Commercial Loans and Fun Blog

You may find this shocking, but the successful commercial loan broker today will devote 60% of his working hours to marketing for commercial loans, as opposed to lead negotiation, lead follow-up, commercial loan packaging, or commercial loan placement (actually finding a commercial lender).

Now, of course, the successful commercial loan broker will still eventually have to call and work his leads, follow up on them, organize his commercial loan packages, and pitch his commercial loans to a bank.  But if he wants to make steady dough, he needs to focus mainly on marketing.

The commercial loan market today has changed.  In the old days, there were only about 250 active commercial lenders in the entire country.  The commercial loan officers working for these 250 commercial lenders were buried with phone calls and packages.  They despised taking calls from rookies with commercial loan deals that were obviously not do-able.  They tossed away away any commercial loan package that was not prepared by a pro. 

In these olden days, the successful commercial loan broker therefore had to spend hours and hours preparing his Schedule of Leases, preparing his Pro Forma Operating Statements, computing all of his ratios, and organizing his loan commercial loan packages into a beautiful presentations, just so that they looked perfect before approaching his lender.  The commercial loan broker had to do all of the work.

Today, however, there are 4,900 commercial banks and over 6,000 credit unions in the United States.  Just about every one of them is scratching and clawing to make commercial real estate loans these days.

Therefore, you hardly have to sell a banker on making a good commercial loan these days.  You simply have to find one.

Let me put this another way.  You can limp in a butt-ugly commercial loan package to a bank or credit union these days, and if the loan is a good one, the bank or credit union will jump all over it.  You don't have to impress the banker with your package and sell him on your professionalism.  

You just have to find good commercial loans!!!  So focus on what's important.  Focus on what the market wants you to do.  Focus on finding good commercial loans.

Most commercial mortgage brokers, unfortunately, devote less than 15% of their time to marketing for commercial loans.  Instead, they devote the vast bulk of their hours to trying to place a $5 million loan on a money-losing bowling alley in some hollowed-out city or a $20 million construction loan on a new resort in Mexico.

Get Commercial Leads For Less Than the Cost of Two Cups of Coffee

The typical commercial real estate loan officer working for a life company, bank, credit union, or a hard money lender will take at least 40 to 50 phone inquiries and will underwrite 10 to 15 loan packages for every loan he approves.  Commercial real estate lending therefore is an immense sifting and sorting process.

One of the key values that you will add as a commercial mortgage broker is to help your lender sift and sort through dozens and dozens of loan requests to find that one deal that makes sense.  Your job is NOT to grab ahold of the first loan request you find - say, a $10 million land loan on scrub grass in the desert of California - and then spend 20 precious working hours trying to place a deal that is not do-able.

Instead, your job is to say to your borrower or realtor, "I'm sorry, Bob, but in today's market, I'm not sure anyone will finance this project."

Therefore, it is my opinion that the typical commercial mortgage broker should devote SIXTY PERCENT (60%) of his time to marketing for commercial loans!

When a lead call comes in, you should quickly qualify it over the phone.  If this is a purchase money deal, how much cash is the borrower putting down?  If this is a refinance, and he needs an 80% LTV loan, or higher, to pay off his existing lender, kill the deal.  

What is the borrower's net worth compared to the loan size?  It should be at least equal.  Got an auto mechanic with a net worth of only $200,000 trying to buy a $3 million apartment building?  Kill the deal.  Remember, the Net-Worth-to-Loan-Size Ratio says that the net worth of the borrower should be at least as large as the loan amount.

"But George, what if I don't have a single deal in processing?"  Then spend every possible minute calling, writing, or visiting nearby bankers and commercial real estate brokers.  Write newsletters and get them out.  Go to mixers.  Schmooze.  Do not - do not - waste your precious working hours trying to place pipe dream deals.

It is far better to turn away one deal in forty that might possibly have been do-able than to waste precious marketing time trying to pull off a miracle on 39 other goofy loans.  Your policy should be, "If a deal is not obviously a winner, I'm turning it down and working on my marketing."

Free Commercial Loan Software:

C-Loans has just developed some brand new commercial loan software that is super-easy to use, even for a complete newbie to commercial real estate finance.  You just fill in the blanks.  You can then take your professional-looking commercial loan package and submit it to any lender in the country.  This new software is also 100% free.

Still Trading Training Courses For Bankers:

If you haven't visited C-Loans.com recently, you will be shocked by the number of new banks and credit unions to whom you can easily submit your deal.  We have added hundreds of new banks recently.

Ever wished you could afford my nine-hour video training course, How to Broker Commercial Loans?  It is now online.  If you get me 20 commercial real estate loan officers working at a bank or credit union, I'll give you a copy for free.  (They each have to work at a different bank.)

You can use this course again and again to train new loan officers.  The most successful commercial mortgage broker in the country, Les Agisim of Trevor Cole Commercial, has used my course to train at least thirty of his loan officers.  By the way, Les has closed 55 commercial loans using C-Loans, thereby earning on the order of $1 million in commercial loan fees.

Here is how to get your free 9-hour commercial training course. You will be soooo much more confident about commercial real estate finance ("CREF") once you know what the heck you are doing.

"But George, I Only Know One or Two Bankers Making Commercial Loans."

What if you only know one or two bankers making commercial real estate loans?  You can trade one banker for your choice of (1) a Commercial Mortgage Marketing Course (the PDF); (2) an Income Property Underwriting Manual; (3) a Mortgage Broker Fee Agreement, prepared by an attorney; and (4) a regional copy of The Blackburne List, a list of 750 commercial lenders in your area.

You Get Two Free Training Courses or Tools, Just For Submitting a Commercial Loan Into C-Loans:

Once you enter a new commercial loan into the SIX-STEP C-Loans System (you actually checked off six banks and pressed "Submit"), simply send an email to Tom Blackburne at tommy@blackburne.com and say, "I submitted a commercial loan using C-Loans.com".  He will send you your two free training courses.  You get to choose from the list above.  Helluva deal.

Are You a Top-Tier Commercial Mortgage Banker?

For those of you who are really smart, C-Loans will pay you 20% of our net software licensing fee for convincing a bank or credit union to join C-Loans.com.  One smart mortgage broker, Arnold Taylor, has added 145 banks to C-Loans so far.  As his deals progress towards closing, he is going to make a fortune.

It's far easier than you think to convince a bank to join C-Loans.com.  Just call or email the commercial real estate loan officer, working at a bank or credit union, and say, "Do you want to close more commercial real estate loans?  You ought to join C-Loans.com as a lender."

"There is no cost to join, and there is no monthly fee.  You simply pay them a 37.5 bps. software licensing fee when the deal closes.  Most banks just bump their normal loan fee up from 1 point to 1.375 points to cover the cost of receiving their online commercial loan applications.  On deals over $5 million, their fee drops to just 25 bps."

