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Oil and Gas Subordination Agreement Request Letter Example

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					Index


AAA corporate bonds, 112, 130               Big box retail, 81, 183–184




                                                               AL
Accountants, cultivating, 177               Board of realtors
Acquisition and development (A&D)             networking to reach new clients, 26
     residential and condominiums, 189      Bonds




                                                          RI
Allstate Insurance, 187                       AAA corporate bonds, 112, 130
Alumni events                               Borrower strength, impact on pricing,
  networking to reach new clients,               133–134


                                                    TE
     25–26                                  Breaking into the business, 31–35
Amortization                                Bridge lender, partnering with,
                                            MA
  defined, 67, 68                                 173
  generally, 70–72                          Bridge loans, 68
  and loan amount, 71                       Brinker’s Intl., 187
  negative amortization, 69                 Brokerage agreement/engagement letter,
  request, impact on pricing, 135                61–64
                                     ED


Anatomy of a deal, 155–162                  Brokers. See also Mortgage broker and
Anchored centers, 81                             mortgage banker
Annual documentation                          payment, how, 46–47
                              HT



  after loan closing, 150–151                 residential mortgage broker, approach
Apartments, 186                                  to finding first deal, 59–60
  Class A, 132, 186                         Building permits
                        IG




  Class B, C, D, 186                          first deal, finding, 54–56
  commercial loans, need for, 84, 86        Business cards, 178
Appraisal, 145–146                          Business model, inefficiency of, 13
                 R




Assignment of lessors interest in leases,   Business owners
              PY




     144                                      networking to reach new clients, 26
Assisted living facilities, 186–187
Assumable loans, 69                         CAM. See Common area maintenance
       CO




                                                 (CAM)
Back-end fees, 169–170                      Capital improvements
Bankers                                       reserve accounts, 96
  mortgage broker and mortgage banker,      Capitalization rates
     difference between, 41, 43               leases, 102
Banks, 109–111                              Capital markets
  partnering with, 173                        1990 through September 2007, 6
Basis of loans, (1990 through September     CCIM. See Certified Commercial
     2007), 6–7                                  Investment Member (CCIM)
Benefits to clients, 27–28                   Certificates of deposit (CDs), 110


                                        191
192                                     Index


Certified Commercial Investment                term, 68, 70–72
      Member (CCIM), 31                      Commercial loan types, 67–75
Chamber of Commerce                           assumable loans, 69
  networking to reach new clients,            basic elements of commercial loan,
      25                                         56–70 (see also Commercial loan
Charity events                                   elements)
  networking to reach new clients, 25         bridge loans, 68
Chili’s, 187                                  deal example, 75
Class A apartments, 132, 186                  fixed-rate, 68, 73–74
Class B, C, D apartments, 186                 floating-rate loans, 68, 73–74
Clients, finding. See New clients, finding      hard-money loans, 68, 115
Closing, 40. See also Closing and             interest-only loans, 68–69
      funding of loans                        recourse versus nonrecourse loans, 68
Closing and funding of loans, 141–151         take-out loans, 54, 68
  annual documentation after loan            Commercial mortgage-backed securities
      closing, 150–151                           (CMBS), 113–115
  appraisal, 145–146                          approval of loans, 129
  loan commitment, 138, 141–142               and back-end fees, 169
  loan documents, 143–145 (see also           generally, 7–8, 109, 122
      Loan documents for detailed             and loan fees, 74
      treatment)                             Commercial mortgage brokering. See
  phase I report, 146–147                        also specific topics
  property condition report (PCR), 147        business model, inefficiency of, 13
  property inspections after loan closing,    defined, 9
      150–151                                 industry, reason for lack of people in,
  responsibilities after closing, 148–151        12–13
  servicing after loan closing, 149–150      Commercial mortgage deal, typical,
  survey, 147                                    39–47
  termite inspection, 147                     closing, 40
  third-party reports, 145–147                correspondent relationships, 43
  title commitment, 147–148                   eight basic steps, 39–40
  title policy, 147–148                       fiduciary responsibilities of mortgage
Closing letter to title company from             broker and mortgage banker, 43–46
      lender, 145                             financing, types of property, 40–41
CMBS. See Commercial                          finding lender, 40
      mortgage-backed securities (CMBS)       finding property to finance, 39
Coca Cola, 187                                funding, 40
Cold calls, 58–59, 178                        loan quote from lender, 40
Commercial loan elements                      mortgage broker and mortgage banker,
  amortization, 67, 68, 70–72                    difference between, 41, 43
  earnout, 69–70                              payment of brokers, 46–47
  holdback, 69                                preliminary loan submission, 39
  interest rates, 71, 72–73                   retail strip center, typical, 42, 75
  loan fees, 74                               underwriting loan, 39
  negative amortization, 69                  Commercial real estate brokers,
  prepayment penalty, 68                         cultivating, 176
                                      Index                                    193

