Commercial Loan Help Desk

What loan program the borrower can qualify for a 6-unit apartment (Purchase)? What are the documents needed?
728 FICO with experience renting out properties (currently have 4 other rental properties).

I am interested in commercial loans. What does Factoring work and how do I learn about Factoring?

I am more interested in the spec builder new construction loans. My brother Javier and business partner told me he heard Lending Network LLC offers land acquisition and construction loans that does not require a lot of red tape. Thank you.

Loan Officers who have case scenario questions about commercial loans through Lending Network, LLC, please post them on this thread and either Nelson Thompson or myself will answer them as soon as possible. Please be detailed in your questions regarding the property, such as the type of property, location, history, and other pertinent facts. Share the purpose of the loan, the current value or P and L, the repairs required, the loan amount, the scope of work, and projected P and L. Besides the purpose of the loan, explain in detail what the money will be used for, and the projected proforma P and L after the renovation or improvements. Explain the current value of the house, the renovation costs, the after improved value, and expected time to stabilize the property. The down payment the borrower has to put down, reserves, and experience of the guarantor or guarantors. If we decided this will be a loan that has merits, the next step will be to have the client complete and personal financial statement and summary sheet to us via email. If you have any questions, please post on this thread or start a new thread. We will start all inquires, case scenario, Q and As on this forum.

https://www.lendingnetwork.org

• This discussion was modified 1 year, 7 months ago by  Sapna Sharma.
• This discussion was modified 2 months, 2 weeks ago by  Gustan Cho.

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COMMERCIAL LOANS, COMMERCIAL REAL ESTATE

Amanda had a question on a real estate investor who has a 35 unit apartment building needing to refinance out of a bridge loan. The apartment building was purchased needing work. As a real estate investor of 7 apartment complexes consisting of 3,000 units, lenders require the following:

1. Summary sheet of the purpose of the loan and property detail. Location. What condition is building in A, B, C, D tier and what type of area is the apartment in A, B, C, D.

2. Personal financial statement

3. Three years of tax returns for conforming traditional commercial loans

4. Current P and L and rent roll which is current and proforma. Eventually need copy of leases. Need to itemized income and expenses which includes insurance, property tax, payroll, utilities, maintenance, water, and third-party vendors. Number of units, and approximate square footage. Number of rooms, bedrooms, bathrooms, and does it have dining rooms. Parking spaces or carports.

5. Type of work done and itemized cost

6. Real estate purchase contract

7. Appraisal if available and estimation of value of the property

8. How many are market rent, and section 8 housing

9. Comparable rents in the area for studio, one bedroom, two bedroom, etc.

10. What type of loan program does the borrower prefer and/or expect: Recourse, or non-recourse. How many owners to the property. Is property individually owned or in a LLC or partnership. Traditional conforming commercial loan or hard money loan, or bridge financing.

11. Any deliquent outstanding bills such as mechanics lien, tax liens, or pending lawsuit.

We can start with this before we have a meeting with Dianne and see what type of loan program suits the borrower.

Please make sure all LOs have this

How to find active builders and spec builders.

one way is to

go to realtor.com, choose a large city

go to filters, click home, age no min, and less than one year. This should list the new construction homes.

get the addresses, the agent usually doesn’t want you speaking with their client, however, call the agent anyway and let them know that you can help their builder to build more homes, and sometimes they will introduce you. if not, then

do a Google search for parcel search using the city, county and state

. Usually, they have a gis map, and you can use it to locate the owner and the owner’s address, where you can further search and get a cell phone.

realtor.com is a great source to see who is building where and at what price.

• This discussion was modified 1 year, 5 months ago by  Gustan Cho. Reason: Wrong information

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Did you know, we can count rental income from an ADU on a DSCR Loan and allow for multiple ADU’s.

There are certain states that you cannot do NO-DOC Loans. Anyone know what states you cannot do no-doc loans.

Hello,

The borrower is a new Buddhist non-profit organization (Church. Actually they call it temple.) This organization is planning to buy a property in NY or NJ to establish a place for retreats, different events and classes. Their teacher, Rinpoche,  is well known in Europe, US, Mongolia, India and many other countries. Where to start, what documentation do they need, how much money do they need for down payment, etc. Thank you, Tatiana

DIANNE BURNETT CASE SCENARIO QUESTION FROM TAYLOR GILMORE ON DSCR LOAN

Hi Gustan,

Could you do the deal below?

commercial
refinance
in LA
on Westin
currently occupied to child care center
government program
DSCR is 1.49
building appraised for $1.2mn
$500k loan currently on property
mortgage she’s paying is $3500
income from child care center is $5400
good DSCR

Best regards,
Taylor Gilmore

• This discussion was modified 1 year, 7 months ago by  Gustan Cho.
• This discussion was modified 1 year, 7 months ago by  Gustan Cho.
• This discussion was modified 1 year, 7 months ago by  Sapna Sharma.
• This discussion was modified 2 months, 3 weeks ago by  Sapna Sharma.

