Commercial fixed rate loans drying up fast - Posted by Jim(MA)


#1

Posted by Mark (SDCA) on October 16, 1998 at 15:57:00:

Great!!! I only hope that residential dries up soon too.


#2

Commercial fixed rate loans drying up fast - Posted by Jim(MA)

Posted by Jim(MA) on October 16, 1998 at 15:07:02:

Since I’m currently in the market for a commercial loan just thought I’d share today’s news. Six major conduits have filed for bankruptcy in the past three days. They borrowed short, sold long and wall street has said no. Commercial fixed rates jumped by .5% today and are expected to continue to rise into next week. Source predicts disappearance of fixed rate products soon. I guess we better move quickly.


#3

Re: Commercial fixed rate loans drying up fast - Posted by Ed Garcia

Posted by Ed Garcia on October 16, 1998 at 21:35:08:

Jim:
I hate to say it, but there is tons of money around for commercial
financing. The kind of property that your financing is marginal
commercial. It is not even part of the commercial financing community.
You have a non- conforming property which limits you to a smaller group
of lenders.

Just for you to know, true commercial lending right now is about 6 1/2%
fixed .It has a minimum loan amount of $2,000,000. Some lenders
minimum is $5,000,000.

As you know, the word commercial covers a broad definition. It can be
anything from a gas station, to a 100 story office building.
I am aware of what is going on in the market place, and I can tell you, it is
not gloom and doom.

The stock market is causing a lot of turmoil right now. I can tell you that
after the first of the year the market will be flooded with money. The
Japanese will be bringing money over by the bucket full to buy T- Bills.
The Feds will probably lower the rates two more times.

Another thing to know Jim is that Wall Street is not the biggest player in
commercial loans. Banks, Insurance Co.?s, and Pensions are.

I think right now everyone is over reacting. Meanwhile, we can?t be
concerned with any of that. We have to do deals that make economic
sense.

Hide and watch Jim, you’ll see.

Ed Garcia


#4

Re: Commercial fixed rate loans drying up fast - Posted by Jimbob

Posted by Jimbob on October 16, 1998 at 16:15:47:

I never really did care for commercial loans, too difficult to obtain, and too expensive. To hear these companies are filing bankruptcy after soaking the working investors for high interest and loans fees almost makes we want to laugh. They put us investors through the ringer on qualifying, and they themselves go broke and out of business. Hope you pull your deal together but I have no sympathy for the lenders!

Jimbob