Talking About Government Loans!

Regardless of political affiliation or how you feel about the government, there is one thing that is very helpful in commercial today, government-backed loans.  Because the government is backing them, money is readily available on these types of deals all day.  In past newsletters, we have explored SBA loans.  But I want to talk today about a much lesser known loan, a USDA loan.

 These loans can be used for owner-occupied businesses, like the SBA loan, but can also be used for INVESTOR PROPERTIES!  They can go all the way up to $10 Million – much higher than SBA.  And they require a lot less down, typically 10%-20%, much less than most banks will lend on – especially on investor deals.  And these can be used for construction as well.  The key is that they must be in rural areas which is defined by a population of less than 50,000 people in that city.  Many lenders won’t lend in towns of less than 50,000 people so this loan program really fills a gap.  And with so many banks no longer doing construction loans, this product is HOT.  If what you are building will create jobs; it is even better.

For example, say you want to build a hotel in a city that is near a major metro area but only has a population of 30,000 people.  This describes a tremendous amount of cities across America – including the city I live in.  If that loan size is $7 Million or so you are going to be stuck.  SBA only goes to $5 Million, and the big construction money only wants to look at hotels over $10 Million.  But the USDA loan can fill the gap and you will not have to put down 35% either!  Rates will usually be tied to prime on an adjustable but that puts you in the 5-6% range right now and fixed rates may be available on extremely strong deals.  Because it is a government-backed loan, it does take longer to close but this loan WILL get you closed and with a lot less down than a conventional loan.  Hey, you can do investor hotels on this deal!  We have a loan that just got approved on this program for a saw mill refinance in Arkansas.  That broker had been trying to place that loan for 6 months and we are getting it done!  Had terms out in two days and initial approval in less than a week after getting docs!  If you have a deal that you think might fit these parameters, give us a call today at 866-926-0576 x 704 .

With all of the deals that I have seen recently.  I can tell people are starting to get desperate. They are starting to to take short cuts, instead of doing things the right way.  We need to have good executive summaries. They need to have some thought put into them. Here is a look at how to write an executive summary.

I am also starting to see very hold financial statements.  If you are going to submit a loan to be underwriting please don't try to pass off a year old financial statement.  All it does is cause the process to slow down.

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We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinancial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial lending nationwide see  In-Vision Financial Holdings

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We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinacial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial lending nationwide see  In-Vision Financial Holdings

We are starting to close a lot of these loans but I still see a lot of people trying to do loans that make no sense.  You need to understand these deals.  Hard money does not mean stupid money.  THEY ARE NOT FOR LOW CREDIT SCORE PEOPLE.  That is one MAJOR difference between commercial hard money and residential hard money.  Remember, 50% of all deals in commercial are not fundable. 

The private hard money lenders, the guys who really have the bucks to lend $5 Million and close in 2 weeks, are not dumb individuals.  Their goal is NOT to foreclose, (commercial foreclosed properties can sit on the market for 10 years), their goal is to get their money back quick with a profit between 13% on the low end to 25% on the high end.  That is points and interest rate.  The stronger the deal, the less the total points.  What these guys are looking for is situations where the borrower needs money quick but only needs it for a short time and has a sound exit strategy or pay back strategy that gets them their money back in less then 2 years.  Often, these deals are funding the mortgage payments into the loan. 

For example, someone owns a good piece of property and has builders lined up to buy the lots once he gets them developed but needs the money quickly to develop them.  Hard money guys can get him 50-70% of the value in a week or two and roll in the mortgage payments and points so the developer gets this thing done with no additional outlay and gets his money in a couple weeks.  Or you have a guy who needs to close in 2 weeks or he loses the deal but it is a fundable loan by the local banks.  He just needs money quicker then the banks will close.  Or any of a thousand types of other scenarios.  The thing to look for when screening one of these deals is:  1. A transaction that needs speed.  2.  A deal that makes sense. 3.  Some exit strategy where the guys loaning the money can get their money back sooner rather then later-almost guaranteed.  Saying, "I will use the money to help my credit and then refinance in a year is NOT a hard money deal-they do not see that as a safe risk since so many bad credit people STAY bad credit people.

Again, it is NOT a hard money where the buyer has major credit issues and no real viable plan for re-payment.  Where he just needs the money to hold off people, or where the LTV is really high.  In residential, hard money is for those really bad borrowers that need to stave off foreclosure.  In commercial, they want good borrowers, with good plans, the deals are sound.  The story has to work.  If the borrower does have bad credit he CAN go hard money in one instance-he has a clear plan to pay off that is nearly guaranteed-such as a contract from another company to buy his property and the company buying it is sound.  The scenarios are endless and the good news is that the deals tend to be larger-between $5-$30 million or higher and the closings are quick.  We are starting to close a lot of them and we have good lenders for these loans.  But they must make sense and the story has to fly.

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We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinacial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial lending nationwide see  In-Vision Financial Holdings

Yes, we have sources for hard money loans.  And the need right now in the marketplace is huge.  These loans are not for bad borrowers; they are for people who need money quick.  Maybe it is a purchase contract that needs to close in 3 weeks, or a tight situation that just needs a short term bridge...these loans are great sources of quick revenue for you.  There are two basic types of commercial hard money loans:

• Cash flowing properties: Apartment complexes, retail strip centers, etc.  These are properties that kick off enough cash to support the debt at almost 1 to 1 coverage or better.  When that is the case, there are PLENTY of hard money lenders lending.  You may think; why if it is cash flowing does someone need hard money?  The reasons are endless.  I have one deal where it is a developer who has a bunch of properties working but because of long delays, they are cash poor.  He has one property that he owns free and clear that is cash flowing; we are getting him short term hard money to get him $12 Million to keep things rolling while the other loans close.  We have a small $400,000 hard money loan where the guy just needs to close quickly because he shopped too long and now his closing date is in 3 weeks and no one can close him.  On these types of properties; money is available all the way up to $25 Million without too much sweat.  LTV's up to 75% are possible if the property cash flows strong.  These are GREAT loans and can close quickly.

