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Bugs, would you be concerned with the liquidity of any banks that had mostly Commercial RE loans on their books? From what I understand, lending criteria is a bit tighter than it is for residential RE.

[Bugs]

Q007,

Some of my clients are telling me that a few of the commercial banks were behaving like the residential lenders – selling their loans off to investors and generally running very loose with their due diligence.

I never did much – if any – business with the really agressive commercial lenders because our philosophies with respect to values never meshed. I’d do an appraisal for one and then I’d never hear from them again, most likely because my value didn’t meet their “needs”. Everywhere else the lending officers were acutely aware that they would have to live with any non-performing loans, so they avoided making weak loans.

But yeah, there are a few commercial lenders who are at substantial risk, in part because of their due diligence criteria and in part because of their eagerness to write loans in markets with horrific price increases that far outpaced rent increases. There’s a few of these lenders who are already dealing with REOs and the commercial meltdown hasn’t really started in earnest yet.

[Bugs]

Q007,

Some of my clients are telling me that a few of the commercial banks were behaving like the residential lenders – selling their loans off to investors and generally running very loose with their due diligence.

I never did much – if any – business with the really agressive commercial lenders because our philosophies with respect to values never meshed. I’d do an appraisal for one and then I’d never hear from them again, most likely because my value didn’t meet their “needs”. Everywhere else the lending officers were acutely aware that they would have to live with any non-performing loans, so they avoided making weak loans.

But yeah, there are a few commercial lenders who are at substantial risk, in part because of their due diligence criteria and in part because of their eagerness to write loans in markets with horrific price increases that far outpaced rent increases. There’s a few of these lenders who are already dealing with REOs and the commercial meltdown hasn’t really started in earnest yet.

[Bugs]

Q007,

Some of my clients are telling me that a few of the commercial banks were behaving like the residential lenders – selling their loans off to investors and generally running very loose with their due diligence.

I never did much – if any – business with the really agressive commercial lenders because our philosophies with respect to values never meshed. I’d do an appraisal for one and then I’d never hear from them again, most likely because my value didn’t meet their “needs”. Everywhere else the lending officers were acutely aware that they would have to live with any non-performing loans, so they avoided making weak loans.

But yeah, there are a few commercial lenders who are at substantial risk, in part because of their due diligence criteria and in part because of their eagerness to write loans in markets with horrific price increases that far outpaced rent increases. There’s a few of these lenders who are already dealing with REOs and the commercial meltdown hasn’t really started in earnest yet.

[Bugs]

Q007,

Some of my clients are telling me that a few of the commercial banks were behaving like the residential lenders – selling their loans off to investors and generally running very loose with their due diligence.

I never did much – if any – business with the really agressive commercial lenders because our philosophies with respect to values never meshed. I’d do an appraisal for one and then I’d never hear from them again, most likely because my value didn’t meet their “needs”. Everywhere else the lending officers were acutely aware that they would have to live with any non-performing loans, so they avoided making weak loans.

But yeah, there are a few commercial lenders who are at substantial risk, in part because of their due diligence criteria and in part because of their eagerness to write loans in markets with horrific price increases that far outpaced rent increases. There’s a few of these lenders who are already dealing with REOs and the commercial meltdown hasn’t really started in earnest yet.

[Bugs]

Q007,

Some of my clients are telling me that a few of the commercial banks were behaving like the residential lenders – selling their loans off to investors and generally running very loose with their due diligence.

I never did much – if any – business with the really agressive commercial lenders because our philosophies with respect to values never meshed. I’d do an appraisal for one and then I’d never hear from them again, most likely because my value didn’t meet their “needs”. Everywhere else the lending officers were acutely aware that they would have to live with any non-performing loans, so they avoided making weak loans.

But yeah, there are a few commercial lenders who are at substantial risk, in part because of their due diligence criteria and in part because of their eagerness to write loans in markets with horrific price increases that far outpaced rent increases. There’s a few of these lenders who are already dealing with REOs and the commercial meltdown hasn’t really started in earnest yet.

[Bugs]

jpinpb,

If I remember correctly you need a construction lender that can deal with a rehab scenario, right? If so, you’re probably looking for one of the community banks. As in not Bank or America or Wells Fargo or Washington Mutual. You want a lender that’s headquartered in this region. A short list that includes, but it not limited to:

First Pacific Bank
Neighborhood National Bank
Community Commerce Bank
Seacoast Commerce Bank
Pacific Western Bank
First Business Bank
Home Investment Bank

Etc., etc. You can look in the Yellow Pages. I know at least half of the above would do a deal like this because I’ve appraised such properties for them before.