"This commercial loan portal has more than 750 participating banks, they have been up now for 20 years, and they have closed over 1,000 commercial real estate loans.  There is nothing to sign.  Just complete this form to tell them your Commercial Lending Preferences."

Heck, you can just cut and paste these last three paragraphs and send them to your loan officer. Don't worry about closing the sale.  Just send us his contact information, including your loan officer's address and email address.  We'll then dangle delicious commercial loans in front of him until he joins.

It would be even better if you can gather from him the size and types of commercial real estate loans that he is seeking first, before even telling him about C-Loans. This way, when we dangle candy in front of him, it will be the type of candy that he really craves.  The good news is that most banks across the country are ravenous for commercial loans right now because commercial loans are so high-yielding.

Here is more information about convincing banks to join C-Loans.com.

First, just a quick reminder that C-Loans.com is now giving away free commercial loan software.  Now on to today's subject:

I read a very disturbing article this morning in a military journal about the Iranian drone and missile attack this week on that Saudi oil distribution facility.  The author pointed out that our advanced missile and drone radar detection system completely missed the attack!  The Iranian drones and missiles flew right through our radar detection fields, and we did not pick them up.

The Iranians have in their arsenal high-speed surface-to-ship missiles that can fly 40 miles per minute.  Our carrier fleet in the Persian Gulf is ... just 40 miles away.  Even if we could detect these incoming missiles, we would only have about one minute to react.

Folks, the U.S. Navy is in trouble.  Lockheed announced today that it is opening a hypersonic, long-range missile manufacturing facility in Alabama.  That's great and everything; but the Russians and the Chinese have been devoting a huge percentage of their military budgets to missile development for more than a decade.

Although it clearly has bugs (a Russian nuclear-powered test missile went off-course this month and blew up during recovery from the White Sea), the Russians are close to developing a hypersonic, nuclear-powered missile with an unlimited range.  This means that those of you close to military bases or chip manufacturing plants in Arkansas will soon not even be safe.

Now available online.  You gotta take this course!

Folks, the U.S. is woefully far behind in missile warfare.  Remember, no nukes will be used in World War III.  If any country ever used nukes, it would be answered with nukes.  Depending on the size of the exchange, the resulting nuclear winter could easily exterminate virtually all advanced lifeforms on earth.  Experts have said that a nuclear exchange between just Pakistan and India would produce a nuclear winter so horrific that it would result in the starvation deaths of two billion people.

A sizable nuclear exchange between the US and Russia or between the US and China would be roughly similar to that asteroid strike in Mexico (known as the Cretaceous–Paleogene extinction event) which resulted in the sudden, mass extinction of some three-quarters of the plant and animal species on Earth, approximately 66 million years ago.  Sunlight was largely blocked out for decades.

The fact that World War III will be fought without nukes means that one side or the other could actually win the war. 

To me, this is incredibly terrifying.  Mutual Assured Destruction no longer seems to be a deterrent.  As Richie Cunningham (Opie) might have said on Happy Days, "You're never going to use your nukes, Bucko, so we're coming at you with conventional weapons."

This month the Russians and Chinese plan to conduct an enormous joint land warfare exercise involving more than one-hundred thousand soldiers.  The Winds of War are blowing, folks, and America is on the dinner menu.  (I know, I know, I just mixed metaphors. Haha!)

The emergence of missile warfare reminds me a lot of the emergence of the longbow in the Middle Ages.  Until the Battle of Crecy in 1346, outside of Paris, the mounted knight was the master of the battlefield.  These immensely-muscular and fit knights would practice for two hours per day, easily swinging heavy swords that most layman could barely lift.  When you gave them armor and an armored horse, these monsters were almost unstoppable.  They were the main battle tanks of their day.

Get tons of commercial loans for less than the cost of two cups of coffee.

King Richard the Lionhearted, 6 feet 5 inches tall, was one such beast.  Ambushed and greatly outnumbered in 1162, at the Battle of Jerusalem, Richard rallied his disordered troops and personally led a counter-attack.  No one could stand in front of him.  King Richard was simply unstoppable.  The enemy was routed, and Jerusalem was recaptured.

In 1461, at the Battle of Towton (the bloodiest battle ever on British soil), King Edward IV - another armored giant - took a position at the head of an unstoppable wedge of knights to rout, and then to slaughter, the Lancastrian army, even though the Yorkists were outnumbered two-to-one.  The Lancastrian longbow men were out of arrows, and King Edward was personally unstoppable.  By the way, the book, Game of Thrones, was based on the War of the Roses in Britain.

The Battle of Crecy changed the age of the offense to the age of defense.  Until this battle, charging knights ruled the battlefield.  At Crecy, a tiny English army (14,000 men) took refuge on a hill.  The English created trenches and horse defenses, and stood behind them with their 5,000 longbow men.  After the longbow men routed the French crossbow men, on the order of 100,000 French mounted knights and men-at-arms repeatedly charged up the hill.  

Using arrows with bodkin heads, which easily penetrated armor, the English archers slaughtered the charging knights.  So many knights were killed that it has been said that the French lost the cream of their nobility.  It ended the Age of Chivalry - the age of the knights.  The Battle of Crecy also marked the end of the advantage then enjoyed by the offense in warfare.

The development of cannon and Hitler's blitzkriegs marked the return of the advantage to the offense.  Cannon had a longer range than the longbow.  Castles could no longer stand before an artillery barrage.  Hitler's tanks and dive bombers crushed the French army.  With the rise of aircraft carriers and air power, that offensive advantage in warfare has remained... until now.

I greatly fear, however, that the military advantage is once again swinging in favor of the defense.  How can our carriers approach and destroy targets in China, or even in Iran, when their long range missiles can sink a carrier from hundreds of miles away.

If your kid simply must join the military, don't have him join the Navy or the Marines.  The U.S. Navy is in trouble.

If you need a commercial loan, don't forget to enter your loan request into C-Loans.com.  We have been adding new banks like crazy, and you get TWO free training courses, just for entering a new commercial loan into C-Loans.com.  

Once you enter a new commercial loan into the SIX-STEP C-Loans System (you actually checked off six banks and pressed "Submit"), simply send an email to Tom Blackburne at tommy@blackburne.com and say, "I submitted a commercial loan using C-Loans.com".  He will send you your two free training courses.  Helluva deal.

But guys, filling out a freebie form to get a freebie does NOT constitute entering a commercial loan into C-Loans.com.  For example, filling out the form below does NOT constitute completing a C-Loans app.

Working on a construction loan?  Is your construction lender
demanding that your client come up with more equity?

To actually enter a commercial loan into C-Loans, you first have to register and hit a button that says, Step 1 of 6.  Later you get to add pictures.  Guys, always try to add pictures to your commercial loan applications.  Pictures are not required to use C-Loans, but they triple your chances of closing the deal and getting paid.  Here's an easy way to get pictures. 

