Commercial Loans Blog

Huge Development in Commercial Mortgage-Backed Securities

Posted by George Blackburne on Wed, Aug 24, 2016

Securitization.pngToday you are going to learn a ton about the securitization of commercial mortgages.  Then I will explain this huge new development in the CMBS industry.  CMBS stands for commercial mortgage-backed securities.

A mortgage-backed security is a bond secured by a portfolio of mortgages.  These could be residential mortgages or commercial mortgages, but usually not both.  Back in the crazy days leading up to the 2008 crash, there were some asset-backed securities that were backed by a mixed collection of car loans, credit card paper, aircraft loans, scratch-and-dent residential loans, and subprime commercial loans.

A scratch-and-dent loan is one that is flawed and has been kicked out of the pool of loans that some sponsor has assembled.  Perhaps the debt ratio was too high.  Perhaps the home lacked a proper foundation.  Back in the day, Bayview Financial used to place some of its subprime commercial loans into such mixed collateral portfolios to raise the average yield and to lower the average loan-to-value ratio.  I once blogged that I thought Bayview's old commercial loans were actually quite good loans.

 

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A bond is just a garden variety promissory note whereby some borrower promises to pay back some money to some investor.  "I, Wells Fargo Bank Commercial Trust #2015-3, promise to pay the little old widow, Francine Investor, the sum of $5 million at 4.25% interest and with monthly payments of $27,086 per month..."  Bonds are typically issued by companies or trusts, as opposed to by individuals.  In this example, the bond was issued by a trust managed by Wells Fargo Bank.

Now in this example, Francine Investor's bond is backed by a portfolio of commercial mortgages.  The typical CMBS portfolio contains $1 billion to $2 billion in commercial first mortgages.  Francine might have invested $100,000 - along with a ton of other investors - into this $2 billion bond.  The trustee of the trust - in this case Wells Fargo Bank - services the 200 or so commercial mortgages in the trust.  If any of the borrowers default, the bank has strict instructions to foreclose on behalf of Francine and the other investors.

But not all investors are created equal.  Some might be little old ladies with almost no tolerance of risk.  Others might be well heeled college endowments, who can afford to take some risk.  Yale University's endowment fund is said to be as rich as Croesus.  Others investors might be go-go investors, like the filthy rich owner of a life insurance company who we will call Billy Life, who love to take big risks for the chance of earning 20%.

 

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Now the big bank or the big mortgage company bringing the offering to the market (peddling the mortgage-backed bonds) is known as the sponsor.  Sponsors securitize these commercial mortgages for a reason; i.e., to make a profit.  The sponsors have learned that they can take a 4.25% average portfolio yield and sell slices of the yield off to different groups of risk-takers and still have a big chunk of the yield still left over for themselves.  These various slices of the yield are called tranches.  

Let's continue with our example to make this tranche concept more clear.  Now Francine Investor, the widow, depends on her bond payment to buy groceries, so she cannot afford any risk.  Therefore Francine, along with other widows like her, cuts a deal with the Sponsor that goes like this:  "Even though the average yield on this CMBS portfolio is 4.25%, I'll accept just 2.75%; but in return for this lower yield, I want to be the first investor paid.  In other words, I get my full 2.75% yield before any riskier investors get a dime."  Francine is the buyer of the AAA-rated tranche.

Now Yale University's endowment fund can afford to take a little bit of risk.  Yale cuts a deal with the sponsor that might go like this, "I will accept just 3.40%, and I agree to the second tranche to be paid.  In other words, Francine and her fellow widows get paid first.  Only if there is interest income left over does Yale get a penny."  We'll call this the BBB-rated tranche, which is still considered investment grade.

Billy Life, the life company owner and gambler, might cut a deal with the sponsor as follows:  "I want a 20% yield, and I'll agree to be the last one paid."  We'll call Billy Life the B-piece buyer.  Securities rated lower than BBB are not considered to be investment grade.  They are very risky.   How can the sponsor afford to pay Billy 20% when its only earning 4.25%?  Answer:  Billy's piece might only be $300 million on a $2 billion offering, and don't forget that the Sponsor is earning an interest rate spread on everyone else's investment.  The sponsor is picking up the difference between 4.25% and 2.75% on Francine's tranche, and it is picking up the difference between 4.25% and 3.40% on Yale's investment. A 1.5% spread on $1.2 billion (the AAA-rated tranche) is a lot of money.

In real life, there may be a dozen different tranches on a $2 billion CMBS offering.  We are finally done with my explanation of the securitization process.

Now let me describe what happened during the Great Recession.  Francine emerged as a genius.  Despite commercial real estate plunging 45%, the holders of Francine's tranche got paid in full - 100% of principal and interest.  Yale lost all of its interest income and took a 20% haircut off of its principal.  And Billy Life?  He got nada.

Lots and lots of elderly investors and pension plans took huge losses.  One of the many reasons was because the originators of commercial mortgages were sticking deals of 80% to 82% loan-to-value into the securitization trust!  Some of these loans were interest-only for the first three years, and others depended on projected rent increases in order to service the loan.  These loans were absurdly risky.

Congress therefore, in the Dodd-Frank Act, changed the rules.  No longer could originators throw risky loans into these pools and then walk away, risk-free and counting their dough.  Beginning in late-2016, CMBS sponsors now have to retain 5% of the mortgage portfolios.  This cast a scary cloud over the CMBS industry, and originations plummeted.  I was therefore thrilled to see the following announcement from Wells Fargo Bank.

"Wells Fargo teamed up with Bank of America and Morgan Stanley to lead the first US Risk Retention compliant conduit transaction (WFCM 2016-BNK1). The new regulations, which do not formally go into effect until December 24, 2016, will require issuers to retain a 5% economic interest in new CMBS transactions."

The good news?  With Wells Fargo Bank, Bank of America, and Morgan Stanley keeping some serious skin the game, this new CMBS offering sold like hotcakes this month and at lower than expected yields.

