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Volume 9: Issue 2 | Date: May 7, 2019
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COMMERCIAL LENDING NEWSLETTER
You are receiving this letter because you are one of my Spartans - my top-producing brokers and investor clients - of whom I am allowed to have 300. Removal instructions are below. Today we'll discuss look-back yields. We also have lots of cute, clean jokes, some funny pics, and a hilarious video of kid fails!
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Joke Du Jour
One day, when a golfer was playing golf on a famous golf course in Mumbai, some tourists pointed and said, "Tiger Woods!! Tiger Woods!!” The golfer was feeling pretty cocky because he had indeed just hit a great shot… until tiger came out of the woods.
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Still Making Nationwide Permanent Loans From $100K to $3.5M
Do you need a commercial lender who will actually lend up to 75% LTV? Blackburne & Sons has decided to compete against banks by offering a higher LTV.
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Do you need a lender who will also look at the borrower's global income - income from salaries, other investments, etc.? Do you need a lender who will allow the seller to carry back a second mortgage? Does your client have a balloon payment coming due on his commercial property? Has your bank offered him a discounted pay-off? Does your borrower have less-than-stellar credit? Is your client's company losing money? Is your borrower a foreign national? Do you need a non-recourse loan? Do you need a commercial loan with no prepayment penalty? Is your client's commercial property partially vacant? Do all of your commercial leases run out in the next 18 months? Do you need a lender who will allow a negative cash flow? Do you need a loan against a portfolio of rental houses?
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And don't forget, we will quickly and happily issue you a written Loan Approval Letter - at no charge - that you can use as a fallback and to lure cheaper lenders. After all, everyone wants to lend to you if you already have a commitment. Here is our latest rate sheet.
Blackburne & Sons is looking for commercial real estate loans that are not quite clean enough for a bank. Please click here to submit a hard money commercial loan or call me, Alicia Gandy, at (916) 338-3232 Ext. 310.
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- Today's Lesson -
What Are Look-Back Yields?
A look-back yield is typically computed when a high-cost lender is preparing his payoff demand on a commercial loan. The borrowers asks, "Hey, lender, I want to pay off your commercial loan. How much do I have to pay you?"
The commercial lender will look back at the loan origination points that he charged, the interest rate on the loan, the prepayment penalty, any exit fee, and the size of the balloon payment to make sure that he has earned a certain minimum annual return. This look-back yield is all agreed to in advance between the lender and the borrower, so there is no sneakiness here.
Why would a lender add a look-back yield requirement (minimum annual return) to a commercial loan?
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Let's suppose a lender makes a commercial loan to a borrower who specializes in flipping rundown apartment building. It's a super-risky deal. The note rate was 8% interest. There were three loan origination points to the bridge lender, ten discount points to the bridge lender's mortgage fund, and a five-point exit fee. Since the term of this commercial loan was scheduled to be just two years, the lender expected to earn over 17% annually.
But a problem developed. The existing apartment tenants refused to move out, so the apartment builder flipper had to spend 18 months in court to finally evict them. Then he was finally able to start the two-year project of renovating and selling the building. Even though the flipper was 18 months late in paying off his balloon, the lender saw no point in foreclosing of him because the flipper was very competent, and he moving as fast as he legally could.
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When the loan finally paid off 18 months past maturity, the lender realized that he had gotten seriously shafted. During that extra 18 months, the lender had earned just 8%, which was the nominal rate, and not 17%. The nominal rate is the rate on the face of the note.
His yield was thereby diluted by the delay in the balloon payment to just 14.5%. Had the high-cost bridge lender included a minimum look-back yield provision, he would have earned the 17% that he was expecting. Read more on George's blog.
Click here for free training in commercial real estate finance.
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Dog Joke
My dog used to chase people on a bike a lot. It got so bad, finally I had to take his bike away.
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Business Purpose Rental Home Loans in Twenty States
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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We can lend in these states:
- New Jersey
- Missouri
- Maryland
- Alaska
- Ohio
- Florida
- New York
- California
- Washington
- Arizona
- Texas
- Hawaii
- Virginia
- Delaware
- Indiana
- Louisiana
- Hawaii
- North Carolina
- Georgia
- Pennsylvania
- Michigan
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Unfortunately the following states are out:
- Nevada
- Minnesota
- Idaho
- Oregon
- South Dakota
- Vermont
- North Dakota
- Utah
What about YOUR state? If you have a real-life deal, we’ll hire our attorney to quickly research its availability.
