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? Self-employed borrowers Less than perfect credit Story loan borrowers Bank turn downs Hard money refi Time is of the essence Tax issues Someone 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 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 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 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? 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 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 Borrower needed to pull cash out to build 4 th 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. 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 bworthington@apexmtg.com