COMMERCIAL BROKER NEWSLETTER
You are receiving this letter because you either wrote to us or you are a commercial real estate broker client of either Blackburne & Sons or C-Loans, Inc. Today we'll talk about why hard money mortgage funds fail. We also have lots of cute, clean jokes, some funny pics, and a funny video of clever pranks.
Joke Du Jour
My wife asked me to buy ORGANIC vegetables from the market. I went and looked around. I couldn't find any, so I grabbed a harassed and tired-looking employee and said, "These vegetables are for my wife. Have they been sprayed with any poisonous chemicals?" The produce guy looked at me and said, "No, sir, you'll have to do that yourself."
Annie Is Awfully Quiet
Private Money Commercial Permanent Loans Nationwide From
$100,000 to $3.5MM
Do you need a purchase money lender who will actually go to 75% loan-to-value? 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? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other invest-ments, etc.? Do you need a loan against a portfolio of single family homes?
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 private money commercial loan or call me, Tom Blackburne, at (574) 210-6686.
"A man in Oregon walked away with minor injuries after he fell asleep in a dumpster and ended up in a trash compacter. This raises a lot of questions, and the answer to all of them is tequila." -- Jimmy Fallon
Why Hard Money Mortgage Funds Fail
Over two-hundred new hard money mortgage funds have arisen from the ashes of the Great Recession. After all, its relatively easy to hire an attorney to create the legal documents to form a new mortgage fund, and private investors are flocking to these brand new outfits for a chance to earn double-digit returns. Unfortunately many of these private mortgage investors maym be doomed to suffer large lossess when these new mortgage funds almost inevitably fail.
Here's why: Most hard money mortgage funds only make bridge loans - loans with terms of two years or less. The sponsor makes two to three points for originating each loan, plus maybe 75 bps. for servicing. The bottom line is that the sponsors of these mortgage funds make 70% of their dough from originating new loans, as new deposits flow into their pools and as old loans pay off. Okay. There is nothing morally wrong with this, right? Right?
Unfortunately, bad real estate slumps seem to hit every seven to twelve years. When real estate values fall 20% to 45%, the losses to the fund start to mount. Once the investors start to smell these losses, they panic and demand their money back. Millions of dollars flow out of these mortgage funds, and hardly a penny flows back into them.
Soon the Sponsor has no new money with which to lend, so his loan fee income virtually disappears. This last sentence is so important that I ask you now to please read it again. Remember, this loan fee income used to constitute 70% of the Sponsor's income. Without enough income to pay salaries and rent, the Sponsor is eventually forced to close his doors.
Without the sponsor to shepherd the collection efforts- making collection calls, filing foreclosure, getting borrowers out of Chapter 11 Bankruptcy, hiring attorneys, hiring foreclosure companies, hiring contractors, hiring property cleanup crews and hiring real estate brokers - this portfolio of once decent loans invariably gets crushed. Eventually the government moves in to clean up the mess. Greedy attorneys, trustees, and accountants feast, the investors get fleeced.
Am I exaggerating? There were aound 150 hard money mortgage funds in business before the Great Recession. Fewer than six survived. The next time you get solicited to invest a large portion of your retirement funds into a mortgage pool yielding 10%, ask the Sponsor, "Was the fund operating in 2007?"
As an investor, I don't like mortgage funds. Are you a very accredited investor? Please write to me.
Only Blackburne & Sons Can Do This:
Blackburne & Sons has some truly unique and super cool programs:
- We'll give you a bridge loan on your commercial property for only one point! There is no prepayment penalty.
- We allow sellers to carry back a second mortgage behind our first mortgage.
- We will actually lend up to a 75% loan-to-value ratio. Banks claim they will lend up to 75% LTV, but in real life they will only go 68% LTV.
- We are the only lender in the country offering small balance preferred equity. We'll raise as little as $100,000 if your client can't come up with a full 30-35% down to satisfy the bank.
