All Forum Posts by: Darryl Dahlen

Freddie SBL only finances stabilized properties. I've gotten some done with some minor CAPEX needed, but they required the work be completed inside of 90 days and the borrower funded the CAPEX each case. They won't finance a property that needs major work as it's a very vanilla loan program.

That being said, there are bridge lenders out there for properties less than 5MM the lower the loan amount the harder it is to secure interest. Personally, unless the property is in a large MSA I draw the line at 2MM. I know some banks now offer a bridge to perm loan structure, but they're unique to each market so I can't speak to the generalities of how what they offer.

How most of my clients operate is to find a property and obtain enough info to make a preliminary decision on if they want to proceed. If they do they put the property under contract, with a financing contingency and DD period. They then use this time to conduct a more in depth analysis of the property and financials while working to line up financing. They can back out if they uncover something they don't like or can't secure a lender and/or terms that are favorable.

It's very uncommon to be able to secure a pre-approval in the commercial space. It wastes valuable time approving a borrower/property that isn't under contract. Also, in a lot of cases, the lender needs more information about the property than you can obtain without being under contract. Lastly, the lender is really approving the property more so than you so it's not like you can get a commercial loan pre-approval based on your income.

One of my favorite programs. One of the nicest things about this program for a borrower is the fact the lender pays for all 3rd party reports which keeps the closing costs, and engagement fee, very low. Not to mention no lender origination fee and a streamlined loan process. 

As @Oren Karp stated, unless there's a reason to order a new one, if a survey has been conducted within the past 3 years a lender will typically use it or perhaps request it be updated instead of requiring a brand new one. 

I have never in 11 years been involved in a real estate transaction where the seller gets the cash reserves. You start with zero cash reserves at closing and it's on you to either have the needed funds either personally as liquidity or raise them if you have investors while still meeting the lender's liquidity and net worth requirements.

It's not common for a P&L to show cash reserves so if the owner is showing it it may be simply because a 3rd party, such as the PM, is showing him the reserves on hand, or the owner likes to know on a monthly basis what they have for reserves after all the bills are paid.

The rub is that while pricing my be worse on a CMBS loan compared to an agency product, you can often get more flexibility from a CMBS lender which can make the higher rate palatable.

CMBS loans were somewhat more difficult to close a few months ago, and rates did climb for a while, but for the most part things have settled back down. There are, however, some CMBS lenders who are still very reserved and may not even consider a CMBS loan request. I'm referring to agency lenders who offer CMBS loans as a way to offer a different product in case an agency loan isn't a good fit.

Larger CMBS lenders are still bullish on these loans though.

Like anything related to commercial lending, it pays to know who you are working with and ensure you submit the loan to the right lender.

 Absolutely.

I'd be happy to speak to you and help you out. I've been involved in commercial lending for more than 10 years and work with investors who are new all the way to large sophisticated owner operators. Everyone has to start somewhere.