Have you checked out the brand new CommercialMortgage.com yet?  Here's the best way to understand this competing portal to C-Loans.com.  We have a guy who calls banks every day and invites them to join C-Loans.com.  Those that say no, we add to CommercialMortgage.com.  Because most  bankers are old fuddy-duddies, many more banks say no than yes.  CommercialMortgage.com is therefore packed with four times more lenders than C-Loans.com.

 

3,159 Different Lenders    CommercialMortgage.com

 

Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Got a squeeky-clean commercial loan request that deserves to be funded by a life company, conduit, or bank?

 

Submit Your Loan to 750 CommercialLender

 

Just doing some general research on commercial loans?

 

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Topics: Securitization

Peer-to-Peer Lending, Crowd-Funding, and Commercial Loans

Posted by George Blackburne on Sat, Aug 20, 2016

Crowdfunding.jpgToday we are going to talk about peer-to-peer lending, crowd-funding, FinTech, and shadow banking. Then I will explain why you should care.

Peer-to-peer lending is the practice of lending money to individuals or businesses through online services that match lenders directly with borrowers. It is sometimes abbreviated P2P lending. The important thing to understand about peer-to-peer lending is that there is no bank involved. A single private investor is lending money directly to a private borrower.

Crowd-funding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.

The difference between peer-to-peer lending and crowd-funding is that P2P lending typically involves small loan amounts ($5,000 to $50,000), and just one investor lends the entire loan amount. Crowd-funding can sometimes involve much larger amounts, where lots of different investors chip in a little bit to make the loan or the equity investment.

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In the doctor’s office, two patients are talking. "You know, I had an appendectomy last month, and the doctor left a sponge in me by mistake." "A sponge!" exclaims the other. "Does it hurt much?" "No, there’s no pain at all," says the first, "but boy, do I ever get thirsty!"

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FinTech is short for financial technology. FinTech is a line of business based on using software to provide financial services. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software. Peer-to-peer lenders and crowd-funding companies are all examples of FinTech companies.

My own commercial mortgage portal, C-Loans.com, is an example of a FinTech company. This week I launched a new commercial mortgage portal, different from C-Loans.com,  called CommercialMortgage.com. It’s a handsome site and very easy to use.  You should check it out.

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It’s almost football season. Here are some famous and funny quotes:

"Gentlemen, it is better to have died a small boy than to fumble the football." -- John Heisman

"A school without football is in danger of deteriorating into a medieval study hall." -- Frank Leahy / Notre Dame

"I don't expect to win enough games to be put on NCAA probation. I just want to win enough to warrant an investigation." -- Bob Devaney / Nebraska

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Google defines shadow banking as follows: A shadow banking system refers to the financial intermediaries involved in facilitating the creation of credit across the global financial system but whose members are not subject to regulatory oversight.

When Blackburne & Sons arranges a hard money loan, we are creating credit without banking oversight. (There is plenty of state oversight. Geesch.) When LendingClub.com arranges a $25,000 start-up loan to a recent immigrant wishing to buy and equip a truck to serve lumpia and other fast food at a worksite, this is another example of shadow banking. In a moment I will explain why you should care about peer-to-peer lending, crowd-funding, FinTech, and the shadow banking system.

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"Football is not a contact sport, it is a collision sport. Dancing is a contact sport." -- Duffy Daugherty / Michigan State

After USC lost 51-0 to Notre Dame, his post-game message to his team was, "All those who need showers, take them." -- John McKay / USC

Ohio State's Urban Meyer on one of his players: "He doesn't know the meaning of the word fear. In fact, I just saw his grades, and he doesn't know the meaning of a lot of words.”

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Here’s why you should care about the explosive growth of the shadow banking system: When an economy overheats and inflation begins to soar out of control, the Fed has a number of tools to cool down the banking system. It can raise the reserve requirement. “Hey, you bankers out there, we’re worried about too much credit being created. As of right now, you all have to increase your reserve account at the Fed. This means you will have less dough to lend.”

The Fed can also engage in open market operations, selling off some its enormous hoard ($4.5 trillion?) of government bonds, corporate bonds, and mortgage-backed securities. Investors have to take money out their banks to buy these securities, thereby reducing the liquidity in the system and cooling off the creation of new bank loans. Lastly, the Fed can raise interest rates, thereby making loans less attractive to borrowers.

 

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“Okay, so our fire truck is all set to douse any hyper-inflationary fire, right?” Uh, what about the shadow banking system – those P2P lenders, crowd-funders, and hard money lenders? In 2012, Chinese monetary authorities tried to cool down their economy by raising the reserve requirement and interest rates. The move didn’t work so well. Chinese property speculators just went around the banks and took out private loans to buy their tower apartment units.

My point is this: If inflation were to ever take off again, which is far-far from certain to happen in our lifetimes, inflation could quickly get away from the Fed. Speculators could simply go around the banks using FinTech and keep borrowing. For example, as the owner of Blackburne & Sons, I don’t give a hoot if the Fed raises the reserve requirement for banks. It just means more sweet loans for Blackburne & Sons to make. I have no idea what the exact number is, and I am just pulling a number out of my tush, but I wouldn’t fall off my chair in surprise if global investors didn’t have as much as $75 trillion dollars sitting around under-invested.

 

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The reason I wrote about this subject today is because my instincts are screaming at me to syndicate the purchase of more prime, multi-tenant industrial buildings in California gateway cities – and to buy that property with all cash. No debt. Zip-zilch-zero. Nada.

(I originally wrote this piece as my monthly Investor Letter.)  With zero debt, we are protected either way. If deflation rules the roost, and we only earn 4.5% to 5.0% after operating and organizational expenses (the most likely scenario), we are still earning far more than what CD are yielding. On the other hand, if inflation takes off and/or industrial rents sky rocket, we would be sitting in clover.

It will be interesting to see how the markets react when the Fed finally raises interest rates. The investment world could easily interpret such an action as a sign that the U.S. economy is now completely healed. They could go rushing to buy commercial-investment real estate using today’s low mortgage rates. I’m just sayin’.

 

3,159 Different Lenders    CommercialMortgage.com  

 

 

Topics: Peer-to-Peer Lending

Commercial Loans and Brokers of Record

Posted by George Blackburne on Thu, Aug 18, 2016

Courtroom.jpgThis training article actually matters to a great many of you, whether you are arranging commercial loans or selling income property across state lines.