Ever wished you could afford my nine-hour video training course, How to Broker Commercial Loans?  It is now online.  If you get me 20 commercial real estate loan officers working at a bank or credit union, I'll give you a copy for free.  (They each have to work at a different bank.)

You can use this course again and again to train new loan officers.  The most successful commercial mortgage broker in the country, Les Agisim of Trevor Cole Commercial, has used my course to train at least thirty of his loan officers.  By the way, Les has closed 55 commercial loans using C-Loans, thereby earning on the order of $1 million in commercial loan fees.

Here is how to get your free 9-hour commercial training course.   You will be soooo much more confident about commercial real estate finance ("CREF") once you know what the heck you are doing.

What if you only know one or two bankers making commercial real estate loans?  You can trade one banker for your choice of (1) a Commercial Mortgage Marketing Course (the PDF); (2) an Income Property Underwriting Manual; (3) a Mortgage Broker Fee Agreement, prepared by an attorney; and (4) a regional copy of The Blackburne List, a list of 750 commercial lenders in your area.

Lastly, for those of you who are really smart, C-Loans will pay you 20% of our net software licensing fee for convincing a bank or credit union to join C-Loans.com.  One smart mortgage broker, Arnold Taylor, has added 145 banks to C-Loans so far.  As his deals progress towards closing, he is going to make a fortune.

It's far easier than you think to convince a bank to join C-Loans.com.  Just call or email the commercial real estate loan officer, working at a bank or credit union, and say, "Do you want to close more commercial real estate loans?  You ought to join C-Loans.com as a lender."

"There is no cost to join, and there is no monthly fee.  You simply pay them a 37.5 bps. software licensing fee when the deal closes.  Most banks just bump their normal loan fee up from 1 point to 1.375 points to cover the cost of receiving their online commercial loan applications.  On deals over $5 million, their fee drops to just 25 bps."

"This commercial loan portal has more than 750 participating banks, they have been up now for 20 years, and they have closed over 1,000 commercial real estate loans.  There is nothing to sign.  Just complete this form to tell them your Commercial Lending Preferences."

Heck, you can just cut and paste these last three paragraphs and send them to your loan officer.  Don't worry about closing the sale.  Just send us his contact information, including your loan officer's address and email address.  We'll then dangle delicious commercial loans in front of him until he joins.

It would be even better if you can gather from him the size and types of commercial real estate loans that he is seeking first, before even telling him about C-Loans.  This way, when we dangle candy in front of him, it will be the type of candy that he really craves.  The good news is that most banks across the country are ravenous for commercial loans right now because commercial loans are so high-yielding.

Here is more information about convincing banks to join C-Loans.com.

Before we get into today's commercial loan training lesson, I have an interesting story for you.  Yesterday a newbie commercial loan broker contacted me, and he said, "I desperately need your fee agreement for a deal that is close to closing, but I don't have a banker to trade."

I told him, "Just call your local bank and ask to speak with a commercial real estate loan officer.  Every bank has one.  Collect his address, phone, and email address, and voila, you're done!"  Twenty minutes later, he sent me my commercial loan officer and lived happily ever after.

You can trade a commercial real estate loan officer, working at a bank or a credit union (no other types of commercial lenders please), for your choice of (1) an Income Property Underwriting Manual; (2) a Commercial Mortgage Marketing Course; (3) a Fee Agreement; or (4) a regional copy of The Blackburne List of 750 commercial lenders.

Even if you are not a commercial loan broker, this particular training article has some lessons that you might find very helpful, especially the part about marketing leverage further below.

Before we go any further, it is important to understand that it is illegal to pay a referral fee on a residential one-to-four family dwelling loan, where the purpose of the loan is to either buy the property or to build it.  What about residential refinances or business-purpose residential loans?  I dunno.  Anybody else out there know?

Such referral fees on residential loans are called kickbacks, and the Feds will go absolutely bat-snot crazy if you violate RESPA.  They do not want people steering unsophisticated and trusting residential borrowers to higher-cost lenders.

Referral fees on commercial loans, however, are perfectly legal.  You do NOT have to be licensed.

If you are not licensed, however, be absolutely sure that you do not try to negotiate loan terms.  For example, you cannot say, "The bank will probably charge you 2.75% to 3.5% over five-year Treasuries."  Even though this is true, don't say it!  It might be considered negotiating terms.  Just work on a name and number referral basis, and you will be fine.

The standard referral fee for commercial loan leads is 20% of the lender's loan fee.  This is what Blackburne & Sons pays.

Get tons of commercial loans for less than the cost of two cups of coffee.

Marketing Leverage:

I have a business buddy who is spending a fortune advertising his mezzanine loans and preferred equity investments using Google AdWords.  Whenever I use Google to look up “supermodels in swimsuits” (haha, just kidding?), my buddy’s advertisement pops up. 

First of all, kudos to Google for knowing that I am in the commercial real estate business.  Kudos also to Google for showing my buddy’s very relevant advertisement.  Pop quiz, Google: "Where do I (old man Blackburne) stand on gun control?”  I am sure that Big Brother knows.

But holy cramps, this kind of advertising is incredibly expensive.  My buddy was moaning recently about the cost.  He needs to start using marketing leverage.

Marketing leverage is the technique of advertising to people who themselves are advertising like crazy.  By doing so, your advertising dollar is multiplied or leveraged. These guys who are advertising themselves have lots of leads to refer out.

Example:

Back in the days of snail mail - now called lumpy mail - it cost me over $1 (nowadays $2) to send each lumpy mail piece.  I quickly learned that adverting directly to the public for commercial loans was horribly ineffective.  But what ended up working like a charm was advertising to mortgage brokers, bankers, commercial brokers (real estate brokers who sell commercial property), and property managers (with whom I had a prior working relationship).

Each of these guys was spending at least $400 per month (today maybe $700) advertising for his own business.  I could reach each one for only $1 per month, and if they got a subprime commercial loan request, they would bring it to me.  Therefore my $1 was able to reach $400 worth of borrowers.  I enjoyed marketing leverage.

Today we can reach referrals sources by email, which is almost cost-free.  As you know, advertising to referral sources is still my preferred method, even though TONS of guys are now doing it.

I try to separate myself from the other guys by rewarding my loyal readers with funny pics, jokes, and helpful practice tips.  You guys just know, whenever you get a blog article or an email from me, that there will be some kind of reward for opening it.

But if I was my buddy, and I wanted to use expensive Google AdWords, I would build a list of referral sources and submit the list to Google.  Did you know that you can do that?  You can give Google or Facebook a list, and they will regularly throw up your advertisement to them.  In addition to referral sources like mortgage brokers, bankers, commercial real estate brokers and property managers, I would also throw in as many high-net-worth commercial property investors as I knew.  This list of actual investors would probably be much smaller.

Then I would only pay for AdWord ads to these special guys, not the general public. Most of them are advertising themselves for commercial real estate clients, and I would achieve marketing leverage.

You should never-ever submit a commercial loan package to a commercial real estate lender without at least one picture of the subject property.

