Overview: All mortgage money is not created equally. Many different financial structures are available from a wide variety of lenders depending on the borrower’s goals. In order to craft the right loan we need to understand the borrower’s motivation. Here are excerpts from a seminar we have presented to hundreds of Realtors, investors, developers and community groups over the years.

Understand the closing timeline: Are we running for the bus and need to close in two weeks (our record is 8 days) or do we have a normal timeframe of 60-90 days to process this loan?

Understand the investment timeline: Does the borrower intend to hold the property for a long time or is this a short term value creation event that will be sold or refinanced in 24 months or less?

Understand the property: Single tenant (rated or unrated) or Multi-Tenant Stabilized or Value Added.

Understand the sponsor:

- Owner occupied or investment?
- Seasoned investor with substantial track record or rookie?
- What is the sponsor’s personal net worth, liquidity & global income?
- Personal or Syndicate Funds to provide the equity?
- Existing entity or new SPE?
- Is this a refinance or acquisition (straight acquisition or 1031)?
- Anything weird we should know before we pull borrower’s credit file and do a background check (bad credit, bankruptcy, etc.)?

Understand the local real estate market: Trends, demographics, market vacancy and rental rates

Understand the borrower’s goals:

- What part of the capital stack does the borrower need?
- Senior debt, subordinated debt, mezzanine, participating preferred or equity Loan term and amortization?
- Recourse or non-recourse?
- Fixed or variable rate?
- Balloon or self-liquidating?
- Does borrower need ability to make partial paydowns?
- Does borrower need an earnout provision to tap into equity build up as value grows?
- Can borrower live with lender escrows for capital reserves, tenant improvement & leasing commissions?

Six Main Food Groups of Commercial Real Estate:

- Multifamily: Apartments and Manufactured Housing Communities
- Retail (anchored or unanchored)
- Office / Industrial / Warehouse / Flex / Distribution / R&D / Showroom / Self-Storage
- Hospitality (flagged or unflagged)
- Owner occupied properties
- Land

Problems & time wasters:

- Borrowers that have little or no equity or do not want to put equity in the deal
- Poor bookkeeping of borrower or seller (aka “shoebox accounting”)
- Unable or slow to provide critical financial information such as a current rent roll, year to date financials, year end financials for previous 2 years and a trailing 12 month financial statement
- Unable or slow to provide critical personal financial information such as a current personal financial statement, 3 years of signed federal tax returns and a current resume
- Borrowers with unrealistic expectations (ie, non-recourse, max leverage construction loan on a project with no presales or pre-leasing)
- Broker daisy chains

Who is Bison? Bison works with investors and developers nationwide that invest in multi-tenant income producing properties and freestanding, single tenant facilities leased to credit tenants. Bison has an array of unique and dependable sources of capital willing and able to lend on properties in all shapes, sizes, conditions and locations. Bison has closed complex loans on commercial real estate in as little as 8 business days.

For a detailed breakdown of the transactions we have closed visit the Track Record section of our website.