Why Use A Debt Broker
Instead of Going Direct To Lender?
1. Preventing the
"Bait & Switch"
Lenders offer attractive initial quotes to secure borrowers and earn their application fees, knowing borrowers are unlikely to switch lenders due to sunk costs, even if loan terms worsen. Picking the most aggressive quote increases your likelihood of a re-trade, accuracy is more important.
2. Preventing your loan proceeds from Dropping
Underwriters have no incentive to improve appraisals, property condition or environment assessments. We actively negotiate lowering underwritten expenses, immediate repairs, replacement reserves, etc.
3. Ensuring fair rate lock
(Avoid Yield Spread Premium)
CRE/multifamily lenders often add a so called (and undisclosed) yield spread premium (YSP) at rate lock you are not even aware of.
(Can exceed $100,000 in undisclosed compensation)
4. Identifying the most
suitable lenders
We have relationships with hundreds of lenders and constantly monitor changes in the lending space. Selecting the right lender, with the most appetite for your deal, takes exploration.
5. Avoid Hostile Loan Terms
Loan agreements (especially non-agency) frequently include unfavorable covenants that borrowers are not aware of or do not fully understand. We are in this business 24/7 and know how to identify an renegotiate these problematic terms to protect borrowers' interests.
"Yes, you can 'wing it', but you are better off
delegating this process to your debt broker."
FAQS
What are your fees?
Our fees start at $30k flat with "add-ons". This is designed in order to price our services in proportion to the work being done. Most lenders & brokers use a flat percentage, but in our opinion a larger loan does not necessarily require more work and thus a higher fee. This allows us to dynamically price based on complexity, while also starting at a lower cost than most of our competitors.
How are you adding value as a broker?
This can be a very long-winded discussion, but we'll give you our top 5 reasons.
1.Preventing the "bait & switch" of lenders quoting terms that are completely unrealistic, only to re-trade you once they have your business.
2. Preventing loan proceeds from dropping during lender due diligence, this is achieved through monitoring and understanding the lender's process.
3. Ensuring a fair rate lock often by preventing lenders from padding your spread with a "yield spread premium". This is common with multifamily correspondence lenders and is only prevented by monitoring the markets as well as having a deep understanding of the process.
4. Identifying the most suitable lender for your deal by shopping the market.
5. Avoiding hostile terms by leveraging our decades of experience.
Yes, you can "wing it" but you are better off delegating this process to your debt broker.
Can you help me find great deals?
No, sorry we are not that type of "broker".
However, we are able to provide feedback & debt quotes when you are underwriting a deal, even pre-LOI. This will give you an edge in your underwriting and provides a realistic outlook for the funding process.
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