Time are tough. Enough said. One of the worst things you can do is "shop your deal". What I mean by this is sending your transaction (currency exchange, project development) to a) multiple funders; or b) multiple brokers. The most dangerous is sending it to multiple brokers. Or worse yet, a broker(s) accepted your project but doesn't have a funding source.
First, this is unethical on the broker's behalf, secondly the obvious will happen: He will send your project to every funding source and broker on the planet in hopes that someone will fund your deal. The best way to prevent this is to qualify your broker by asking if he already has a funding source that would accept your project. If he doesn't, don't give him your file. If he does, he should be able to explain the relative terms of the financing immediately or within 24 hours after contacting is funding source.
Why shopping hurts you: it's a small world in the universe of performing funders and brokers. We all know each other. There are some files that I see submitted to our company by 5 or 6 different brokers...funders simply turn down files they see more than once because they assume there's something wrong with the file,they turned it down previously, or they'll pick up the phone and call their other colleagues and ask them why they turned it down.
Why? Probably because the original broker was a rookie and just sent in a bunch of files that made no sense. WCF has our own in-house underwriter and we MAKE FILES WORK. Yes, files that have been turned down. They were good files, just not submitted properly. So we have go back to the funder after hearing, "we saw this file and turned it down" and explain why the deal will work.
Currency exchange deals won't tolerate ANY shopping. If they see the same deal twice, it is immediately declined and the client is blacklisted.
Solution: qualify your broker and make sure he is direct to a performing source or a broker that is. Often, that is WCF. To learn more about our company feel free to watch this one minute video: ABOUT WCF
Banking as we once knew it is gone for a very long time. In fact, very few institutional banks funded large commercial projects in 2008. I have substantial visibility into the market and the only institutional activity I saw was banks calling their notes due immediately. Banks were forced to do this because of their own liquidity issues and many developers were left with no funds and the project(s) came to a screeching halt.
"Joe Developer" then knocked on every bank's door only to find the same answer: "sorry, we are not lending right now."
Since the death of institutional banking, the developers have gone to the private equity world to get their projects funded. My company has always worked exclusively in the private equity side of funding and have had to introduce many of these seasoned developers to the private funding world. Fortunately, this world is actually more simple and efficient than the traditional, institutional banking model. There are, however, some differences that anyone seeking private financing for the first time needs to be made aware of.
1. Your private funder usually has his own idiosyncrasies. For example, a funder may only be interested in hospitality projects in Costa Rica, Mexico and Panama. That's just his funding footprint. He knows the area and is comfortable lending there.
2. There are no referrals in the private money world. Period. Your local bank advertises their closings. Private money never discloses their transactions or their clients. Your private funder will have you sign an NCND, which means you cannot even reveal who funded your project. This protects the funder. He does not want to be vetted, interviewed or interrogated. He usually has a "gate keeper" or "master broker" that will qualify you. Once you fit his funding footprint, he will want to meet you face to face. At this point, the funder will give you every comfort level you will need to assure you of his abilities to fund your project.
3. Private money moves fast. If you, as a developer, have all of your business in order, you can fund in as little as a week.
4. Private money has no rules. Every funder has their own terms and will structure a loan in the most "make sense" way for your project. It's best to hear what is offered than tell him what you will accept. As the old addage goes, "the tail will not wag the dog".
Walker Commercial Funding works exclusively with private funders. For more information, visit our website and find one our professionals nearest you....or call me, Brian Walker at 281-852-8298
In the recent past, nearly 70% of all commercial appraisals were ordered by the banks that were going to fund the project. Now that banks are absent from the performing funding space, many developers are left with the responsibility of ordering an appraisal. Unfortunately, many of the appraisals they order and submit are simply unacceptable to 90% of our funding sources.
As a rule of thumb, if you don't have an appraisal, don't order one. Let the funder that has an interest in your project suggest one that you use. Otherwise, if you want to order your own appraisal, there are few bits of advice to follow:
1) Ask your mortgage broker who they use and have had success with. Be prepared to spend more than what the local guy quoted you. Your mortgage broker is always going to choose an appraiser he or she has had success with and gotten deals funded with, which is your primary objective.
2) If you want to shop yourself, make sure the appraiser is MAI certified. The acronym stands for Member of the Appraisal Institute. It's no simple achievement to get this accreditation. MAI appraisers must meet the following criteria for accreditation:
Receive a passing grade on 11 examinations that reflect 380 hours of classroom instruction and that test the appraiser's knowledge of basic and advanced appraisal principles, procedures and applications; report writing; valuation analysis and standards of professional practice
Receive a passing grade on a four-module, two-day comprehensive examination
Hold an undergraduate degree from a four-year accredited educational institution
Experience: Receive credit for 4,500 hours of experience, all of which must meet strict criteria
3) Anyone that is not MAI certified will perform your appraisal at about half the cost, but...it's a fool's errand because your finder is going to require that you get an MAI certified appraisal. So, you end up paying for two appraisals.