CASE SCENARIO FROM DANNY VESOKIE QUESTIONS: Are you a super broker or direct lender. FINANCIAL PACIFIC out of Seattle did a food trailer for $45,000, 25% to 30% rate, $1,100 month for 60 months. EFA EQUIPMENT FUNDING AGREEMENT FIRST MONTH AND LAST MONTH DOWN. COMMERCIAL LOAN BROKER MADE 12% COMMISSION. DOC FEE $250, PREFUNDING FEE OF $200.END USER PAYS TO RESTAURANT OWNER. DMV PAPERWORK PRO TRUCK COMPANY PAYS. CREDIT SCORE 700, 7 YEARS IN BUSINESS.

Mobile home parks are great investments and are becoming increasingly popular and profitable. Who finances Mobile Home Parks and how do you qualify. What are the financing guidelines of Mobile Home Parks

Nelson Thompson is the President of Mortgage Sensei and the CEO of Lending Network Inc. Both positions place him at the helm of influential financial organizations within the mortgage and lending industry. Here’s a bit more about each of these roles and the respective organizations:

Mortgage Sensei: Nelson Thompson

• Role: President
• Focus: Mortgage Sensei is likely to provide mortgage solutions, consulting, and educational resources for consumers and industry professionals.
• Services: The organization may offer various services, including mortgage brokerage, loan origination, and mortgage education.

Lending Network Inc.

• Role: CEO
• Focus: Lending Network Inc. operates as a comprehensive lending service provider. It may offer various loan products, including residential mortgages, commercial loans, and other financing solutions.
• Services: The company likely provides financial products and services aimed at helping individuals and businesses secure the funding they need. This can include everything from personal loans to large-scale commercial financing.

Contributions and Impact

• Leadership: As a leader in these organizations, Nelson Thompson plays a key role in strategic decision-making, business development, and overseeing daily operations.
• Industry Influence: His positions suggest a significant influence in shaping the direction of mortgage lending practices and policies within the industry.

Contact and Further Information

• For more detailed information about Nelson Thompson’s work and the services offered by Mortgage Sensei and Lending Network Inc., it would be beneficial to visit their respective websites or professional profiles on business networking sites like LinkedIn.

Unfortunately, detailed information about Nelson Thompson’s work and the services provided by Mortgage Sensei and Lending Network Inc. may not be readily available in the public domain. If you require more precise details or wish to contact these organizations directly, consider reaching out through their official websites or professional contact channels.

Visit us at Lending Network, Inc. @MortgageSensei

https://lendingnetwork.org/

When seeking financing from a commercial lender for a six-unit apartment building, you will need to provide a comprehensive set of documents and information to demonstrate your ability to manage the property and repay the loan. Here is a list of what you typically need to give to a commercial lender:

1. Business Plan: Provide a detailed business plan that outlines your investment strategy, property management approach, and financial projections. Include information about the location, market analysis, and your long-term goals for the property.

2. Loan Application: Complete the lender’s loan application form, providing personal and financial information about yourself and any co-borrowers.

3. Property Information:

   • Property address and legal description
   • Property photos or appraisals
   • Description of the property’s condition and any planned renovations or improvements

4. Purchase Agreement: If you’re acquiring the property, include a copy of the signed purchase agreement with the seller.

5. Financial Statements:

   • Personal financial statements for you and any co-borrowers
   • Business financial statements if you have an existing real estate investment company

6. Rent Roll: Provide a detailed rent roll that lists the current tenants, their lease terms, rental rates, and any delinquencies. This helps the lender assess the property’s income potential.

7. Operating Expenses: Document the property’s operating expenses, including property taxes, insurance, utilities, maintenance costs, and property management fees.

8. Income and Expense Projections: Create income and expense projections for the property to demonstrate its potential cash flow and profitability. Include details such as expected rent increases and expense trends.

9. Property Management Plan: Outline your property management strategy, including who will manage the property, their qualifications, and any third-party management agreements.

10. Credit Report: Expect the lender to check your credit history and the credit history of any co-borrowers.

11. Down Payment and Equity: Provide information on the down payment you plan to make and any existing equity in the property, if applicable.

