Hello. I am an owner of a correspondent lender in Miami Florida and after 5 years in the residential side of the buisness I have had my first commercial deal fall into my lap. I appreciate any help and input on this as I am a novice at anything commercial. I would be open to co-brokerig this deal in order to be able to learn while providing better service to the client.

The Project:
The client wants to develop a cay in the bahamas. It is 162 acre oceanfront site that has been valued at 41 Mil. by Global Valuations. He is looking for 24 Mil to complete this project. The client has other large tracts of land that can serve as collateral and also owns several corporations. The land is owned free and clear.

Questions:
1. Are there institutions that loan on projects like this or will this be a private lender type of deal?
2. Where do you begin analyzing the strength and/or weakness of a borrower who wants to do something of this scope

Thanks you for taking the time to read this post. I look forward to your replies.

------------------------------
Ari Estrada
Cosmopolitan Mortgage Corp.
T:305-220-2033 F:305-220-3275

I don't work with any deals outside the US so I won't be able to recommend a lender. You may want to check to see what banks have a presence in the Bahamas and also check public records (if this is possible) to see who has financed other deals in the Bahamas. May want to check with Starwood Properties. They are well known for owning, financing and participating in resort and hospitality deals.

You didn't say what type of development he is planning on doing. The type of development is crucial not only for suggesting lenders but also for determining what is key to success.

The keys to all development projects are:

Borrower capitalization
Feasibility study (third party)
pre-sales/pre-leasing
Borrower experience/background with this type of development and if applicable operating the proposed business portion (hotel, spa, restaurant etc)

Ari:

No offense, but I hope that you understand that the fact that you get a crack at trying to broker the deal implies that the experience level of the developer is low. I do not recommend lenders, but I know that most US based bank lenders will not touch a project overseas.

The size of the deal is also problematic as it reduces the potential pool of lenders significantly. I would make sure to perform my due diligence on anybody that claims that they can get this deal funded.

Good luck

I second what loanuniverse says regarding why the deal fell onto your lap. The vast majority of large commercial deals that come through residential brokers or inexperienced commercial brokers are because of the inexperience of the borrower, the lack of borrower funds or because the borrower has exhausted all other avenues and is hoping to luck into a deal. This is especially true of overseas deals. The Bahamas, Mexico and Costa Rica seem to generate the most of these files. As an example I did a deal for a company in Mexico. I began to test the overseas market and was inundated with files from the Bahamas, Caribbean and Mexico. In one year I had over $1billion in loans sent to me. None were workable. I saw the same project 5 times in one year from 5 different mortgage brokers.

A viable large project owner will demand verified references for similar projects funded. They will do their homework and not work with people with little no experience. If the project is solid they won't need to.

If you decide to proceed, do so with the understanding that, unfortunately, the chances of you funding the deal are very slim. If the borrower had the funds and background to manage the project and get funding, he would already know who the financial players are for this type of project and then would not need to go through you. Nothing personal and not a judgment of you, your skills or determination, just the reality of commercial lending.

I agree with the above posts. However, if you still like to try it out, call companies like GE Finance, CIT Group and large banks like Citibank. The larger banks have international offices or participate in correspondent relationships for funding international loans. You may also try banks in Puerto Rico like Doral Financial.

Thank you for all the feedback guys, your input is much appreciated. I dont take any of your advice or comments personally but as constructive criticism so please feel free to share what you have to say. I realize that such a big deal landing with an inexperienced player like myself is a red flag, having said that the benefits of something like this coming to fruition warrant I investigate to the best of my ability. At the very least I will up my learning curve on what it takes to get a resedential loan done.

Thanks for all the advice, I will follow up with any details if this thing progresses.

when it comes to LARGE commercial deals......keep i mind that things that fall in your lap fell usually fell out of someone else's lap AKA...undoable for some reason that is not clear, yet. Also with a lot of the deals in Caribbean, builders are just out fishing. We don’t lend on deals in excess of $5M but i routinely co-broker stuff with brokers i have worked with in the past. And my approach is to deny all large deals until i have a liquidity statement, detailed plans and other proof that borrower is serious. There are so many variables to these files and the closing ratio is low. Before you know it, 2 months and a carton full of documents later you will have no real progress. Having said that, large deals do happen all the time and they are not rocket science. Being new to commercial you just have to figure out how to weed out the bad requests.

As for the loan in question. GE is very picky and the big boys on wall street will not be interested in hospitality loan unless its a an experienced operator with other assets and a track record. There are a few pure construction companies that may be interested. Is $41M the final completion value?

If you want, PM me basic info and i can give you a few names. Thanks, Naj

Jason Andrews, Charter Funding, we will do an equity share and cover the rest. Here a little synopsis about our company.
Commercial to 300 Million in house, syndication on a case by case basis. We are the largest privatly held bank in the US and fund about 3 billion a month in loans. We are licensed in all 50 States for residential. Commercial lending in the USA, Europe and Asia. Please call for quotes and rates.

There are so many deals taking place now in the Bahamas where they are looking outside of the Bahamas for financing. Having done 2 there already with another now that I am working on, the reason I am being told is that the Bahamian $ is about half the value of the US dollar. To keep up with inflation the banks there have increased their rates almost two fold and have imposed tougher restrictions and guidelines for construction and development loans. Only the strong and established local developers need apply is what they are basically saying.

If I can help with your clients needs I would be more than happy to discuss details with you...