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It all starts with a decision to get a commercial loan. Once you decided to get a loan there are 10 steps you need to take before the loan escrow is started. Some of the steps are very short and will take only minutes, some will take days or even weeks based on the size and nature of the loan.
1. Prepare a short executive summary of your commercial loan request.
There are hundreds of different types of commercial properties e.g. apartment building, hospital, gas station etc. There are different sizes of loan and different conditions. All in all there are unlimited possible loan scenarios. Each scenario may require slightly different approach and documentation; fortunately you need not worry about it. As you continue through the 10 steps, described here, your particular loan scenario will be unfolded and only the information demanded by the lender will have to be supplied. The first step is a short executive summary that covers 5 essential elements which are commonly needed by any lender.
A. Brief information about the property
Address: (at least City and state if you like to keep confidential at that stage)
Type of property: Gas station, mall, hotel what ever
Estimated value: if you have specific information like appraisal done recently you can mention it. (Note: if you already have a website with information and pictures about your property you can include a link to it but do not try to create it. It is not essential to the loan). This entire step (step #1) should take you 3-10 minutes. Enter what you know.
B. General information about your financial condition
Your credit: good? Bad? Etc. How much is your net worth and what is your gross/net yearly income. What is the existing financing on the property? What is the current rate? When the loan is due?
C. What kind of loan do you wish to get?
Loan amount you need and any special condition if any that must be met (e.g. No prepayment penalty after 2 years etc., but do not request any specific rate or terms you will get these from the lenders at later steps.
D. Short description of your request
The entire purpose of step #1 is to have lenders contacting you. Step #1 is kind of executive summary (or “loan résumé”). Make sure to include some compelling information about your property and or yourself to entice the reader (lender) to contact you. Keep it short, yet inviting enough and clear enough. The executive summary should be written in such a way that it will grab the lender attention when he glance at it and prompt him to contact you it immediately.
E. Information on how the lender can reach you. In step 2 you will find and distribute the executive summary to potential lenders so make sure to include your return email and optionally phone number. (If you prefer not to give out your regular email get a separate email address at email@example.com or firstname.lastname@example.org exclusively for the purpose of the loan.)
Keep the executive summary brief. The lenders need to be able to look at it and contact you without spending too much time reading through it. Additional information will be certainly required at step 5 but for now, what you have entered is the best way to start. If you need help writing up your executive summary or help in monitoring and doing all the steps 1-10 correctly and quickly you can use the Free software, loan control center at http://www.lendinguniverse.com website. It is 100% FREE and all your data is protected.
2. Search for commercial lenders
After preparing the short executive summary of your commercial loan in step #1 you are ready to look for lenders. The rule is to try and get as many qualified lenders as you can possibly handle (without losing your mind). Do not be satisfied with a single lender’s quote. It might be that the first offer is the best one but you won’t know it until you speak with few lenders.
Here are the most promising lenders sources:
A. Your existing lender- For sure e contacts your existing lender and tell him about your intention to obtain a new loan. Email him your executive summary. If your lender still lending he will jump on the opportunity and will give you an offer.
B. Old lenders and brokers you know from the past- Contact old brokers and lenders email them your request. (The lenders can also receive your communication and provide quotes via loan control center they may be already members or can easily ad freely become members.)
C. Family and friends and business associates’ referrals- ask around especially people who own similar properties. They will be happy to give you some referrals if they had good experience with lenders. When you get lenders name call the person and either email or fax your request to him.
D. Internet search- That will net you many new lenders. You can check the main banks websites like bankofamerica.com, wellsfargo.com and the main lenders in your town. Also google “commercial lenders in My City Name “, “Commercial loans My City Name ” and ” My City Name Commercial lenders” . You should also search with the specific of your type of property e.g. if your property is gas station search “gas station lenders My City/State Name” and “gas station loans name of your city/state”. When you find a suitable lender go to it website find it email address and email your loan request. It can be a waste of time filling out lenders forms, it can take you days. Instead look for the main email address and email your request to the company. Step #1 covers all the important data any lender needs and good lenders will respond to it quickly.
