'Success' looking for a CMBS loan... I think. - Posted by CarolFL

Posted by CarolFL on April 23, 2007 at 12:25:42:

Patrick, thanks for your reply. The points you mentioned are the ones which have me thinking “friendly neighborhood bank”.

The current lienholder today offered 25 yr am/ 5 yr fixed/ 7 yr balloon indexed at the 5 yr T-note rate plus 3.5%. Adjusts to the 2 yr t-note + 3.5 after 5 yrs. LTV is not a problem.

Goals? We originally had thought to hold this one long term, but the partnership has proved unwieldy, so we will likely sell sooner rather than later. The refi is to bring the pieces together (we have a number of loans hanging out for the purchases of the units), get the funds we fronted to the co. for the rehab, etc., back in our hands, and leave a bit to ‘play money’ for continuing improvements - so they don’t have to be done out of pocket again!

We are in Polk Co., and the property is just getting stabilized. It’s a great piece(s) of property, with a lot of upside still to come.

The easy route is probably riding the horse we are on.
Closing costs? From memory - a point. Appraisal is already done for them. The more I write, the more I wonder if I am not just looking to make this complicated.

‘Success’ looking for a CMBS loan… I think. - Posted by CarolFL

Posted by CarolFL on April 21, 2007 at 17:43:24:

Ed, The Great Caper is at “mid point” … we are about to be stabilized and aching to refi our multiple loans covering the 75 units into one nut and get the pvt and institutional loans rolled into one, and the cash we have lent to the company back into our pockets, too. I say at mid-point, because I believe there is as much upside waiting to be made over the next 2-3 yrs as we have made to date.

Anyway, we are debating returning to our friendly bank vs a conduit loan. The bank will no doubt do what we want (based on conversation, our DSC and a appraisal just done), but more costly. However, we can ‘talk with’ them. On the other hand, we like the non-recourse, assumable, low interest aspects to the CMBS.
Other than poking around on the internet, I don’t know where to go to look at conduit loans… any specific suggestions?
Current value: $5 mil. We want to refi about $3 mil to cover all loans, plus have some reserves for the next set of improvements (landscaping, resurfacing parking, irrigation, fencing, etc.).
Thanks, and greetings to all from
Carol and Dennis

Re: ‘Success’ looking for a CMBS loan… I think. - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on April 23, 2007 at 11:28:52:

The best source of conduit loans are investment banks. They tend to like deals that are $5 Million +, but some will go as low as $1 Million.

The biggest considerations when looking at conduit loans are:

  1. Closing Costs (they can be quite high).
  2. Defeasance/yield maintenance (these are forms of pre-payment penalties. You need to “commit” to the terms of these loans as these penalties are very high)

What are your goals? What is the bank offering…Rate…term…closing costs?

Depending on your location in Florida you can receive very favorable rates and terms without having to go the conduit route.

Patrick S. Lawson
Highland Banc, Inc.
308 South Dillard St
Winter Garden, FL 34787
(407)-877-7047 Office
(866) 476-1133 Fax