Fees on commercial loans, what's considered "reasonable"?
Greetings from N CA.
Hope everyone is making deals left and right, collecting lots of money, and spend some to boost the economy. :)
Okay, so I just bought a mix used multi-building to use for non-profit purposes. It has a single house, 2 units apartment, a big building with church upstairs and classrooms downstairs. I'm renting everything out except the big building, which is used for church (my seller, renting back) in the morning upstairs, and for our youth group in the afternoon (Sundays).
Now I need to refi to pay off my seller carry back and hard loans.
Chase wouldn't want to do my loan, so they recommend a local broker who after talking to me verbally said he can get a loan (about $700K) for me.
He's asking for $1000 of "packaging" fee up front, plus 2% (of which he said usually bank would pay him 1%, I'd pay the rest). This is my first commercial loan so not sure what would be normal fees in general, and in my area in particular.
I also asked him to do a cash out refi on my primary residence. He said he would credit back the $1000 if I'm doing both with him. This residential loan wouldn't have any fee at all.
His reason for the $1000 is not to waste his time since there are people who had his company does all the work, but at the end decided not to go through with the loans. :)
Please advice.
Thanks.