3. Keep track of your activities- Keep record of all your email you send out and all the responses you are getting back from the lenders. It is relatively easy to remember 2-3 lenders but when you have to deal with 4, 5 and even 10 different lenders and when each proposed 1-6 programs it become impossible to track the results unless you keep some kind of a spread sheet. You can use the control center at lendinguniverse.com it keeps records of all lenders, all offers and all communications between you and the loan officers, processors etc.
4. Establish Communication with lenders- Best communication is done face to face. It is not possible in most cases. Second best is by phone. Talk to the lenders. Emails are great for transferring documents and quotes. Emails can be used for simple questions but for more complicated questions it is better to use the telephone. Always insist on quotes being done by email or through the control center
5. Answer questions – at this steps you find exactly what you need to show in order to obtain your particular loan. This is the step when you give complete information about the property and complete information about your financial condition. Keep track on what you give out. Don’t be surprise when some lenders ask for some documents other do not request. Almost in all cases tax return P&L and bank information will be required. Based on lenders responses you will get a better idea on what kind of loan you can get and what conditions are need to be met. (The control center at http://www.lendingunverse.com can keep your tax return and other information so you do need to upload it to each individual lender but, with your permission, make it accessible to lenders of your choice. It can also keep appraisal reports and other lengthy reports that ordinarily cannot be email because of being too big for email delivery. This service is 100% free). The appraised value will have strong bearing on the final approval. It can make or kill deals. In many cases it is easy to get done based on income and recent sales. Sometimes it is very hard to ascertain value before the appraisal is done. The appraisal can be the wild card for high LTV loans and you should discuss it with loan officer at length.
6. Get loan quotes and LOIs- When lenders have enough data the lenders will issue you quotes and LOIs. Insist on quotes being in writing. Do not pay any attention to verbal quotes and be very skeptical of quotes coming back too quickly and without lenders full understanding of your loan request. Also insist on lenders conditions in writing. No lender gives any commitment at this step. Commitment comes only after an appraisal is done and the lender verified all your information. Many lenders ask for money prior to issuing a commitment letter. Try to avoid it and do not give any money until step 8 is completed
7. Compare quotes and conditions- The control center help you sort out and compare commercial loans offers. In addition to interest rate terms and prepayment penalties you should watch out for the conditions. If a condition is impossible to fulfill ask the lender to remove it or re-quote the rate and terms without it.
8. Conduct due diligent on the most promising lenders- At this point you will have a fairly good idea who can do your loan. Many lenders will be eliminated in steps 5-7. Now it is your turn to find out about the qualification of the runner up lenders. Get references from people who dealt with the lender in the past. Also try to get the identity of the actual investor. Keep in mind that the loan officer you have been talking with can be very friendly but he may not know the company lending ability at any time and he is not the one who decides your loan. You particularly want to find out what loans the lender funded in the past 1-3 months. An important factor is the property value. Appraisal is ordered only after an LOI is signed. Get the lender opinion of value on what the appraised value should be as it will have strong bearing on the final approval. It can make or kill deals. It is therefore very important to get the lenders opinion on the value prior to signing the LOI. The appraisal can be the wild card for high LTV loans and you should discuss it with loan officer at length.
9. Negotiate for optimum terms- If you have 2 or 3 lenders at that step you can try and negotiate with each one a better rate/terms or condition removal. There are many books written on the subject of negotiations. The best negotiation is done when you have knowledge. When you know the rules you are case over the situation. Every loan can be negotiated, sometimes very little sometimes to large degree. This step depends also on general market condition the eagerness of the loan officer and the lenders and your ability to communicate with the knowledge of your situation.
10. Proceed with the winning lender but keep the runner up on standby. – A loan is not done until it is funded recorded and closed. Lenders can go out of business or change their mind or just be too slow for your needs. Keep good communication with all the runner ups- you may need to switch lenders and as bad as it sound at least you will not have start at step #1 but back at step #9
The subject of commercial loans is large and this article does not try to replace the vast knowledge about commercial lending nor does it give any legal advice or opinion about any particular lender, program or qualification. Lendinguniverse.com is neither a broker nor a lender it provides services to borrowers, brokers, lenders and service providers with the intention of making commercial lending more efficient to all parties involved.
