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Doing Commercial Loans - LoanUniverse Community

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Doing Commercial Loans


10 replies to this topic

#1 lotusraee

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Posted 28 July 2004 - 02:27 AM

I own a net branch of a Mortgage Lender in the state of CA. We are licensed in approx. 48 states. After 9 years of being on the residential side I also wanted to check into the Commercial lending side. I have a connection that can get 10-15 commercial loans a month. I have several questions on how to begin and hope someone can help.

1. Do I have to obtain separete licensing for commercial loans or can I work off the one I have?

2. Is it true that some states don't require any license at all to do commercial loans?

3. What would be some negatives about the commercial business?

Is there a helpful website that can give me information on doing commercial loans?

Any information is greatly appreciated.
Jayme

#2 loanuniverse

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Posted 28 July 2004 - 07:59 AM

Jayme:

I can’t really speak to licensing issues, maybe one of the non-bank lenders here can give you some feedback on those points. However, if I had to pick something to say about commercial lending to someone coming from a residential lending background, I would say the following:

- Commercial loans are usually custom products. There is no 15-year and 30-year standard.

- When you start talking about bigger deals, credit score is not enough. You will need to get people with the skills and experience to underwrite the loans or quality might suffer.

- I assume that the plan is to expand into commercial real estate lending and stay away from business financing? If you do decide to offer a full spectrum of commercial loans that would need even more expertise.

- Even if you decide to keep your entry to commercial lending limited to commercial real estate, sometimes you will need to analyze the company/tenant. Specially if you have an owner occupied property.

- I think it would be fair to say that the secondary market for commercial loans is less liquid than that for residential loans. This brings the question of “can you fund those loans yourself?”.

- You can certainly improve your yield with commercial loans, but remember that the risk/reward relationship holds true.


The following are a couple of sites that have information about the tools used. Moody’s financial analyst is pretty much the standard for spreading financial information, and Omega has a great series of training books that are usually given to people at the start of their commercial lending careers. They are both on the pricey side so you might just want to wait and see if you want to get into the business first.

Moody’s
Omega Training products


Good luck

#3 Guest_Commercial broker_*

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Posted 07 August 2004 - 11:09 PM

1) No liscence to broker loans but to deal loans straight to the client required commercial licences will be needed. Here is a way around it. I'm to am a Residentual loan officer but there are those little problems that show up and to deal with those was not worth the money to me. So I hooked up with a friend of mine and we now do the world. we have aproximently 1.750 Billion dollars world wide in processing at this time. That is in just the last 3 weeks. what you should do is hook up and for now just have your deals brokered for you until you get your paperwork squared away and collect part if not half the points charged just for refering the loan this way your clients are happy your learning the in and outs of the business. They do get more complicated then Res. but look at it this way One good deal and you could retire. calculate the above number by 1.5 to 2 points.

#4 combank

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Posted 10 August 2004 - 02:57 PM

Hi Jayme... I work for a commerical lender in California and I would be happy to help you learn more about commercial loans. How they work, what docs are needed and Debt service ratio's, maybe we can work together and you can broker the deals to me until your ready to go on your own. We only deal in California though. We can loan up to $50 k to $3 million. Please e-mail me back if your interested.... Thanks for you time.
Antoine
E-Mail-aanderson@ccombank.com

#5 Commercial Lender

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Posted 20 August 2004 - 03:39 PM

Jayme, ur right in looking to expand in to the commercial part of the mortgage business. With brokers being on the tail end of the refi-boom, and being that the commercial market is being underserved (underserved by honest and competent brokers, in my opinion atleast) it makes sense. There are tons of restrictions including fed and state usuary laws on residential but almost none on commercial. I belive Wisconsin & Arizona require a company to have a physical office in the state to do business there. Aside from that there are no other lic req for broker. I dont wanna turn this board into a Billboard for what we do so feel free to give me buzz, i will let you know how to get started. biggrin.gif

#6 loanuniverse

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Posted 20 August 2004 - 06:29 PM

”… (underserved by honest and competent brokers, in my opinion at least)…”

Naj is right, you know that saying something like “he gets all of his prospects from brokers” is actually a derogatory comment about a commercial lender in some circles of the banking industry. There is an aura of shady dealings around the profession, which can be looked at as an opportunity.

#7 MikeF

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Posted 27 August 2004 - 03:24 PM

Hi
my company just hired an expert on commercial deals just for this reason. We do
mortgages nationwide but have been mostly residential. now we have an expert who
can help us get the cmmercial deals together.
If you need us we can cobroker your deals until you are ready to do them on your own.
We just sign an agreement and our guy will do the work and you will get paid at closing.
Email me mike@guaranteedlendinggroup.com if you need me,
good luck
Mike

#8 lotusraee

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Posted 27 August 2004 - 07:24 PM

Thank you for all the replies. I just want to broker commercial loans. I have a broker license and we are able to do loans all over so I thought I would just open my horizons a bit to commercial. After doing some research I am headed into commercial real estate as well.

#9 Guest_Claudia_*

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Posted 04 January 2006 - 06:19 PM

I have questions regarding commerical loans. Please call 5109641094

#10 LenderBuddy

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Posted 06 January 2006 - 11:53 PM

You don't need a license to broker commercial deals out of state. I'm based in CA and I do only commercial loans and fund them nationwide through my network of lenders. In theory you can fund loans worldwide with the right network of people/lenders. Good luck. Commercial is fun.

#11 dtq

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Posted 07 January 2006 - 12:22 AM

QUOTE(Commercial Lender @ Aug 20 2004, 01:39 PM)
Jayme, ur right in looking to expand in to the commercial part of the mortgage business. With brokers being on the tail end of the refi-boom, and being that the commercial market is being underserved (underserved by honest and competent brokers, in my opinion atleast) it makes sense. There are tons of restrictions including fed and state usuary laws on residential but almost none on commercial. I belive Wisconsin & Arizona require a company to have a physical office in the state to do business there. Aside from that there are no other lic req for broker. I dont wanna turn this board into a Billboard for what we do so feel free to give me buzz, i will let you know how to get started.  biggrin.gif

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What about Texas? If I wanted to start brokering commercial loans would I need to have a physical office in Texas? Please let us know.

Thanks





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