On Tuesday, I released an important blog article about how to use C-Loans.com to create a handsome PDF of your commercial loan package.  This commercial loan origination software is 100% free.  Even if you don't find the perfect lender for your deal, you walk away from your four minutes of sweating and slaving (not!) with a professional PDF that you can easily blast out to thirty banks.

Using our new free commercial loan software, you can easily upload pictures of the property to your commercial loan application.  These pictures serve to accomplish four things:

1. Pictures show the lender that this is a serious commercial loan application.  Borrowers and brokers who are just poking around seldom bother with pictures.
   
   
2. Pictures also show that the borrower or broker is not a complete newbie.  Only an intellectually-challenged mortgage broker would ever submit a commercial loan application without at least one picture of the property.
   
   
3. If the property is attractive - or if the picture was taken on a sunny day with lots of blue sky - commercial lenders will swarm all over your deal.  We sell trust deed investments to about a thousand private investors by email, and we always include three pictures of the underlying property.  I can tell you that blue sky really sells.  Deals with pictures taken on an overcast day tend to linger unsold.  Hence the securities law term, "blue sky".
   
   
4. Pictures also greatly help to explain the property.  For example, you might have have a real estate office on the street, with several apartment units behind it, plus 60 mini-storage units in the very back.  A picture is worth a thousand words.  Here several pictures would really help.

"But George, I am a New Jersey commercial loan broker, and my commercial property is in Alabama.  How on earth can I get pictures?"

You can always ask the borrower to send you some pictures; but I would wait until the borrower has gotten the ball rolling by sending you an old financial statement, a rent roll, and his actual income and expenses on the property.

Asking for pictures right up-front might cause the borrower to procrastinate and, in the meantime, entertain competing offers.  In other words, you will lose the deal to a competitor.  I would wait to ask for pictures until after the borrower has sent you a package.  Let's make him work a little and commit to working only with you, before asking him to fetch the broomstick of the Wicked Witch of the West.

One way you might handle this is to ask him whether he has ever sent pictures by email or text.  If he stammers and stutters, you should resolve to get your pictures another way.

The easiest way to get pictures of your commercial property is to simply google the address of the property.

Google has now photographed at least 90% of the standing commercial properties in America.  When you google the property, you can almost always find one picture of the property.  Guys, there really is no excuse - other than laziness or a desire to remain poor - for not including a picture of the property in every one of your commercial loan packages. 

Get commercial loan leads for less than the cost of two cups of coffee.

Now Google went to a lot of expensive work to photograph those 30 million commercial properties, and they would prefer if people didn't just steal their pictures.  You and I are only using the picture - not to mass market the property - but rather to just show our commercial loan to twenty of so lenders.  Using their picture is really not taking any money out of the hands of Google.

But Google doesn't make it easy to download their pictures.  You can't right-click on a picture and download it to your desktop.  Google has programmed their pictures so they cannot be downloaded.

What I discovered personally this week is that you can simply take a screen shot of the picture and save the screen shot to your desktop.  Voila!

To take a screen shot on my Mac, I simply hit Command-Shift-4 at the same time, hold down my moose, and drag the curser from the upper-left to the lower-right.  When I release my mouse, the screen shot of the property picture saves to my desktop. 

I am often asked, "Where can I get some commercial loan origination software?"  This sounds like an intelligent question.  After all, there are dozens of vendors who sell similar software for residential mortgage loan originations.

In real life, however, commercial loan origination software makes little sense.  First of all, there is no such thing as a Uniform Commercial Loan Application - similar to the FNMA 1003 residential loan application - used by thousands of commercial lenders across the country.  Every commercial lender in the country uses its own commercial loan application.

Secondly, in real life, most commercial lenders don't ask the borrower to fill out a commercial loan application until the commercial loan has essentially been pre-approved.  What?  Huh?

Yup.  Completing a commercial loan application is one of the last steps in the commercial loan closing process.  Remember, commercial real estate loans are based primarily on the property's cash flow, the value of the property, and the strength of the tenants.

The borrower himself is surprisingly unimportant - as long as he has good credit, he has some liquidity, and his net worth is larger than the loan amount.  See the Net-Worth-to-Loan-Size Ratio.

When a commercial loan officer for a bank is reviewing a commercial loan package, he might spend ninety minutes studying the appraisal and reviewing the leases.  He then might spend only three minutes scanning the borrower's financial statement to verify that the borrower has some liquidity (cash and marketable securities) and a net worth at least as large as the loan amount.

The commercial lender will NOT pour over the borrower's budget to analyze his top and bottom debt ratios.  A quick, three-minute scan is all he will do.  "Frankly, my dear, I don't give a hoot."

During the commercial loan application process, the bank's commercial real estate loan officer will typically ask for an old financial statement, as well as the actual income and expenses of the property and the leases.  Right before he takes the deal to Loan Committee, and only after he has essentially pre-approved the deal, will he ask the borrower to complete an updated financial statement on the bank's forms.

Get dozens of commercial loan referrals for the cost of two cups of coffee.

Marsha-Marsha-Marsha.  Property-property-property.  It's all about the property.  Therefore, in order to close commercial real estate loans, a commercial loan broker needs software that showcases the property, not the borrower.

Now the good news.  Please take a gander below:

This is page one of a four-page Executive Loan Summary of a commercial loan application prepared as a PDF.  The software automatically computes the Loan-to-Value Ratio, the Debt Service Coverage Ratio, and if the deal is a construction loan, the Loan-to-Cost Ratio.  Armed with this attractive and concise summary, you can quickly submit your commercial loan application to dozens of banks to find the one in the mood to lend today.

Open and view a sample PDF of a commercial loan.

Remember, folks, banks and credit unions make the vast majority of all commercial loans today, and banks are extremely fickle.  One day a bank is moody, fickle, and impossible to satisfy.  Three weeks later that same impossible bank is making crumby commercial loans like a drunken sailor.

The key to success as a commercial loan broker is to find out which bank - because of excessive liquidity - is making commercial loans like a drunken sailor today.  

And once you have a beautiful PDF of your deal, submitting your commercial loan to dozens of commercial lenders is easy.  You just blast out an email to 12 banks, maybe six at a time, and include this beautiful PDF in the email.

So where do you go to get access to this wonderful software?  How much does it cost?  You will find this software on C-Loans.com, and the cost is... get ready... it's expensive... ready?  Nuthin', honey.  The cost is zip-zero-zilch.

"But, George, I have been to C-Loans.com before, and I don't remember ever seeing it." 

When you visited C-Loans.com, you probably got distracted by the enticing blue call-to-action ("CTA") buttons on our home page offering a free commercial loan placement kit or a free list of 200 commercial lenders.  (The buttons below are not live.)

Because you probably got distracted buy these CTA buttons, you may have never actually entered a commercial loan into the six-step C-Loans System:

Had you done so, you could have placed a checkmark next to six lenders and pressed, "Submit".  Within minutes, hungry commercial lenders would have been contacting you with offers.