4) Try to find someone that is familiar with your area and project type. This enables them to do them faster and at a lower price.
While this is not the appropriate place to give recommendations, feel free to contact me at my office and I'll gladly steer you in the right direction
If you do, we need to talk. There's a very high probability of Walker Commercial Funding being able to fund your project if you do. Please call Brian Walker at 281-852-8298 or email me brian@walkercf.com.
Many people ask me, is Walker Commercial Funding a direct lender or a broker? That's a tricky question...in most situations, Walker Commercial Funding is a "correspondent lender." So, what does that mean? That means we don't actually lend the money, but we do a lot more than a broker. A broker merely submits the file.
A correspondent lender does all of the activity a lender would do with exception of a) providing the funds to close and b) issuing the final approval.
At Walker Commercial Funding, we completely underwrite the file to the funder's specifications and deliver what appears to be a closed loan. The only thing we are lacking is the final approval that the loan fits within their "funding footprint" and the funds wired....Essentially, we make the funder's job very easy. We deliver files that are in their strike zone that are completely underwritten and ready to close. We even do the site visits.
That is what a correspondent lender is and does.
Hope this helps you all out there in Active Rainland!
Hey Folks, the ice has finally thawed for funding Mexican projects. I'm very pleased to announce that we will be closing 3 three mexican transactions (one land and two resort projects) on Monday and Tuesday of this week. No, these are not miracle closings. They are just "make sense" deals that should have been funded a year ago when the market just completely locked up.
The good news, however is that funding is happening again..at low LTVs. These projects all have 65% LTC or less, but we can now honestly say that the international funding windows are now open again!
Walker Commercial Funding can be reached at 281-852-9422. We consists of 20 seasoned commercial professionals, speak 8 languages, live on 4 continents and have our own in-house underwiting department.
Walker Commercial Funding funds projects world-wide. But this program is presently restricted to the US. Brian Walker with Walker Commercial Funding can be reached at brian@walkercf.com
WE ARE PRESENTING LOANS TO AVAIL AN ALTERNATIVE MEANS TO THE REFINANCE OF COMMERCIAL PROPERTY IN THE USA
The Commercial Lender / Operator that we introduce will refinance your Commercial Property in the United States (mainland) using the following formula;
50% of the Appraised Value
- any/all Debts against the Property
= Equity
X Multiple of up to 10
Wherein, if the Appraised Value of the Property is USD $ 20 Million and fifty percent (50%) of that Value is USD $ 10 Million and assuming there is an unpaid Mortgage on said Property of USD $ 4 Million, then the Equity balance via this formula would be
USD $ 6 Million.
The Lender / Operator will afford a loan of up to ten (10) times the Equity, so assuming upon evaluation, a 5 X multiple is requested and/or accepted then the loan of
USD $ 30 Million (20M x 50% - 4M = 6M x 5 = 30M).
The LOANS are presented as
»5% Interest – Fixed
»3 Year Balloon
»NO Payments for the 3 Years (optional)
»NO Personal guarantees
The MINIMUM Equity against which this type of Loan is offered is USD $ 5 Million.
TO APPLY –
One (1) Page Loan Application (Simple Form Letter. NO form 1003)
Copy of Title Policy
Copy of Current Appraisal
NO credit review, NO personal guarantee, NO lengthy mortgage application.
Please review and advise if you should have any questions or comments.
Here's the reality about getting 100% financing for commercial projects in 2009. At Walker Commercial Funding, we always tell the truth. The good truth or the bad truth, but it is the truth. So, with that being said, here is the truth about the 100% financing that is currently available:
1. You could get a joint venture partner, but you must have a very attractive project. Please read this article for a more clear definition of what is available in the JV world and what JV/Venture capital is requiring to take on your project. Read This Article
2. You can nearly gaurantee your success by going through a structured finance program. We are master brokers to a firm that specializes in this type of transaction. It is nothing new and the probablity of success is very high if your project is accepted. The firm we work with is both an international law firm and a licensed financial institution. They require a $100,000 retainer and the process takes 12 months to fund. Their competitors charge an excess of $500,000 and don't even provide the collateral to complete the transaction.
3. The other option involves working with our asset managers that will fund your project at 100% LTC, but they will require that you deposit a substantial amount of collateral with them. The benefit to this program is your collateral will generate handsome returns while you get your project financed at 100% LTC.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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