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Wednesday, October 22, 2008

Daily Observations - I'm So Excited


I found a Lender that wants to lend, they will lend on any commercial property with normal underwriting guidelines as long as there is cash flow. Almost sounds like the way it used to be. They are even closing loans regularly the BDO told me.

So what's the catch I asked Him. How can you ignore what everyone else is "hung up" on and still be closing loans regularly.

Here's his answer as long as the client will deposit 20% of the loan amount in our bank we will approve their loan subject to normal underwriting requirements.

Here's a thought...If the client has an additional 20% to be put in the bank over and beyond their down payment do you think they really need a loan? That probably means in terms of a straight commercial loan 60 to 70% down including the extra CD at the bank, with CAP rates as low as they are. I might be exaggerating somewhat to make my point, but I don't think I am off the mark that much. Lower CAP Rates means lower net cash, and when you compare it to the higher purchase price, down payment has to be increased accordingly.

For a thorough discussion of this point and the Ten Secrets your lender does not want you to know email me about our Special Report; GET Your Loan Closed! with over 95 pages which is now available.

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