Commercial Real Estate Finance            associated with term quotes and
    (CREF)                                   locking interest rate, 136, 138
  conference, 174–175                    Domino’s Pizza, 9–10
Common area maintenance (CAM), 93,
    96–98, 102                           Earnings
Condominiums, 189                          amount of, 9–10
Conduit lending. See Commercial            generally, 5–6
    mortgage-backed securities (CMBS)      six-figure incomes, how to get to,
Conferences:                                  32–35
  next level, taking business to,          $3,000/month, earning in side
    174–175                                   business, 20–21
Construction loan take-outs, 54          Earnout, defined, 69–70
Convenience stores, 188–189              E-blast (marketing), 25
  commercial loans, need for, 90         Educational requirements, 14–15
Correspondent relationships, 43          Elevator pitch, 178
Correspondent versus open lenders,       E-mail
    115–116                                presentation or submission to lenders,
CoStar, 59                                    125
Costco, 187                              Engagement letter, 63
Credit quality, impact on pricing,       Escrow companies
    133                                    networking to reach new clients, 26
Credit tenant properties, 187            Ethics, 167–170
CREF. See Commercial Real Estate           unacceptable practices, examples of,
    Finance (CREF)                            167–170
Current clients, marketing ideas for     Expenses
    reaching, 24–25                        underwriting loan, 95–96
Customers, staying in touch with,        E-zines
    177                                    monthly or weekly (marketing), 24
                                           writing, 174
Database                                 Fannie Mae, 109
  detailed call and log, 60–61           Farming
DCR. See Debt service coverage/debt        networking to reach new clients, 25
     coverage ratio (DCR)                FDIC, 110, 111
Deal                                     Federal Express, 187
  example of, 155–162                    Federal Funds Rate, 72
  finding (See First deal, finding)        Federal Home Loan Bank Board,
Debt service coverage/debt coverage           111
     ratio (DCR)                         Federal Open Market Committee, 72
  leases, 104                            Fees
Deed of trust, 143                         brokerage, 62
Depository institutions. See Banks         loans, 74
Developers                                 management fees, 95
  first deal, finding through, 57            professional fees, 95
“Dialing for dollars,” 31                Fiduciary responsibilities
Direct mail pieces, 175                    mortgage broker and mortgage banker,
Documents. See also Loan documents            43–46
194                                     Index

FIERRA, 110                                Hampton Inn, 131
Final loan submission, 124–125             Hard copy versus electronic e-mail
Financing                                    presentation or submission to lenders,
  high-leverage, 6                              125
  types of property, 40–41                 Hard-money loans, 68, 115
Finding lender, 40                         Heller Financial, 9–10
Finding property to finance, 39             HELOCs. See Home equity lines of
First deal, finding, 53–64                       credit (HELOCs)
  brokerage agreement/engagement           High-leverage financing, 6
      letter, 61–64                        Hilton Hotel Group, 131, 185
  builders, through, 57                    Holdback, 69
  building permits, through, 54–56         Holiday Inn, 131, 185
  cold calling, 58–59                      Home equity lines of credit (HELOCs),
  construction loan take-outs, 54               71
  database, keeping, 60–61                 Hotels/motels, 87, 185–186
  developers, through, 57                    commercial loans, need for, 86
  mini-perms, 54                             typical non-flagged hotel/motel
  referrals, 56                                 property, 137
  residential mortgage brokers’            Housing market slowdown, 7
      approach, 59–60                      HUD statement, 145
  sample deal, 61
  signing up customer, 61–64               Income
  signs, looking for, 54–56                  rent roll form, 94
  title companies, through,                  underwriting loan, 93
      58–59                                Income Property Finance, 31
Fixed-rate loans                           Indoor malls, 81
  defined, 68                               Industrial property, 85, 188
  versus floating-rate, 73–74                 commercial loans, need for, 84
Flagged property, defined, 131              Inspections
Flex-space property, 85                      after loan closing, 150–151
  commercial loans, need for, 84             termite inspection, 147
Floating-rate loans                        Insurance impound letter, 144
  defined, 68                               Intercontinental Hotel Group (IHG),
  versus fixed-rate, 73–74                       131
Freddie Mac, 109                           Interest-only loans, 68–69
Freedom of working as commercial           Interest rates
      mortgage broker, 10, 12                generally, 72–73
Freestanding restaurants, 184–185            LIBOR, 73, 74
Funding, 40. See also Closing and            and loan amount, 71
      funding of loans                       locking, documents associated with,
                                                136, 138
Gas stations, 188–189                        1990 through September 2007, 7
 commercial loans, need for, 90              prime rate, 72
General services administration (GSA)        U.S. Treasury Yield, 73
     properties, 189                       Investment-grade tenant properties,
Guarantee, 143                                  187
                                         Index                                    195

