How do you tell the wheat from chaff when searching for multifamily financing? For starters, consider national names you know. When seeking multifamily financing the best of all worlds is to work with someone you know with a track record of getting multifamily loans closed.
The second best alternative in securing multifamily financing is a direct (first line) referral from someone you know that has closed a multifamily loan with the lender or correspondent. But what if you don’t know anyone?
With no direct link to a mortgage banker, first; identify banks, lenders and correspondent lenders that have closed deals in your marketplace, on property’s that is familiar to you- perhaps competitive properties.
Since mortgages are recorded in the public record, identify lenders closing multifamily loans in your marketplace. This is as easy as doing a public records search.
Next steps… no personal contacts, no loans closed in recent months? Cast a wider net and contact your extended network requesting introductions to lenders that have closed multifamily loans.
Still nothing? Start with correspondent mortgage bankers. They have established relationships with lines of communication to direct lenders, often pensions, life insurance companies and banks with large geographic footprints.
Who to stay away from:
- Companies asking for retainer fees in the first five minutes of the first phone call.
- Companies asking for retainer fees before knowing any of the salient deal points.
- Companies asking you to send retainer fees without ever asking to see financials on the deal.
There is nothing wrong with retainer fees. Many correspondent lenders require advance payment for third-party service providers (appraisal, environmental et al) along with the loan application and perhaps additional funds to secure your place in line in loan processing. In essence, it’s a commitment fee that is a reflection of your seriousness in proceeding with the loan.
Real lenders are in the business of closing real loans. There are loans getting done today. The job of the Correspondent is to place loans that meet or exceed loan underwriting standards as set out by the company committing funds. Take the time to understand these standards prior to making application.
Do your homework. There is a small criminal element in every industry and ours is no exception. Protect yourself with knowledge, research and time…. taking the time to make further inquiries about those new to your circle. There is no replacement for time.
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