C-LOANS BANKER LETTER
This letter is intended only for commercial real estate loan officers working for banks and hard money lenders. Today we'll explain why commercial loans that cash flow very well can be stinkers. We also have lots of cute, clean jokes, some funny pics, and a disgusting but fascinating video about ticks.
Hey guys, if we make you chuckle today, won't you please-please-please refer a turndown this week to CommercialMortgage.com?
Joke Du Jour
At a workshop on dog temperament, the instructor noted that a test for a canine's disposition was for an owner to fall down and act hurt. A dog with poor temperament would try to bite the person, whereas a good dog would lick his owner's face or show concern.
Once, while eating pizza in the living room, I decided to try out this theory on my two dogs. I stood up, clutched my heart, let out a scream and collapsed on the floor. The dogs looked at me, glanced at each other and raced to the coffee table for my pizza.
Not That There is Anything Wrong With That
Ever Wonder What a C-Loans Application Looks Like?
Here's a sample commercial loan application.
I started carrying a knife after an attempted mugging a few years ago. Since then, my mugging attempts have been a lot more successful.
Won't You Please-Please-Please Refer Us Your Commercial Mortgage Turndowns?
If you have to turn down a commercial loan this week, you would really be helping your customer if you referred him to CommercialMortgage.com. There are over 3,000 commercial lenders listed on this commercial lender search engine.
Today's Lesson: Be Wary of Commercial Loans That Cash Flow Too Well
“This is a really good commercial loan, George. It has a 1.63 debt service coverage ratio.” Whenever I hear comments like that, I roll my eyes. The property is inevitably in a slum. How can I possibly know this? It has to do with the cap rate.
You will recall that the capitalization rate is the return on his money that an investor would earn if he bought an income property for all cash. The nicer the property and the nicer the area, the lower the cap rate with which an investor will be satisfied. An apartment buyer might be satisfied with a 6.5% cap rate in an average area, and he might be satisfied with a cap rate of just 3.5% in a premier area.
On the other hand, if the property is in the slums, a seller might have to keep lowering his asking price in order to attract a buyer. Who wants to buy this apartment building in the ‘hood for $1 million. The cap rate is 7%. No one? Who wants to buy this property in the ‘hood for $900,000. That’s a 9% cap rate. No one? And so on. Finally, who wants to buy this apartment building for $520,000? This is an 11% cap rate. Finally he finds a buyer.
The buyer then applies to Blackburne & Sons for a 75% loan-to-value, purchase money first mortgage. There is tons of net operating income because no one wanted to buy the property unless the cash flow was huge. (They didn’t want to get shot while collecting the rents.) Therefore the proposed debt service coverage ratio was enormous. On paper, the deal looks great.
The problem is that when Blackburne & Sons sends out a loan officer to do a site inspection, local toughs chase him off the property. Pasadena. But we sort of knew this was going to happen when the mortgage broker told us about the 1.63 debt service coverage ratio. If a property cash flows too well, invariably the property is in a slum or there is some other glaring problem, like toxic contamination.
Space X Joke
"SpaceX is planning to build a Mars rocket right here in Los Angeles. The voyage to Mars will take nine months, but eight of those months will be spent just getting out of L.A.” -- Conan O'Brien
Join C-Loans.com and Close Five More Loans Every Year, Decade After Decade
As a lender on C-Loans.com, you will receive carefully screened commercial loan applications directly to your email box. Each loan will be the right size, the right type (permanent, construction, bridge, etc.), on the right type of property, and in your exact lending area. And there will be a pretty good volume of them.
With one click you will see an Executive Loan Summary, with the debt service coverage ratio and loan-to-cost ratio already completed for you. Many Executive Summaries contain property pictures as well.
If you see a deal that you like, simply pick up the phone and call the borrower or broker directly, with no one else in your way.
Does it work? C-Loans lenders have closed more than 1,000 commercial real estate loans totaling over one billion dollars. One of our lenders (Trevor Cole Commercial) just closed its 50th loan for C-Loans. Two other have closed 40+ loans for C-Loans.
How much does it cost for your bank to be listed on C-Loans.com? You can pay a monthly fee to be listed on C-Loans.com (see further below), but nobody does that. All 750 of our banks choose to simply bump their normal loan fee up from 1 point to 1.375 points. When the loan closes, we send you an invoice for our software licensing fee. Click here for more details.