Joint ventures, 173                             mortgage or deed of trust, 143
                                                opinion letter of borrower’s counsel,
Kickbacks, 169–170                                 144
Landlord and tenant                             promissory note, 143
  leases, 97                                    settlement statement, 145
Large markets, benefits of, 14                   spousal consent for, 144
LCs. See Leasing commissions (LCs)              tax impound letter, 144
Leases                                          tenant estoppel, 143–144
  capitalization rates, 102                     tenant subordination and
  debt service coverage/debt coverage              nondisturbance agreement, 144
      ratio (DCR), 104                          W-9 form, 144
  landlord and tenant, 97                     Loan quote from lender, 40
  loan to value, 104                          Loans. See specific topic
  net operating income (NOI),                 Loan summary. See Presentation or
      100–102, 104                                 submission to lenders
  NNN lease, 95, 97, 98, 101                  Loan to value
  pro forma analysis form, 103                  leases, 104
  start and end dates, 99–100                   request, impact on pricing, 134–125
  term of lease, 99                           Location of property, impact on pricing,
  types of, 97–104                                 134
  value, 102                                  London Inter Bank Offering Rate
Leasing commissions (LCs), 96                      (LIBOR), 73, 74
Lenders
  main, 109–116 (see also specific topic)      Mailing with USPS (marketing), 24
  presentation or submission to (See          Maintenance
      Presentation or submission to            common area maintenance (CAM),
      lenders)                                    93, 96–98, 102
  pricing of loan (See Pricing of loan by     Management fees, 95
      lenders)                                Market
LIBOR (London Inter Bank Offering              pricing of loans, impact on, 130–131
      Rate), 73, 74                           Marketing
License requirements, 15                       current clients, ideas for reaching,
Life insurance companies, 111–113                 24–25
Lifestyle centers, 84                          e-blast, one-time, 25
Lists for sale, 175                            e-zines, 24, 174
Loan application, 136                          mailing with USPS, 24
Loan commitment, 138, 141–142                  newsletters, sending by USPS, 24
Loan documents, 143–145                        parties, holding, 25
  assignment of lessors interest in leases,   McDonald’s, 187
      144                                     Medical office buildings, 183
  closing letter to title company from        Merrill-Lynch, 11
      lender, 145                             MHPs. See Mobile home parks
  deed of trust, 143                          Mini-perms, 54
  guarantee, 143                              Mobile home parks, 188
  HUD statement, 145                           commercial loans, need for, 86, 90
  insurance impound letter, 144                pricing, 131
196                                    Index


