Commercial Real Estate Broker · Irvine, CA · Member since 2011 · 11 posts · 2 votes
Hi All - I've agreed to terms on a property for purchase in the Dallas Fort Worth market and looking for financing of roughly 65% LTV, 10-year term, 20-year amortization. The purchase price is $1,540,000 and an 8% cap. I've reached out to many of the banks and have found half of them are out of the game at present for either being at their limit for CRE lending or having suffered oil-related losses which they are still in the process of working out. Of the remaining half, half of the lenders will only lend if you live in Dallas. That leaves the last quarter of lenders of which a handful of shown interest. Can you recommend any lenders that I should be speaking with?
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
9y
I know capital markets brokers in those areas. You will pay 1 point at closing of the loan amount as a fee.
It is true in Texas that some lenders want someone who lives there. You mentioned 10 year term and 20 year amort. but did not mention length term left on those leases,age of the building etc.
I don't like calling around lenders myself because I know my capital markets guys might do 100 million a year with one lender and if the lender jacks them around or re-trades a rate then they will lose future business.
That versus you calling around as a single one off loan with a small purchase price. It's easy for lenders to push you to the side or re-trade rate when they have to give concessions on one of their other larger customers to keep them happy.
1,540,000 at a 65% ltv is only 1,001,000 loan. Some capital markets guys have a minimum to source a loan of say 15,000 to 20,000 or they will not work on a file. Your deal is going to be more difficult.
Commercial Real Estate Broker · Irvine, CA · Member since 2011 · 11 posts · 2 votes
9y
Thank you Joel. I am in the middle of experiencing what you are talking about and find that I just have to be diligent and persistent. I'll be in the area in 10 days to start meeting folks in person.
Lender · Sacramento, CA · Member since 2009 · 1k+ posts · 277 votes
9y
@Justin Smith..I'd like to know who you've reached out to so far. Carlos is right that a bank might tell an out-of-towner no, but we placed a deal mid last year for a RE broker who lives in Southern CA and owns a retail property in TX. It was only 70% occupied, but cash flow crazy (over a 2.25 DSCR at terms). He was looking for cash out and he couldn't find the financing, b/c of being absentee borrower, occupancy, and lenders wanted to hold his funds for TI's but he wasn't having it. We finally found a bank who provided the loan, no problem.