Page 184 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

Conduit Lenders

These are Wall Street firms such as Lehman Brothers and Citigroup.

They pool their loans together into buckets (the Wall Street suits like to
call them tranches ), thus creating mortgage - backed securities. They then
sell them on the open market. The loans tend to have higher interest
rates, but are sometimes less conservative with their qualifying criteria.
Other conduit lenders include insurance companies and pension
funds. These companies usually only want to lend amounts of several
million dollars at a minimum.
Here are some general guidelines: When you need money to rehab
a property, consider local banks. Go to national lenders when you
have a straightforward cookie - cutter deal, and approach conduit lenders
when you require the lender to be more creative in its underwriting or
due diligence process to get you approved.

Your Mortgage Broker — Money Well Spent

Mortgage brokers are to investors what sports agents are to athletes.
They ’ re expensive, but you ’ re paying for their vast knowledge and
their ability to present you in the best possible light.
Good brokers have a long list of contacts at all three of the types of
lenders I mentioned earlier. Not only can they help you to judge
whether the deal you ’ re reviewing is a winner, but they ’ ll tell you right
away whether it can be financed, and on what terms. This saves you

time and money.
Cultivate these people because they also know everyone in town.
Need a quick drive - by on a property, or a reference to a good manage-
ment company or attorney? Your broker will know.

The Many Types of Loans

We just discussed lenders; now let ’ s look at the different types of loans
that are available.

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