Now as you probably know, I am an attorney, licensed in California and Indiana.  Now let's suppose that I had a long-time Indiana law client who had a contract dispute with an Illinois company, and my client wanted me to represent him in Illinois in a suit against this Illinois company.  There is a legal procedure for me to do this called "appearing pro hoc vice."

Pro hoc vice (pronounced pro-hock-veechey) is a Latin term that means "for this occasion" or "for this event."  It is a legal term usually referring to a practice in common law jurisdictions, whereby a lawyer who has not been admitted to practice in a certain state is allowed to participate in a particular case in that state.  Now I would be required to "associate in" an Illinois attorney to supervise me and to make sure that I complied with Illinois state law and the local rules.

 

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I promise that the relevance of this article to you will be made clear in the next paragraph. The relevance to commercial real estate brokers selling commercial-investment property will be made clear in the paragraph after that.

Okay, now let's suppose that you have a long-time Utah loan client who wants you to arrange a commercial loan for him on a property in Arizona - a state where a commercial loan broker needs an Arizona mortgage broker's license.  Can you legally arrange this loan?  Answer:  Only if you associate in an Arizona mortgage broker (and pay him $500 or so).

Now if you are a commercial real estate broker, legally licensed in Utah, and you have a long-time Utah investor client wishing to buy a commercial-investment property in Arizona, you will need to associate in a legally licensed Arizona real estate broker.  In the parlance of commercial brokerage, you will need to have him serve as your broker of record.  But, if you do it right, I am pretty sure that you may legally help your long-time Utah client buy a commercial-investment property in Arizona.

 

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The reason this subject came to mind today is because I received this week an interesting email from a company advertising to commercial brokers, offering to serve as their broker of record.  Now I had never heard of a broker of record service before, but when I googled, "broker of record services", I found quite a few companies offering this service.

Now this one company charged the higher of $1,500 or 3% of the total commission; e.g., 3% of 6%.  It sounded like a reasonable price to me to pay to keep your tush out of jail.

Keep looking for the contact information (the contents of a business card) of any banker making commercial real estate loans.  We'll trade you that information for a free directory of 2,000 commercial real estate lenders.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

 

Have you created a link to C-Loans.com on your real estate web site yet?  The links should say "Commercial Loans" or "Commercial Mortgages" or "Commercial Real Estate Loans" or "Need a Commercial Mortgage?"

Remember, the home page of C-Loans.com is programmed to automatically capture the referring URL (the address of your web site) and to print it at the bottom of the corresponding C-Loans application.  When the deal closes, we look up the lucky guy who put the link to C-Loans.com on his website and notify him of the big referral fee check waiting for him.  We once paid Alan Dunn of Spydercube.com a $21,250 referral fee on a $17 million land loan application that came from his site.

 

Earn a $21,250 Referral Fee  In Your Sleep

 

Do you need a lender who will allow a negative cash flow?  Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.?  Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Do you have a squeeky clean commercial mortgage loan that deserves to be financed by a life company, conduit, or a commercial bank?

 

Submit Your Loan to 750 CommercialLender

 

I keep telling you commercial brokers that there is no easier way to meet high-net-worth investors than to open up a little commercial mortgage brokerage operation (a desk and a phone) in your real estate office.

 

Commercial mortgage training

 

Want to receive free training in commercial real estate finance?

 

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Got a buddy or a co-worker who would benefit from learning commercial real estate finance?

 

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Topics: Broker of record service

Commercial Loans and Dialing For Dollars

Posted by George Blackburne on Sun, Aug 14, 2016

Patience-2.jpgIn addition to owning C-Loans.com, I also own Blackburne & Sons, a $50 million private money commercial mortgage company that makes hard money permanent loans, as well as just bridge loans.  This reduces the APR to your borrowers considerably.

Our best loan officer is Alicia Gandy, a lovely lady who has been with us now for 17 wonderful years.  Alicia is such a big producer and such a diligent go-getter that we call her the Loan Goddess.  Alicia taught me a clever marketing technique this week, a virtually cost-free technique that could be used by a commercial real estate salesman, a leasing agent, a property manager, as well as any commercial mortgage broker.

It's summer time.  Many people are out hiking, biking, boating, or doing some other fun outdoor activity.  The last thing most of us want to do is to work really hard during the final few weeks of the summer.   Therefore business here at Blackburne & Sons is pretty slow.

 

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Instead of goofing off, however, Alicia went out and killed something this week.  Alicia called her twelve best brokers and complained, "Hey, I'm dying here!  I have no business.  If you bring me a commercial loan right now, your deal will be at the top of my stack, and I'll work my tail off on it."  Each of her best brokers complained that they didn't have anything for her... and yet within 24 hours, Alicia had three new deals in the door!

"Gee, George, this is so obvious that its like the moron with the headphones repeating, "Breath in, breath out."  Yeah, yeah... but when was the last time that you made twelve outgoing calls to your best brokers?  That's what I thought.

Here's an idea:  (1) Pull out a file folder right now and label it, "Best Brokers."  (2)  Take out a yellow legal pad and write down the names and phone numbers of your twelve best repeat customers.  (3)  Then, whenever you are slow, maybe you call these twelve special customers and petition for deals.

I have been using the term, "best brokers".  As a lender, commercial loan brokers are one of the best repeat sources for commercial real estate loans.  But if you are a commercial real estate salesman (properly called a commercial broker, even if you are only a salesman and not a broker), your twelve best repeat customers will probably be wealthy commercial real estate investors.  If you are a leasing agent, your best repeat customers may be the owners of rapidly growing companies.  But you get the concept.  All of us have a dozen or so repeat customers who make up a big part of our annual sales, so get off the dime and dial them for dollars.  (How about that for staying consistent with my metaphor - dime and dollar?  Get it?  Ha-ha!)

 

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Have you created a link (or 20 links) to C-Loans.com on your real estate web site yet?  The links should say "Commercial Loans" or "Commercial Mortgages" or "Commercial Real Estate Loans" or "Need a Commercial Mortgage?"

