What properties do you guys finance?

Every property comes with its own unique considerations, so please contact us to discuss your specific situation. In general, we will finance stabilized multifamily assets with at least 5 units, in addition to retail, office, light industrial, and mixed-use properties in major markets and adjacent communities with a population of at least 50,000.

How big of a loan can I get?

This will depend on the debt service coverage ratio, which is the net operating income (NOI) divided by the annual mortgage payment. Generally, we want no less than 1.20x debt cover on multifamily and 1.30x on any other asset. If there's enough debt coverage ratio, we can go up to 65-75% of the purchase price or property value, whichever is lower on a purchase.

What are your general terms?

Multifamily:

• We offer 5-, 7-, and 10-year fixed rates, with up to 30-year term and amortization.

• We can do up to 5 years of interest-only payments if the leverage is low enough.

• We can do non-recourse.

• We can finance borrowers with Chapter 11, foreclosures, and bankruptcies, depending on the situation.

Retail, office, industrial:

• We offer 5-, 7-, and 10-year fixed rates, depending on the length of the leases. Must not be month-to-month.

• We usually do 25-year amortization, but can do 30-year amortization.

• Interest-only and non-recourse are possible.

• Credit tenants, long leases, strong markets, and multiple tenants make for better loan terms.

What do you need to get a quote?

On purchases, an offering memorandum usually has the financial information we're looking for. We also need a schedule of real estate and personal financial statement. You can submit this information when you go to the "apply" tab.

On refinances, we need a current rent roll (with lease terms for retail/office/industrial); at least the past two years of profit and loss statements; and a schedule of real estate and personal financial statement.

How long does it take to get a loan?

Generally, from when the bank issues a letter of interest to a final approval is about 45-60 days.

When rates go down, how come the banks don’t drop their rates?

Banks have many internal factors affecting their "floor" rates. They may decide that they have enough business volume, so they don't feel motivated to lower their rates. Or they may decide that other banks have lowered their rate, and they want to be more competitive. Or their cost of funds haven't lowered.

How much cash/liquidity do you need?

The rule of thumb is that most banks want to see at least nine months of payment reserves for the loan.

I just bought a property and improved the value. Can I get a loan amount based on the appraisal value instead of the purchase price?

Generally, we are limited by loan-to-cost (LTC) for at least a year. Meaning, lenders will base their loan amount as a percentage of the purchase price instead of appraisal value until you've owned the property for over a year.

I have a bankruptcy/foreclosure from many years ago. Will lenders find it?

Banks employ third-party companies to perform extensive background and credit checks, and they are capable of discovering major credit issues from many years ago. Being upfront about past issues and explaining them will be more helpful than attempting to conceal it. Lenders may not catch it every time, but we would rather not take that chance.

Since the property pays for the loan, the bank doesn't care about me as a borrower, right?

Lenders look at everything. Even though the cash flow from the property must be there to support the loan, lenders want to know if the borrower is financially strong enough to support the loan if the property isn't performing for any reason. And they want the borrower to be knowledgeable in real estate management.

What is non-recourse?

Non-recourse means that the lender is limited to just foreclosing the subject property, as opposed to recourse, which is pursuing other assets to make up for the balance of the loan after foreclosure. In California, lenders are limited to either foreclosing the subject asset or pursuing other assets. But they typically choose to foreclose the subject property.

My property is owned by a LLC. Why does the lender still need my information?

Lenders will always want a human being to be a guarantor on the loan, someone who will be legally responsible for repaying the loan.

What's the difference in terms and rate on a purchase loan and a refinance?

Both purchases and refinances are treated similarly. However, on purchases, the loan is maxed out as a percentage of the purchase price.