Expect to pay more in interest rates and deal with lower loan-to-value maximums. As one of the other posters in the other thread already noted, a rehab scenario in a declining market involves some additional risks.

[Bugs]

jpinpb,

If I remember correctly you need a construction lender that can deal with a rehab scenario, right? If so, you’re probably looking for one of the community banks. As in not Bank or America or Wells Fargo or Washington Mutual. You want a lender that’s headquartered in this region. A short list that includes, but it not limited to:

First Pacific Bank
Neighborhood National Bank
Community Commerce Bank
Seacoast Commerce Bank
Pacific Western Bank
First Business Bank
Home Investment Bank

Etc., etc. You can look in the Yellow Pages. I know at least half of the above would do a deal like this because I’ve appraised such properties for them before.

Expect to pay more in interest rates and deal with lower loan-to-value maximums. As one of the other posters in the other thread already noted, a rehab scenario in a declining market involves some additional risks.

[Bugs]

jpinpb,

If I remember correctly you need a construction lender that can deal with a rehab scenario, right? If so, you’re probably looking for one of the community banks. As in not Bank or America or Wells Fargo or Washington Mutual. You want a lender that’s headquartered in this region. A short list that includes, but it not limited to:

First Pacific Bank
Neighborhood National Bank
Community Commerce Bank
Seacoast Commerce Bank
Pacific Western Bank
First Business Bank
Home Investment Bank

Etc., etc. You can look in the Yellow Pages. I know at least half of the above would do a deal like this because I’ve appraised such properties for them before.

Expect to pay more in interest rates and deal with lower loan-to-value maximums. As one of the other posters in the other thread already noted, a rehab scenario in a declining market involves some additional risks.

[Bugs]

jpinpb,

If I remember correctly you need a construction lender that can deal with a rehab scenario, right? If so, you’re probably looking for one of the community banks. As in not Bank or America or Wells Fargo or Washington Mutual. You want a lender that’s headquartered in this region. A short list that includes, but it not limited to:

First Pacific Bank
Neighborhood National Bank
Community Commerce Bank
Seacoast Commerce Bank
Pacific Western Bank
First Business Bank
Home Investment Bank

Etc., etc. You can look in the Yellow Pages. I know at least half of the above would do a deal like this because I’ve appraised such properties for them before.

Expect to pay more in interest rates and deal with lower loan-to-value maximums. As one of the other posters in the other thread already noted, a rehab scenario in a declining market involves some additional risks.

[Bugs]

jpinpb,

If I remember correctly you need a construction lender that can deal with a rehab scenario, right? If so, you’re probably looking for one of the community banks. As in not Bank or America or Wells Fargo or Washington Mutual. You want a lender that’s headquartered in this region. A short list that includes, but it not limited to:

First Pacific Bank
Neighborhood National Bank
Community Commerce Bank
Seacoast Commerce Bank
Pacific Western Bank
First Business Bank
Home Investment Bank

Etc., etc. You can look in the Yellow Pages. I know at least half of the above would do a deal like this because I’ve appraised such properties for them before.

Expect to pay more in interest rates and deal with lower loan-to-value maximums. As one of the other posters in the other thread already noted, a rehab scenario in a declining market involves some additional risks.

[jpinpb]

Bugs – Maybe I’m not clear or I’m not following you. I apologize for being a little dense or slow. I want to buy the place. I don’t think it’s a construction loan. Are you saying that’s what I need to get?

I want to buy the place, take out a loan to buy it. Looking at 450k – 500k. Yet I’m told b/c of the condition of the place, no kitchen or bath, I guess uninhabitable? I’m told no bank will lend on it.

So now I’m trying to figure out how to get money to buy the place, then I’ll fix it up. Then once fixed, I guess, I can get a bank to give me a regular 30 yr fixed.

Are you saying I can get around all this by getting a construction loan of 500k using the house I’m interested in purchasing as collateral? I am not too concerned about the interest rate being higher. I’m sure it will be. I only want to do it short-term, so I guess make sure no pre-payment penalty. This way, once it’s fixed, I can get a normal 30 yr fixed on the place.

Alternatively, I’m co-owner of a commercial lot off the 210 Freeway, and I thought perhaps I can use that to get a loan to buy the house, then again, once fixing the house, take out a 30 yr fixed and pay off the loan on the commercial. Or at a minimum, use some of the different raw lands I own as collateral. It adds up to more than what I’m looking to get for a loan.

Edit: Or are you saying to take a construction loan against the freeway lot?

