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BANKER LETTER
Volume 8: Issue 5
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This letter is intended only for commercial real estate loan officers working for banks, credit unions, conduits, and hard money lenders. Today we’ll discuss just how incredibly low are the rates of conduit commercial lenders right now. We also have lots of cute, clean jokes, some funny pics, and a funny video of a border collie who has trained his neighbors to play fetch with him.
Hey guys, if we make you chuckle today, won't you please-please-please refer a turndown this week to CommercialMortgage.com? Seriously, guys, this searchable portal is free, and it contains thousands of commercial lenders. You really are doing them a favor.
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Joke Du Jour
A lost dog strays into a jungle. A lion sees this strange, new kind of animal from a distance and says with caution, “This guy looks edible. I’ve never seen his kind before.” The lion therefore starts rushing towards the dog with menace. The dog starts to panic, but, as he's about to run, he sees some bones lying next to him. Suddenly the dog gets an idea and says loudly, “Mmm, that was some good lion meat!” The lion abruptly stops and says, “Whoa, this guy may be tougher than he looks. I better leave while I can.” Sitting in a nearby tree, a monkey witnesses everything. The monkey realizes the he can benefit from this situation by telling the lion what really happened. The lion says angrily, “Get on my back. We'll go get him together.” They start rushing back towards the dog. The dog sees them, and he quickly realizes what must have happened. The dog starts to panic again; but just then he gets another idea. The dog loudly shouts, “Where the heck is that monkey? I told him to bring me another lion an hour ago.”
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Free Commercial Loan Software
C-Loans has just developed some brand new commercial loan software that is super-easy to use, even for a complete newbie to commercial real estate finance. You just fill in the blanks. You can then take your professional-looking commercial loan package and submit it to any lender in the country. This new commercial loan software is also 100% free.
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Market Crash Joke
This stock market crash is worse for me than a divorce. I've lost half my net worth, but I still have a wife.
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Free Commercial Loan Leads
C-Loans.com, is our original portal. C-Loans.com has been phenomenally successful, boasting over 1,000 commercial loan closings totaling over $1 billion. We will list banks on C-Loans.com for free, and they will receive free leads by email, as well as calls and emails directly from borrowers.
If the bank closes a commercial loan, however, the bank owes to C-Loans.com a software licensing fee of between 25 to 50 bps (usually 37.5 bps.) In real life, all of our banks simply bump their normal loan fee from 1.0 points to 1.375 points, so C-Loans.com effectively costs the bank nothing. Please click here to get listed on C-Loans for free. (You must be a bona fide direct commercial lender servicing at least $20 million in commercial loans.)
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Craig's List Joke
I have a 24-pack of Aldi toilet paper rolls. Looking to swap for a 4-bedroom house.
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How C-Loans Actually Works
Think of C-Loans.com as a giant filter. We start with 750 participating commercial lenders. Every time you enter more information into the application - loan amount, property type, loan type, state, credit - dozens of lenders are filtered out. Upon completion, you are left with a list of 20 to 30 perfect lenders. You put a check mark next to six lenders at a time and press submit. Soon you are receiving quotes and offers. No good offers? Come back and submit to six more lenders, then six more, and so on. And C-Loans.com is free!
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Indian Joke
Q: Why are all of the Indian reservations being attacked?
A: Because they have TP.
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Movie Joke
Q: Who's going to direct the new Coronavirus film?
A: Tintin Quarantino
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Won't You Please-Please-Please Refer Us Your Commercial Mortgage Turndowns?
If you have to turn down a commercial loan this week, you would really be helping your customer if you referred him to CommercialMortgage.com. The domain name is easy to remember.
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Pasta Virus Joke
The coronavirus is much like pasta. It was invented by the Chinese, but spread by the Italians.
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- Today's Opportunity -
Conduit Loan Rates Are Soooo Low
Conduit loans, also known as CMBS loans, enjoy a fixed rate for a whopping ten years. Unlike a fixed-rate commercial loan from a bank, there is no rate readjustment after five years. The rate is fixed for the entire ten years. With ten-year Treasuries at just 0.79%, there has never been a better time in history to get a ten-year, fixed-rate conduit loan.
Conduit loans are priced at some negotiated spread over the higher of ten-year Treasuries or corresponding interest rate swaps. Today (3/8/20), ten-year Treasuries are at 0.79%, and ten-year interest rate swaps are at 0.81%. Therefore we will use the higher of the two indices - interest rate swaps.
Okay, but what is the spread or margin over the index? Conduits are pricing their office, retail, and industrial commercial permanent loans at 140 to 290 basis points over the index. Therefore, we are talking about conduit commercial loans priced at between 2.21% to 3.71%. Wow!
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So who gets the 2.21% rate, and who has to pay 3.71%? It depends on the loan size, the risk, the debt yield ratio and the tenancy. The larger the deal, the smaller the spread. The safer the deal, the lower the spread. For example, if your property is located on Madison Avenue in New York City, you will enjoy a lower spread than a deal located on a nice retail street in Salt Lake City. Madison Avenue is a more proven location.
There are some properties, however, that sell for such incredibly low cap rates - for example, Madison Avenue in New York City - that the debt yield can be too low. This is a bad thing. Sometimes the debt yield ratio on that Salt Lake City property can be more attractive to a CMBS investor.
The quality of your tenants also determines your spread over the index. Quality refers to strength of your tenants. If you have a shopping center anchored by Target or Krogers, you will enjoy a tighter spread than a shopping center anchored by a mom and pop grocery story.
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Battery Joke
I had to remove the battery from my carbon monoxide detector. The constant beeping was giving me a headache and making me feel sick.
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Become a Hard Money Lender
One reason why hard money brokers make ten times more money than desk-and-a-phone mortgage brokers is that they approve their own deals!! Four-hour video course, How To Find Your Own Private Mortgage Investors. Just $549.
Now available online!
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Gray Hair Joke
I found my first gray hair today. Things like this don't normally bother me, but I found it in my Big Mac. Eeeuuu.
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Would You Mind a $21,250 Referral Fee?
We once paid a $21,250 referral fee to a website owner named Alan Dunn for referring us a $17 million deal. Please click here for details.
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Baby Powder Joke
When I was told Baby Powder was on sale, I said, "Talc is cheap.”
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Love Joke
Woman: "Do you love me?"
Man: "Yes, dear."
Woman: "Would you die for me?"
Man: “No, mine is an undying love."
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Vacation Joke
Yesterday I purchased a world map...gave my wife a dart and said to her "throw this and wherever it lands, I'm taking you for a holiday.” Turns out we're spending three weeks behind the fridge.
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Personal Space Joke
My friend Robbie shocked and hurt me. He told me today that I make people very uncomfortable and have no respect for their personal space. I mean, what a thing to say to a friend? It totally ruined our bath.
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Video - Border Collies Are So Smart
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FREE Commercial Loan Brokerage Training
From an Industry Veteran and Attorney
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Final Funny (PG-13)
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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www.C-Loans.com
4811 Chippendale Drive
Suite 101
Sacramento, CA 95841
P: (574) 210-6686
F: (916) 338-2328
CA DRE #1330173
NMLS #167100
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Tom Blackburne
General Manager
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