Phone: (800)-786-1834
Address: 75-280 Highway 111, Indian Wells, California 92210
Website: http://1stcommercialmortgage.com/
States They Lend In: California
Private Hard Money Loans and Financing
Hard money loans are short-term collateralized loans emphasizing the value of the real estate rather than the asset's income production or the borrower's ability to service the debt.
These asset-based loans require equity in the collateral well in excess of the loan amount to offset the other high risk parameters associated with the borrower or the collateral itself. Hard money loans are typically made by private investor with high interest rates
Typical uses of hard money loans include relative short terms projects, similar to bridge loans, except that hard money often can include financial distress such as payment in arrears bankruptcy, and pending foreclosure proceedings.
The qualifying criteria usually considers credit scores, income and other conventional lending criteria may be analyzed, but the emphasis is on the value of the real estate used as collateral with a limited Loan to Value percentage not exceeding 65% to 70%.
Property Types
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Industrial Warehouse Loans
Industrial Property Types
Single and multi-tenant properties as well as owner-occupied properties including warehouses used for storage, assembly, manufacturing, packaging and distribution as well as flex and R&D facilities.
Locations
Access to roads, rail or major interstate roads as well as key local roads providing access to local, industrial, and commercial centers.
Loan Amounts
$500,000 to $20 million
DCR
x> 1.20
LTV (Loan to Value) Ratio
x to 70%, possible higher with mezzanine or equity solutions.
Loan Terms
5, 7 and 10 years
Amortization
x to 25 years depending on lease terms, expiration and property age.
Tenancy
Triple net leases with diverse tenant mix and staggered lease expirations prefered. Leases should reflect market conditions; single tenant properties require higher coverage and reserves. Warehouse leases should be triple net. Exceptions may be made for structural maintenance and management fees. R&D leases typically written on a modified gross basis. Lease rollovers should be less than 30% GLA in early years of the loan term.
Net Operation Income (NOI) Calculations
History
3 years of operating history.
Rent Roll
Lease expiration included to ensure DCR remains above 1.0; 3 month seasoning requirement.
Management Fee
3% with NNN leased properties and occupant managed single tenant buildings also at 3% management fee; others adjusted to market.
Reserves
$.10 to $.25 per square foot for structural reserves depending on the property age, condition and percentage of office build-out subject to an engineering report.
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Office Building Loans
Office Property Types
Multi-tenant and single tenant office buildings as well as owner occupied properties.
Performance
Stabilized income.
Locations
Central business districts, office parks, and suburban markets. Should be accessible from main thoroughfares, and in markets with high absorption rates, population growth and positive employment trends.
Loan Amounts
$500,000 to $20 million
DSCR (Debt Service Coverage Ratio)
x> 1.20
LTV (Loan to Value) Ratio
X> 70% with mezzanine financing options.
Term
3, 5, 7, 10.
Amortization
To 25 years depending on lease terms, expiration and property age.
Tenancy
Single tenant properties amortized over the remaining term of the lease and typically require higher coverage and reserves.
NOI (Net Income) Calculations
Calculations and History
Prefer three years of history of stable income; normalized NOI should reflect a minimum vacancy of 5% or local market average. Recoveries on NNN rents must be consistent with market.
Rent Roll
Lease expirations included so DSCR remains greater than 1.0.
Management Fee
Mgt Fee > 5% of effective gross income; single tenant buildings managed by the occupant can be underwritten at a 3% management fee
Reserves
$.10 to $.25 per square foot for structural reserves per property age and conditions in accord with the engineering report. Determine tenant improvement and leasing commission reserves from the rollover schedule and market averages.
Shopping Center Loans
Retail Property Types
Anchored Retail Centers include drug stores, discount department stores, dry goods, retail and home improvement stores as anchors. Financially stable national, regional or local chains are desired. Anchor tenant leases should have at least five years remaining on their leases, as of the date of closing. Anchors should demonstrate strong sales histories.