Remember, the home page of C-Loans.com is programmed to automatically capture the referring URL (the address of your web site) and to print it at the bottom of the corresponding C-Loans application.  When the deal closes, we look up the lucky guy who put the link (or - even smarter - 20 links) to C-Loans.com on his website and notify him of the big referral fee check waiting for him.  We once paid Alan Dunn of Spydercube.com a $21,250 referral fee on a $17 million land loan application that came from his site.

Now be sure to note:  You do not need any special partner number.  You do not need to notify us.  You could create this link at 3:00 a.m. tonight, or better yet, create 20 links.  By the way, Alan Dunn was asleep when this $17 million loan application was sent over from his site to C-Loans.com!  "Asleep?  How could you possibly know this, George?"  In truth, I don't; but he certainly could have been asleep, and it makes for a great story.  Ha-ha!  These 20 links work automatically while you're sleeping, playing golf, or cuddled up with your honey.  Notice the subtle upsell to 20 links rather than just one?  Hey Dad, can I have $50?  Twenty dollars???  What do you need $10 for?

 

Earn a $21,250 Referral Fee  In Your Sleep

 

Keep looking for the contact information (the contents of a business card) of any banker making commercial real estate loans.  We'll trade you that information for a free directory of 2,000 commercial real estate lenders.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow?  Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Do you have a squeeky clean commercial mortgage loan that deserves to be financed by a life company, conduit, or a commercial bank?

 

Submit Your Loan to 750 CommercialLender

 

If you are a commercial real estate broker (you sell commercial-investment real estate), and your company does not have a small commercial mortgage brokerage operation (desk and phone), you are missing out on a huge opportunity.  There is no easier way to meet high-net-worth investors than to be a commercial mortgage broker.  Just about every borrower responding to your ads will be a high-net-worth commercial real estate investor.

 

Commercial mortgage training

 

Want to receive free training in commercial real estate finance?

 

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Got a buddy or a co-worker who would benefit from learning commercial real estate finance?  I write this blog to train my two sons, George IV and Tom, in commercial real estate finance.  Long after I have gone to that huge commercial real estate loan closing in the sky, my sons will be able to review my training on any commercial real estate finance (CREF) subject by going to a search engine and typing, "C-Loans mezzanine loans." 

 

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Topics: calling sources

Commercial Loan Advertising

Posted by George Blackburne on Wed, Aug 3, 2016

cloanlogomedium-1.gifToday I am going to remind you of a marketing principle that is applicable to many fields of business, not just to commercial real estate finance (CREF).  If you are looking for leads, advertise to the guys who are advertising.

In prior training articles about marketing for commercial loans, I have made the following points:

  1. Advertising directly to the public for commercial real estate loans does not work.  It's cheap to refinance your home, so many borrowers do it every few years.  In stark contrast, obtaining a new commercial real estate loan is very, very expensive.  There is the cost of the appraisal, the cost of the toxic report, the loan points, and the legal fees.  Commercial real estate investors therefore refinance their buildings as seldom as possible.  The net result is that the chances of your advertising postcard or snail mail newsletter arriving at the exact moment when a commercial mortgage borrower is looking for a new commercial is less than one in a one hundred thousand (1/100,000).  Be smart.  Read this last paragraph again.

  2. The smart commercial loan marketer therefore advertises to those guys and ladies who, because of their job, are in a position to send you referrals of their turndowns.  Examples includes commercial bankers, commercial real estate brokers, property management companies, other commercial real estate lenders like conduits, credit unions, and hard money lenders; attorneys, accountants, estate planners (life insurance salesmen), residential real estate agents, etc.

  3.  But not every referral source is the same.  Some are better than others.  If your advertising costs money (as opposed to email newsletters), focus your advertising dollars on those guys who are seeing a lot of commercial loan requests.  Makes sense, huh?  As a general rule, I would say that (#1) commercial bankers and (#2) other commercial real estate lenders probably see the most commercial loan requests on a weekly basis.

 

Pee.jpg

 

Now we are getting to the point of today's training session.  The more commercial loans that a referral source has crossing his desk, the more turndowns he can refer your way.  At any given moment, who is seeing the most commercial loan requests?  The company with the most commercial loan turndowns to refer you will usually be the company paying the most for commercial loan advertising at the moment.  Therefore if you see a bank or a commercial mortgage company advertising for commercial loans, be sure to contact them and beg them for their turndowns.

In the old days such commercial loan advertising would appear as a display advertisement in the newspaper or in some glossy real estate magazine, like the National Real Estate Investor.  Modernly, you will see the most commercial loan advertising on Google.  If you do a search for "commercial real estate loans" on Google, you will see four Sponsored Ads at the top of the results page, lead off by an ad from LendingTree.  These are the guys you want to chase for their commercial mortgage turndowns.  There are also commercial real estate e-zines.  If you see an advertisement for commercial loans in one of them, be sure to hit them up for their commercial mortgage turndowns.

But how do you do it?  How do you advertise to some strange loan officer at some strange commercial lender?  (1) Call the lender, introduce yourself and your commercial mortgage brokerage company; and (2) Follow up with a snail mail letter, including two business cards, thanking him for his time and asking for his commercial loan turndowns; and (3) Every week send him a funny joke, an entertaining picture or cartoon, an interesting business article, or a cool random story, along with a hand-written note asking for his commercial loan turndowns, as well as three business cards every time.  Don't expect him to keep your business cards around for more than a couple of days.  The hope here is that he will hand your card out to declined commercial loan applicants.

Bottom line:  Advertise to the guys who are advertising.

 

Spots.jpg

 

Qualified commercial mortgage brokers can now buy commercial mortgage leads for just $1 to $9 apiece upfront, plus a 37.5 basis points if the deal closes.

 

Please Click Here ToBuy Commercial Lead

 

C-Loans, Inc. once paid Alan Dunn a referral fee of $21,250 for a $17 million commercial loan application that came from his site to C-Loans while Alan was asleep!  All he did was create a "Commercial Loans" link and point it to C-Loans.com.  That's it.  There was no fancy computer code to write or special partnership numbers to imbed.  C-Loans.com is programmed to automatically capture the URL of the last site visited by the borrower before coming to C-Loans.  That URL is printed at the bottom of every loan application.  If the deal closes, we look up who owns that referring site and give them the good news.

