A Small World

Small World
(image via The New Wage Truth)

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”
Margaret Mead

I received an email from a friend (who often refers me new clients), asking me if we do commercial loans. Our company is very unique. We are experts in every type of real estate loans. This week, we are working on a loan for the acquisition of a retail showroom, purchase/construction for two residential spec buildings, a refi loan for a hotel, a purchase of an industrial building, and a refi for a number of apartment and mixed use buildings.

One of the new referrals came from my corporate/real estate attorney, who has a client who needed to refinance an owner occupied industrial building. His loan had a balloon after five years, and the bank refused to renew his mortgage. When I inquired for the reason, he did not know, but informed me that he had short sales on two of his residential properties. My first reaction and obvious solution was to apply for an SBA loan. When I called my friend Bill Hand, who helps me with SBA loans, not only did he know the building, five years ago he helped the borrower to get financing for it. Bill also warned me that the client does not report enough income to qualify for a bank loan and because the borrower had a short sale, he cannot get an SBA loan.

The next step was to try to get a private loan to save the client from foreclosure. To accomplish this, the value of the loan had to be $1,500,000, while the bank appraised it for only $1,200,000. I questioned this value since I recently arranged financing for another building in the same neighborhood in downtown San Francisco and knew that the value had to be higher. To support my point of view, I needed an opinion from an experienced real estate agent, so I called my friend Rick O’Neil. (I wrote about him in my newsletter from last week.)

As it happened, Rick knew the building since only a week ago he found a tenant for the vacant space in the back of the building. While I was doing my research, the owner called his real estate agent Art, who works with Rick, to discuss the possibility to list the building for $1,500,000. Only a week later, Art had a buyer, who agreed to the full price. The buyer needed to get a mortgage. He contacted Wells Fargo Bank and Bill Hand. Bill used to work at Wells Fargo and knew that they would have a problem to approve the loan, but it would take them 60 days to realize it.

Meanwhile, Bill was leaving the bank he was working for. He called me, and there was a simple decision. We agreed to work together since I had sources to find fast solutions.

What a very small world we live in.

Mortgage Game Book

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Best Wishes,

Manny<br />