- We offer private money (loosey-goosey underwriting) commercial loans with a 15 year term. Our competitors offer 2 to 3 year bridge loans. We offer 15-year permanent loans with no prepayment penalty. Never again will you have a balloon payment come due during a recession.
- We have a terrific apartment permanent program that can compete with Agency loans.
- We buy commercial first mortgages (usually at a discount).
- But instead of discounting your wonderful commercial first mortgage, consider pledging it as collateral for a smaller loan. This is called a hypothecation. We make loans secured by mortgage notes owned by the borrower.
"The Canadian food inspection agency announced that gin is being recalled. The recall was announced because bottles of Bombay Sapphire gin were found to contain 77 percent alcohol by volume rather than the typical 40 percent. Here's how you can tell--normally, gin tastes like juniper with hints of lemon and coriander. Seventy-seven percent alcohol gin tastes like regret, with hints of fighting a parking meter." -- Stephen Colbert
Free Copy of the Blackburne List
The Blackburne List is a list of over 2,500 commercial lenders located nationwide. We just spent almost $30,000 and three months updating this list.
The Blackburne List is available for purchase for just $79.95. Is money tight? You can also buy one of our three Regional Lists (750+ lenders) for just $39.95. But why spend money at all?
We will trade you one of our three Regional Lists for the contact information of just one banker making commercial real estate loans. If you refer us three bankers, you will own the list for all three regions. Together you will own the entire Blackburne List.
There is another way that you can access The Blackburne List. Our newest portal, CommercialMortgage.com, is an online way to search the entire Blackburne List for the 30 lenders most suitable to make your loan. Use of CommercialMortgage.com is also 100% free!
Not Married Joke
Sitting in the bar, George asked his 40-year-old friend John, "How come you aren't married?" John: "I haven't found the right woman yet." George: "So what are you looking for?" John: "Oh she's got to be real pretty, a good cook and house keeper, she's got to know how to handle finances, have a forgiving personality -- and money, she's got to have money, and if she has her own house it wouldn't hurt either." George: "A woman like that would be crazy to marry YOU!" John: "Oh, it's okay if she's crazy."
Sweet Apartment Program for "A" Deals
Blackburne & Sons has an incredible apartment loan program for "A" quality deals. 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 fixed rate, 30-year fully-amortized loan. For more details, please call Tom Blackburne at (574) 210-6686.
Star Wars Joke
"Today was Star Wars Day, because the day was May Fourth, as in 'May the fourth be with you.'' And now, it's technically May Fifth, Cinco de Mayo, as in 'May the fifth margarita be in you.'" -- James Corden
Do You Need a Commercial Loan Right Now?
If you need a non-prime, subprime, or slightly-flawed commercial loan, simply complete this super-easy mini-app to Blackburne & Sons.
If you need a bank-quality commercial mortgage loan right now from a life company, commercial bank, or conduit, you should enter your deal into C-Loans.com.
If you still can't find a commercial lender using C-Loans, then try CommercialMortgage.com. Keep in mind that the 3,159 commercial lenders on CommercialMortgage.com are different than the 750 commercial lenders on C-Loans.
In any case, you should come visit CommercialMortgage.com right now and take it for a free test drive. You do NOT need a real life commercial loan request.
Counting Joke (PG-13)
There was a little boy who had just learned to count on his fingers. One day his uncle came to visit, and the boy was anxious to show off his newly acquired skill. He told the uncle to ask him an addition question. So the uncle asked, "What is three plus four?" The little boy counts it out on his fingers and said, "Seven." The uncle said, "Listen kid, you can't count it out on your hands because someday when you are in school, a teacher will get mad at you for it. Now put your hands in your pockets." So the little boy put his hands in his pockets and his uncle asked, "What is five plus five?" After a few moments of intense concentration, the boy said, "Eleven."
