Commercial Real Estate Loans

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Commercial Mortgage Information

Assembling A Commercial Loan Package

Don't be that guy (or girl)!!!that brokers unscreened and under packaged loans!

Scroll below to see actual list for loan package.

Go here to see our Wholesale Commercial Loan Program. 

Hello people, this is an "educational" rant, by yours truely and founder of Commercial Finance Advisors, Inc, Jeff Rauth.  First of all, I'm far from some tight as* stereotypical banker or CPA type individual.  I'm all about getting loans in and getting them closed.  And I understand first hand how hard it is to learn this business and to get your first couple of loans closed.  So I do sympathize with you as you cut your teeth in this business, which has been pretty tough the last few years, (for everyone). 

  

With that said, here's my scolding rant :-)  Often times newer brokers get a couple of leads/inquires than start to call banks and lenders to figure out if they're doable loans, and what the terms/rates will be so that they can go back to their clients with some initial answers.  This is a terrible approach, which wastes your time, the loan officers time and really just ruins your reputation with professional in the business.  Loan officers figure out in about 1 minute that you have no clue what your doing and that you have no idea if the deal your discussing is a decent deal or not.   

What you should do is first pre screen these deals before you reach out to lenders/banks. So you need to collect a full package from the borrower first, than make decent effort to qualify the loan and look at its cash flow, the borrowers experience, credit, liquidity, loan to value, etc to make sure its close to being decent/doable.   And if you don't know or understand what a decent loan request is, you had better learn or your not going to get anything closed and or make any money in this business.  For example, probably 80% of the loan request out there are NOT fundable under the current requirements.  So your likely working on deals that have no chance of closing and are wasting your time and everyone else's that you involve with it.   

This is a big "catch 22", as you maybe thinking, how do I know if its doable or what to say to the borrower if I really don't know?  Basically it's on you to learn and understand this business.  You need to get educated.  I recommend that you read as many small business related accounting books as you can get through.  Also, there are some commercial mortgage underwriting books as well.  We also have a store for commercial mortgage brokers where we have many items including a 13 page spread shead, complete with a training manual on how to use it, so you can properly calculate global cash flow as well as an ebook that covers brokering commercial loans. (Click on the link above to take a look). Yes that's a plug, but I'm really more interested in you bringing us a quality $3,000,000 deal, then selling you a $40 book.    

So don't be that guy that wastes yours and everyone elses time on garage deals that you haven't even pre screened.  Do it the right way! pre qualify and pre sell your deals first, than submit them. 

By the way, if you have a hard time getting loan packages from borrowers in the beginning of the process it means1. that they think your full of shi* and don't believe that you know what you're doing or 2. that they already have a better deal lined up than what you described...   

So now that my finger pointing rant is over, here's a list of what you need to collect from your clients.  We've broken down the lists by owner user and investment property loans.

Best regards,
Jeff Rauth 

Owner Users - Loan Package List 

  • Resumes 
  • 3 years of business tax returns  
  • 3 years of personal tax returns
  • Personal Financial Statement 
  • Business Debt Schedule 
  • A/R & A/P Ageing Statement, if the business regularly collects and pays on 30 days or more terms.  For example a manufacture.   
  • Year to date profit & loss and balance sheet on the business, less than 90 days old. 
  • Copy of the Purchase Agreement, if applicable 
  • Bank statements that show where the money is coming from for the down payment, if applicable 
  • Pictures of subject property
  • Credit report

    • Investment Property  - Loan Package List

  • Resumes 
  • 3 years of real estate related tax returns, if applicable 
  • 3 years of personal tax returns
  • Personal Financial Statements
  • Year to date operating statement, less than 90 days old
  • Detailed rent roll
  • Copy of all leases  
  • Copy of the Purchase Agreement, if applicable 
  • Bank statements that show where the money is coming from for the down payment, if applicable 
  • Pictures of subject property
  • Credit report

    • After you collect these items you have a legitimate package that you can be proud of, even if the deal is declined.  The next step of course is to sit down with all the documentation and go through each page to make sure that you have a decent borrower and loan request. 

    See high lights of our wholesale commercial mortgage program here.

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