• Non-cash flowing properties: Whether it is raw land, or a vacant building that needs to be gutted and rented out or an apartment complex that is mostly empty and losing money; if it doesn't cash flow, the rates are higher and the availability of lenders is greatly diminished.  Excellent credit on the part of the borrower and borrower financial strength is critical on these kinds of deals.  The lenders will also want a lower LTV, generally 50%.  But a good borrower at a low LTV can get the money quick, whether it will be for cash-out, purchase, whatever.  Even though these are tougher, we DO have loans available on these products from $200,000 up to $25 Million.  Again, closings are generally very quick.

Remember with hard money loans these are short term loans.  1 to 2 years is preferred.  They often have NO pre-payment penalty because the lenders want to get the money back so they can re-deploy it again.  The EXIT STRATEGY IS CRITICAL.  How are they going to pay it off in 1-2 years?  If the exit strategy is compelling, these deals can close.

That’s right; there are a few products that allow you to receive quick money in commercial. One of the hottest is a securities loan.  These loans allow someone to get money at incredible rates with no verification of income, credit, etc.  There are no strings on the money you can use it for anything.  All you need is a substantial amount of assets in stocks, bonds or treasuries.

And it is easy!  Give us one simple statement showing the asset, like a quarterly report, and send it in.  Within 2 days, we will have a contract.  Once the you as the client signs that they get funded in 7-10 days.  If we get it rolling this week, you could be funded by the end of the month!  The rates and terms will depend on the strength of the asset, so Treasury bonds will get a better deal than stocks and blue chip stocks will get a better deal than some other stocks.  Rates will be between 2.5% and 5% or so – interest only for 2-5 years.  That is some of the cheapest money available!  And with no credit check or income verification!  They keep ownership of the securities, and if the stock goes up…they get all the benefit.  A lien is placed against the stocks/bonds or treasuries, so they cannot trade them for the duration of the loan.  But unlike a margin loan, the loan cannot be called if the stocks go down in value.  It is a safe way of tapping the asset for short term needs while protecting the asset for long term gains, retirement, etc.  When they pay the loan off, the lien is released!

This money could be used for a developer to finish construction.  Or a small business to keep afloat until the economy turns.  It could be used to pay off high interest debt, remember, we are often talking rates below 5% interest only.  It can be used by real estate investors to grab some cheap homes or commercial properties…the opportunities are endless.  One deal we have working is a developer who was building a hotel and was half done when the bank got taken over by the FDIC.  Because it is half way through construction, there is not a lot of interest among other lenders to get the hotel completed.  But he has $7 Million in his stock portfolio.  We can get him a quick $5 Million and he can finish out the hotel and get it open.  Remember, you just fax us or scan and e-mail us a copy of your securities and we can have you a contract in 48 hours.  How easy is that?

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We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinacial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial lending nationwide see  In-Vision Financial Holdings

I would like to announce that we have a new program for commercial construction projects. We can do all types of projects, including hospitality, apartment buildings, and many other types of projects.  Please call to receive more information.

We can fund these projects in about 30 days.  If you would like more information please call me or email.

____________________________________________________________________________

We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinacial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial lending nationwide see  In-Vision Financial Holdings

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To see the # 1 Commercial Correspondent lender in the US

In-Vision Financial Holdings

Stocks close on Wall Street in a huge rally after the Treasuries new plan, a sign of the bottom in the housing market and a call from global investor Mark Mobius saying this is a start to a bull market. The Dow rises almost 500 points to 7,775.

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We have Money to lend!!! We are in all 50 States and provide Great Service, are Honest and Show Professionalism.

The above information regarding Commercial/Residential Lending was provided by Christopher Hills, the Senior Vice President for In-Vision Financial Holdings, LLC. Chris can be reached via email at chris.hills@in-visionfinacial.com or by phone at 508-377-5872 x 704.

I am dedicated to helping you find the right financial solution for the purchase or refinance of your next commercial project

For Commercial/Residental lending nationwide see  In-Vision Financial Holdings

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To see the # 1 Commercial Correspondent lender in the US

In-Vision Financial Holdings

Market Wrap: Wow. Today is one of those rare days when its 'OK' to 'pop the corks' and do a little celebrating. Our benchmark 4.5% mortgage bond sliced its way through a tough layer of overhead resistance like a hot knife through butter. The bond gained 138bp to close at $102.47 after trading in a widely expanded 153bp range. The day's economic news showing hotter than expected consumer inflation took a back seat to the Fed and their FOMC Policy Statement. As widely expected, the Fed kept their target for the Fed Funds rate at 0.00% to 0.25%. For bond traders, expectations were running high that the Fed would offer new programs or expand existing bond buy-back programs. And the Fed delivered on both counts in a huge way. In a new move, the Fed said they would spend up to $300 billion during the next six months to buy long-term Treasury bonds. They also stated they will expand the existing $500 billion buy-back program for mortgage-backed securities with another $750 billion, bringing their total commitment to a staggering $1.25 trillion. The Fed will also raise its buy-back of direct Fannie and Freddie debt to $200 billion. All of these moves are designed to lower interest rates for mortgages and other forms of consumer debt to help the economy recover from a deep recession. We should now see conventional 30-year rates stabilize near historic lows providing excellent refinance opportunities. The stock market also reacted favorably with the Dow reclaiming 90 points to close at 7,486. The broader S&P 500 Index added 16 points to end at 794 while the NASDAQ Composite Index picked up 29 points to close at 1,491.