When borrowers and brokers send us a request for commercial real estate funding, we always respond with questions. Every loan request that comes to us is in raw form and needs to be prepared for lender review. Many times these loans are prepared by a third party and when asking for additional information the client points to an extensive business plan, which may have been written for a different audience.
Here are some links to the links I found in my search.
# 10 – Top 10 things to do before starting a business
Commercial Lending Report
Even with uncertain economic indicators and slow hiring, rental housing demands are increasing. Conditions remain favorable for multifamily markets across the nation. The demographic trends indicate high levels of immigration, the surge in echo boomers forming their own households, a further shift away from homeownership, and the growing diversity in household composition support continued demand for rental housing.
It’s an exciting time for the Private Commercial Lending industry. 2012 trends are showing growth for commercial investments and many regional and local banks have started lending again for commercial projects. The demand for private money is still very high as the banks and mortgage companies are still avoiding construction and land development. Also the recent years’ lack of funding for notes coming due and distressed properties has left the door open for Hard Money Lenders and Equity Lenders.
One of my favorite movies is Easy Money with Rodney Dangerfield and Joe Pesci.
Rodney’s character made a deal to give up all of his vices to inherit his mother-in-law’s fortune. It turned out to be harder than he imagined.
There is nothing “easy” about obtaining a Hard Money loan from a private lender. It is a proposition based on risk. The lender assumes the risk of repayment of a highly leveraged loan, the borrower assumes risk of paying up-front fees to someone who will not perform, and the brokers assume the risk of getting squeezed out of the deal. Hard money fees can be as high as 10 points with interest rates above 12% and upwards of 20%.
My wife, Monalisa and I just celebrated our 27th anniversary. She is my soul mate and I could never have found a better person to spend my life with. We have truly loved and respected each other all these years and are the perfect match.
The Perfect Match
By now you know that I am a Consultant representing Private Lenders for Commercial Real Estate. Those of us in this business specialize in certain types of loans, based on the offerings of our Lending Groups. One of the problems in this industry is that the lending groups are looking for the perfect match.
This article may seem self-deprecating as I try to give a realistic view of Private Lending Groups for Commercial Real Estate. Many agents contact me with loan requests that were turned down by their lender. Instead of walking away, they try to find someone who can solve their problem. We all do this because we want to help our clients. That should be a good thing, but it is frowned upon by the Lending Groups.
As a private lender for commercial real estate, I receive requests everyday for loans and equity partnerships. On average, about 1 out of 100 is presentable to the lender and 1 out of 25 of those is fundable. If you are a broker or an investor looking for a loan for a commercial real estate purchase or refinance, you could save yourself some time and frustration by giving the lender what they need to evaluate your request.