Volume 5, Issue 2

Newsletter Date:  January 26, 2015


COMMERCIAL LENDING NEWSLETTER

You are receiving this letter because you are one of my Spartans - my top-producing brokers and investor clients - of whom I am allowed to have 300. Removal instructions are below. Today we'll talk about commercial loans on ground leases. And, of course, we have lots of cute, clean jokes, some funny pics, and an interesting video for you.

Joke Du Jour

As chaplain in a university residence hall, I am supposed to uphold all of the school rules, which include a ban on pets. That changed when a kitten adopted me. The freshmen in my dorm kept my secret. They covered for me by calling my kitten "the Book," since I had so many in my room. One morning I was leaving the dorm with the kitten in a carrier. A student stopped me and asked, "Where are you taking the Book?" I explained that I was taking the kitten to the vet. "She's getting neutered today," I told him. "Hmmm," the student responded, "no sequels."

Behind By Two, Shot Clock Ticking Down, 3...2...1

Private Money Commercial Loans Nationwide From $100,000 to $3.5MM

Is your client's commercial property partially vacant? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? We make slightly scratched-and-dented commercial loans.

Our hot, new product is a blanket loan against a portfolio of rental homes. Rental homes? Yup, as long as there are at least five homes or units, we consider this to be a commercial loan. We even offer a partial release clause. This loan is ideal for speculators.

Here is our latest rate sheet.

Blackburne & Sons is looking for commercial real estate loans that are not quite clean enough for a bank. Please click here to submit a hard money commercial loan or call me, Tom Blackburne, at (574) 210-6686.

Senior Breakfast Joke

We went to breakfast at a restaurant where the "seniors' special" was two eggs, bacon, hash browns and toast for $1.99. "Sounds good," my wife said. "But I don't want the eggs." "Then I'll have to charge you two dollars and forty-nine cents because you're ordering a la carte," the waitress warned her. "You mean I'd have to pay for not taking the eggs?" My wife asked incredulously. "I'll take the special." "How do you want your eggs?" "Raw and in the shell," my wife replied. She took the two eggs home.

Commercial Loans on Ground Leases

This month Blackburne & Sons is competing for a loan on a ground lease. These deals come in two types - commercial loans on the ground lessor's interest and commercial loans on the ground lessee's interest.

If your borrower owns the underlying land in fee simple, and he has merely leased out the land for, say, 25 to 50 years, and the land lessee has constructed a building on the land, then this deal is easy. This is the kind of deal for which we are competing this month. Some major fast food corporation leased out the land for 25 years and built a fast food franchise. We don't really care that the lease is expiring soon because the building reverts back to the land lessor.

A more difficult kind of land lease loan is where your borrower has leased the land for a long period, say 20 to 99 years (the max legal term of a land lease). He then built a building on the property. Now he wants a mortgage against his land lessee's interest.

These deals are do-able, but the problem is often the size of the land lease payment. If it is large, then the requested commercial loan is very much like a second mortgage. If the borrower fails to make his land lease payment, the lender with the loan on the land lessee's interest will get wiped out if he doesn't bring the payments current. This is what scares the life out of Blackburne & Sons. I will blog on the entire subject shortly.

Need a commercial loan? Simply complete this super-easy mini-app.

Business School Joke

I'd been working on my business degree for about a year when I finally got to take a popular finance course. I went to the bookstore to buy the text and was shocked to find out that it would cost me $96. I asked how much it was worth if I sold it back at the end of the semester. "You'll get $24," said the clerk. "This is insane," I protested as I wrote out the check. "I know," replied the clerk sympathetically. "I've always thought that a person who buys a book for $96 and then sells it back for $24 should fail the course."

Lemmings - The World's Cutest Looking Animal

Small Balance Preferred Equity ($100K to $1MM)

If an investor wants to buy a leased commercial property, banks today will seldom lend more 58% to 62% LTV. Your buyer only wants to put down 25% of the purchase price

Quick, easy preferred equity from Blackburne & Sons fills in the missing piece of the capital stack. We'll add our $150,000 in equity dollars to your client's $250,000 down payment to create a down payment large enough to satisfy the bank. Think of our preferred equity as tiny Joint Venture investments.

For more information, please call Tom Blackburne at (574) 210-6686.