After submitting your commercial loan to six banks, you are given a chance to make your C-Loans app into a PDF:

Voila!  It's that simple.  Now you have a PDF of your commercial loan package that showcases the property.  There was no cost, and perhaps a C-Loans lender will make you an offer that you cannot refuse.

There are additional benefits to submitting your commercial loan through the six-step C-Loans System.  You also get to choose TWO of the following gifts.  (1) Income Property Underwriting Manual; (2) Commercial Mortgage Marketing Course; (3) Fee Agreement prepared by an attorney (me); and (4) The Blackburne List of 750 commercial lenders.

After you have submitted your commercial loan using the six-step C-Loans System, you can click on the purple call-to-action button below to collect your thank-you gifts.

A lot of you guys are missing out on a wonderful land rush.  If you introduce us to a new bank or credit union, and we later convince that bank to join C-Loans.com, we will pay you a 20% referral fee on the first three closings for us by that bank.  

You don't have to make the sale.  Just send an email to the commercial real estate loan officer at a bank or credit union, "Hey, Steve, have you heard about C-Loans.com?  They send you carefully filtered commercial loan applications.  It costs nothing to join.  There is no monthly fee.  You simply bump up your normal loan fee from 1.0 point to 1.375 points, and after the close, C-Loans sends you an invoice for their 37.5 bp. software licensing fee."

Then please just send us the contact information for the banker, and we'll continuously tempt him with attractive real deals.  Eventually he will see the perfect deal, and he will join so he can work the lead.  Arnold Taylor of Northeastern Funding Group now has 145 banks that have joined C-Loans.com, and other brokers have brought in bankers as well.  Each of them will, in time, enjoy some huge referral fees.

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Handel was a famous German composer.

Almost done.  Because banks and credit unions have been joining C-Loans in droves, we have over 200 new commercial lenders.  You need to come check them out.  When you submit a commercial loan using C-Loans.com, the system limits you to just six submissions at a time.  I now want you to come back to C-Loans, log back in, and put a check mark next to six more lenders, for a total of 12.

Remember, banks are extremely fickle.  One day a bank is impossible to satisfy.  Three weeks later, that same impossible bank is making crumby commercial loans like a drunken sailor.  The key to success as a commercial loan broker is to find out which bank - because of excessive liquidity - is making commercial loans like a drunken sailor TODAY.

So please come back to C-Loans and start using this wonderful commercial loan origination software to make yourself a handsome PDF of your deal.  Our software also teaches you what information you need to collect - for example, pictures of the property - in order to create the ideal Executive Loan Summary.

Then, after you have submitted your deal to 12 banks, be sure to contact us for your free rewards - a choice of TWO from (1) an Income Property Underwriting Manual; (2) a Commercial Mortgage Marketing Course; (3) a Fee Agreement; and (4) a copy of The Blackburne List of commercial lenders.

In the past two weeks, North Korea conducted an intermediate range missile test, and then it conducted another test the next day.  Trump reassured us that it was no big deal.  His agreement with Kim was not to test ballistic missiles, not intermediate range missiles.  Then the Russians tested a hypersonic missile, and it was a disaster.  More on this later.

Next the U.S. withdrew from the 1987 Intermediate-Range Nuclear Forces (INF) Treaty, claiming that Russia had been violating for years.  Then the U.S. took a modified Navy Tomahawk missile and tested it from a ground based launcher.  The missile successfully hit a target 500 miles away.

Then the Chinese tested a new carrier-killer hypersonic missile, a missile that will be impossible to shoot down because it can change directions during flight.  This missile might be operational within one year.  This is why I worry that Elon Musk's new military satellite array will not be operational in time to prevent World War III.

Then the North Koreans tested another missile.  Three days ago the Iranians successfully tested a surface-to-air missile that they had constructed themselves.  So each of the countries in the enemy Axis - China, Russia, North Korea, and Iran - all tested missiles in the past two weeks.

World War III will not be a nuclear exchange because such an exchange would create a nuclear winter so complete and long-lasting that all but a handful of people on Earth would starve to death.  Instead, World War III will be a missile war, with these missiles having the ability to slam into targets with near-absolute precision.  I read an article this week about an intermediate range missile test that landed within mere yards of the target.

The United States is two-years behind the Russians in the development of hypersonic missiles, so we could easily lose World War III.

You might be tempted to think that this war really won't affect you.  You would be wrong.  Russia is developing nuclear-powered hypersonic missiles that have a virtually limitless range.  They can also fly in a constantly changing flight pattern that is nearly impossible to shoot down.  Therefore, if you think you are safe from a conventional bomb attack in your condo overlooking Lake Michigan in Chicago, think again.

The entire city of Chicago will not be destroyed.  Remember, these nuclear-powered hypersonic missiles are NOT nuclear bombs.  These missiles will use conventional warheads.  No one will use nukes in the coming war.  

These conventional missiles, however, will be able to fly all the way from Siberia - launched from a mobile launcher that changes location daily -  right into the huge railroad hub at Union Station.  Much of the train and truck traffic in the U.S. may be brought to a halt in the first few days of the war, as Russian missiles slam into railway hubs and bridges all across the country.  How are you going to get food?  How is your daughter going to get her asthma medicine or her insulin?  

There will be no gasoline or natural gas either.  For environmental reasons, we only have a limited number of oil refineries in the U.S.  It will be an easy thing for the Russians to take out our oil refineries and natural gas pipelines.  Folks, this war will affect everyone from the very first day.

Get dozens of commercial loan referrals for the cost of two cups of coffee.

Russia has not yet perfected its nuclear-powered hypersonic missiles.  They tried to test the missile a week ago outside of Arkangel, a Russia city way to the north on the White Sea.  Something went wrong.  There was an explosion.  Five Russian scientists were killed, and a nearby town was evacuated due to a radiation spike.  Fortunately, the Russians are not yet ready for war.  I wonder whether CIA agents sabotaged that Russian missile test?

How many of you are old enough to remember Mad Magazine, with Alfred E. Newman?  In every edition, there was always a hilarious cartoon about Spy versus Spy.

This cartoon series was based on historical events.  In the years leading up to World War I, many well-read people in Britain and Europe could also feel the Winds of War blowing.  The British and the Germans were engaged in an arms race to determine which could develop the largest dreadnoughts.

A dreadnought was an early battleship, named after the first of its type, the British ship, H.M.S. Dreadnaught, built in 1906.  Please remember that this was before the age of dive bombers and torpedo planes, so the dreadnoughts clearly ruled the seas.  Whoever controlled the sea could cut off the enemy's flow of oil and food - the lifeblood of a country at war.

The Germans were rapidly building their own larger and larger dreadnoughts.  The larger the dreadnaught, the larger the guns it could carry.  A dreadnaught with one-inch larger (diameter) guns could sink an enemy dreadnaught before it could even come into range.  The designs of such a ship could literally determine the outcome of the coming war.