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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 Alicia Gady:
(916) 338-3232 ext. 310
gandy@blackburne.com
CA DRE #01430908 / NMLS #389678
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Pigmy Joke
A hunter walking through the jungle found a huge dead elephant with a pigmy standing beside it. Amazed, he asked: "Did you kill that?” The pigmy said, "Yes.” The hunter asked, "How could a little bloke like you kill a huge beast like that?” "I killed it with my club.” The astonished hunter asked, "How big is your club?” The pigmy replied, "There's about 60 of us."
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Submit Your “A” Quality Commercial Loans Using C-Loans
You old veterans know that commercial lenders are incredibly fickle. One moment a bank loves self storage loans, and the next moment - usually after taking a loss - it wouldn't touch a self storage facility loan with a ten-foot pole. C-Loans.com is a commercial mortgage portal that was designed with commercial lender fickleness in mind. You fill out one mini-app, and then you can submit your commercial loan application to bank after bank, six at a time, until you find a bank hungry to make a commercial loan today. Mortgage brokers like you have closed over 1,000 commercial real estate loans totaling over $1 billion, so C-Loans clearly works. And C-Loans.com is free!
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Egg Joke
The golfer sliced a ball into a field of chickens, striking one of the hens and killing it instantly. He was understandably upset and sought out the farmer. “I’m sorry,” he said, “My terrible tee-shot hit one of your hens and killed it. Can I replace the hen?” “I don’t know about that,” replied the farmer, mulling it over. “How many eggs a day do you lay?”
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CommercialMortgage.com Just Keeps Getting Better and Better
Every day we add two to five new banks and credit unions to CommercialMortgage.com. With almost 4,000 banks, credit unions, and other commercial lenders, CommercialMortgage.com is by far the largest databank of commercial lenders in the country.
Do you understand that CommercialMortgage.com is absolutely free to use? The lenders listed do NOT jack up their loan fee in order to pay a software licensing fee to C-Loans, Inc. One of the most successful commercial mortgage brokers in the entire country is Les Agisim of Trevor Cole Commercial, and Les uses CommercialMortgage.com all of the time. You would be wise to do what the successful guys do.
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Girlfriend Joke
As a man serviced an alarm system at a jewelry store recently, the saleswoman let him know that the store was having a 20 percent off sale.
"I bet your girlfriend would love it if you bought her something," she suggested.
"I don't have a girlfriend," he answered.
"No girlfriend? Why not?"
"My wife won't let me."
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Learn How to Easily Find Hundreds of Commercial Mortgage Loans. Learn How to Quickly Underwrite the Deals. Learn Over 100 New Commercial Mortgage Finance Terms. Get That Confidence You Know You've Been Lacking. Learn Exactly Where to Place Your Loan. Access to Hundreds of Lenders. Learn How to Package Your Deal. Most Important of All - Learn How to Collect Your Fee. Just $549.
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Post Turtle Joke
While suturing a cut on the hand of a 75 year old rancher, whose hand was caught in the gate while working cattle, the doctor struck up a conversation with the old man. Eventually the topic got around to one of the political candidates.
The old rancher said, "Well, ya know, that candidate is a 'Post Turtle'."
Not being familiar with the term, the doctor asked him what a 'post turtle' was.
The old rancher said, "When you're driving down a country road you come across a fence post with a turtle balanced on top, that's a 'post turtle'."
The old rancher saw the puzzled look on the doctor's face so he continued to explain.
"You know they didn't get up there by themselves, they don't belong up there, they don't know what to do while they're up there, and you just wonder what kind of dummy put them up there to begin with."
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The Blackburne List - Freshly Updated in 2019
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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Have You Been Screwed Out of a Big Loan Fee Yet?
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Whenever someone boasts of being a good horseman, I always ask him, “Have you ever been thrown?” The correct answer is, “Many, many times”. There is an old saying, “If you ain’t been thrown, you ain't ridden very much.”
The same is unfortunately true of commercial mortgage brokerage. You will screwed out of a loan fee of $10,000 or more at least twice per year for your entire career. Now I am NOT talking about the borrower closing the loan and not paying you. That rarely happens. What these dastardly borrowers do is lie to you or cancel on you. You would be a flipping idiot not to pay a lousy $199 for my ninety-minute video training course, Fee Collection For Commercial Mortgage Brokers. It includes my famous fee agreement. Go ahead and ignore this section. You will cry, I absolutely guarantee you.