Hoover Joke

Father Murphy was playing golf with a parishioner. On the first hole, he sliced into the rough. His opponent heard him mutter, "Hoover!" under his breath. On the second hole, the ball went straight into a water hazard. "Hoover!" again, a little louder this time. On the third hole, a miracle occurred & Fr. Murphy's drive landed on the green only six inches from the hole! "Praise be to God!" He carefully lined up the putt, but the ball curved around the hole instead of going in. "HOOVER!" By this time, his opponent couldn't withhold his curiosity any longer, and asked why the priest said "Hoover". "It's the biggest dam I know." he replied.

Senior Citizens' First Experience With New Technology Never Ends Well...

New Apartment Program for "A" Deals

Blackburne & Sons has a terrific new apartment loan program for "A" quality deals. These loans close in our name and are sold to an institutional investor which purchased almost $400 million in apartment loans last year.

The rate is adjusted according to the desirability of the property and the area, but it starts at 3.87% and 1 point for a 30-year fully-amortized loan. For more details, please call Tom Blackburne at (574) 210-6686.

Canvas Joke

I used to work in an art supply store. We sold artists' canvas by the yard, and you could get it in either of two widths: 36 inches or 48 inches. Customer: "Can you please cut some canvas for me?" Me: "Certainly, what width?" Customer: (confused and slightly annoyed) "Scissors?"

Too Busy to Broker Commercial Loans to Us? Why Not Just Refer Them Instead? We Make It Easy!

We once paid a $21,250 referral fee. Here is our referral fee program.

The Truth About Lemming Suicides

This account will surprise you.

On a Personal Note

This past weekend was my daughter's 4th birthday party. We were celebrating at the house, so I came up with a story line involving six mini games to keep the little girls entertained. The theme was Disney’s Frozen and the premise of my story was to save the captured Princes Anna from the evil Prince Hans!

On their journey, they had to pin the nose on Olaf, have their faces painted, throw snowballs at a giant snow monster, go troll bowling, and use icy magic to freeze the evil Hans in order to free the princess from the dungeon. The girls had so much fun - almost as much as I did!

Don't Forget About C-Loans.com

We have a whole new crop of hungry commercial lenders on C-Loans, so if you have a commercial loan you're trying to place, it takes just four minutes to submit your deal to 750 commercial lenders. And remember, C-Loans.com is free!

Final Funny

A man is driving along a highway and sees a rabbit jump out across the middle of the road. He swerves to avoid hitting it, but unfortunately the rabbit jumps right in front of the car. The driver, a sensitive man as well as an animal lover, pulls over and gets out to see what has become of the rabbit. Much to his dismay, the rabbit is dead. The driver feels so awful that he begins to cry

A woman driving down the highway sees the man crying on the side of the road and pulls over. She steps out of the car and asks the man what's wrong. "I feel terrible," he explains, "I accidentally hit this rabbit and killed it." The blonde says, "Don't worry." She runs to her car and pulls out a spray can. She walks over to the limp, dead rabbit, bends down, and sprays the contents onto the rabbit.

The rabbit jumps up, waves its paw at the two of them and hops off down the road. Ten feet away the rabbit stops, turns around and waves again, he hops down the road another 10 feet, turns and waves, hops another ten feet, turns and waves, and repeats this again and again and again, until he hops out of sight.

The man is astonished. He runs over to the woman and demands, "What is in that can? What did you spray on that rabbit?" The woman turns the can around so that the man can read the label. It says... (Are you ready for this?) "Hair Spray: Restores life to dead hair, adds permanent wave."

Get a Free E-Book on CREF

This free e-book contains seven of George's best blog articles on the subject of commercial real estate finance.

Contact Information

Tom Blackburne
BRE# - 01919403
NMLS# - 1014118
BLACKBURNE & SONS REALTY CAPITAL CORPORATION
4811 Chippendale Drive, Suite 101
Sacramento, CA 95841
Phone: (574) 210-6686
Fax: (916) 338-2328
Email
: tommy@blackburne.com

 


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4811 Chippendale Drive, Suite 101, Sacramento, CA 95841 telephone: (574) 210-6686 * Fax: (916) 338-2328
Real Estate Broker -- California Bureau of Real Estate -- License Number 01330173

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