Fast Money? Hard Or Otherwise
As a newer mortgage brokers, I have had a couple of commercial situations where the lender needs to close on a deal quickly. (15 days.) This is barely enough time for a commercial appraisal and a title search.
Where does one get the money fast like that? The client is going to auction on a certain date and expected to close 15 days later.
The auction has many cash buyers.
Who does loans like this? He looked at the Kennedy Institute.
Do you have experience with Kennedy funding? I have considered using them as they are pretty flexible.
My brother used them and hates them as he feels that he was getting ripped off.
They charge for 2 application fees. (I don't remember what they are called.)
He did use them and it seemed to work out for him. Although not happy about it still, he got the money and he did his commercial deal.
I do have other sources who are cheaper and move pretty quickly given an appraisal and application/documentation - P/L's and rent roll. (I know that is most of the battle).
I am working on a deal with Kennedy now. They are expensive, but they can get the job done(I hope). You will need to pay for everything(More than you know), and you will need to close in NJ. But they can get the job done(the keep telling me). In fact they called me back offering more money for operating expenses to be lent. Albeit at a high interest rate, but a heck of a gesture nonetheless. I also talked to there lawyares and they stated that they can and have done the job in 2 days once the paperwork is in, so fast money is available, but at a price.
If you need to have quick money available then I would suggest lining up private investors. They have the ability to make the decision quickly, and will have the monies ready at the drop of a hat for the right deal. I would have no less than 10 investors to call. The only problem dealing with them is that there are some that will try to steal the deal from your client, so make sure that they are secured by contracts and down payments. I have a couple of mortgage brokers I call for jobs 15 million and less that have private monies ready for it. The cost is anywhere from 8% and up, or partnering. The rate term is usually 6 months to 5 years, but its done by one person, not a commitee.
Also if your client needs to close in 15 days, have a list ready of what you will need to close, fax it to him the same day you get the package, and tell him to get to work. Kennedy gave me a 54 item checklist, not all of them pertained to me, but I was able to pay more to certain people to get them to move faster, where as the lender wouldnt have done that. The environmental was done in three days, the appraisal was done in under a week, etc etc.
If you need help in that area, I cannot suggest anyone as that would be against the rules, but I can help you as to where to look and what to look for, just PM me or ask on open forum. As far as Kennedy is concerned I will let you know if they are good after I close. Once they do that I will know personally that they are for real.
Good Luck,
Kyle
Kyle,
Any update on kennedy?
Thanks
Kyle,
Great detail on Kennedy. Definitely interested in hearing about the final view after you close.
The check list sounds like a great idea when you are trying to push through a deal quickly. Keep everyone focused and moving.
John
[addsig]
My experience with kennedy has been disappointing and thats an understatement!
They could not close. They take money upfront ,but when the promised closing date nears comes back with more documents required,some of which you can hardly give them.
and the commitment letter is so cleverly worded that the money paid to them is never refunded back becuase we are not able to provide them with required documents. we cannot take them to court either. So this is how they make most of their monies. They have a bad reputation in the market becuase of that.
Please be wary of them,if you were to deal with them
There is an online commercial loan "brokering" service that I have used a couple times. You enter the specs of your deal, and they give a list of say 5-20 lender to pick from. All Free
With the click of the mouse all the project info is sent to the lendor(s) you like, and they generally respond quickly.
For fear of advertising, PM me if you want the name.
as for a 15 day close, that is very agressive, and I sure wouldn't be comfortable. Unless of course you didn't care and just wanted the deal. (like a trashed house on good dirt, and you offer 10days all cash just to get it.)
what if their are liens
lead, asbestos, etc.
lendor DD period
It sounds like there is an artificial time preasure due to the auction. Generally lenders will postpone the sale, if the property is under contract.
Final word on Kennedy for me would be to run "not walk" away from them.
I have had to seek other means of financing on a deal I am doing because of them. Because of the length of time it has taken me to give them there list of closing documentation, I will now have to find someone that can close quickly.
I have asked around to other investors, private hard money lenders, and mortgage brokers about Kennedy Funding. This is what we have all agreed upon happens every single deal with them.
They will collect 10 grand in the beginning to start the job.
They will send over a contract, the gist is that you cannot sue them, and that all disagreements will be handled in New Jersey Law, and under arbitration, not a court room.
Then they will collect a 1.5% of the loan amount to send there appraiser, and cover there expenses. For me it was 105K.
After that happens they will manipulate the appraisal so that the amount comes in lower, in turn the lending amount comes in lower. They can end the deal there and take all your money, or if you have a good enough deal that you can work around that you keep going to the next stage.
They will then have there lawyers send over a generic list of 54 items, some will not pertain to you, some will not be able to be gotten with out tremendous expense. Unless of course your deal is raw land, which cannot change.
If and when you are able to finish up the list, they will tell you that you took too long, and they will require more money as they have already spent the monies you have sent them.
For me it was another 50Grand they wanted. For others the amounts may be different.
All of this has happened to me, and a whole lot more, but those items are guaranteed to happen with every deal. In my opinion there are better lenders out there that will do the deal, for a lot less money and headache. The services they offer can be gotten elsewhere for a lot cheaper, without all the smoke and mirrors. The deciding factor for me leaving the table with them was that they wanted a specific type of survey that would have cost 40 grand that was not needed, opinion letters for another 10 grand, and they wanted another 50 grand for there time and trouble. Mind you all of this before they even gave me a closing date.
I have heard that they close deals, and have checked into that as well. Every deal they close is either raw land, or a refinance. And the amount of LTV they lend is nothing spectacular on either. In my opinion they do just enough deals to stay legitimate, but htere main money maker is collecting deposits and setting up the deal to fail, so that they do not have to return the money.
Also one other thing to mention is that they do not have any money of there own. They are a mortgage broker!!!! NOT a lender. They give the impression that they are more, but as with everything else it is smoke and mirrors. In my deal they had to contact investors to see if they were still interested (supposedly).
When I have the time I will write an article to warn others not to go with them, but for now I have to clean up the mess they have put me in.
Grumbling expletitives,
Kyle
Update.
I found a company in Vegas that does commercial deals pretty quickly. They were not fast enough to get my deal done.
Anyway, the other bidders at the auction and everyone else was a cash buyer. Beats me how you have cash buyers for a $5mm deal.
Thanks for all the advice.
Kyle,
I can send you a list of commercial lenders both hard and not hard. Please pm me if interested. (Although I need clients, I am giving you this info without taking you on as a client. I am doing this because I have been helped many times on this forum and am very grateful for all the help that I have gotten.)
I am not advertising. I respect the rules of the board and ask people not to pm me for this information as you can go to the lender section of the board.