 PM
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| I am working on getting more information on the lender. The broker is a lady named Mary Danko out of Littleton Colorado (Cruise Investments/Choices...A Mortgage Company). It is for a more equity/hard money kind of loan so the rates are up around 12%. It is for a portfolio of commercial real estate properties. My thought was that if they are trying to scam me then they probably would have gone for more money given the size of the deal. |
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Blackbear
7 Posts |
Posted - 06/16/2009 : 12:36:19 PM
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| please forgive the poor wording in the previous post, I really can speak English. |
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cosh400
19 Posts |
Posted - 06/16/2009 : 1:51:30 PM
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| $7k for due diligence might cover an appraisal but not much else. i agree if they were trying to scam you like Summit Financial Investment Group they would ask for more money. They would have to scam a lot of people to make a living that way. |
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Quicksilver
5940 Posts |
Posted - 06/17/2009 : 08:25:33 AM
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| Well what can happen with quite a few groups, that 7K may end up being really an app fee, then before they issue an initial interest letter may ask for another fee which could easily end up being 15-25K+ etc. Gotta be careful, personally if a group can't prove anything to me that can be verified then I don't bother even if they may be legit, with some of my clients all it would take is one deal to go wrong like that with a scammer and ruin your rep. Also see how the contacts are drawn up, as far as reimbursement of fee's or portion etc. |
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rmbhoops
25 Posts |
Posted - 06/18/2009 : 08:28:46 AM
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If you give them the fee, say good-bye to it.
Send it to me, I'm a nice guy! Just kidding.
DO not ever send up-front fees.
You'll find Brokers telling people they are the actual lender, when in fact they are nothing but crooks.
NO UP-FRONT FEES. EVER! |
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shakeytime
73 Posts |
Posted - 06/18/2009 : 09:25:14 AM
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rmbhoops obviously has been screwed over or is inexperienced....Up front fees or costs are part of the biz. The real question is whether they are going into someones pocket or are they being used to close the loan or even both.
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rmbhoops
25 Posts |
Posted - 06/22/2009 : 09:44:07 AM
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[quote]Originally posted by shakeytime
rmbhoops obviously has been screwed over or is inexperienced....Up front fees or costs are part of the biz. The real question is whether they are going into someones pocket or are they being used to close the loan or even both.
We have been in Business since 1989, haven't been screwed over, but have had many clients come to me after they have been screwed over. We do not take upfront fees, Except from past clients we have performed for and they know we will perform for them again.
Let me reiterate, do not give Brokers up-front fees and be very careful about giving up-front fees to Lenders. Make sure they have a History of performance.
Yes, up-front fees are a part of the Business, with a Legitimate Business (Lender) - Brokers don't count. Period!
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Commercial_Hitma
98 Posts |
Posted - 06/22/2009 : 6:37:44 PM
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quote:
Originally posted by rmbhoops
If you give them the fee, say good-bye to it.
Send it to me, I'm a nice guy! Just kidding.
DO not ever send up-front fees.
You'll find Brokers telling people they are the actual lender, when in fact they are nothing but crooks.
NO UP-FRONT FEES. EVER!
Ditto and I agree with Chris Cheney as well... |
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shakeytime
73 Posts |
Posted - 06/25/2009 : 11:48:30 AM
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fees vs cost's
what are they actually?
I am working on a HUD loan and it requires about $40K in upfront cost for $2.5mm.... |
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Quicksilver
5940 Posts |
Posted - 06/26/2009 : 08:27:38 AM
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quote:
Originally posted by shakeytime
fees vs cost's
what are they actually?
I am working on a HUD loan and it requires about $40K in upfront cost for $2.5mm....
HUD Multifam? yeah they can be quite expensive especially when you get to larger amounts 5, 10m+ |
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Flash1966
1 Posts |
Posted - 07/02/2009 : 3:07:47 PM
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| If you are thinking of doing business with Mary or Jeff Danko of Cruise Investments or East West Masonry I will be happy to provide you with information and documentation as to why you should not. |
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integrity11
57 Posts |
Posted - 07/03/2009 : 6:06:58 PM
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| Sounds like someone is living off committment fees. I determine the validity of their claim based on their LOI. Clauses like a "right to advertise the loan" "right to sell the loan" "right to assign the LOI" etc. Things like that tells you a lot. If they want fees for an appraisal, tell them you want the borrower to pay for those things COD. Tell them you'll create an escrow account for the costs, but will release them when needed. Make sure they don't have line items like "packaging and processing" or "legal" those types of line items can cost $500 or $5000 very easily. It is unfortunate, but it's the business, you just have to be as careful as possible. Based on what you've stated, I wouldn't give them a commitment fee. Also, FYI, our fund doesn't require any commitment fees ever. We decide in a day if we want the loan and immediately go to docs, but we do bridge loans. You may try the larger funds that you know are closing loans like Capmark and other similar lenders. |
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shakeytime
73 Posts |
Posted - 07/04/2009 : 05:52:21 AM
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| Citi has that verbiage you mentioned and I don't think they are living off of fees. Great ad by the way! |
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frank drigotas j
3871 Posts |
Posted - 07/05/2009 : 7:04:24 PM
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I hate to be so obvious, but here is a simple rule:
know your co broker and know the lender...very, very well.