Mr Smith, a retired home owner who owns his home free and clear, discovered that the house next door is up for sale by a bank as a REO. That same house sold 2 years ago for $548,000. At that time Mr Smith’s pregnant daughter and son in law were eager to buy but could not qualify since they are self employed. The bank who foreclosed on the house is listing it for $275,000 and Mr. Smith would love to have his daughter living next door. Since neither he nor his kids qualify for a bank loan at the present time an alternative solution will be to purchase the house using private funds otherwise known as a hard money loan.
The consideration is clear; the price of the house is almost what it cost to build a new home, the son-in-law’s business is more established and in 12 month he will be able to show enough income on taxes and thereby obtain a conventional bank loan. This is a good exit strategy to pay off the hard money loan. More importantly for Mr. Smith is that he will be able to play with his grand kids every day.
Mr Smith can get a hard money loan using the equity in his home. The loan will cost more than a conventional loan (about 3-6 points versus 0-2 point with the conventional loan). Mr. Smith presented an all cash offer to the seller and was able to get the house at the even better price of $265,000 and thus offset all the costs and higher rate associated with this hard money loan. Since the seller was eager to get rid of it fast he preferred the all cash offer over other offers that were contingent upon financing.
In the past 2 years, real estate prices across the country dropped down to very low levels. The decline may soon taper off and by the end of 2009 there will be many opportunities to buy properties at very attractive prices. Unlike the “no down payment, get rich quick schemes” of the past, today only strong cash buyers are able to buy investment properties at bargain prices. (A person can still buy his own home with very low down payment providing he shows income and good credit but normally he is unable to buy more than one property).
More and more we can see those once in a lifetime kinds of opportunities to buy a properties at even below replacement costs. To take advantage of this situation, a hard money loan may be the best and only way to capitalize on those unique golden opportunities and situations that may never again be possible in our lifetime.
This applies well to borrowers who have strong equity in their property and yet cannot obtain a bank loan in a timely manner or cannot obtain a bank loan at all. If the piece of real estate is owned free and clear, or if it has a lot of equity, a hard money loan can be arranged with private investors’ funds.
The most common reasons to seek hard money are:
• Need a loan quick.
• Does not have tax returns proving all the income.
• Poor credit (but most hard money loans are arranged for borrowers with good credit).
• Unusual credit/income situation.
• Unusual property or property condition (e.g. unfinished construction).
• Cannot obtain a bank loan despite several attempts.
There are 7 vital steps to ensure the best and most optimum hard money loan. Skipping any of the steps may result in not being able to obtain the loan in timely manner or ending up paying more than was needed. These steps are detailed at the http://www.lendinguniverse.com . The second step involves searching for hard money investors – it is vital to search everywhere.
Since hard money loans are funded by private investors one should look for local hard money lenders by googling “hard money lender my city name” or “hard money lender my state name”. For loans of over $500,000 a borrower can also search general terms to get the nationwide lenders by googling “hard money lenders”, “private real estate loans.” It also advised to add property type. E.g. “commercial hard money loans” in case the property is commercial or “land hard money loans” etc.
Note: Exactly how to search and how to track the different lenders and offers is part of the sophisticated yet simple-to-use the free software that the website offers. Borrowers are able to track hundreds of offers, negotiate and compare it all from one single control center. Social security numbers are not needed for the initial request. The precise timing of when a borrower needs to provide confidential information is detailed on the website. Using it borrowers can avoid, or at least reduced, the pitfalls and anxieties normally associated with getting financing and thereby get the most optimum loan possible. In the past 10 years the website has provided software to help find and tack loan quotes by hundreds of lenders, brokers, private investors, and banks. Lendinguniverse.com is neither a lender nor a broker it is a lending portal and a market place for hard money loans. It does not endorsed any bank, lender, broker, private investor, or any other entity connected with arranging loans.
Different cultures worship different gods. Whether real or imagine it is not the debate but what is certain is that all Gods provide an apparent security and protection to its followers. The idea of a common god to any culture is very useful; it unites the people under the same concept of acceptability and establishes a common denominator for basic activity in the game of life. Imagine a football game without strict rules referees and playbacks, and you immediately see that such an uncontrolled game will end up with no spectators and no players. Games are not possible without freedoms and without barriers and rules are there to have a balance playing field and a good game. Yet not any game need have a god. Who is the “God of football”? there is not such a thing because the rules of football are very well define and only tiny portion of the game is subject to interpretation by the referee, and to that degree he might be considered a slight sort of a god.
