The Spectrum of Lending
The Spectrum of Lending
David Goldman covers the full spectrum of loan products and lender types and explains the differences.
Opening: "I'm Laura Munoz and welcome to Let's Talk Commercial Real Estate a newly created video blog covering topics of interest for commercial brokers and borrowers sponsored by American Life Financial. We'll be chatting with members of the real estate community asking them questions that you use submit on social media."
Laura Munoz: "So tell us a little bit about the spectrum of lending?"
David Goldman: "Yep so I was telling you earlier when somebody comes to me with a loan request you've got to break it down and understand what kind of category or what's where do they lie in the spectrum of lending and on the one edge of the spectrum of lending you have all the biggest name banks that are basically lending at the top of the scenarios where you've had an A+ property, you've got A+ income, A+ credit business long standing you get the best rates, best terms and so on that's at the very top often times they're not coming to me for that per se because they probably have existing relationships with their bankers but once in a while there's something unique that doesn't fit and usually it may not be at the top of that spectrum but it'll be like maybe one match down and then you've got all levels of lending from that the most conventional of sorts to the most private and hard money of sorts okay and I guess I can quickly go down the line. I know there's another level let's say off many a few spectrums is these alternative banks that are funded by hedge funds or Wall Street, they got you know five hundred million dollars and they're there they have certain guidelines that if you fit within these guidelines you they can give you terms that are a little bit better than private money but they often lock you up with prepayment penalties but they're not as good as conventional but for certain circumstances those work…but you're often boxed in and so those don't work so often for me whereas Not So Hard Money for example that I consider them in the next spectrum and they're really competitive with respect to their rates and terms they I love working with them they're very flexible and for me I just like to be able to logically talk about the loan request and the plus the minus and I feel like that's important don't oversell it but don't under so I'd be able to explain the negatives along with the positives and for example I speak with Scott often and I enjoy talking to him and going through these scenarios but that's that let's say like three quarters of the way through the spectrum where they don't really qualify for conventional financing but there's still some merit to their request where they still deserve financing but it's just that a different kind of rate in term but still competitive and still flexible which is why that's the hard money is such a great lender.
Laura Munoz: "Well I really appreciate all you shared with us I'm sure you've answered a lot of questions out there continued success to you thank you thank you appreciate it thank you for being here yes have topics or questions you'd like covered on let's talk commercial real estate or if you'd like to be a guest on let's talk commercial real estate please contact us
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