 

Earn a $21,250 Referral Fee  In Your Sleep

 

Keep looking for the contact information of a commercial banker making commercial real estate loans.  You can trade that information for a database of over 2,000 commercial real estate lenders.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

For just $549 you can buy our famous 9-hour video course, How to Broker Commercial Loans.  I say "famous" because a sizeable percentage of all practicing commercial mortgage brokers learned the business from this course.  We also now throw in our 5-hour audio course, Intermediate Commercial Mortgage Finance.  Finally you will understand all of the strange terminology and financial ratios.  Your confidence will soar.

 

Commercial mortgage training

 

Is your client's company losing money?  Does your commercial mortgage borrower have less-than-stellar credit?  Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Do you have an excellent commercial loan request that deserves to be financed by a life company, conduit, or commercial bank?

 

Submit Your Loan to 750 CommercialLender

 

Are you a commercial loan officer for a bank or other commercial lender?  Want custom-fitted commercial loan requests delivered directly to your email box?

 

Join C-Loans  As a Lender

 

Want to receive free training in commercial real estate finance?

 

Subscribe To Blog

 

Got a buddy or a co-worker who would benefit from learning commercial real estate finance?

 

Forward To a Friend

 

 

Topics: commercial loan advertising

Commercial Loans and Helicopter Money

Posted by George Blackburne on Sun, Jul 24, 2016

helicopter_money.jpgBelow you will find my latest Investor Letter, our monthly newsletter to our 1,000+ private commercial mortgage investors, somewhat similar to Warren Buffet's annual letter to his shareholders.  I hope you enjoy it.

INVESTOR LETTER

July 22, 2016

Nobel Prize-winning economist, Milton Friedman, is known to be the one who coined the term, “helicopter money”, in the now famous paper, “The Optimum Quantity of Money”, where he included the following parable:

“Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event, which will never be repeated.” -- Milton Friedman

The reason that I am talking about helicopter money today is because I have heard this term, “helicopter money”, used more often by financial commentators in the past thirty days than in the past five years.

Now I have been blessed – truly blessed (thank you sooo much!) – by loyal investors who have stuck with Blackburne & Sons for more than twenty to twenty-five years. If you happen to be one of these old-time investors, I have three comments: (1) God bless you for your loyalty and your trust. The Great Recession was pretty awful, but together we limped through it; and (2) darn, we’re getting old, ha-ha; and (3) you may faintly remember that, long before Ben Bernanke was ever appointed Fed Chairman, I pointed out in one of our Investor Letters perhaps the most important economic speech given in our lifetimes, a speech made by then Fed Governor (but not yet Fed Chairman) Ben Bernanke, in November of 2002 to the National Economist Club in Washington, D.C., entitled “Making Sure ‘It’ Doesn’t Happen Here”:

“… the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation...” -- Ben Bernanke

 

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The “It” in the name of the above speech is deflation, and back in 2002, Japan had recently completed the first of its two Lost Decades. Let me state, for the record, that there are times when I am an absolute idiot. There has also been a few times, however, when I have accidently stumbled upon an observation that, in hindsight, looked pretty prescient. Making a special note of the above speech by a then obscure Fed governor was one of my luckier moments.

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“Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel.” -- John Quinton

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Okay, so why is everyone - especially commentators on the European economy - talking so much these days about “helicopter money”?

The answer is because quantitative easing and negative interest rates have not been enough to jumpstart the economy of the European Union. The economy in Europe is sluggish. The money supply refuses to grow, even with the European Central Bank (“ECB”) buying up trillions of Euros worth of sovereign bonds (a fancy word for bonds issue by a country, like Italy) and even with the ECB buying up trillions of Euros worth AAA and AA-rated corporate bonds. Inflation just won’t stay lit.

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When we take our dog on a car journey, we carry his drinking water in a gin bottle. On one occasion we stopped for lunch and let him out of the car. Pouring some water from the bottle into his bowl, I noticed a man watching with fascination. He came over to me and whispered, "I hope that you're not going to let him drive!"

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Why won’t inflation ignite in Europe? In school we were all taught that when the Fed (or the ECB in the case of Europe) pumps money into the system that inflation was the result. In truth, this lesson is an over-simplification. The money supply only grows if banks are willing to lend and borrowers are willing to borrow.

In the United States, we recapitalized our banks - gave them cash to rebuild their loan loss reserves and their capital (the dough left in the bank to act as a further cushion against losses). Do you remember TARP? That was a $700 billion bailout of U.S. banks. It was pretty controversial at the time, but in hindsight, it was the right move. Most of that money was eventually paid back to the Treasury by the banks and by AIG Life Insurance Company.

 

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Bam! Oh, my goodness, what was that??? That’s the teacher’s yardstick slapping the desktop. “Pay attention,” my professors used to say, “This is on the test.” The European Union did not recapitalize its banks. Hundreds of billions of Euros worth of loan losses from the Great Recession have still not been written off by European banks. Many of the largest banks in Europe – including names like Deutsche Bank and Credit Suisse – are very weak. Weak banks tend not to lend money out like crazy.

In order for inflation to ignite, banks need to be willing to lend.

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Q: What's the difference between a poorly dressed man on a tricycle and a well-dressed man on a bicycle?

A: Attire.

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According to my favorite economist, Ben Bernanke, “The U.S. government has a technology called a printing press… (and) under a paper-money system, a determined government can always generate higher spending and hence positive inflation.” If banks just won’t lend and borrowers just won’t borrow, the ECB can always drop one-hundred Euro bills from a helicopter.

If I were the head of the ECB, I would distribute one-trillion Euros between all of the countries of the European Union and insist that they use this dough to put a solar panel on the roof of every home and every commercial building in the union. This move would be considered a helicopter drop.

