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RESIDENTIAL LENDING NEWSLETTER
Volume 9: Issue 10 | November 2, 2020
You are receiving this letter because you are a client of either Blackburne & Sons or C-Loans, Inc. Removal instructions are below. Today we’ll discuss the difference between a bridge loan and a mini-perm. As always, we have lots of cute, clean jokes, funny pictures, and a video of some African boys dancing. These happy five-year-old are immensely talented.
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Joke Du Jour
The biology class was taking their mid-term exam. The last question was, "Name seven advantages of Mother's Milk.” The question was worth 70 points or none at all.
One student was having a problem thinking of seven advantages; however, he wrote:
1) It is perfect formula for the child.
2) It provides immunity against several diseases.
3) It is always the right temperature.
4) It is inexpensive.
5) It bonds the child to mother, and vice versa.
6) It is always available as needed.
But then the student was stuck. Finally, in desperation, just before the bell rang, indicating the end of the test, he wrote:
7) It comes in two attractive containers that are high enough off the ground where the cat can't get it.
He got an A.
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Hitchhiker Joke
Picked up a hitchhiker. He asked if I wasn’t afraid he might be a serial killer? I told him the odds of two serial killers being in the same car were extremely unlikely.
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Business Purpose Rental Home Loans in Most States
Click HERE to Apply Now!
Please pay special attention to the following: Unlike other hard money brokers, Blackburne & Sons Realty Capital Corporation makes home loans with a 15-year term (30-year amortization), and there is NO prepayment penalty. Our competitors make just three-year or five-year bridge loans. Our loans are clearly better because you may want to hold the property. These loans are sometimes known as buy-to-rent loans.
Historically, Blackburne & Sons was mostly a commercial lender. This has now changed. We are aggressively aggressively seeking non-owner occupied home loans. We have already closed loans in the following states, and our attorney can quickly research your state to verify that we can lend there. Unfortunately, in a handful of states, an NMLS license is not enough.
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Commercial:
NATIONWIDE
Residential:
- Alaska
- Arizona
- California
- Colorado
- Delaware
- Florida
- Georgia
- Hawaii
- Illinois
- Indiana
- Louisiana
- Maryland
- Michigan
- Missouri
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- Tennessee
- Texas
- Virginia
- Washington
- West Virginia
- Wisconsin
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Unfortunately these states are out:
- Idaho
- Minnesota
- Nevada
- North Dakota
- Oregon
- South Dakota
- Utah
- Vermont
What about YOUR state? If you have a real-life deal, we’ll hire our attorney to quickly research its availability.
The property has to be non-owner occupied, and the purpose of the loan must be for business. Remember, the nice thing about business purpose home loans from Blackburne & Sons is that our loans have a 30-year amortization, a 15-year term, and no prepayment penalty.
Call or email your favorite loan representative by clicking their picture:
(916) 338-3232
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Carpet Joke
Just helped my neighbor throw a rolled up carpet in the dumpster… Her boyfriend would have helped, but he is out of town.
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- Today's Observation -
Bridge Loans vs. Mini-Perms
A permanent loan is a first mortgage, secured by a multi-family or commercial property, with a term of at least five years and at least some amortization. A permanent loan cannot just have interest-only payments for the entire term. There must be some principal pay down, usually using a 25-year amortization.
A mini-perm is a first mortgage on multifamily or commercial real estate - made by a lender with low, A-quality, interest rates, like a bank, S&L, or credit union - that has a term of less than five years.
Most mini-perms have a term on two years, although terms of one year and three years are also reasonably common.
In the old days, when interest rates varied, mini-perms were floating rate loans, typically tied to either prime or LIBOR. Nowadays, commercial lenders are desperate for yield, and interest rates have been falling for more than a decade. Therefore, many mini-perms are now written with a fixed rate.
Okay, so what's the difference between a first mortgage bridge loan and a mini-perm? The two loan types look very similar to me. Maybe it's a prestige thing. Yucky, shark-like hard money lenders and mortgage funds make bridge loans. Hoity-toity banks make mini-perms.