One-Point Commercial Bridge Loans
Suppose you have listed a commercial property for sale, and the seller is getting antsy. You can often hold him off long enough to find a buyer by getting him a bridge loan. Blackburne & Sons offers a six-month bridge loan for just one point and no prepayment penalty. Please click here to submit a commercial bridge loan mini-app or call me, Tom Blackburne, at (574) 210-6686.
Should I Work Out?
My friend's son worked at a fast-food restaurant when he was in high school. One night while he was manning the drive-thru, a customer told him that the intercom wasn't working properly. My friend's son went about filling the order while a female co-worker fiddled with the intercom. She asked, "Is that okay now?" "Well, no," the customer replied. "Now you sound like a girl."
Buying or Selling a Commercial Property? We'll Help Your Buyer With His Down Payment!
No one else in the entire country does what we do. We add our equity dollars - not debt dollars - to your buyer's down payment to create a down payment large enough to satisfy the bank.
The reason you need us is because banks are now requiring 35% to 40% down payment on the purchase of many commercial-investment properties. To make matters worse, most banks today will not even allow the seller to carry back a second mortgage.
Does your buyer really want to put down 35% to 40% of the purchase price? Our small-balance preferred equity solves your problem. Please click here for more information about our preferred equity.
Blackburne & Sons (est. 1980) is a commercial private money lender. We will allow second mortgages behind our own first mortgages!
Please click here to apply for preferred equity or a private money commercial mortgage. You can also call me, Tom Blackburne, at (574) 210-6686.
Wedding Vows Joke
A grandmother overheard 5-year-old Christy "playing wedding." The wedding vows went like this: "You have the right to remain silent, anything you say may be held against you, you have the right to have an attorney present. You may kiss the bride."
Two Ways To Earn Referral Fees For Commercial Loans - We Once Paid $21,250.
This one is an absolute no-brainer. You simply put a link to C-Loans.com on your real estate website. We once paid a $21,250 referral fee to a guy who was asleep when the lead came in! Here are the details.
You can also referral commercial loans by hand. Here is our referral fee program.
It moves fast.
On a Personal Note
I am not much of a gardener, but I am learning to appreciate the amount of work a garden takes. I took the weekend to build a 20ft x 20ft garden in my backyard to surprise my girlfriend. Just the tilling alone took several hours. I built a 4.5ft tall fence around the garden and stapled chicken wire throughout to keep out any hungry deer that often meander into my yard. Time was of the essence. I had candles lit and a torch-light going while I worked through the dark of night. But the most frustrating thing that whole weekend wasn't the intense work. It was the fact that when I heard the cackle of a coyote not far off in the pitch black distance, my 5-month-old Golden Retriever pup, named Bernie, was nowhere to be found. When I bolted inside, I found him nestled quietly in his large, comfy doggy bed that my girlfriend made for him. A pampered pup already..
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!
[OMGoodness, I belly-laughed sooo hard.] For a computer programming class, I sat directly across from someone, and our computers were facing away from each other. A few minutes into the class, she got up to leave the room. I reached between our computers and switched the inputs for the keyboards.
She came back and started typing and immediately got a distressed look on her face. She called the teacher over and explained that no matter what she typed, nothing would happen. The teacher tried everything. By this time, I was hiding behind my monitor and quaking red-faced. I started to type, "Leave me alone!" They both jumped back, silenced. "Whaa??" the teacher blubbered.
Then I typed, "I said leave me alone!" The kid got really upset. "I didn't do anything to it, I swear!" It was all I could do to keep from laughing out loud. The conversation between them and HAL 2000 went on for an amazing five minutes. Me: "Don't touch me!" Her: "I'm sorry, I didn't mean to hit your keys that hard." Me: "Who do you think you are anyway?!" Etc.
Finally, I couldn't contain myself any longer and fell out of my chair laughing. After they had realized what I had done, they both turned beet red. Funny, I never got more than a C- in that class.
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