Must I call every single bank???

Question

... it's what I'm doing trying to find the best rates and terms for a 1.5 commercial cash-out refi on a fully paid off mf in Brooklyn. LTV is less than 50% and my credit is solid. Is there a website that compares commercial loans? Rates I've been quoted range from 5.41 - 7.25%. So far brokers are better than banks and CUs. Has anyone here gotten a nice deal?

Jason Wray · Answer

Bobbi,

Be careful when you deal with a "broker" because they tend to make a lot of promises that they cannot deliver upon.  I would also tell you to "never" pay an upfront fee to lock into a letter of intent which is a non-refundable fee.

If you have a bank/CU offering a rate under 7.25% take it and run do not waste your time with teaser rates.  Make sure you know if they are hitting you with prepayment penalties and how many points.

Steven Foster Wilson · Answer

You could also call local brokerages to see who they use. I call multiple banks whenever I am doing something like this. I have found the more you ask the more you receive.

Dave Skow · Answer

@Bobbi Casalino- thanks -  many banks and credit uniuons dont  do  commercial loans  ....many commercial lenders  will not do  cash out  refinances  ....so the number of lenders that can  assist  with this  need  likely wont be large  ....I would  recommend  contacting the  follwoing :  smaller to mid size banks in the area of the  proeprty   2) the bank you bank at   3) any lenders you are aware of that  have made loans on this property in past  or  one  similar  properties - good luck

Erik Estrada · Answer

I mean you will end up finding out who the bank is once you are signing loan docs, unless they have a set up where everything is white labeled. A lot of banks and brokers have agreements set up to protect the broker in case you decide to go around the middleman.

Regardless, when you work with an experienced broker, you are working with someone that already knows how to navigate the banks underwriting process. You are paying them a fee to save the headache of a bank killing your deal or not responding for days..

On top of that, they will present you with the best possible rate for your scenario, along with assurance that the deal will close. Taking that out off the equation, you are relying on a bank employee that may or may not have a proven track record. Brokers get paid when the deal closes, bank employees get a salary, and do not really care if your deals go through or not.

Shafi Noss · Answer

Banks set their own prices and compete with each other like every other industry. Compare how much time you have and the administrative load of getting multiple quotes to how inefficient you think the market is and you can make an educated decision about how many more lenders to reach out to.

Eliott Elias · Answer

You should be looking for the cheapest money out there. You’re going to get to a point where many lenders are similar, but different in a few aspects.

Mohammed Rahman · Answer

Hey @Bobbi Casalino depends on market conditions and the brokers you work with... I've heard good things about Janover ventures and also have friends working at Lev Capital.

Let me know if you want an intro to the latter, thanks.

Simmy Ahluwalia · Answer

Everything takes work:)  The beauty of working with a broker (you need to vet the broker) is that they already have established relationships with the banks, and can basically tailor a solution for you based on your needs.  If you are getting a LEGIT 5.41% rate, then run with it.  I quoted a high 5's/low 6's a couple weeks back on a 10-unit.  Granted, rates are expected to go up again.

Steven Foster Wilson · Answer

Yeah, I would be willing to share any of the banks that I use. It can be mutually beneficial.

Must I call every single bank???

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