But perhaps there really is a difference. Bridge loans are typically made quickly to borrowers in a little bit of a jam. In contrast, banks just saunter down to make mini-perms, taking their sweet, 'ole time.
Mini-perms are also about 2% to 3% cheaper than even the cheapest bridge loan. The reason why is that even the largest bridge lenders have to borrow from some bank to get their dough to make their bridge loans; so obviously the bridge lender has to charge a rate higher than the bank, in order to make a profit.
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Lover Score Joke
I asked my wife if I was the only one she had been with. She said yes, all the others were nines and tens. Ouch! Hahahaha!
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Mirror Check Joke
Do you ever get up in the morning, look in the mirror, and think, “That can’t be accurate?”
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Fifteen-Year Fix-and-Flip Loans for Residential Properties
Most fix-and-flip lenders make one or two-year loans. If the market turned (a very real risk today) and houses stopped selling, the flipper might be forced to sell his cherry house at a loss in order to pay off the balloon. Had he had gotten a 30-year amortization, 15-year fix-and-flip loan from Blackburne & Sons, he could have simply rented out the property and enjoyed a positive cash flow until the time time was right to sell again.
Our fix-and-flip loans have no pre-payment penalty, so you can use them for 60 days or 15 years.
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Food Prep Joke
My wife asked me to take her to one of those restaurants where they make food right in front of you. I took her to Subway. That’s when the fight started.
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The Blackburne List
The Blackburne List is a list of over 2,500 commercial lenders located nationwide. It is available for purchase for just $79.95. Is money tight? You can also buy one of our three Regional Lists (750+ lenders) for just $39.95.
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Aliens Joke
Aliens probably fly by earth and lock their doors.
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Are You Wise Enough To Pay Attention?
There are literally hundreds of private money mortgage companies out there today, and you can probably get a decent loan from most of them. But here’s the thing. Virtually all of these hard money shops are newbies (since 2009), and they are funds. The problem with hard money mortgage funds is that they don’t survive recessions. As soon as a recession hits, the investors rush to withdraw. Suddenly the hard money shop running the fund has no money with which to lend and earn loan fees. With little income coming in, the hard money shop closes.
Think I am full of beans? There were 300 hard money mortgage businesses in 2006. Fewer than ten survived.
Why do you care?
You have lost your relationship with these lenders! Success in real estate finance is all about relationships. Consider the fact that Blackburne & Sons has been in business for almost 40 years. We survived the S&L Crisis, the Dot-Com Meltdown, and the Great Recession. We were just about the only hard money shop in the country to remain in the market every day of the Great Recession.
Most of you will ignore this. The handful of wise investors and brokers will build a relationship with Blackburne & Sons. Winter is coming.
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Hungry for Commercial Loans Too
Blackburne & Sons is also looking for hard money first mortgage loans - up to $1.5 million - secured by commercial properties nationwide. Our private money loans almost never have a prepayment penalty.
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RSVP Joke
Apparently RSVP’ing to a wedding invitation, "Maybe next time", isn’t the correct response.
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Toilet Seat Joke
A cold seat in a public restroom is unpleasant. A warm seat is worse.
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Video - These Kids Can Dace
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Final Funny (R)
An old man goes to confession. He tells the priest that on Friday night, he’d been in the bar, when he met a young woman. “She was maybe 22,” he says. “She was a gorgeous blonde. I started lusting, Father.” “Yes, lust is a dangerous sin.” says the priest. “There’s more,” says the man. “We went back to her place and made passionate love for hours.” The priest pauses. “And how long has it been since your last confession?” “This is my first confession ever, Father." “How is this your first confession?” asked the confused priest. “I’m Jewish,” answered the old man. “Then… why are you telling me all this?” asked the priest. “Telling you?" said the old man, "I’m telling everyone!”
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A member of the Blackburne Family of Companies
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4811 Chippendale Drive, Suite 101
Sacramento, CA 95841
P: (916) 338-3232
F: (916) 338-2328
CA DRE #829677 // NMLS #103430
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