PRIVATE CLIENT NEWSLETTER
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Volume 4: Issue 3 | Date: April 24, 2020
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You are receiving this letter because you are either a high-net-worth client of Blackburne & Sons Realty Capital Corporation (since 1980) or you once applied for a commercial real estate loan of $1 million or more using C-Loans.com or CommercialMortgage.com. Blackburne & Sons and C-Loans, Inc. are sister companies.
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.
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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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You Are Now a Private Client of Blackburne & Sons
Please be sure to tell us when you call. "George asked me to mention that I am a Private Client of the firm.” My loan officers are trained to snap to attention. Our commercial mortgage office number is 916-338-3232.
Alternatively, you can apply for a business-purpose loan secured by a commercial or non-owner occupied property.
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Stock Market 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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Earn Up to 12% Interest in Your IRA or Kid’s College Fund
It is important that you please grasp the concept that you could be borrowing from Blackburne & Sons against some rental or commercial property at the very same time that you are using your IRA to invest $30,000 in one of our first trust deed investments. Many of our biggest trust deed investors first came to us twenty years ago as commercial property borrowers.
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You probably have money set aside for your retirement and for the cost of college for your children and grandchildren. It shouldn't all be invested in the stock market. In California, the first trust deed investment business is huge. A recent law change - the JOBS Act - now allows accredited investors nationwide to also invest in these same first trust deeds and first mortgages.
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Craigs List Joke
I have a 24-pack of Aldi toilet paper rolls. Looking to swap for a 4-bedroom house.
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Want to Speak With a Loan Officer From Blackburne & Sons?
Blackburne & Sons, our private money commercial lending company, continues to seek slightly-flawed first mortgages between $100,000 to $1.5 million on standing commercial properties nationwide.
To apply for a private money commercial loan from Blackburne & Sons, please click on your favorite loan officer below to send them an email:
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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 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!
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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Hand Sanitizer Joke
Did you hear that New York State developed its own hand sanitizer to combat COVID-19? They filled small bottles with water from the Hudson River. That stuff can kill anything.
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Need a Commercial Real Estate Loan?
C-Loans.com is a commercial mortgage portal. It will take you just four minutes to complete your mini-app.
Then C-Loans will sort through its databank of 750 commercial lenders and produce for you a custom-generated Suggested Lender List containing twenty to thirty lenders who are perfect for your particular deal.
You put a check mark next to six lenders and then press, "Submit." Within minutes hungry commercial lenders will be contacting you with offers.
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Time Traveler Joke
I think my wife is a time traveler. I've seen that doctors are now saying you should avoid close physical contact to stop the spread of coronavirus. Somehow she knew about this years ago.
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Why You Want to Stay Close to Blackburne & Sons
Founded in 1980, Blackburne & Sons is an old-time syndicator. There are very few of us left. The Tax Reform Act of 1986 pretty much nuked the whole syndication industry off the face of the Earth. Because you know a syndicator, you now have access to some special money.
If you need a fix and flip loan, a buy-to-rent loan, a bridge loan, or even a permanent loan on, say, on your single-wide trailer park in Georgia, we'll make you a private money loan. We've been syndicating hard money loans for 40 years.
If you have some dough set aside for your kid's college, and you want to be extra careful with it, we'll put you into a first trust deed investment (8% to 12% yields) on, say, a nice 8-unit apartment building in San Jose, California.
Let's suppose you are richer than Crassus, and you want to speculate in 11% and 12% first trust deeds. We've got them.
Please be very wise and play close attention to the following:
Because every loan we make is a new syndicate (as opposed to a fund investment), Blackburne & Sons is always in the market.
When the stock market has fallen by 40%, when real estate values are falling like a knife, and when your own bank is too terrified to lend you a dime, Blackburne & Sons always has a group of savvy investors willing to lend - admittedly at a price - when blood is running in the streets. We are one of a tiny handful of lenders who remained in the market, making loans, every single day of the Great Recession.
So stick close to us. Syndicators are pretty rare, and now you know one.
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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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Quickly Find 30 Commercial Lenders For Your Deal
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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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Apply to Blackburne & Sons For a (Very Soft) Hard Money Loan
Here is a scenario that might tickle you. You could have $100,000 from your self-directed IRA spread out among four or five first trust deeds from Blackburne & Sons, and at the very same time you could be borrowing $250,000 from Blackburne & Sons on an apartment building that you are fixing up in Boston. Not every hard money lender is the same. Our loans have a 30-year amortization (almost interest-only), a 15-year term, and no prepayment penalty. You never want to have a hard money loan ballooning during a recession.
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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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Video - Border Collies Are So Smart
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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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ANGELA VANNUCCI
President
CA DRE #1425852 / NMLS #389465
BLACKBURNE & SONS
Realty Capital Corporation
CA DRE #00829677 / NMLS #103430
4811 Chippendale Drive, Suite 101
Sacramento, CA 95841
P: (916) 338-3232
F: (916) 338-2328
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A member of the Blackburne Family of Companies
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