A permanent commercial real estate loan is a first mortgage with a term of at least five years. Commercial mortgage loans with shorter terms or are considered mini-permanent (3 years) or bridge loans (1-2 years).
Now commercial mortgage lenders prefer to make very small loans permanent, unlike the loans for the development of land, construction of commercial lending, financing or even the bridge. It makes no sense to give the commercial mortgage lenders what they want, so in this tight lending market should focus exclusively on small business loans permanent. If you work in any other type of commercial real estate loan, the loan probably is not going to quit, and you do not pay.
From the small, I mean bids below $ 3 million. Small business loans standing by far the highest rate of closure.
Why the rate of closure on small business transactions so much higher than the large ones? First, the typical small business loan borrower is a small business owner who is busy running his print shop or car repair. He needs the help of a mortgage broker business, and that you appreciate.
While this little guy can be a value of one or two million dollars, which is not so rich that the banks are beating on his door. Therefore, no bank has cited some in his back pocket that can go out and beat your best offer.
Because he is a business owner, as opposed to a professional commercial real estate investor or developer, is not terribly complex on commercial lending. You know much more about the mortgage financing business to him. Because this little guy does not know where to go for the best price in a commercial real estate loan, Squeaky Clean and power to do deals often end up being submitted to the commercial mortgage brokers like you.
In contrast, real estate investors who own large properties and require large commercial loans are normally very rich and very sophisticated. Some bank is calling on his door every month trying to sell a loan. If you try to broker a large commercial front, and the operation is clean, almost every time the borrower is rejected because its best offer is a quote directly from a bank, without a commercial mortgage broker fee.
In fact, if a large commercial real estate loan does not have just been submitted to a commercial mortgage broker, there is usually something wrong with the deal. Perhaps there are too many vacant or perhaps the treatment will not cash flow. You can easily waste months working in a large commercial mortgage loan that can never be done. In the meantime, who is dying of hunger?