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You have a real estate or mortgage web site, right?  Open up your home page, create a link that says, "Commercial Mortgages" or "Commercial Loans", point this link to http://www.C-Loans.com, and Voila, you're done.  Now forget about it.  It may be one year or two years or three years, but if your site enjoys some good traffic from wealthy real estate investors, you might get a call like this (true story!):

"Are you Mr. Alan Dunn?  Guess what, Alan, I have some very good news for you.  I have here a referral fee check for $21,250.  An investor visited your web site while you were sleeping and clicked on your "Commercial Loans" link.  He came to C-Loans.com and filled out a loan application for a $17 million land development loan.  The deal closed!"

Our software is programmed to automatically capture the referring URL (the address of your website), and that URL is printed at the bottom of every C-Loans application that came from your site.  When the deal closes, we look up the owner of the referring URL and pay him a nice fee.

There is nothing more to the process.  You do NOT have to notify us that you have created the link. You do NOT need any special partner code.  Just create the link and point it to C-Loans.com.

"But George, how do I know that you won't cheat me out of my fee?"

There are times - especially after a big loan payoff - when there is over $3 million sitting in our loan servicing trust accounts.  We literally make our living based on trust, and this is the start of our 37th year in business.

And folks, if you are going to the trouble of adding a link to C-Loans.com on your website, why add just one?  If it were me, I would add a "Commercial Financing" tab at the top of the page, a "Commercial Loans" link on the left or right side, and a "Apply For a Commercial Real Estate Loan" link in the footer.  Any new page I added after this first one, I would make sure that it had the same links.  Why not?  Why not increase your chances of catching the idea of a commercial real estate borrower?

 

Earn a $21,250 Referral Fee  In Your Sleep

 

Keep looking for the contact information of a banker making commercial real estate loans.  You can trade his contact information for a free directory of 2,000 commercial real estate investors.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Got a commercial loan request that deserves a low-rate loan from a life company, commercial bank or conduit?

 

Submit Your Loan to 750 CommercialLender

 

Are you finally ready to add a commercial mortgage brokerage division to your existing commercial realty brokerage?  All you need is a desk and a phone, and there is no easier way to meet wealthy commercial real estate investors than to be a commercial mortgage broker.  After all, poor people do not own shopping centers.

 

Commercial mortgage training

 

Want to receive free training lessons in commercial real estate finance ("CREF")?

 

Subscribe To Blog

 

 

Got a buddy or a co-worker who would benefit from learning commercial real estate finance?

 

Forward To a Friend

 

 

Topics: Investor Letter

Sizing a Commercial Loan

Posted by George Blackburne on Wed, Jul 20, 2016

To many of you, Blackburne & Sons is an ancient commercial mortgage company; but we're "only" 36-years-old.  There are some commercial mortgage banking companies that make us look like wet-behind-the-ears youngsters, companies like Holiday, Fenoglio and Fowler, George Elkins Company, or George Smith Partners.

What is the difference between a commercial mortgage brokerage company and a commercial mortgage banking company?  A commercial mortgage banker is defined as a company that services its loans (collects the payments every month) for its investors.  Typically commercial mortgage bankers are correspondents for life companies; although Blackburne & Sons is arguably also a commercial mortgage banker because we collect the payments for our private investors and for our various mortgage pools.

 

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Okay, but what is a correspondent?  A correspondent is a commercial loan origination company that acts as the branch office of a commercial lender.  Typically a correspondent is the exclusive representative of a lender for a specific area or region, like Southern California.

An example will make this clear.  Suppose you're a small life insurance company out of Indianapolis, Indiana named Grant Life Insurance Company.  You've only got $4 billion in assets, so you can't afford a branch office in every gateway city, where you greatly prefer to invest (make large permanent loans).  Therefore you set up seven or eight correspondents across the country to be your branch offices.

If a borrower calls the home office of Grant Life Insurance, the receptionist will ask him where the property is located.  If it is located in, say, San Francisco, the receptionist will look at her chart and see that George Smith Partners is the exclusive correspondent for Grant Life in the Bay Area.  The only way a borrower can get a commercial loan from Grant Life in the San Francisco Bay Area is through George Smith Partners.

Although there are older commercial mortgage companies than Blackburne & Sons, in truth there are not a whole lot of them.  Why?  Because every 12 years or so, commercial real estate is hit by horrible depression, where commercial real estate falls by almost exactly 45%.  Almost exactly 45%?  In each of the three horrible commercial real estate depressions that I have endured since founding this company in 1980, commercial real estate fell by almost exactly 45%.

A good colonic is good for the industry.  Those commercial mortgage companies without loan servicing income are nuked off the face of the planet.  It's the loan servicing income, silly!  With 90% of the competition gone, the commercial mortgage bankers (they've got servicing income to tide them over) really mop up in the recovery years.

 

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Okay, we're finally getting to the point of today's training article.  Even after 36 years in the commercial real estate finance ("CREF") business, I still learn new stuff from the "Big Boys" almost every day.

Funny story:  So I am at the Western States Commercial Real Estate Finance Conference, the biggest trade show of the year for the CREF industry, in late 2007.  I am boasting to an attendee that C-Loans.com had placed $206 million in commercial real estate loans in 2006.  He was very polite and surprisingly humble, but then he informed me that the last commercial loan he closed (just one loan!) was for $250 million.  I felt like George Constanza coming out of a cold pool in that famous Seinfeld episode.  Humbled!  Ha-ha!  Yeah, the Big Boys.

Anyway, I subscribe to FinFacts, a wonderful newsletter published by George Smith Partners.  I religiously read these newsletters because they use lingo that I often have to research just to understand.  Remember, I write this blog to train my two sons and my wonderful staff in commercial real estate finance ("CREF").

In a recent FinFacts newsletter, the author deservedly boasted:  "Fixed for five years at SWAPs+225, the non-recourse loan was sized to 65% of current appraised value from a California Portfolio capital provider."

Note the expression, "sized to 65%".  That's the way the Big Boys say it.

Okay, so let's make some money together.  Do you have real estate web site?  This should be a no-brainer.  We once paid Alan Dunn a referral fee of $21,250, and he was sleeping when he send the lead to us!

