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Commercial Realtors; Get more Deals Through

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If you are a commercial realtor and you have clients that have been turned down by a bank you should check out this presentation. If you are interested in having your deal funded by private money …

If you are a commercial realtor and you have clients that have been turned down by a bank you should check out this presentation. If you are interested in having your deal funded by private money please contact Megan Krache at mkrache@sensiblelendingsolutions.com. We are actively lending to people the banks have turned down and are able to lend to people/businesses that have losses on their tax returns.

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Transcript

  • 1. Commercial Realtors The Next Big Opportunity Presented by Christopher Perez Sensible Lending Solutions, Inc
  • 2. The Real 2012
    • Did the ancient Mayans have it right? Maybe.
    • The Facts
    • We are in a depressed economy
    • Property Values are at all time lows
    • The Banks are failing
    • An unprecedented amount of commercial mortgage balloons are coming due.
  • 3. The Economy
    • Currently (2011) the economy is growing but not robustly and there is still weakness in the elements of business investment. Gross Private Investment is still only 79 percent of what it was in the first quarter of 2006. Investment in inventory which was fueling the recovery dropped to a negligible level in the fourth quarter of 2010. It has returned to significant levels in the first quarter of 2011 but not to the levels it reached in the second and third quarters of 2010. The Administration can very easily offset everything that it does to stimulate the growth of the economy by creating uncertainty about its future actions and policies. Uncertainty about present and future government policies strongly discourages investment in plant and equipment.
  • 4. Commercial Property Values
    • U.S. commercial property prices fell to a post-recession low in March as sales of financially distressed assets weighed on the market, according to Moody’s Investors Service.
    • The Moody’s/REAL Commercial Property Price Index dropped 4.2 percent from February and is now 47 percent below the peak of October 2007, Moody’s said in a statement today.
    • The national index has fallen for four straight months as sales of distressed properties hurt real estate values. The index “continues to bounce along the bottom as a large share of distressed transactions preclude a meaningful recovery of overall market prices,” Tad Philipp, Moody’s director of commercial real estate research, said in the statement. “Indeed, the post-peak low in price has been reached in the same period as a post-peak high in distressed transactions has been recorded.”
  • 5. The State Of Banks
    • "Elizabeth Warren, chair of the Feds TARP, Troubled Assets Relief Program, oversight panel suspects half of all commercial mortgages will be underwater by the end of 2010-11. The kick though is that commercial real estate loans are mostly held by mid-sized banks, not the international powerhouses. It is estimated that 2,988 of such banks are endangered by commercial loans. In all likelihood there could be as many as 200 bank failures in 2010-11 (there were 140 in 2009). 23 banks were closed in April 2010 alone."
  • 6. Commercial Balloons
    • Of particular concern, says Jon D. Greenlee, associate director at the Division of Banking Supervision and Regulation in congressional  testimony  on July 9 and  again  on Nov. 2 “Almost $500 billion of commercial real estate loans will mature during each of the next few years. In addition to losses caused by declining property cash flows and deteriorating conditions for construction loans, losses will also be boosted by the depreciating collateral value underlying those maturing loans. The losses will place continued pressure on banks' earnings, especially those of smaller regional and community banks that have high concentrations of CRE loans.”
    • What this means is that over a trillion dollars in commercial loans will balloon in the next 3 years.
  • 7. The Perfect Storm & The Plan
    • So, should we all invest in bunkers? Is it all gloom and doom? The end of the world? The short answer is NO. We are clearly in a time of economic change, but opportunity and lending are the key words of the day. The light at the end of the tunnel is new lending relationships and non bank programs.
  • 8. Alternative Lending Today
  • 9. SBA
    • The  Small Business Administration  ( SBA ) is a  United States government  agency that provides support to entrepreneurs and  small businesses . The mission of the Small Business Administration is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters." The agency's activities are often summarized as the "3 Cs" of capital, contracts and counseling
    • These loans are very difficult, time consuming, and underwritten to almost the same stringent standards of the banks.
  • 10. Stated Income
    • A  stated income loan  is a mortgage where the lender does not verify the borrower's income by looking at their pay stubs,  W-2  forms, income tax returns, or other records. Instead, borrowers are simply asked to state their income, and taken at their word.  In commercial, stated means losses on the tax returns are acceptable as long a the borrowers global picture is acceptable.
    • These loans are intended for self-employed borrowers, or other borrowers who might have difficulty documenting their income.
    • Stated income loans fill a gap of situations which normal loan standards would not approve. 
    • 99.9% of Stated Lenders are now gone.
  • 11. Hard Money
    • A hard money loan is a specific type of  asset-based loan   financing  through which a borrower receives funds secured by the value of a parcel of  real estate . Hard money loans are typically issued at much higher  interest rates  than conventional commercial or residential property loans and are almost never issued by a  commercial bank  or other deposit institution.
    • Many hard money mortgages are made by private investors, generally in their local areas. Usually the  credit score  of the borrower is not important, as the loan is secured by the value of the collateral property. [1]  Typically, the biggest loan one can expect would be between 65% and 70% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000–70,000 against it. This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.
    • This type of funding may be hard to find and is often times only a temporary solution.
  • 12. Commercial Realtors & Sensible Lending Solutions, Inc.
    • Through our partnership Commercial Real Estate Agents will be able to offer many more financing options to potential buyers.
    • Sensible Lending Solutions offers a wide array of loan products from full document, to stated (representing the only stated lender in the country), and access to hard money and bridge loans.
    • For more information please contact:
    • Christopher Perez 888.730.3811 ext. 6109

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