Commercial Loans Blog

Veteran Commercial Lender (Not Me!) Shares Some Wisdom

Posted by George Blackburne on Sun, Nov 9, 2014

Apartment_RenovationThis morning I received a commercial loan solicitation flier (email) from an old friend of mine.  My buddy, Paul, also owns a hard money commercial loan company, and I have realized that he is one of the wisest guru's in the commercial loan business.

This flier contained so much wisdom about investing in commercial real estate and about commercial mortgage underwriting that I am sharing it with you almost in its entirety.  It is definitely worth a read.



The scenario:

  • Purchase of 60 run-down, low-rent apartments in South Carolina
  • 70% vacant!
  • Major deferred maintenance!

We (Paul's company) closed the loan and funded 97% of the purchase price !!!!!

Why would we make a 97% loan on such difficult property?   Simple: We have incredible faith in the borrowers.   We identified one factor in particular that our “maverick” underwriting found compelling.

The borrowers aren’t extraordinarily wealthy, but they earned every dime themselves, and they have superb credit.   They also have an admirable “self-made” business and investment history.   They had previously bought low-rent apartments and personally, “hands-on”, did all the renovation and property management.  All their other income properties are now 100% occupied, and they pledged these properties as additional security for our 97% loan.


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They have a history of consistently pre-paying their mortgage loans.

In fact, they now own several properties free and clear, having paid down the purchase mortgages on an accelerated basis.  Instead of continually leveraging and over-leveraging and insanely taking on more debt, they took things slowly.

They did all their own work.  They paid down their mortgages aggressively and have no personal debt.   When I did our lender’s inspection of their current assets, I was impressed to find that all their tenants knew them on a first name basis – and smiled at them.  Our borrowers are young, hungry, possess great judgment . . . and energy.  What rare judgment, skill and self-discipline!

These are the kind of young (immigrant [are you listening, Washington?]) borrowers with whom you instinctively want to build a relationship.   I wouldn’t be surprised if we wind up “partnering” with them one of these days.


Do you now understand why I respect Paul so much?  (That's his picture above. Ha-ha!)  He has the flexibility to blanket additional collateral, even if it means making a loan of 97% loan-to-value on a horrible property.  He has the wisdom to appreciate the importance of the character of the sponsor (borrower/developer).  He spotted and admired the fact that these sponsors use debt cautiously and pay it off quickly.  He saw value in the work ethic and ambition of these young immigrant sponsors.  (Studies have repeatedly shown that, around seven years after a big wave of immigration, the U.S. economy soars.)

"Gee, George, I might have a deal for your friend Paul.  Where can I find him?"

Paul is one of the 750 commercial lenders listed on  When you enter your commercial loan into the C-Loans System, you will find Paul listed as one of the very first lenders on the Suggested Lender List.  He ranks near the very top of the Suggested Lender List because he has closed a TON of commercial loans for C-Loans.

Do you guys understand the Lender Diligence Score listed next to the name of each lender on C-Loans?  The hotter the commercial lender - the more deals he closes for C-Loans - the higher his score.  You definitely want to work with the loan officers near the top of the Suggested Lender List.  They are the guys and ladies who are actually closing loans.

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