"In honor of Tax Day, Hardee's offered free breakfast biscuits if you said the password 'Made From Scratch.' Arby's had a similar deal. They gave you a free roast beef sandwich with the password 'Made From Squirrel.'” — Jimmy Fallon
Would You Please Refer Your Commercial Loan Turndowns to CommercialMortgage.com?
I apologize for the repeated begging, but C-Loans, Inc. is a tiny company - just an attorney dad, a couple of Eagle Scout sons, and nine hard-working co-workers.
We do have a couple of claims to fame. (1) We are just about the oldest surving hard money lender in the country - since 1980; and (2) C-Loans.com has closed over 1,000 commercial real estate loans. That's a lot of loans for a company that never got venture capital.
Because we are so small, your commercial loan referral means something to us. It will also greatly help your client because he will be able to search a database of over 3,000 commercial lenders.
Commercial Mortgage Dot Com - an easy domain name to remember. Thank you!
Q: If there were four potatoes in a room, which one would be the prostitute?
A: The one that's labeled "IDAHO"
Join CommercialMortgage.com For Free
Want to close a few more commercial loans? Your bank can now be listed on CommercialMortgage.com ("CMDC") for free.
"George, if CMDC is free to both banks and borrowers, how do you make any dough?"
Our hard money commercial mortgage company, Blackburne & Sons (est. 1980), works the subprime leads generated by the site. Basically your bank is our loss leader. Your low-rate loan programs are our dirt-cheap toilet paper that brings shoppers into the store. Ha-ha! If you close a loan, we make nothing.
Click here to list your bank on CMDC and receive totally FREE commercial real estate loan leads.
Bankers: Get 200 Free SBA Loan Applications
Does your bank want to close more SBA loans? C-Loans.com will give you two hundred SBA loan leads for free, deals that are perfect for your bank. These loans will be the right size. They will be located only in your favorite counties of your favorite states, and these SBA loans leads will be secured by just the type of commercial real estate that you prefer - office buildings, industrial buildings, etc.
Please click here for more information about how to receive 200 free SBA loan applications. The above offer is made only to commercial banks and credit unions.
Moment of Silence Joke
At a wedding I attended, the priest called for a moment of silence to remember the faithful dead. As the church grew quiet, a little boy sitting in front of me turned to his father and said excitedly, "Dad, you have some of their albums!"
Is Your Boss Having Trouble With the Idea of a Software Company That Only Gets Paid When Deals Close?
C-Loans, Inc. is a software company. It cost us $2 million and 18 years to develop the software for C-Loans.com. We have all of the required licenses to be a commercial mortgage broker, but we're just not in that business. We license software. Period. We never even speak with these borrowers.
If your bank wants to license our software on a flat fee basis, just as it does with their accounting software, their customer relationship manager (CRM) software, and their SBA loan origination software, this option is available.
For banks with less than $2 billion in assets, the cost is just $250 per month. For banks with more than $2 billion in assets and less than $7 billion in assets, the cost is just $350 per month. For banks with more than $7 billion in assets and less than $15 billion in assets, the cost is just $500 per month. For banks with more than $15 billion in assets, the cost is just $1,000 per month. In all of these cases, the bank owes nothing more, even if it closes a loan.
A little known fact… The first testicular guard, “the cup”, was used in hockey in 1874, and the first helmet was used in 1974. That means it took 100 years for men to realize that their brain is also important.
Oh, Won't You Please-Please-Please Refer Your Turndowns to CommercialMortgage.com?
If you have to turn down a bank customer's request for a commercial real estate loan this week, it will help him immensely if you would please suggest a place for him to look elsewhere. With over 3,000 listed commercial real estate lenders, CommercialMortgage.com is the place to send him. If none of our 3,000+ commercial lenders will finance his deal, then his request simply isn't do-able.
Q: How does a lumberjack start his computer?
A: By logging on!
Would You Mind a $21,250 Referral Fee?
We once paid a $21,250 referral fee to a website owner named Alan Dunn of Spydercube.com for referring us a $17 million deal.
We've made it super-easy to refer us commercial loans and to receive big referral fees. Please click here for details.
Video - EEEEuuuu, Ticks!
You'll find this interesting and disturbing.
Paul Revere Joke
Q: What did Paul Revere say at the end of his famous ride?
One Final Pathetic Plea
If you won't let us pay you a referral fee, won't you please-please refer your commercial mortgage turndowns to CommercialMortgage.com? Thanks!