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commercial hard money: Is it a Development Loan or a Construction Loan? - 07/09/08 07:17 PM
Part of my job is to take incoming cold calls. We advertise in a commercial lending industry magazine that generates a good deal of call traffic.
On a regular basis I get requests for “construction” loans. After asking some questions to determine the nature of the loan, I usually find out that the broker/borrower is actually searching for what I would call a “development” loan.
What’s the Difference, Who Cares? Why does it matter if you call it a construction loan rather than a development loan?
First, it reflects on the broker/borrower. If a lender has to educate the … (1 comments)
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commercial hard money: How to Write an Executive Summary for a Commercial Mortgage - 05/19/08 03:07 PM
When I am reviewing a loan file one of the first things I look at and look for is the executive summary or loan summary. A well written executive summary speaks to the quality of the borrower and the value of the project. The goal of well written loan summary is to give the underwriter enough information to understand the commercial loan and to determine if the loan will fit within the lender’s lending guidelines.
Below are items that should be included in a well written and complete executive summary.
Salient Facts Lenders want to know the details of the commercial … (4 comments)
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commercial hard money: Locked Up in a Broker Daisy Chain - 04/22/08 05:59 PM
What is a Daisy Chain? I field phone calls from commercial loan brokers all day long discussing the different loan scenarios that come across their desks. Our company advertises in the Scotsman Guide and this generates some “cold” incoming calls.
Frequently, we will get a phone call from a Broker A that received a loan file from Broker B. Broker B received the file from Broker C who received it from Broker D who knows the borrower. This is what we call a broker “daisy chain”.
Merriam-Webster defines a “daisy chain” as “1) a string of daisies with stems linked … (3 comments)
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commercial hard money: When Hard Money Pays - 04/09/08 07:03 PM
It is not often that borrowers enjoy using a hard money lender to finance their projects. However situations do arise that demand the services of a commercial hard money lender. Let me illustrate this point with a story.
A few nights ago, one of the sinks in our house was plugged. Because I am a frugal person ("Cheap Smack" is the technical term) I decided to fix the problem myself. I called a relative to borrow their plumber's snake and clean out the plugged drain. Two hours later, I had unstopped the drain and had a functioning sink. However, had the sink … (0 comments)
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commercial hard money: A Busy Week - 02/01/08 06:59 PM
The week has been a whirlwind. I worked on sending out two applications and worked on sending out a loan closing package.
The process here is streamlined but there are a lot of T's to cross and i's to dot. The loan was very complex with many moving pieces and a somewhat moving target. I am glad that Friday is here.
Have a great Super Bowl Weekend!
… (0 comments)
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commercial hard money: Story Lenders: What's your story? - 01/17/08 06:28 PM
As a commercial hard money lender I have to be good listener. The reason is that everyone has a story to tell about their need for money. Some stories are better than others.
What should you include in your story? Introduction A good literary story introduces you to the characters, the setting, and any history relevant to understand the narrative going forward. A good lending story will include some of the same attributes. Most of this information should be included in a easy to read executive summary.
Who are the main characters? This includes the loan sponsors, and any borrowing entity … (0 comments)
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commercial hard money: Commercial Hard Money Construction Loans - 01/02/08 06:15 PM
I get at least one phone call a day requesting construction financing. (Owens Financial Group does fund commercial construction projects on a limited basis.) Underwriting a construction loan is handled differently than a typical commercial loan.
Lenders desire to know that a developer has enough money invested in the project to motivate the developer to overcome the headaches and hassles that are bound to arise during development. A developer with too little invested, is likely to cut their losses and run, if construction problems arise, permits are not obtained, or weather is not favorable. Many lenders will underwrite a construction loan … (0 comments)
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commercial hard money: Hard Money Hints - 12/27/07 06:13 PM
Not many mortgage brokers live consistently in the world of hard money. It is a subject despised by some and feared by others. When I call on brokers for the first time, many of them report, “We don’t do that here.”
I believe commercial mortgage brokers, often times, don’t understand the role hard money lenders can play in serving their clients. Anything new can be intimidating. Especially, something that if not handled carefully can injure your business. Hard money is like a sword: wielded by an experienced broker it is a valuable tool. Wielded recklessly by an amateur, the user … (3 comments)
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Peter Maclennan - Investment Real Estate
Walnut Creek,
CA
More about me…
Maclennan Investment Group, Inc.
Address: PO Box 2564, Walnut Creek, CA, 94595
Office Phone: (925) 385-8798
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