 

Put a Link on Your Site To Earn Huge Referral Fees

 

Surely you know at least one banker who is in the market to make commercial real estate loans.  We solicit these guys to send their turndowns to C-Loans.com.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

Attention Commercial Real Estate Brokers:  Poor folks do NOT own shopping centers.  Want to meet a half-dozen wealthy commercial real estate investors every day? Open a commercial mortgage company!  All you need is a desk and a phone.

 

Commercial mortgage training

 

Do you need a lender who will allow a negative cash flow?  Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.?  Do you need a lender who will allow the seller to carry back a second mortgage?  Does your client have a balloon payment coming due on his commercial property?  Has your bank offered him a discounted pay-off?  Does your borrower have less-than-stellar credit?  Is your client's company losing money?  Is your borrower a foreign national?  Do you need a non-recourse loan?  Do you need a commercial loan with no prepayment penalty?  Is your client's commercial property partially vacant?  Do all of your commercial leases run out in the next 18 months?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Do you need an "A" quality commercial real estate loan?

 

Submit Your Loan to 750 CommercialLender

 

Are you just browsing today?

 

Free Commercial Loan Placement Kit

 

I write this blog to train my two wonderful sons in commercial real estate finance ("CREF"), and you get to peek in and learn as well for free!  I try to write at least two training articles in CREF very week.

 

Subscribe To Blog

 

Got a buddy or a co-worker who would benefit from learning CREF?

 

Forward To a Friend

 

 

Topics: Sizing

Every Commercial Loan Package Needs Pretty Pictures

Posted by George Blackburne on Wed, Jul 13, 2016

Ugly_Office_Building.jpgI am going to teach you a quick and easy way to get pictures taken of a commercial property that is more than 200 miles away - far beyond driving distance.

Today's training article was inspired by a real life commercial loan request on C-Loans.com.  The mortgage broker had a very do-able commercial mortgage deal in his hands.  It was a 44-unit office complex in Ohio, and the property was 100% occupied.  He was only looking for a $3.1MM permanent loan.  Just $3.1MM - wow!  This commercial loan request should have been a slam-dunk deal and a cool $31,000 commission to the mortgage broker.

The deal was turned down by over 30 different lenders.  Huh?

Yup.  And do you know why?  The mortgage broker attached the most butt-ugly picture I have ever seen on any C-Loans app.  Why was it ugly?  Let me count the ways:

  1. The picture was horribly out of focus.  By the way, the picture above is NOT of the butt-ugly property, even though this picture is a little depressing.  Compared to the subject, however, the above office building is a supermodel.

  2. The resolution was really low.  The picture looked liked a thumbnail that had been blown up 60 times.

  3. The picture was taken on a dreary, overcast day.  Guys, blue sky sells.  Always make sure your property pictures are taken on a bright, shiny day with a beautiful blue sky.

 

Tell_Him.jpg

 

Now this mortgage broker was not an idiot.  He had very competently completed his C-Loans app.  I'm sure he realized that his picture was atrocious.  His problem was that he was located in Michigan, and the property was located in Ohio - a six-hour drive away.  I'm sure this mortgage broker asked the borrower for better pictures, but the borrower just didn't appreciate the importance of the picture.

A good argument can be made that the single most important document in a commercial loan package is the picture(s) - even more important than the Pro Forma Operating Statement.

So what could this broker have done?  He should have hired a nearby real estate broker to take the pictures for $50 or so.  Here is how you do it:

  1. Go to Google Maps -  http://maps.google.com

  2. In the Search Google Maps field, insert the address of the property.

  3. In many cases, Google has a nice front view of the property that you can download and use.

  4. If not, click the Nearby button and a search field will appear.  Type in "Real Estate Broker".  There will usually be few within a five-minute radius.

  5. Call the real estate office and offer one of the salesmen $25 to $50 to take a few pictures and send them to you by email.

  6. Voila!

 

Cat_lady.jpg

 

Yikes.  I'm a crazy cat lady.  We've got six of them.

Do you have a mortgage or real estate website?  We once paid a guy named Alan Dunn a referral fee of $21,250 for placing a Commercial Mortgages link on his website.

 

Earn a $21,250 Referral Fee  In Your Sleep

 

Keep looking for the contact information of a banker making commercial real estate loans.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

Got a commercial loan that deserves a loan from either a life company, commercial bank, or conduit?

 

Submit Your Loan to 750 CommercialLender

 

Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan?  Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Want to learn commercial real estate finance for free?

 

Subscribe To Blog

 

Got a friend or a co-worker who would benefit from learning commercial real estate finance?

 

Forward To a Friend

 

 

Topics: commercial loan pictures

Co-Op Marketing For Commercial Loans

Posted by George Blackburne on Sun, Jul 10, 2016

The marketing trick that I will share with you today can be used to solicit commercial loans, find hungry commercial real estate buyers, find developers ready to order plans, identify bankers about to order a toxic report, or even real estate brokers ready to order a title commitment (called a preliminary report for those of you west of the Mississippi).

 

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The trick:

Find another company - not a competitor - who advertises to the same potential customers and then split the cost of the advertisement with them.

Folks, product placement (when James Bond drives a BMW in the latest 007 movie) and cooperative advertising is the latest trend in marketing. Last night Cisca and I counted FIVE commercials in just two hours where two different advertisers shared the cost of a 30-second TV ad. Doritos shared an ad with the new Ice Age movie. Safeco shared an ad with Banana Republic. Now that I have pointed it out, you will see marketers from two different companies sharing the cost of marketing everywhere.

Another example:

I own 100% of both C-Loans, Inc. and Blackburne & Sons Realty Capital Corporation.  C-Loans, Inc. provides software to banks and other commercial lenders that allows them to receive commercial mortgage leads / mini-app's online.  The only twist is that our lenders only pay us if they actually close a deal.  That's fine with us because our lenders have closed more than 1,000 commercial real estate loans using our software.  Smart tip:  You make far more money if you are willing to work on a contingency (success only) basis.

Blackburne & Sons is a private money commercial lender - but with a twist.  We make long-term commercial loans (permanent loans), as opposed to bridge loans, and we make our dough, not from up-front points, but rather from a very profitable loan servicing fee (essentially an interest rate  spread).