In general the bigger the scope of the game and the more people who are engaging in that game determine the power and positioning of that game’s god. For instance the few thousands year ago the Hebrew’s god united several tribes with common goal of getting out of Egypt and getting the country of Israel. The Hebrew god was real to the degree that the Hebrews believed it to be real and it sure provided a solid game. Life is a big game compromise of smaller games interacting with each other. One important element for a successful god is the mystery he/ she bring into the game. If all games are totally predictable then there will be no game. Therefore for the purpose of having a good game and a good group an acceptable god should be in addition to all else a mysterious god. Unpredictability is a key attribute of a god since without it no satisfactory game will ensue. Recently in the west a new god arise, it fits all the definition of a god and it is getting bigger and stronger by the day. His/her name is Google or Goog and in very short time he/she will be worship by almost every man woman and kid on this planet.
The most useless information you ever needed.___ What brand name cookie if stacked one on top of the other, would stretch to the moon and back three times over?February 25, 2009
What brand name cookie if stacked one on top of the other, would stretch to the moon and back three times over?
Oreo cookies-Oreos were introduced in 1912 by the National Biscuit Company (N.B.C.) and were first sold as the Oreo Biscuit. It became the Oreo Sandwich in 1921, the Oreo Creme Sandwich in 1948, and the Oreo Chocolate Sandwich Cookie in 1974. No one knows for sure how the name Oreo came to be. One commonly accepted explanation is that the word may be derived from the French word “or” meaning gold. The original package label had gold scrollwork on a pale green background, while the product name was in gold. Another theory is that Oreos derive their name from the Greek word for “hill,” because they were originally mound-shaped.
Oreos are still imprinted with the original symbol of the National Biscuit Company, an oval surmounted by a cross with two horizontal lines instead of the one. The first chairman of N.B.C., Adolphus Green, discovered this symbol late one night while thumbing through an old book of Italian printers’ symbols. It was supposed to represent the triumph of good over evil. The Oreo cookie was good indeed to N.B.C., becoming the best-selling cookie in the world today. Over 200 billion have been sold so far. If stacked one on top of the other, they would stretch to the moon and back three times over!
Frankly, unless you get enough leads you are doom, especially now when only small portion of the leads are converting to loans. The good news is that finding the right lead you still make good income. Why? because today (and more than ever before) borrowers need to convert equity to cash and or reduce their payments and since many conventional lenders are no longer lending a good broker can be rewarded with the gold!. My company is a lead generation service one of the originals started 10 years ago. Like others we lost thousands of brokers (paying clients) who are now sell insurance, drive cabs etc., instead of arranging loans and no longer buy leads. Those who remain enjoy almost exclusivity or semi exclusivity on fresh leads. The fear of bad lead is completely eliminated on http://www.lendinguniverse.com because every lead is 100% guaranteed. What I mean with guarantee is simple. Here is a scenario: A broker purchase the leads where the client claimed that the property value is 500K but after doing some comp-check he find out that the value is not higher than 400K. sound familiar? there is really no big surprise. the market is still going down and most borrowers are still oblivious to their actual situation. Since the broker cannot arrange the loan he will get 100% back of the lead purchase price and it takes, literally, only one click to get that credit back to the broker account. Our Guaranteed program is solid -No questions ask we always trusted our brokers since we started in 2000, 10 years ago. Leads are still the bloodline of the mortgage industry without it brokers are “dying”. In the past few months we are getting more and more requests especially from borrowers who own commercial property and borrowers with equity that need to convert to cash. also we are getting many request by investors who are purchasing foreclosed and distressed property and need loan/cash to close. I urge you to get leads from any source you can find and by all means try my website. If you wonder where we get our business try Google us as “private real estate lenders” or “private real estate loans”
How to Get a Bad Credit Mortgage Loan
1. Your first goal is to get as many investors as possible to read your loan request.
Go to http://www.lendinguniverse.com fill out one free real estate loan request safely and securely.
Your Social Security Number is not required.
Finish your loan request in 2-3 minutes
The website have videos and demonstration on how to best use it.
2.Get your own special “Loan Control Center” with tools to conduct all of your negotiations until your loan is closed.