12. Appraisal: Typically, the lender will require an appraisal of the property to determine its current market value.

13. Title Report: A title report is necessary to confirm that there are no outstanding liens or legal issues with the property.

14. Environmental Reports: Depending on the lender’s requirements and the property’s history, you may need to provide environmental reports, especially if there is a concern about contamination or hazardous materials on the property.

15. Legal Documents: Any legal documents related to the property, such as leases, contracts, and property surveys, may be requested.

16. Personal Guarantees: Be prepared to provide personal guarantees if the lender requires them.

17. Entity Documents: If you’re financing the property through a business entity, provide documents related to the entity’s formation, ownership structure, and financial standing.

18. Tax Returns: Personal and business tax returns for the past few years may be required for underwriting purposes.

19. Down Payment Proof: Show proof of funds for the down payment, including bank statements or other financial statements.

20. Insurance Information: Provide details about property insurance coverage and any required insurance policies.

Keep in mind that each lender may have specific requirements and may request additional documents or information. It’s essential to work closely with your lender and be prepared to provide any documentation they request during the underwriting process. Additionally, having a strong credit history, a well-thought-out business plan, and a solid financial position will enhance your chances of securing financing for the apartment building.

Have you gotten a Last Minute Mortgage Denial at your current lender? You are not alone. Over 80% of our clients at Gustan Cho Associates are borrowers who got denied at other lenders. Borrowers got denied at other lenders because the loan officer did not properly qualify the borrower or because of the mortgage company having Lender overlays. Lender overlays are additional mortgage guidelines above and beyond the minimum agency guidelines of FHA, VA. USDA, FANNIE MAE or FREDDIE MAC. The team at Gustan Cho Associates has a no lender overlay business platform on government and commercial loans. We can help borrowers with credit scores down to 500 FICO, non-qm loans, 12 months bank statement loans, DSCR loans, no-doc loans, ITIN loans, DACA LOANS, Condotel Financing, hard money commercial loans, commercial loans, SBA LOANS, Factoring, equipment financing, Business lines of credit, POS, Spec-Builder New Construction, Auto Financing, apartment building loans, land loans, church financing, accounts receivable financing, MCA financing, and land development loans. No need to worry if you got denied. The file is not dead. You can join us where we can help you qualify and get you approved for your commercial or business loan.

If a deal is a cash-out refi, on a DSCR loan, you need to know the loan amount and LTV, credit score, zoning, term of the lease, nor credit scores, or how long the house has been owned, the price that was paid for the house. If this is a bridge loan short term, you need to know whether it will be a 25/30 year term house is a residentially zoned neighborhood, if it’s in a commercial zone, or a permitted or conditional use permit. All of these answers will determine the type of loan along with its term, penalties, and rate, and if we can use the rental agreement VS the rental appraisal supplement 1007 (the appraiser will also perform a rental market analysis report called 1007 if a 1004 appraisal is used). Need to know if it will be for the long-term agreement for the state-certified daycare. This information determines how we will see the house classified and what type of loan will be required. Just because the lease is in place does not mean the lease amount will be used to calculate the DSCR because 1007 will also give a number, and it’s the lower of the two.

If this is a house with a conditional use permit, I could require a rebuild letter from the city or county, and The DSCR would go off the Appraisal rental supplement.
Please note that the definition of debt service coverage ratio (DSCR) is net operating income divided by total debt service.

Next week, @MortgageSensei Nelson Thompson, President of Lending Network, Inc. is going to announce the roll out of the commercial lending programs Lending Network LLC. Nelson Thompson will be launching and finalize our commercial lending platform with NEXA Mortgage and AXEN Mortgage. The merger with NEXA/AXEN and Lending Network LLC will be a game changer for NEXA Mortgage loan officers and for recruiting nee loan officers. Stay tuned. For more information please click Lending Network, https://www.lendingnetwork.org/

• This discussion was modified 7 months ago by  Gustan Cho.

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COMMERCIAL LOANS, COMMERCIAL REAL ESTATE

There is an ample supply of qualified Borrowers ready for a loan Where your Commercial Bankers have just denied them. Start calling CRE bankers today. YES, Cold Call them.

• This discussion was modified 1 year, 6 months ago by  Sapna Sharma.

I am very excited to get involved and start originating commercial loans. What different types of commercial loans is Lending Network, Inc. going to offer to real estate investors and business folks?

Hello! I have a scenario from a non profit organization looking to purchase 12,400 sq ft. warehouse in GA and convert to temporary housing for working class, homeless individuals who will eventually become first-time home buyers. Sale price is $3.5 million, 75% LTV (25% down payment). Contact Cathy Willis for more details @ 708-668-8464.