Money, taking out as benefit to client, 27     customers, staying in touch with,
Monthly payment                                   177
 and loan amount, 71                          direct mail pieces, 175
Mortgage Bankers Association, 31, 174         elevator pitch, 178
Mortgage broker and mortgage banker           e-zine, writing, 174
 difference between, 41, 43                   joint ventures, 173
 fiduciary responsibilities, 43–46             lists for sale, 175
Mortgage or deed of trust, 143                newsletter, writing, 174
MSA markets, 130                              other markets, expansion into,
Multifamily properties, 186                       177–178
 Class A, 132, 186                            property managers, cultivating, 176
 Class B, C, D, 186                           referrals, 173
 commercial loans, need for, 84, 86           residential mortgage brokers,
Multilender quote sheet, 136                      cultivating, 176
Multitenant office properties, 182–183         seminars, 174
Multi-tenant strip centers, 81                thank you after loan closes, 177
                                              title companies, staying in touch with,
Need for commercial loans, 81, 84                 176–177
Negative amortization, 69                   Niche, finding, 181–190
Net operating income (NOI)                    acquisition and development (A&D)
 leases, 100–102, 104                             residential and condominiums, 189
Networking to reach new clients, 25–26        apartments, 186
 alumni events, 25–26                         assisted living facilities, 186–187
 board of realtors, 26                        big box retail, 183–184
 business owners, 26                          condominiums, 189
 Chamber of Commerce, 25                      convenience stores, 188–189
 charity events, 25                           credit tenant properties, 187
 escrow companies, 26                         freestanding restaurants, 184–185
 farming, 25                                  gas stations, 188–189
 title companies, 26                          general services administration (GSA)
New clients, finding                               properties, 189
 networking to reach, 25–26                   hotels/motels, 185–186
 in side business, 23–24                      industrial property, 188
Newsletters                                   investment-grade tenant properties,
 sending by USPS (marketing), 24                  187
 writing, 174                                 medical office buildings, 183
Next level, taking business to,               mobile home parks, 188
     173–178                                  multifamily properties, 186
 accountants, cultivating, 177                multitenant office properties,
 bank, partnering with, 173                       182–183
 bridge lender, partnering with, 173          regional malls, 184
 business cards, 178                          restaurants, freestanding, 184–185
 cold calls, 178                              self-storage properties, 188
 commercial real estate brokers,              single-tenant office properties, 183
     cultivating, 176                         specialty lenders, 189–190
 conferences, 174–175                         strip center retail, 183
                                        Index                                  197

NNN lease, 95, 97, 98                        decision, items with impact on,
 net operating income (NOI), 101                130–136
NOI. See Net operating income (NOI)          documents associated with term
                                                quotes and locking interest rate,
Office properties, 85                            136, 138
  commercial loans, need for, 84             flagged property, 131
  need for commercial loans, 79              loan to value request, impact on
  typical low rise/suburban office               pricing, 134–125
     building,                               location of property, impact on
     80                                         pricing, 134
Oil change shops, 90
Open lenders                                 market, impact on pricing, 130–131
  correspondent versus, 115–116              mobile home parks, 131
Opinion letter of borrower’s counsel,        multifamily property, typical Class A,
     144                                        132
Owner-occupied properties, 89                quality of property, impact on pricing,
  commercial loans, need for, 90                131, 133
                                             quoting of deals by lenders, 129–130
Parties, holding (marketing), 25             term request, impact on pricing, 135
Partner                                      type of property, impact on pricing,
  side business, finding right broker or         131
      lender, 21–22                        Prime rate, 72
Part-time business. See Side business,     Professional fees, 95
      selling commercial mortgages         Pro forma analysis form, 103
PCR. See Property condition report         Promissory note, 143
      (PCR)                                Properties needing commercial loans,
Phase I report, 146–147                         common types of, 79–90
Power centers, 81                            convenience stores, 90
Preliminary loan submission, 39,             flex-space property, 84, 85
      123–124                                gas stations, 90
Prepayment penalty, defined, 68               hotels/motels, 86, 87, 137
Presentation or submission to lenders,       industrial property, 84, 85
      119–125                                mobile home parks, 86, 90
  calling first to discuss deal, 122–123      multifamily/apartments, 84, 86
  final loan submission, 124–125              office properties, 79, 80, 84, 85
  hard copy versus electronic e-mail,        oil change shops, 90
      125                                    owner-occupied properties, 90
  preliminary loan submission, 123–124       restaurants, 90
Prestige of working as commercial            retail, 81, 81–82, 84
      mortgage broker, 12                    self-storage properties, 86, 88, 90
Pricing of loan by lenders, 129–138          special purpose property, 89, 90
  amortization request, impact on            warehouse/industrial, 84, 85
      pricing, 135                         Property condition report (PCR), 147
  approval by lenders, 129–130             Property inspections
  borrower strength, impact on pricing,      after loan closing, 150–151
      133–134                                termite inspection, 147
  credit quality, impact on pricing, 133   Property managers, cultivating, 176
198                                    Index