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Become a Hard Money Lender - Just $549
Because banks are only paying 1% for deposits, it has never been easier to become a hard money lender. Hard money brokers make three to ten times more than generic desk-and-a-phone mortgage brokers. Four-hour video course, How to Find Your Own Private Mortgage Investors. In truth, if you don’t want to become a direct commercial lender, rather than just a mere mortgage broker… well, how do I sensitively say this? Maybe you shouldn’t have children? Haha!
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Whisper Joke
My sister had been ill, so I called to see how she was doing. My ten-year-old niece answered the phone. "Hello," she whispered. "Hi, Honey. How's your mother doing?" I asked. "She's sleeping," she answered, again in a whisper. "Did she go to the doctor?" I asked. "Yes. She got some medicine," my niece said softly. "Well, don't wake her. Just tell her I called. What are you doing, by the way?” Again in a soft whisper, she answered, "Practicing my trumpet."
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Commercial Mortgage Marketing Course - Freshly Updated in 2019 - $199
Need commercial mortgage leads? This Commercial Mortgage Marketing Course will teach you how to turn on a flow of commercial leads as easily as turning on a spigot.
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It's the Loan Servicing Income, Folks
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No one ever listens to me. Please pay attention! The money in the mortgage industry is in loan servicing fees, and servicing loans is easy. For your first 50 deals, you can just hire a sub-servicing company for $40 per loan per month. I charge my investors $1,583 per month (!!!) for servicing a one-million dollar loan. $1,580 per month minus $40 equals...
The loan servicing portfolio for Blackburne & Sons just broke $53 million this quarter. Since our average loan servicing fee is two percent annually, that means we earn over $1 million per year for servicing just 250 loans. How would you like to walk in the door on the first of each month knowing that you will earn at least $83,000? Find your own private mortgage investors.
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Honking Joke
As I drove into a parking lot, I noticed that a pickup truck with a dog sitting behind the wheel was rolling toward a female pedestrian. She seemed oblivious, so I hit my horn to get her attention.
She looked up just in time to jump out of the way of the truck's path, and the vehicle bumped harmlessly into the curb and stopped. I rushed to the woman's side to see if she was all right.
"I'm fine," she assured me,"but I hate to think what could have happened to me if that dog hadn't honked."
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Trade One Banker For ONE of the Following Freebies
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Middle of the Night Joke
A recent survey was conducted to discover why men get out of bed in the middle of the night:
5% said it was to get a glass of water
12% said it was to go to the toilet
83% said it was to go home
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FREE Commercial Loan Brokerage Training
From an Industry Veteran And Attorney
The C-Loans Blog: info.c-loans.com
Every week we publish one or two new blog articles that train commercial brokers in commercial real estate finance. We try to have fun with it, including lots of funny pics. If you want access to this FREE training, subscribe to George's blog by clicking the button below.
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Video - Hilarious Kid Fails
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On a Personal Note
On Easter weekend we drove to Las Vegas. It was about a 10 hour drive. Every year my husband’s family has a family reunion, and the last couple of years it has been in Las Vegas. It also happened to be my husband’s grandfather’s 96th birthday. We left on a Thursday and drove half way, and stopped for the night in Bakersfield. We got to Vegas by 1:00 pm on Good Friday. Our daughter and her boyfriend came along with us. We stayed at the Hard Rock Casino & Hotel. It was a very nice place. We got to play in Vegas on Friday, had the reunion on Saturday, walked around Fremont Street (old Vegas), hung out at the pool and relaxed on Easter and drove the entire way back on Monday. Overall, we had a wonderful time and the most important thing was to be able to be there for the grandfather’s 96th birthday. We don’t know how many birthdays are left for him, so it was important that we made it to the reunion this year. Family is important!
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Final Funny
On a beautiful sunny Saturday afternoon my buddy and I stood on the first tee of our Golf Club. He had just pulled out his driver when a young woman in a wedding dress came running up to him, crying. She slaps him in the face, turns, and runs away. My buddy turns to me and says calmly, "I don't know what her problem is. I distinctly told her only if it rained."
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Members 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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