3. Get the best rate and the terms Among our registered lenders are: Bank of America, Wells Fargo Bank, and over 10,000 other banks, brokers and private investors who will have instant access directly to your loan application.
If your loan request fits their lending criteria, they can immediately provide you with a “Letter of Interest” and a loan approval.
You may receive 4-6 bids. These bids will come directly to your own Loan Control Center with email notification to you.
4. use the tools on the site to compare loans and negotiate with the lenders
5.Choose the best offer but keep the other offers on standby.
6. Just follow the instruction on the website and close the loan
Tips & Warnings
You do not need to have any preconception idea about loan programs, interest rate and lenders practice. Lendinguniverse.com website design to teach you as you go. There are hundreds of different programs and thousands of situations specific to each borrower and to each property. Only after entering a very simple request you can be guided about what is available to your particular situation. You will learn it directly from the lenders, compare the data and then decide what is best. for your particular situation.
Consider a hard money loan if you have at least 65% equity in the real estate and a good exist strategy. If a loan has to be funded quickly, the Loan to Value is a factor which determines how quickly the loan could be funded. (Not the only factor but a factor). Private Money lenders are obviously more conservative with loan to value now than a year ago. Particularly on less desirable properties such as undeveloped land or half-finished homes, the loan to value requirements are getting to be not higher than 25%-50%.
In California for example, raw land is restricted to between 25-35% loan to value. Improved land (utilities, water, power, road), is maxed at around 40% loan to value. Only properties with completed structures are able to attract 50%-70% loan to value and higher. And obviously income producing properties are able to obtain the highest loan to value.
However, depending on the characteristics of the subject property, these percentages are flexible.
Carefully considering your loan to value in your initial loan request is crucial in the swiftness of the loan being funded. If you submit a request with a loan to value that is too high for your property type or characteristics, lenders (private investors) will not even look at the loan request. The trick is to put your a loan request in front of the investor nose.
1. Your first goal is to get as many investors as possible to read your request
2. Your second goal is have the investors look at the property
3. Only then you can start real negotiation on terms
4. select the lender who offer you the best loan for your needs. (it may not be the cheapest offer but maybe with more cash , longer terms etc.)
At http://www.lendinguniverse.com you will find the tools to keep track of all the requests and and all the negotiations. You will also find a large list of private investors in your area who can potentially arrange the loan. You will need to check the internet, friends and business associates for additional resources and the website will guide you exactly on each step of the way.
There are 4 options for borrowers with bad credit, option one is to to simply wait, clean up the credit and apply for a loan depending on the nature of bad credit it be fast or very lengthy process. Option 2 is to work with the existing lender to modify the loan term reduce the payments the rate and even the loan balance. Option 3 applies in case the borrower have a lot of equity in the property then hard money might be a good solution to convert equity to cash. Option # 4 is to try for an FHA loan, that option may require that the all collection accounts and present time lates are being brought currant. At http://www.lendinguniverse.com a borrower can find experience brokers who are able sometimes “make things happen” and put the loan together. It requires that borrowers talk to several lenders and never give up.
http://www.lendinguniverse.com Bad Credit Mortgage lendersprovide financing and hard money loans refinancing nationwide. This story demonstrates the financial crisis:
Subject: Best explanation of the market crises I’ve seen yet
Young Chuck moved to Texas and bought a donkey from a farmer for $1,000.00.
The farmer agreed to deliver the donkey the next day. But the next day he drove up and said, ‘Sorry son, but I have some bad news, the donkey died.’
Chuck replied, ‘Well, then just give me my money back.’ The farmer said, ‘Can’t do that. I went and spent it already.’ Chuck said, ‘OK, then, just bring me the dead donkey.’ The farmer asked, ‘What ya gonna do with him?
Chuck said, ‘I’m going to raffle him off.’ The farmer said ‘You can’t raffle off a dead donkey!’ Chuck said, ‘Sure I can Watch me. I just won’t tell anybody he’s dead.’
A month later, the farmer met up with Chuck and asked, ‘What happened with that dead donkey?’ Chuck said, ‘I raffled him off. I sold 500 tickets at twenty dollars apiece and made a profit of $9980.00.’
The farmer said, ‘Didn’t anyone complain?’ Chuck said, ‘Just the guy who won, So I gave him back his twenty dollars
Chuck now works for Goldman Sachs.