Never have YOUR customer send money to someone YOU do not know and trust thru experience.
dollar |
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champakstmtn
19 Posts |
Posted - 07/05/2009 : 8:25:52 PM
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I have just joined recently --few days ago--
But I ahve done commercial loans sicne 1998 --
Few responses amke sense. $7000 is just for
Due Deligence-- for lender to review --preliminary
data to see if they have any ineterest... must get
some thing in writing..
Why go overseas--- we have many Equity / JV lenders
in USA. Overseas lenders ..go for Bank Guarantee
or other type instruments.
12 % For Equity LOan is good ..at least do not share
part of project or profit.. I have seen upto 25 %
equity or 15 % to 18% return --some times back end fee
called exit fees..
After Due Deligence, Ledner will issue a Letter of Approval
and then ask for third part reports - usually1 5 to 2 % of
loan amount --similar to HUD / DUS ...
For this size loan--I like to look at some more details of
project ..types of properties, cash flow projections etc.
Please contact me via email.. champakstmtn@bellsouth.net
Champak C Shah
RIPA Financial Services, Inc
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Blackbear
7 Posts |
Posted - 07/07/2009 : 07:31:23 AM
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| Just an FYI, we dropped the deal with this "Lender". It is hard to believe their are so many people out there who attempt to make money through proclaiming to be lenders or have direct relationships with lenders and charging upfront fees with no hope of ever closing the deal. If you arent going to be upfront with who the lender is when you are asking me to send money then dont bother asking for the money. |
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wealthyonetwo
2 Posts |
Posted - 07/16/2009 : 1:21:05 PM
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quote:
Originally posted by Blackbear
Just an FYI, we dropped the deal with this "Lender". It is hard to believe their are so many people out there who attempt to make money through proclaiming to be lenders or have direct relationships with lenders and charging upfront fees with no hope of ever closing the deal. If you arent going to be upfront with who the lender is when you are asking me to send money then dont bother asking for the money.
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wealthyonetwo
2 Posts |
Posted - 07/16/2009 : 1:24:02 PM
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| I have done several loans with Mary Danko over the past year, all hard money and I have purchased many properties over the years and all lenders charge due diligence fees period, some require due diligence plus make you pay for appraisal on top of that. Anyone can contact me for reference approvedbykc@yahoo.com |
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shakeytime
73 Posts |
Posted - 07/16/2009 : 3:50:10 PM
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| The biggest bunch of poser losers are the people who come on here and never pay any upfront due diligence fees. The reason they say that is because most likely they are bad salesman and don't sell their borrowers on the fact that every bank, lender and so on in the commercial sector makes the applicant pay all the cost of the loan to see if they qualify. But these schmucks who come on here and say don't do it are probably the guys who said, and I quote "pay these fees and then you get the money right back when the deal closes." errrrr...moron, what they are paying for is to see if the property and the borrowers qualify. Go back to selling cell phones, cars and printers and let the professionals handle the big boy stuff. It makes me sick reading some of this! |
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stevenicholl
13 Posts |
Posted - 07/20/2009 : 10:39:17 AM
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You rarely see commercial projects without upfront DD fees. If the lender had to pay for due diligence every time they looked at an interesting project it would get expensive very quickly.
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velecico
5311 Posts |
Posted - 07/20/2009 : 11:04:27 AM
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quote:
Originally posted by shakeytime
fees vs cost's
what are they actually?
I am working on a HUD loan and it requires about $40K in upfront cost for $2.5mm....
whats the 40K for ? |
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Blackbear
7 Posts |
Posted - 07/20/2009 : 12:22:02 PM
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| I dont have a problem with upfront fees if you outline exactly what they are for and come clean on who the lender is. My biggest beef is when brokers are not upfront with you on who the actual lender is even after you sign the engagement letters. It is stupid to ask someone for upfront money when the broker doesnt say who is lending the money. |
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Quicksilver
5940 Posts |
Posted - 07/20/2009 : 12:28:19 PM
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quote:
Originally posted by velecico
quote:
Originally posted by shakeytime
fees vs cost's
what are they actually?
I am working on a HUD loan and it requires about $40K in upfront cost for $2.5mm....
whats the 40K for ?
HUD commercial loans have a commitment fee that has to be payed, usually 1-2% of the amount aside from actual DD fee's but it can vary. Costly, but the terms are good so... |
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