I'm still looking for options for traditional commercial lending on real estate. I rehab rowhouses, single family or up to 4 units, in Philadelphia. My bank's commercial lending officer has offered: 30% down plus 1point, 100% of the rehab costs up to 65% ARV, prime+2 interest rate, interest only payments. We're trying to find something without points, and with a down payment requirement closer to 20%. We have good FICO scores (my middle is 740), good incomes, modest reserves. The key is, we want to purchase through our LLC.
Any help or leads would be appreciated, but we're not interested in hard money at the current time. We've got hard money offers coming out the whazoo !!
Thanks,
Mark

Just out of curiousity, have you considered working with a residential mortgage broker? You don't necessarily need commercial financing, seeing as how you mentioned the properties are under 4 units. The properties could easily be purchased under the LLC, or transferred to the LLC after they were purchased. Also, depending on how the purchase contracts are worded, a seller credit could be issued for the amount needed to repair the properties, using the equity they already have, with much higher LTV's than are allowed commercially. When dealing with residential finanancing, the down payments would be lower, and while you could very well have the interest only option, you would have more avenues open to you as far as terms....fixed rates, adjustables with a 3 or 5 year fixed term, etc., all with lower interest rates than are available to commercial borrowers. Contact me if you'd like to discuss these options...I'd be happy to run some numbers for you and give you a better idea as to what you're qualified for(Rates, Terms, Down Payment, etc.). FYI, I also am able to obtain commercial finanancing if you're certain that's the route you'd like to go with this.

Im in KC., Commonwealth Mortg has a special product made just for you. They loan you 90% of the completed cost and 100% of original purhase price. You are set up on a series of draws up to the final amount of rehab cost. It is easy to qualify for, you just need a broker in your area signed with them to get started. There are many different scenerios for each occasion. Im sure 1 would work for you. ANy questions let me know, happy to help.

Hi Mark,

We have several options that may work for you. 90% LTV commercial loans, non-recourse, and several others that you probably cannot find. If you haven't found what you nedd, let's talk. If you have found it, great. Let's talk anyway!

Can you post contact info?

Sherri,
I'm emailing you.
Thanks,
Mark

Can you post contact info?

Seven Seas Financial Inc.

Commercial Property Mortgage Loans

Typical Commercial Mortgage Loan Rates
(for loans over $2,000,000)
Loan to Value (%)
50 60 70 80
10 yr fixed 6.3 6.3 6.5 6.7
5 yr fixed 6.5 6.5 6.8 6.9
3 mo ARM 7.3 7.3 7.5 7.7

Types of Commercial Real Estate Lenders
We shop loan requests to all types of commercial lenders including:
Conduit Lenders
Life Insurance Companies
Banks
Investment Banks
And more

Typical Commercial Property Financing Terms (e.g. retail, industrial, office)
Note: These are not terms of any specific lender. They represent terms that we frequently see in the marketplace and are not to be relied on as a commitment to provide any specific terms for any specific deal.

Maximum loan to value: Most lenders will loan up to 75% of value or cost (whichever is lower).
For loans under $2M, there are a few lenders who will go to 80% or 90% or will allow secondary financing for a combined loan to value of 85% to 90%.
For long term fixed rate loans a small "mezzanine" piece can be added to the loan to yield an 80% to 85% LTV.
Debt service coverage: The cash flow from operations must be at least 1.25 times the mortgage payment.
Term: 5, 10, 15 year terms are most common.
Amortization: 20, 25 or 30 years if building is in good repair. Typically 15 and 20 year loans are full amortizing.
Typical Rates: • 10 year fixed = 10 yr US Treasury bill rate + 1.1% to 2.0%
• 15 and 20 year fixed = 10 yr Treasury + 1.6% to 2.5%>
• 5 year fixed = 5 yr Treasury + 1.6% to 2.5%
• ARM = LIBOR + 1.7% to 2.5%
Prepayment terms: • 10 year fixed rate loans - typically have prepayment based on "yield maintenance" or "defeasance". This kind of prepay can make it prohibitive to refinance or sell the property (prepayment fees can easily exceed 10% to 15% of the loan).
• 5 yr fixed rate loans - typically have a decreasing prepayment each year (e.g. 5%, 4%, 3%, 2%, 1%).
• Adjustable rate loans - typically have a decreasing and smaller prepay (e.g. 3%, 2%, 1%).
Allowable vacancy: Generally lenders expect the vacancy to be near the local market vacancy. This is generally in the 5% to 10% range.
Recourse: Longer term loans (typically from life insurance companies or conduits) are generally non-recourse. Bank loans are typically recourse.
Closing costs: Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc)
• Loans under $3M - costs range from $6,000 to $12,000
• For loans over $3M - costs can be $20,000 or more
Recent Commercial Real Estate Loans