H.M.S. Dreadnaught (1906)

Each country sent out its legion of spies to the shipyards of the other, trying to seal the dreadnaught building plans of the other.  Knives flashed in the dark.  Spies disappeared.  British spies won that contest, and the British controlled the seas during World War I.

According to John Bolton this week, President Trump's National Security Advisor, the Russians stole much of our technology to develop their more advanced hypersonic missiles.  Clearly the Russians and Chinese are winning today's spy war.

Putin was the first to suddenly realize that no one is going to use nukes in the coming world war.  It would mean the extinction of mankind.  Putin therefore set out to develop and build an arsenal of conventional hypersonic missiles with the longest range.  He clearly hasn't perfected nuclear-powered hypersonic missiles, but he is well on his way.  The Chinese also realized years ago that missiles will determine the outcome of World War III.  The enemy Axis of China, Russia, North Korea and Iran is now testing missiles like crazy.  Missiles, missile everywhere,

So make no mistake.  The danger of another World War is very, very real.  The Winds of war are blowing.  On Friday, for the first time, President Trump referred to China's President Xi as an enemy.  The Dow fell 623 points.

Do you see the gold call-to-action button above that talks about earning three huge referral fees?  Let's suppose you have buddy at the bank who makes commercial loans.  Tell him about C-Loans.com.  It's free to join.  No monthly fee.  If he never closes a deal, it doesn't cost him a cent.  If he does close a deal, he simply increases his normal loan fee from 1 point to 1.375 points.  After the close, we send him an invoice for our 37.5 bp. (0.375 point) software licensing fee.  

It doesn't matter if he says yes.  Just ask him his minimum commercial loan, his maximum commercial loan, and his lending area.  Then send this info to Tom Blackburne at tommy@blackburne.com.  Tom will then code you as the referral source.

C-Loans.com will then tempt your guy with commercial loan applications that fit his requirements exactly.  Folks, 95% of these bankers are eventually joining C-Loans because banks and credit unions are desperate to close high-yielding commercial loans right now.  You will earn a 12.5 bp. fee on the first three deals closed by this banker.  One of our brokers, Arnold Taylor, has added 125 new banks to C-Loans.com is the past 45 days!

Nineteen men and women get together every week for breakfast or lunch.  Included in the group is a -

1. Residential real estate saleswoman
2. Residential mortgage agent
3. CPA or accountant
4. Handyman
5. Real estate attorney
6. Commercial real estate appraiser
7. Fix and flip specialist
8. Owner of a flooring business
9. Owner of as water damage restoration business
10. Commercial real estate broker
11. Residential real estate appraiser
12. General contractor
13. Owner of a moving company
14. Painting contractor
15. Roofing contractor
16. Probate or tax attorney
17. Estate planner or life insurance agent
18. Owner of a property management company
19. You - a commercial loan broker.

Several times a week each of you says to a client, "As it turns out, I know a very good real estate agent (or a commercial loan broker or a handyman).  Would you mind if I gave your name and number to him, so he can contact you?"

Then each member of your group takes out his cell phone, opens up the Cheddar Stacks app, and, in just 45 seconds, sends the lead to his fellow group member.

At lunch, you guys share additional leads, and talk about replacements for the attorney or flooring contractor, who is not sending leads or who is not even showing up for meetings.  Cheddar Stacks makes identifying the hang-dog quitters easy.

What does Cheddar Stacks cost?  It's free at first, and then, after it has proven it's worth, there is a token fee every month.  And guys, compared to paying for Google Adwords, direct mail, or internet display ads for commercial loan leads, the cost of Cheddar Stacks is trivial.  Pocket change.  Two coffees from Starbucks.

It is critical that you learn this lesson about originating commercial loans.  A commercial loan lead that that you get by referral is worth THIRTY leads generated by your own advertising.  

Why?  When you advertise for leads, you get shoppers.  The problem with shoppers is that there is always a bigger liar down the street.  "Oh, yes, I can get you a 2% commercial loan that is fixed for 100 years.  And my commercial lender will lend up to 130% loan-to-value."

Referrals, on the other hand, tend to trust you.  They put themselves into your good, honest hands, and they follow your advice.  So I say again, "A commercial loan lead that that you get by referral is worth THIRTY leads generated by your own advertising."

Okay, you're interested.  Who wouldn't be?  For the cost of a couple of coffees each month, you can get three or four good referrals per month?  This is a no-brainer.

Each of you should already to be pushing your real estate investor clients to refinance their commercial properties.  Banks are making new permanent commercial loans at just 4.5% today; but your clients better hurry.  A recession is coming, and when it hits, banks are likely to get vey conservative about debt service coverage and loan-to-value ratios.  If your client moves right now to refinance, he should be able to get a new commercial loan of 75% loan-to-value.  You can find hundreds of the most aggressive credit unions and banks by using C-Loans.com. 

One of my favorite scenes from any movie was from Ghostbusters II.  Now, remember, FORTY years ago, Sigourney Weaver was smokin' hot.  A demon had possessed her body, and she was writhing on the bed in a very seductive manner.  Tending to her was Bill Murray, of classic Saturday Night Live fame (also Caddy Shack).  The demon utters, "Do you want this body?"  Bill Murray turns to the audience and says, "Is this a trick question?"  Hahahaha!   

So, do you want referral commercial loan leads?  "Is this a trick question?"  There are some propositions that do not need to be oversold.  Simply click here.

Here's the problem.  The winds of war are blowing, and China thinks that it can win.  By the way, this cool image to the right is from The Sun newspaper in the U.K.  I am far from the only guy who is worried about this.

World War III won't be a nuclear war, for the reasons I outlined in a blog article I wrote ten days ago.  It will be a war fought with surface-to-sea intermediate range missiles, and our aircraft carriers are at great risk.  If Russia joins on the side of China, which is increasingly likely, Russia will almost certainly use hypersonic conventional missiles that can fly at up to 15 times the speed of sound.

North Korea and Iran would likely join the two former communist superpowers.  North Korea would probably try to seize South Korea, and the Iranians would probably try to seize Saudi Arabia.  Did you notice that the North Koreans tested their intermediate range conventional missiles this week?  Twice.

Imagine the war beginning with Russia launching intermediate range conventional hypersonic missiles (no nukes) at U.S. and German military bases, airports, anti-aircraft batteries, our own missile batteries, bridges, power plants, pipelines, ports, and munitions depots.  

Because these new hypersonic missiles are so fast, they will strike before the U.S. and our allies can react.  The war in Europe could effectively be over in the first week.

Germany's military is a paper tiger.  The Germans spend less than 1.5% of their GDP on defense, and they depend on the U.S. for their defense.  The Germans are so anti-war that they even refused this month to provide ships for the international flotilla being assembled to protect vital oil tankers from Iranian attacks in the Persian Gulf.    

