“Where commercial loans are all we do!”

“Where commercial loans are all we do!”
Today’s Mission:
Increase your revenue by
adding small-balance
commercial mortgages to
your current product line.
Your Market:
Business owners who need
financing to pay off debt, expand
their business or purchase
commercial real estate, but are
unable to qualify for SBA or bank
financing.
Who is your typical borrower?
üSelf-employed borrowers
üLess than perfect credit
üStory loan borrowers
üBank turn downs
üHard money refi
üTime is of the essence
üTax issues
üSomeone who would typically need a stated deal
Think about the goods and services you use!
• Did you get your morning coffee at a convenience
store?
• Did you drop off your kids at daycare?
• Where did you have lunch today?
• Who repairs your car?
• Did you go to a car wash?
• Did you buy flowers or a gift for your spouse on
the way home?
The property types around you are endless!
Small Balance
Commercial Mortgage Loans
• Loans under $500,000
• Most banks – minimum loan amount
is $1,000,000. Smaller loans not
considered profitable
Small Balance Commercial
Mortgage Loans are Profitable
Mortgage broker makes 3. 5 points
3. 5% of $350,000
= $12,250
Eligible Property Type Examples
Multi-Family
Day Care Facility
Auto Repair Shop
Churches - Traditional
Motel/Hotel
Churches – Non-Traditional
Eligible Property Type Examples
Warehouse/Light Industrial
Self Storage Facilities
Mobile Home Parks * Campgrounds
Office Building
Mixed Use
Essential questions to ask about potential
commercial building financing
• When did you buy the building and what did you
pay for it?
• Why do you want this loan and what are your
plans for the building?
• Why have you had past credit problems?
• For purchases – Where is the down payment
money coming from?
Financing Sources
HARD MONEY
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Commitment fees
1 – 2 year balloon
Usually interest only
55% maximum LTV
5 – 10 Lender points
Broker fee tough to get due to the high lender fee
No YSP
Financing Sources
LOCAL BANKS
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Full document
Strict credit requirements
Limited property types
5/25 programs
Balloons
90 – 120 day close
Call and review options
Lower rate
No YSP
Financing Sources
INTERMEDIARY LENDERS
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Less stringent underwriting guidelines
Higher rates than banks
Long terms and full amortizations available
Less costly than hard money
How do I find these deals?
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Accountant
Lawyers
Bank loan officers – become the go-to product
Bank REO teams
How do I find these deals?
• Review old 1003’s for self-employed borrowers
over the past 5 years
• Talk to private lenders – they need a take-out
option
• Leads from the internet
TOP 5: What’s in it for you?
2. Serving an under-served market
3. Lots of pent-up demand
4. Not subject to regulation
5. Closings in 3 weeks
#1: What’s in it for you?
$$$$$
Recent Closing #1
• 6-family investment
property in Lawrence
• Loan request $100K
• Credit score 724
• All cash out for
purchase of another
investment property
Recent Closing #1
• Borrower’s wife in Central America
• Completed mail-away closing 19 days after
borrower accepted deal!
• Broker made 3 points on HUD and 2 YSP!
• Deal was APEXable™ because borrower showed
very little personal income and did not claim all
rents on Schedule E
Recent Closing #2
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Office space
purchased as social
club for $300K in
2011
Club was downsizing
and sold a much
larger building
Loan request of
$120K to complete
renovations
Recent Closing #2
• Made commitment to borrower within 7 business
days of application
• Broker made 3 points!
• Deal was APEXable™ because Club had no
financials to provide for 2011 or 2012
Recent Closing #3
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Borrower needed to pull cash out to build 4th self storage
building on property
Deal was APEXable™ because property was owned by 3
brothers, personal income was weak and one brother had
poor credit
Deal closed 21 calendar days after commitment
YOU CAN START TODAY!
• Talk to commercial realtors
• Walk up and down a commercial street with your
business cards
• Chamber of Commerce
• Let your whole network know that you can do
commercial
APEX Mortgage Corp.
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We don’t charge any upfront fees
We charge only ONE lender point at closing
Brokers can make up to 5 points
We close our loans in 2 to 4 weeks
We look at credit scores as low as 600
We need only a 1003 or PFS, tri-merged
credit report and summary to look at a deal
Thank You!
Bob Worthington
Business Development Officer
800-262-2739, X208
[email protected]