Page 189 - Trump University Commercial Real Estate 101

Use a Money Multiplier

what they give you. If your deal is good enough (where did we see that
point before?) there will be other lenders who would love to do busi-
ness with you. If there is something in the term sheet that you would
like to change, call the lender and start negotiating. If you ’ re not com-
fortable negotiating the first time out, then have your attorney do it

and listen in on the call.
Attorneys who specialize in real estate are well - versed in negotiat-
ing term sheets. One key negotiating point is the amount of money
that the lender will require up front to start the process. It is likely to
be between $7,000 and $25,000. One lender wanted $95,000 from me
and I got ’ em down to $9,000.
Part of this up - front money is for the costs that lenders incur at
this stage. These include reports from the third parties who are doing
the appraisal, the environmental study (or studies), and the property
inspection. Make sure the lender orders the appraisal as soon as possi-
ble, because it can take from four to six weeks to complete. If there is
anything that consistently holds up deals, it ’ s that appraisal.
The lender will not start the process until the initial fee is paid and
a copy of the purchase and sale agreement, signed by both parties,
is submitted. Why? Because it ’ s not a deal until both parties sign
the P & S.

Someone at the lender ’ s office now gathers up all these reports
from you and the lender ’ s own experts, and sends a package to the
lender ’ s underwriting unit. That ’ s where they decide whether to do
your deal.
It ’ s at this stage that you can improve your chances immensely.
Create your own presentation to the underwriter. Of course you will
not be in the room when your deal is formally discussed, nor are you
likely to meet the underwriter. That ’ s all the more reason to prepare a
package that can be in the room, and can do the talking for you.
The goal is to present your deal in such a way that it answers every
question that might be in the underwriter ’ s mind, even before it ’ s
asked. You do this by presenting an overwhelming amount of informa-
tion about yourself and the deal.

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