Why would Russia do this?  Putin wants to go down in history as the man who returned Russia to its former glory.  After victory, Russia would probably seize the Ukraine and the three Baltic states of Estonia, Latvia, and Lithuania.

China wants Taiwan back.  Economic relations between the U.S. and China have deteriorated so far that China has less and less to lose if it moves to seize Taiwan.  Yes, the United States is China's best customer, but did you know that we only buy 20% of their exports?  They could survive without our business.

To take back Taiwan, the Chinese military will have to storm the beaches of Taiwan.  Did you know that the Chinese Navy has more ships than the U.S. - something like 305 to our 287?  These Chinese ships are not sandpans either.  These are modern warships, though typically smaller than ours.  China just launched it second aircraft carrier this week, and they constructed this one themselves.

Their landing craft will have to endure withering fire from the U.S. 7th Fleet; but U.S. naval power is centered on our aircraft carriers, which could be sitting ducks for Chinese surface-to-sea missiles.  Sure, our cruisers will shoot down a ton of incoming missiles; but they are likely to be overwhelmed by the sheer volume of Chinese missiles, directed on target by Chinese military satellites.  Billion-dollar aircraft carriers are likely to be taken out by storms of mere million-dollar missiles.

It is interesting to note that hypersonic missiles travel so fast that they hardly need a warhead to sink a carrier.  They would strike with so much kinetic energy that the speed of the strike would be enough.

But finally there is hope.   A Naval spokesman this week praised the accomplishments of Elon Musk and Space X.  

Less than two months ago, Space X rocket opened its payload doors and rolled out 60 refrigerator-sized communications satellites.  Each successfully took up position in geosynchronous orbit around the world.  Each is connected and capable of relaying high-speed internet messages.  The network is called Spacelink, and it will eventually be comprised of 12,000 interconnected satellites, costing a total of $10 billion.  When completed, everyone on earth will have access to cheap, high-speed internet service.

The U.S. military now wants a similar satellite network.  If it can be completed before World War III starts, the U.S. can pull back its Navy all the way back to Midway Island, 4,000 miles from the Straights of Taiwan.  Incoming Chinese missiles could then be easily spotted from space and targeted for destruction.  U.S. intermediate-range missiles could then target Chinese ports, railway lines, anti-aircraft batteries, missile batteries, factories, bridges, power plants, communication hubs, and the like.  In other words, we win World War III.

You might be tempted to think, "Oh, well.  What do I care if the Chinese take Taiwan, the Russians take back much of their former empire, the North Koreans unite the Korean Peninsula, and the Iranians take the Saudi Arabian oil fields?  We have plenty of oil here in the U.S."

The Russians are working right now on nuclear hypersonic missiles with an unlimited range.  They will be able to hit middle America from middle Russia.  Imagine your life if every bridge, power plant, port, dam, oil refinery, airport, railroad yard, and cell tower in America is smashed in a one-year missile campaign.  We would all starve.  

By the way, the Russians are not ready yet.  One of their nuclear-powered hypersonic missiles (conventional warhead) exploded this week, killing seven scientists, releasing radiation, and forcing a nearby Russian town to evacuate.  (Source:  Bloomberg and the New York Times)  I wonder if the CIA was responsible?

The big question is whether Elon Musk and Space X can complete this new military satellite network in time.  The winds of war are blowing.

It's Time to Renew Your Continuing Education Hours, Folks

The ten largest economies include (1) the United States; (2) China; (3) Japan; (4) Germany; (5) United Kingdom; (6) India; (7) France; (8) Italy; (9) Brazil; and (10) Canada.  I was personally surprised to see that the economies of both Brazil and Canada made the top ten.  

Most of these economies are shrinking in population, and this is extremely deflationary.

Why is a shrinking population deflationary?  In order for the money supply of a modern economy to grow, its banks need to make new loans.  In order to make new loans, banks need borrowers.  If the number of potential borrowers is shrinking, eventually the country's money supply - and hence inflation - will shrink.

Why is deflation so bad?  A little bit of deflation is not terrible.  It makes the dollars of working Americans go further.  For example, if the price of a new bike for your kid falls from $70 to $62 over two years, that is surely not a bad thing.

But there is a dark side to deflation.  For one thing, deflation makes it harder to make the loan payments on your existing debt.  For example, if your mortgage payments are fixed at $2,000 per month, and the prevailing wage rate is falling at 2% per year, you could be in for a world of hurt if you have to change jobs and accept a new one at the lower wage rate.

The second problem is that deflation slows an economy because people postpone their purchases.  For example, why buy a new car for $50,000 this year when the price will probably fall to $46,000 next year?  Why not just postpone your purchase until next year?  If enough Americans delay their purchases of a new car, the automotive industry will soon tank and tens of thousands of workers will be laid off.

Lastly, significant deflation usually comes with a contracting economy, layoffs, falling demand, and job insecurity.  Deflation can easily become self-feeding.  

This is so important that I am going to say it again.  Deflation can easily become self-feeding.  A modern economy can quickly cycle down the drain.

So the cycle goes as follows:  

People stop having children.  The number of potential borrowers shrinks.  As the number of potential borrowers shrinks, banks make fewer loans.  The money supply then contracts, and a wave of deflation sweeps the country.  As deflation washes over a country, it becomes harder for borrowers to raise the dough to make their loan payments.  As more borrowers start to default, the banks get frightened and stop lending; but they keep gathering in their loan payments.  Because the Multiplier Effect works in reverse at the rate of 20:1, for every $1,000 received in loan payments that is not immediately recycled back out into a new loan, a whopping $20,000 get sucked out of the country's money supply.

Then you REALLY have deflation, like we had in 2008, when at least four trillion dollars was destroyed.  Yes, money can be destroyed.  How else do you think the Fed could have injected $4 trillion into the economy without creating horrible hyperinflation?  

The U.S. used to be the one shining star in terms of population growth.  Most of this population growth came from immigration.  The U.S. birth rate is not large enough to replace itself.  With the U.S. now preventing migration from the south, the population of the U.S. will soon start to decline.

Even China, which has lifted its One Child Policy, is shrinking.  The cost of education is high in China, so the typical Chinese family is saying, “Naw, no thanks.  One child is enough.”

Adding to this deflationary trend is the graying of each of the top ten economies.  Over a billion retired folks across the modern world are saying, “I’m done.  Take my life’s savings and give me an income.”

The problem is that there is FAR too much savings, too little growth potential, and not enough workers to do all of the work.  The young people are saying, through their lack of loan demand, “We don’t need your stinky money, old man and old lady.  We’ve got more than enough money to do what we want.”

There is too much saving retirement chasing too few borrowers.  Therefore, the price (interest rates) must come down.

Grasp this concept:  There is now almost $11 TRILLION dollars invested in bonds, CD’s and business loans with a negative yield.   Most of this is in Europe and Japan.  Did you know that in Europe you now have to pay your bank to accept your deposits?!