Quote sheet, 136                            client’s knowledge of, 28
                                            offered to clients, 27
Recourse versus nonrecourse loans, 68     Servicing
Referrals                                   after loan closing, 149–150
  commissions, side business, 22–23         treasury versus non treasury,
  first deal, finding, 56                        149–150
  next level, taking business to, 173     Settlement statement, 145
Refinance loan example, steps taken,       Shadow-anchored, 81
     155–162                              Side business, selling commercial
Regional malls, 81, 184                        mortgages, 19–28
Rent roll form, 94                          benefits to clients, 27–28
Repeat business, 27–28                      current clients, marketing ideas for
Reserve accounts, 96                           reaching, 24–85
Residential mortgage broker                 generally, 19–20
  cultivating, 176                          networking to reach new clients, 25–26
  first deal, finding, 59–60                  new clients, finding, 23–24
Resolution Trust Company (RTC), 112         partner, finding right broker or lender,
Restaurants                                    21–22
  commercial loans, need for, 90            referral commission, how to structure,
  freestanding, 184–185                        22–23
  special purpose retail/restaurant         3,000/month, earning, 20–21
     property, 83                         Signing up customer
Retail properties, 32                       brokerage agreement/engagement
  anchored centers, 81                         letter, 61–64
  big box centers, 81                     Signs
  indoor malls, 81                          first deal, finding, 54–56
  lifestyle centers, 84                   Single-family residences, 41
  multi-tenant strip centers, 81          Single-story office properties, 11
  need for commercial loans, 81, 84       Single-tenant office properties,
  power centers, 81                            183
  regional malls, 81                      Single-tenant stores, 81
  shadow-anchored, 81                     Six-figure incomes, how to get to,
  single-tenant stores, 81                     32–35
  special purpose retail/restaurant       Small market, benefits of, 14
     property, 83                         Social Security Administration, 189
  strip center, typical, 42, 75           Specializing. See Niche, finding
  unanchored centers, 82                  Special purpose property:
RTC. See Resolution Trust Company           owner-occupied, 89, 90
     (RTC)                                  retail/restaurant property, 83
                                          Specialty lenders, 189–190
Savings and loan debacle, 120             Spousal consent for, 144
Self-storage properties, 88, 188          Stock, worthless, 112
  commercial loans, need for, 86, 90      Strip center retail, 42, 75, 183
Seminars, 174                             Submission to lenders. See Presentation
Service contracts, 95                          or submission to lenders
Services                                  Survey, 147
                                        Index                                199

Take-out loans, 54, 68                     Typical mortgage deal. See Commercial
Tax impound letter, 144                        mortgage deal, typical
Tenant estoppel, 143–144
Tenant improvements, 96                    Unacceptable practices, examples of,
Tenant subordination and                        167–170
     nondisturbance agreement, 144         Unanchored centers, 82
Term                                       Underwriting loan, 39, 93–105
  defined, 68                                 common area maintenance (CAM),
  generally, 70–72                              93, 96–98, 102
  of lease, 99                               expenses, 95–96
  quotes, documents associated with,         income, 93
     136                                     leases, types of, 97–104
  request, impact on pricing, 135          U.S. Border Patrol, 189
Termite inspection, 147                    U.S. Customs, 189
Term sheet, 136                            U.S. Health and Human Services, 189
Third-party reports, 145–147               U.S. Homeland Security, 189
  appraisal, 145–146                       U.S. Treasury index, 135
  phase I report, 146–147                  U.S. Treasury Yield, 73
  property condition report (PCR),
     147                                   Value, leases, 102
TI. See Tenant improvements
Title commitment, 147–148                  W-9 form, 144
Title companies                            Walgreen’s, 95, 187
  first deal, finding through, 58–59         Wall Street, 113
  networking to reach new clients, 26      Wal-Mart, 32, 187
  staying in touch with, 176–177           Warehouses, 85
Title policy, 147–148                       commercial loans, need for, 84
Training, 31
Treasury versus non treasury, 149–150      Yield spread, 62

				
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Description: Oil and Gas Subordination Agreement Request Letter Example document sample