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 the net-worth-to-loan-size ratio. And, of course, we have lots of cute, clean jokes, some funny pics, and the funniest video of all time.
Joke Du Jour
A man asked a Native American man for the name of his wife. He replied, "She called Four Horse." The man commented, "That's an unusual name for your wife. What does it mean?" The old man replied, "It old Indian name. It mean, 'Nag-Nag-Nag-Nag.'"
Oh My Goodness, We're All Gonna Die!
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.
And don't forget, we will quickly and happily issue you a written Loan Approval Letter - at no charge - that you can use as a fallback and to lure cheaper lenders. After all, everyone wants to lend to you if you already have a commitment. 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.
Coffee Cup Joke
"Bernie Sanders has a great coffee mug that says, Feel the Bern. Which Senator Sanders was specifically told by H.R. not to say to his interns." -- Stephen Colbert
The Net-Worth-To-Loan-Size Ratio
As the son of the owner of C-Loans.com, I often see inexperienced commercial mortgage brokers entering $8 million construction loan requests into C-Loans for developers with a net worth of less than $250,000. Are you kidding me? Do these new brokers expect a bank to loan $8 million to some homeless guy off the street?
The Net-Worth-To-Loan-Size Ratio says that a commercial real estate borrower should have a net worth at least as large as his loan request. In other words, this ratio should be 1.0 or higher. Therefore, if some borrower is asking you to find him a $20 million loan, in theory he should have a net worth of at least $20 million.
What if the borrower had a $14 million net worth, consisting mainly of free-and-clear real estate, cash, and marketable securities? Because of his low level of debt and his high level of liquidity, he would probably still qualify. This ratio is not chiseled in stone.
Can you combine net worths? In other words, could four doctors with a net worth of $5 million each collectively borrow $20 million? Yes!
Need a commercial loan? Simply complete this super-easy mini-app.
At the Depth of the Great Recession, I Was Really Feelin' This Shirt
Atlantic Ocean Joke
Q: What do you get when you cross the Atlantic Ocean with the Titanic?
A: Only half way.
Sweet Apartment Loan Program for "A" Deals
Blackburne & Sons has a terrific apartment loan program for "A" quality deals. Our fixed 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.
A three-year-old boy went with his dad to see a new litter of kittens. On returning home, he breathlessly informed his mother, "There were two boy kittens and two girl kittens." "How did you know that?" his mother asked. "Daddy picked them up and looked underneath," he replied. "I think it's printed on the bottom."
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.
On The Positive Side, At Least He Follows Directions
Legal Questions Joke
What are the three questions most commonly asked by lawyers?
1. How much money do you have?
2. Where can you get more?
3. Do you have anything you can sell?
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.
Funniest Video of All Time?
I laughed so hard my sides ached
On a Personal Note
I am hoping to buy my first house this spring. I have a very limited budget, so my options are limited. In order for me to buy in a decent neighborhood, I will have to buy a "fixer upper". Eek!
For those of you who don't know, I am completely inept when it comes to tools/handiwork. When I look at a tool box, all I see are scary, sharp objects hell-bent on maiming me. How can I "fix up" a house when I can barely screw in a light bulb?
Thankfully, my girlfriend's family is very active in fixing and flipping properties and with their experience and my enthusiasm I think we can make it through without me losing more than a couple digits.
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!
An old man goes to a diner every day for lunch. He always orders the soup du jour. One day the manager asks him how he liked his meal. The old man replies, in a thick accent, "Wass goot, but you could give a little more bread." So the next day the manager tells the waitress to give him four slices of bread. "How was your meal, sir?" the manager asks. "Wass goot, but you could give a little more bread," comes the reply. So the next day the manager tells the waitress to give him eight slices of bread. "How was your meal today, sir?" the manager asks. "Wass goot, but you could give a little more bread," comes the reply. So ... the next day the manager tells the waitress to give him a whole loaf of bread with his soup. "How was your meal, sir?" the manager asks, when he comes to pay. "Wass goot, but you could give just a little more bread," comes the reply once again. The manager is now obsessed with seeing this customer say that he is satisfied with his meal, so he goes to the bakery, and orders a six-foot-long loaf of bread. When the man comes in as usual the next day, the waitress and the manager cut the loaf in half, butter the entire length of each half, and lay it out along the counter, right next to his bowl of soup. The old man sits down, and devours both his bowl of soup, and both halves of the six-foot-long loaf of bread. The manager now thinks he will get the answer he is looking for, and when the old man comes up to pay for his meal, the manager asks in the usual way: "How was your meal TODAY, sir?" The old man replies: "It wass goot as usual, but I see you are back to giving only two slices of bread."
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.
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