Investors in Europe and Japan are so desperate for yield that they are snapping up U.S. Treasury securities.  Did you know that the yield on the U.S. ten-year bond dropped from 2.03% yesterday to just 1.88% yesterday?!!!  The ten-year U.S. bond yield may drop below 1% within the next 18 months - maybe even within one year.

I don't want the world.  I just want to refinance every commercial building in America with a lower interest rate.  Is that too much to ask?  :-)

Reward For Entering a New Commercial Loan Into C-Loans:

If you submit your commercial loan to six of our banks, you get to choose two of following gifts. (1) Income Property Underwriting Manual ($199 retail); (2) Loan Broker Fee Agreement ($199 retail); (3) Commercial Mortgage Marketing Course ($199 retail); and (4) The Blackburne List of 750 Commercial Lenders ($79 retail).

Before calling us, please click on this link, which totally explains the offer.  Basically you enter your deal into the six-step C-Loans System (not just filling out a form to get a freebie), you put a checkmark next to six lenders, and you then press Submit.  Finally you send an email to Tom Blackburne and tell him which two of the above gifts that you want.

If you have used C-Loans.com in the past, you are going to be amazed at the huge number of hungry new commercial lenders.

Be Sure to Create a Free PDF of Your Commercial Loan Application

After submitting your commercial loan application to six of our banks, be sure to look for a button that reads, "Create a PDF".  It takes just one click, and then you can download to your desktop a beautiful summary of your deal.  Then you can take this PDF and submit it to dozens of your own banks.

First a correction.  A few days ago, I wrote a blog article about how deflation is sweeping the world.  In that article, I mentioned that deposit rates in Germany are slightly positive.  I am pretty sure that this statement was wrong.

Listening to Bloomberg today, I just discovered that the yield on ten-yield German bunds is a negative 0.46%.  The world is deflating so fast that this yield fell by a full 0.02% in a single day.  That's a pretty big move.  No wonder the Fed is trying to get ahead of deflation in America.

I couldn't find the current yield on bank C.D.'s in Germany right now, but they simply must be negative because German banks are making hundreds of billions of dollars in commercial loans to large German businesses at a negative interest rate.

Holy crappola!  Is this a wild and crazy world or what?  This negative yield means that if you want the safety of loaning money to the German government, you have to pay the German government almost one-half of one percent per year for the privilege.

Now on to Today's Training:

The Debt Yield Ratio is different from the Debt Service Coverage Ratio.  

The Debt Service Coverage Ratio is a financial ratio, used when making commercial real estate loans, designed to determine if the property generates more than enough net income (typically 1.25x) to make the loan payments on the proposed loan.

The Debt Yield Ratio, in contrast, is a financial ratio, used when making commercial loans, designed to make sure that the amount of the new commercial loan never gets too large in relation to the net income thrown off by the property - no matter how low interest rates get.  This latter point is critical.  

In the lead-up to the financial crisis in 2008, conduits brought amazingly low interest rates on commercial loans to prime commercial real estate.  Because interest rates were so low (in comparison to prior years) in 2005, 2006, and 2007 that investors were able to achieve historically sky-high loan-to-value ratios, sometimes as high as 80% loan-to-value!

Because the buyers of commercial real estate could now buy trophy properties with 80% leverage, thousands of wealthy investors poured into the trophy commercial real estate market.  Up-up-up went prices.  Down-down-down went cap rates.  The property valuations and the size of the loans against them went crazy.

Bam!  Then the Great Recession struck.

Down-down-down went the values of trophy commercial real estate.  Borrowers defaulted on their huge CMBS loans.  The bonds backed by commercial mortgage-backed securities (IOU's backed by huge pools of commercial real estate loans) took horrendous losses.

After taking horrendous losses, the buyers of commercial mortgage-backed securities lost their appetite for these bonds. In 2009, the CMBS industry contracted almost out of existence.  Dozens of conduit lenders (specialized mortgage companies originating commercial loans destined for securitization) closed their doors.  It was a bloodbath.  An entire industry - the conduit industry - was almost wiped off the face of the earth.

Finally - slowly - the appetite of CMBS buyers returned, but they were determined to never again invest in bonds backed by commercial loans that were far too large in comparison to the amount of net income being generated by underlying the property.

The result was the creation of the Debt Yield Ratio.  At first, a conduit could not originate a CMBS loan with a debt yield of less than 10%.  This kept most conduit loans at less than 60% loan-to-value.

Why would any borrower be content with a $7 million loan against his office building if the loan-to-value ratio was only 58%?  The answer was that the conduits were the only lenders making non-recourse commercial loans.  

Okay, life companies were also making non-recourse commercial loans, but their properties had to be breathtakingly beautiful.  Conduits, on the other hand, would make large, non-recourse, commercial loans on average-looking commercial properties.

The new wave of CMBS loans performed spectacularly in 2011, 2012, and thereafter, so the appetite of CMBS investors became ravenous.  More and more exceptions to the 10% minimum Debt Yield Ratio were made until 9% became the norm.

I am sure that conduit Debt Yield Ratios have fallen below 9%.  Does anyone out there work for a conduit?  What are conduit Debt Yields today?

This article was triggered by the rate sheet of a money center bank.  Now this bank is a portfolio lender, rather than a conduit lender, but they recently publicized a minimum Debt Yield Ratio of 5% for apartments, 6% for commercial, and 8% for multifamily.  Wow.  The market is truly ravenous for commercial loans.

Receive a Billion Dollar Yacht  - Just For Entering a Commercial Loan into the C-Loans System and Submitting It to Six Lenders.

Really... I am full of beans.  Haha!  But you do get a wonderful assortment of goodies, just for submitting your commercial loan to six of our lenders.

First of all, if you submit your commercial loan to six of our banks, you get to choose two of following gifts.  (1) Income Property Underwriting Manual ($199 retail); (2) Loan Broker Fee Agreement ($199 retail); (3) Commercial Mortgage Marketing Course ($199 retail); and (4) The Blackburne List of 750 Commercial Lenders ($79 retail).

Next, after submitting your commercial loan to six of our banks, you can create a gorgeous PDF of your loan package that you can use to submit your deal to dozens of your own banks.  Look for a button at the very end of the six-step process that says, "Create a PDF."

Lastly, you get to see the 150 new banks that we have added to C-Loans.com in the past three weeks.  Oh, my goodness.  Hungry banks are joining C-Loans in droves.

Remember, Commercial Mortgage Mania is now in full swing.  This will be the greatest turkey shoot of your life.  You should make more money as a commercial mortgage broker in the next six months than you have ever made in your life; so get out there, find some commercial property owner, offer him a 4.75% new first mortgage on his office building, and put some cash in his pockets.

Seriously, if you meet anyone who owns a commercial property, tell them, "I can lower your interest rate to 4.75% fixed, lower your monthly payments, and put tons of cash in your pocket."