- Unanchored Retail Centers should have a diverse tenant mix with strong, stable sales histories. Not more than 25% of the leases should expire in any single year. Credit tenants with base lease terms exceeding five years beyond the final term loan will receive favorable underwriting terms.
- Two-story Retail Centers have qualifications placed on second story rental income. Properties can be held as net leased investments or as owner occupied or free-standing.
- Local/Neighborhood Strip Centers Class A to C properties.
Performance
Strong sales, high occupancy of 85%. Non-stabilized properties underwritten as a bridge loan. Prefer remaining tenancy greater than five years.
Locations
High traffic areas, adjacent to major thoroughfares, high visibility, infill locations and developed neighborhoods; property should have competitive advantage with minimal turnover.
Purpose
Acquisition, refinance and repositioning
Loan Amounts
$500,000 - $20 million
DCR (Debt Service Coverage Ratio)
1.15 minimum or higher depending on the market location, condition of the property, anchoring, and other risk factors.
LTV (Loan to Value) Ratio
70% Max LTV in 1st position. Mezzanine debt possibilities for higher LTVs.
Terms
3, 5, and 10 Years
Amortization
To 25 years depending on risk factors (leasing, age, market, etc.)
Apartment Loans
Outstanding Apartment and Multifamily Loan Programs! We have a brand new apartment financing program with 30 year terms that are fully amortizing and loans sizes small as $250,000 and as large as $20 million.
This program has exceptionally low interest rates with purchase money currently starting at 3.87% (5-year hybrid) in a Tier I market.
Interest rates include Variable and Fixed Hybrids including ARMs, 3 Yr, 5 Yr, 7 Yr & 10 Yr hybrids with a 3.5% Floor and a 6.0% ceiling with an initial fixed rate period are tied to six-month LIBOR. On the hybrid loans, there is no periodic rate increase cap on the initial rate readjustment, immediately after the fixed rate period. After the first rate readjustment, there is a 1% rate readjustment cap every six months.
Loan to Value
The loan-to-value ratio is between 75% and 60% depending on the property's quality, age, and location. It also depends on whether the loan is a purchase-money loan, a rate-and-term refinance or a cash-out refinance.
Recourse
Personal guarantees are required from Managing Members, General Partners, corporate officers, and individuals owning 20% or more of the property.
Foreign Investors
Loans to foreign nationals are available, up to 50% loan-to-value.
Hotel Loans
Hotel Property Types
Flagged and Non-Flagged, preferred national franchisees
Locations
Central business district, airport, freeway, university, tourist destination and suburban locations.
Performance
Should demonstrate strong demand and market strength through revenue par trends, ADR comps, occupancy/breakeven and trends in population and employment.
Loan Types
Construction, take-out, acquisition or refinance.
Loan Amounts
$500,000 - $20 million
DSCR (Debt Service Coverage Ratio)
x> 1.30x minimum
LTV (Loan To Value) Ratio
x> 75% LTV in first position; to 85% CLTV with mezzanine
Loan Term
5, 7 or 10 years
Amortization
To 25 years depending
Recourse
All permanent loans are non-recourse subject to standard carve-outs.
Submission Requirements
Property and ownership description to include resume, net worth and experience of key principals.
Documentation
Property profit and loss statements for last 2 years and month by month for past 12 months. If the property is a non-flagged property information on the management company. Most current appraisal and market study.
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Specialty Property Loans
Specialized properties are a niche business where only a few national programs are often found with narrow underwriting guidelines. Lending in specialty property markets requires a specialized understanding of both real asset and the businesses that use them. This makes for more localized lenders or highly specialized national lenders.1st Commercial Mortgage gives you access to a broad range of lending resources covering all property types specialty property types. The underwriting guidelines on the following pages should be used as guidelines and to inform your documentation needs and risk profile. They are not hard and fast rules.
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