Greetings from a jam-packed airplane headed North. I am on my way to go Walleye fishing in South Dakota. I am not an avid fisherman by any means and I have no idea how to fish for Walleye….but off I go to make new friends and to reconnect with another.
As some of you know, I have been working on refinancing my shopping center for almost a year now….and guess what? We closed!!! As my attorney, Jay, said…”…what an ordeal.” An ugly ordeal it was….thankfully with a happy ending due to the work of my mortgage broker(s).
I have three strong (at least I think) relationships in the commercial mortgage business. Not only are they my friends but they are amazing at what they do. I consider them the best in the industry.
- Brandon Haddon @ Omni Credit in Denver, CO
- Scott Nelson and Karla Lyngvar @ Lyngvar Financial in Sacramento, CA
- Terry Painter @ The Business Loan Store in Milford, OR
I now use all three in every deal I do. “How so?” you ask….well….let me explain.
The subject is an eighty-three thousand square ft, class C, retail shopping center located in West, TX. Solid cash flow, solid tenants, great history, great city, etc…. but there were a few issues:
- Environmental Reports were not conclusive
- Lease terms for credit tenants were up for renewal in the next few years
- Loan needed to be defeased
- A weak economy and tight credit (and getting tighter)
- and on and on….
I started with Brandon Haddon at Omni Credit first. Brandon had pulled off a miracle the year before by refinancing my mobile home park which I acquired via a lease option. Many mortgage lenders, including Terry from The Business Loan Store said I could not do the deal without me having to put 20% down….and I could not pull cash out. Brandon was able to do the deal for me. Not only was it a no money down deal…I was also able to pull cash out… a no money down commercial real estate!
Now….the shopping center was a difficult deal for several reasons but the first hurdle was the environmental report. Many moons ago…there was a gas station on the premise. The gas station and the underground gas tanks are long gone. BUT…the tanks at one time leaked. Now, to understand the problem fully, the property where the gas station once stood was not part of the shopping center and not part of the loan…but because it was an adjacent property, the lenders had concern. This issue caused my first mortgage broker (Brandon) to fall off. I felt that Phase One environmental report would suffice and that a Phase Two was not needed…and I stuck to my guns. But the lender Brandon was working with (Union Bank of California…which screwed me once before via another mortgage broker) felt that a Phase Two was needed….even though, at one time, they were fine with the Phase One report (go figure).
Next…I decided to “two fist it” and go to both Scott/Karla @ Lyngvar Financial and Terry Painter @ Business Loan Store. Karla and Scott felt that I would need to do a Phase Two. Terry on the other hand thought I had a good chance of avoiding the Phase Two. So I went with Terry.
Now, I have dealt with Karla and Scott on a personal level….and they came through on a big way later in the process.
So…Terry and his right hand, Sarah, went to work. There were so many issues (the list above) but Terry was able to get me a lender commitment on the property. This was a huge accomplishment because Terry was able to bypass the need for a Phase Two as well as manage the lender regarding the changes in the economy and the impact on the rates. Not to mention dealing with the defeasance.
Now, when I got the commitment, I sent it to Scott at Lyngvar financial to see what he thought. Scott said “Rob, I would love to do this deal for you but I cannot beat this commitment. You are getting the best terms in the market. I cannot even come close.” Wow….at that very moment, I knew that I was going to add Scott to my commercial mortgage team. Integrity in the mortgage business is hard to find…..as if you don’t already know that.
I needed Brandon, Terry, and Scott to get this refinance done. Even though only one mortgage broker was able to close the deal, they all played a huge role.
“Okay Rob…so what?”
Well….having different mortgage lenders in your corner is crucial. Mortgage brokers have relationships with different lenders. Just because one lender cannot do a deal does not mean that all lenders cannot do the deal. Even when it comes to environmental issues, terms, market conditions, etc., different lenders handle issues differently.
Also, having mortgage brokers that you trust will go a long way in avoiding losing money and time. Have a resource you can trust to confirm if you have a good loan commitment or not is a HUGE plus.
I have been burned by several brokers in the past that I have contacted through forums or newsletters (I have never had a good experience). I have always lost money and or time dealing with people that I do not have a relationship with. But I have had great success from those recommended to me. I met Terry at a commercial real estate seminar that we both spoke at. I met Brandon through a friend of mine that highly recommended him. I met Karla through a friend while I was in Sacramento. I highly recommend all three of them.
I am very thankful for Brandon, Karla, and Terry for helping me get through this “ordeal.”
Until next time……rob