I would think I’d have to own the property before they give me a construction loan, so I wouldn’t be able to get a construction loan on the house if I don’t own it yet.

Sorry. I’m a little confused. If you could please help me understand.

[jpinpb]

Bugs – Maybe I’m not clear or I’m not following you. I apologize for being a little dense or slow. I want to buy the place. I don’t think it’s a construction loan. Are you saying that’s what I need to get?

I want to buy the place, take out a loan to buy it. Looking at 450k – 500k. Yet I’m told b/c of the condition of the place, no kitchen or bath, I guess uninhabitable? I’m told no bank will lend on it.

So now I’m trying to figure out how to get money to buy the place, then I’ll fix it up. Then once fixed, I guess, I can get a bank to give me a regular 30 yr fixed.

Are you saying I can get around all this by getting a construction loan of 500k using the house I’m interested in purchasing as collateral? I am not too concerned about the interest rate being higher. I’m sure it will be. I only want to do it short-term, so I guess make sure no pre-payment penalty. This way, once it’s fixed, I can get a normal 30 yr fixed on the place.

Alternatively, I’m co-owner of a commercial lot off the 210 Freeway, and I thought perhaps I can use that to get a loan to buy the house, then again, once fixing the house, take out a 30 yr fixed and pay off the loan on the commercial. Or at a minimum, use some of the different raw lands I own as collateral. It adds up to more than what I’m looking to get for a loan.

Edit: Or are you saying to take a construction loan against the freeway lot?

I would think I’d have to own the property before they give me a construction loan, so I wouldn’t be able to get a construction loan on the house if I don’t own it yet.

Sorry. I’m a little confused. If you could please help me understand.

[jpinpb]

Bugs – Maybe I’m not clear or I’m not following you. I apologize for being a little dense or slow. I want to buy the place. I don’t think it’s a construction loan. Are you saying that’s what I need to get?

I want to buy the place, take out a loan to buy it. Looking at 450k – 500k. Yet I’m told b/c of the condition of the place, no kitchen or bath, I guess uninhabitable? I’m told no bank will lend on it.

So now I’m trying to figure out how to get money to buy the place, then I’ll fix it up. Then once fixed, I guess, I can get a bank to give me a regular 30 yr fixed.

Are you saying I can get around all this by getting a construction loan of 500k using the house I’m interested in purchasing as collateral? I am not too concerned about the interest rate being higher. I’m sure it will be. I only want to do it short-term, so I guess make sure no pre-payment penalty. This way, once it’s fixed, I can get a normal 30 yr fixed on the place.

Alternatively, I’m co-owner of a commercial lot off the 210 Freeway, and I thought perhaps I can use that to get a loan to buy the house, then again, once fixing the house, take out a 30 yr fixed and pay off the loan on the commercial. Or at a minimum, use some of the different raw lands I own as collateral. It adds up to more than what I’m looking to get for a loan.

Edit: Or are you saying to take a construction loan against the freeway lot?

I would think I’d have to own the property before they give me a construction loan, so I wouldn’t be able to get a construction loan on the house if I don’t own it yet.

Sorry. I’m a little confused. If you could please help me understand.

[jpinpb]

Bugs – Maybe I’m not clear or I’m not following you. I apologize for being a little dense or slow. I want to buy the place. I don’t think it’s a construction loan. Are you saying that’s what I need to get?

I want to buy the place, take out a loan to buy it. Looking at 450k – 500k. Yet I’m told b/c of the condition of the place, no kitchen or bath, I guess uninhabitable? I’m told no bank will lend on it.

So now I’m trying to figure out how to get money to buy the place, then I’ll fix it up. Then once fixed, I guess, I can get a bank to give me a regular 30 yr fixed.

Are you saying I can get around all this by getting a construction loan of 500k using the house I’m interested in purchasing as collateral? I am not too concerned about the interest rate being higher. I’m sure it will be. I only want to do it short-term, so I guess make sure no pre-payment penalty. This way, once it’s fixed, I can get a normal 30 yr fixed on the place.

Alternatively, I’m co-owner of a commercial lot off the 210 Freeway, and I thought perhaps I can use that to get a loan to buy the house, then again, once fixing the house, take out a 30 yr fixed and pay off the loan on the commercial. Or at a minimum, use some of the different raw lands I own as collateral. It adds up to more than what I’m looking to get for a loan.

Edit: Or are you saying to take a construction loan against the freeway lot?

I would think I’d have to own the property before they give me a construction loan, so I wouldn’t be able to get a construction loan on the house if I don’t own it yet.

Sorry. I’m a little confused. If you could please help me understand.

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