$13.5M fixed rate loan for
two office buildings
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$3.3M variable rate loan for
a 201,400 s.f. industrial building
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$2.4M fixed rate loan for
a 39,493 s.f. Flex Industrial Building
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$6.6M variable rate loan for
Class A suburban office
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$3.35M fixed rate loan for
38,250 s.f. renovated strip retail
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Commercial Mortgage Rates



10 Year Fixed Rate
(Index: 10 yr treasury, 5.15%)
Loan to Value
50% 60% 70% 80%
6.3% 6.3% 6.5% 6.7%
6.2% 6.2% 6.4% 6.6%
6.9% 6.9% 7.2% NA
6.3% 6.3% 6.5% 6.7%
6.4% 6.4% 6.6% 6.8%
7.0% 7.0% 7.3% NA
7.0% 7.0% 7.2% 7.4%
6.3% 6.3% 6.5% 6.7%
7.1% 7.2% 7.5% NA
6.4% 6.4% 6.6% 6.8%
6.5% 6.6% 6.8% NA
6.5% 6.6% 6.8% NA
6.3% 6.3% 6.5% 6.7%
6.4% 6.4% 6.6% 6.8%
6.3% 6.3% 6.5% 6.7%
7.8% 7.8% 8.1% NA
6.3% 6.3% 6.5% 6.7%
7.3% 7.3% 7.6% NA
7.3% 7.5% NA NA
6.7% 6.7% 6.9% 7.1%

5 Year Fixed Rate
(Index: 5 yr treasury, 5.04%)
Loan to Value
50% 60% 70% 80%
6.5% 6.5% 6.8% 6.9%
6.4% 6.4% 6.7% 6.8%
7.1% 7.2% 7.5% NA
6.5% 6.5% 6.8% 6.9%
6.6% 6.6% 6.9% 7.0%
7.2% 7.3% 7.6% NA
7.2% 7.2% 7.5% 7.6%
6.5% 6.5% 6.8% 6.9%
7.3% 7.5% 7.7% NA
6.6% 6.6% 6.9% 7.0%
6.8% 6.9% 7.1% NA
6.8% 6.9% 7.1% NA
6.5% 6.5% 6.8% 6.9%
6.6% 6.6% 6.9% 7.0%
6.5% 6.5% 6.8% 6.9%
8.0% 8.1% 8.4% NA
6.5% 6.5% 6.8% 6.9%
7.5% 7.6% 7.9% NA
7.5% 7.8% NA NA
6.9% 6.9% 7.2% 7.3%

3 Month Adjustable Rate
(Index: 3 MO LIBOR, 5.69%)
Loan to Value
50% 60% 70% 80%
7.3% 7.3% 7.5% 7.7%
7.2% 7.2% 7.4% 7.6%
7.9% 8.0% 8.2% NA
7.3% 7.3% 7.5% 7.7%
7.4% 7.4% 7.6% 7.8%
8.0% 8.1% 8.3% NA
8.0% 8.0% 8.2% 8.4%
7.3% 7.3% 7.5% 7.7%
8.1% 8.2% 8.5% NA
7.4% 7.4% 7.6% 7.8%
7.5% 7.6% 7.8% NA
7.5% 7.6% 7.8% NA
7.3% 7.3% 7.5% 7.7%
7.4% 7.4% 7.6% 7.8%
7.3% 7.3% 7.5% 7.7%
8.8% 8.9% 9.1% NA
7.3% 7.3% 7.5% 7.7%
8.3% 8.4% 8.6% NA
8.3% 8.6% NA NA
7.7% 7.7% 7.9% 8.1%




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