My two companies are NOT competitors, yet they market to the exact same customer base:  commercial real estate brokers, mortgage brokers, lenders, and investors.

Therefore those of you who have received our fun newsletters have probably noticed that our C-Loans newsletters contain a lot of plugs for Blackburne & Sons and our Blackburne & Sons newsletters contain a lot of plugs for C-Loans.  Voila - a perfect example of co-op marketing!

 

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And another example:

Bob and Steve are drinking buddies. Bob works for a sub-prime residential lender, and Steve brokers commercial loans. Bob gets 90% of his business by sending newsletters by snail mail to A-paper residential mortgage brokers, soliciting them for their turndowns. One day, between beers and ribald jokes, Steve complains to Bob, "I've got 500 residential mortgage brokers on my mailing list, but it costs me $1.50 per broker to send them a snail mail newsletter. As a result, I can only afford to mail to them once a month. If only I could get my cost down to $0.75 per newsletter. Then I could advertise twice per month, and I would make a lot more money."

Through a beer fog, Steve still sees an opoportunity. "You know, Bob, you and I are not competitors. You're a residential guy, and I'm a commercial guy. We both advertise separately to residential mortgage brokers. Why don't we share the envelope? You stick in a one-page flyer about subprime residential mortgages, and I'll stick in a one-page flyer about commercial mortgages. Then we'll share the cost of the snail mail postage and envelope. It's a huge win-win."

Mary, a hot, 39-year-old, recent divorcee, notices Steve (who is sort of butt-ugly) through her own beer googles and thinks to herself, "Well, he's not that bad." Later Mary invites him home "for coffee". It was a great evening all around for Steve.  Mary chewed her arm off rather than wake Steve in the morning.

One final hypothetical example:

A title company, a toxic report company, and an appraisal company should share their contacts, split the ad costs, and - if each firm paid one-third - each reduce their cost of advertising by 67%.

Sorry guys, but you must be a commercial real estate loan officer working for either a commercial bank or a credit union to take advantage of the following offer:

 

Bankers Only:  Get   Free SBA Loan Leads

 

A perfect example of cop-op marketing is when a commercial brokerage company (they sell commercial-investment real estate) opens a small commercial mortgage brokerage operation.  The dough they spend advertising for commercial loan clients will introduce them to a tons of wealthy investors - to whom they can later obtain listings or sell commercial-investment property.  Verbal proof story:  I now manage $50 million in commercial real estate loans for my investor clients.  The vast majority of my early investors were commercial loan clients (borrowers!) for whom I worked on a loan.

 

Commercial mortgage training

 

Got a commercial loan that is clean enough for a life company, a commercial bank, or a conduit?

 

Apply For Commercial Loan  From a Life Company

 

Does your commercial mortgage borrower have less-than-stellar credit? Is your client's company losing money?  Is your borrower a foreign national?  Do you need a non-recourse loan?  Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off?

 

Apply For a Commercial Loan to Blackburne & Sons

 

Did you learn something today?  Want to receive free training in commercial real estate finance?  I try to write two training articles per week.

 

Subscribe To Blog

 

Got a buddy or a co-worker who would benefit from learning commercial real estate finance?

 

Forward To a Friend

 

 

Topics: Co-op Marketing

Glossary of Commercial Loan Terms in Plain English!

Posted by George Blackburne on Wed, Jul 6, 2016

Lots of companies have created glossaries of commercial loan terminology where they define fancy terms like debt yield ratios, defeasance, lockout clauses, and standby takeout commitments.  Our new glossary strives to be different.

Our new commercial loan terms glossary strives to explain these sophisticated topics using easy-to-understand, everyday English and lots of real-life examples.  I have always been a little slow-witted myself, and examples help me a ton.  "Suppose you're the Chief Investment Officer with a life company, and you need to know exactly what yield you will earn on your mortgage investments..."

Here is our new glossary:  http://www.c-loans.com/knowledge-base/commercial-loan-terms-glossary  You should bookmark it right now because it will get larger and more complete every week.

 

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This new glossary is part of the new Knowledge Base section (you'll find it under the Knowledge Base tab) in C-Loans.  My goal is to eventually have this glossary and this Knowledge Base compendium in C-Loans.com so complete that a starving newbie, someone too poor to even buy my basic training course, can learn the entire business of commercial real estate finance ("CREF") just by studying it.  I am pretty much there already.

Are you confused about about some fancy commercial loan term, like the difference between a permanent loan and a takeout loan, please write to me, George Blackburne III (the old man).  I'll try to blog on the subject so that not only will you learn this fancy lingo, but also so will future visitors to C-Loans.com.

 

Coffee_cup.jpg

 

Did you bookmark our new Glossary of Commercial Loan Terms?  As the hillbillies say, "Git 'er done!"  :-)

Are you finally ready to learn commercial real estate finance?  Those of you who are commercial real estate brokers who sell investment properties are crazy not to open a little commercial mortgage company in your office.  You just need one guy, a desk, and a phone.  In most states he doesn't even have to be licensed.  Why open a little commercial mortgage company?  There is no better way to meet high-net-worth real estate investors than to own a commercial mortgage company.   Po' folks don't own shopping centers.  Every day your little ads will introduce you to four or five wealthy investors.

 

Commercial mortgage training

 

Hey guys, please keep looking for commercial bank loan officers who make commercial real estate loans.  We'll trade you a free directory of 2,000 commercial real estate lenders for the contact information of that one banker.  We solict these bankers for their turndowns.

 

Free Directory of Two Thousand Commercial Real Estate Lenders

 

Got an "A" quality commercial loan that deserves financing from a life company, conduit, or commercial bank?

 

Submit Your Loan to 750 CommercialLender

 

Is your borrower a foreign national?  Do you need a non-recourse loan?  Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money?

 

Apply For a Commercial Loan to Blackburne & Sons

 

 

Just browsing today?

 

Free Commercial Loan Placement Kit

 

Did you learn something today?  Subscribe to our blog and get two free training lessons in commercial real estate finance every week.

 

Subscribe To Blog

 

Got a buddy or a co-worker who would benefit from learning commercial real estate finance?

 

Forward To a Friend

 

 

Topics: Glossary