Shayne Fowler

REMINGTON FINANCIAL GROUP, INC.

We have immediate access to capital for the following deals:

•· New construction, 70-90% complete, and the bank can't continue funding the project

•· Existing income producing properties where the bank loan has matured, the bank can't rollover or extend the loan, and the principal is unable to refinance the loan

Our investors and lenders require the following:

•· Solid developers and/or owner operators

•· Banks willing to accept payoffs at a discount of 20-50%

Typical deal structure:

•· Investor or lender will buy or payoff the loan from the current bank at a discount

•· They will take an equity position in the project and if new construction, provide the funds to complete the project

•· Current principal will retain an equity position in the deal and either finishes the development and/or operates the property

REMINGTON FINANCIAL GROUP, INC.

We have immediate access to capital for the following deals:

•· New construction, 70-90% complete, and the bank can't continue funding the project

•· Existing income producing properties where the bank loan has matured, the bank can't rollover or extend the loan, and the principal is unable to refinance the loan

Our investors and lenders require the following:

•· Solid developers and/or owner operators

•· Banks willing to accept payoffs at a discount of 20-50%

Typical deal structure:

•· Investor or lender will buy or payoff the loan from the current bank at a discount

•· They will take an equity position in the project and if new construction, provide the funds to complete the project

•· Current principal will retain an equity position in the deal and either finishes the development and/or operates the property

Investment bankers may be a good funding option for mortgage brokers and their clients
Andrew Bogdanoff, president, Remington Financial Group
As published in Scotsman Guide's Commercial Edition, January 2009

Although top-tier banks have slowed credit issuance, experienced mortgage brokers understand that funds are still available for those who know where to look.

Some brokers who have customarily secured funding through traditional banks are finding success by developing relationships with investment bankers that have private, proprietary lending sources. These lending partners typically are more flexible than traditional banks when determining where to place their funds and therefore often can assist a wider variety of borrowers.

In addition, they often have money available to lend for reputable commercial deals when traditional lending sources do not.

Keep in mind, too, that many investment banks have secured funding for borrowers who have been turned down by other institutions. Because of this, these funding sources are well-versed at finding investment dollars for borrowers who have had trouble getting money elsewhere. Such problems often arise because the borrowers:

· Have questionable credit;

· Are a small business and viewed as risky by larger banks; or

• Are dealing with financial institutions that don't have the ability to lend.

Choose a partner

Brokers who move beyond the idea that mortgage funding can come only from traditional banks can better maintain their current business and even find new opportunities. There are some key things to look for when investigating investment-banking partnerships.

An ideal investment-banking partner will have considerable financial experience. Brokers should understand how long their potential partners have been in business and for what types of deals they have secured funding.

Many of these private lenders specialize in a particular kind of loan. Brokers, however, often will be better-served by building rapport with a company that can find financing for several loan types. This additional layer of practical knowledge will give you confidence that your customers will be well-served regardless of the type of loan they require. Finding a company that has a deep knowledge of mezzanine, hard-money, construction, bridge and other types of loans is necessary.

Also try to understand more about these companies' potential funding sources. Ask how long they have partnered with their investors and on what type of deals. This information will help you build confidence that you and your clients are in good hands.

Help new clients

It's not just borrowers with some kind of "blip" in their background (e.g., a credit problem or a lack of experience with a particular property type) who are having trouble securing funding. Today, even the crème de la crème of the borrowing community is having a harder time getting a loan.

Keep your eyes open for opportunities to help borrowers you might not have otherwise considered. Your regular clientele will still need your help and guidance to secure funding and push deals through, but so will this new crop of valuable borrowers. By creating a relationship with a reputable investment banker, you can close more deals that make money for all parties.

Creating a strong relationship with a high-quality investment-banking company can help you confidently connect your clients with a lending base they might not have otherwise known about. Such moves also can help you feel more secure about your own business's future.

Andrew Bogdanoff has more than 35 years' commercial lending experience and founded Remington Financial Group in 1993. Bogdanoff has served as the company's president since its inception, and, under his leadership, RFG has closed billions of dollars in transactions. Andy can be reached at andy@remingtonfg.com. For more information on Remington Financial Group, please visit www.Remingtonfg.com

Andy Bogdanoff, founder, Remington Financial Group
As published in The Niche Report, December 2008

For commuters crossing the Golden Gate Bridge to get to work, the value of a highly capable, stable bridge crossing is priceless. The same can be said for bridge loans, which are generally low cost, are used for a specific purpose and help borrowers "bridge the gap" between funds they need and funds they will soon have.

Just like the name implies, a bridge loan is a solid option that takes a borrower from one point to another. Used in commercial and residential lending alike, a bridge loan is another viable lending option that skilled brokers can use when appropriate

Definition of a Bridge Loan

The most clearly defined characteristic of a bridge loan is the fact that the lender requires a specific exit strategy before the loan is made. If a very clear, precisely drawn exit strategy does not exist, the lender will not move forward with the bridge loan and might refer the borrower to a different kind of loan type.

Borrowers frequently use a bridge loan to secure funding required for buying a secondary property, often times before their initial property has completed the sales cycle. For example, assume a borrower needs $100,000 as a down payment for a new property he wants to purchase. He has the equity in his existing property, which is set to close in the next 60 days. The down payment for the new property is due sooner than the initial property will close. In this instance, a bridge loan can provide the $100,000 that the borrower needs in the timeframe he needs it.

Bridge loans, which carry a small amount of risk for the lender due to the requirement for a clearly articulated exit strategy, usually close quickly. Using the previous example, if a borrower walks in with a purchase agreement for property number one, the underwriting process is significantly simplified and the loan funds more quickly.

Not to be Confused with Hard Money

For such a frequently used loan, much confusion exists about a bridge loan. It shares some of the same characteristics with its cousin the hard money loan, which leads a high number of borrowers to confuse the two types. Both bridge loans and hard money loans can be quick to close, are used for a relatively short period of time and have limited or less severe underwriting processes, but significant differences exist between the two loan types.

Bridge loans absolutely require a definitive exit strategy. This is best highlighted using the previous example of a borrower that wants to buy a second property before selling his first property. A lender will not accept the desire to sell the first property as an appropriate exit strategy. There are too many unreliable variables such as when the first property will sell or for what price. A lender would, however, accept a signed sales contract for the first property as a solid exit strategy since the contract spells out exactly where and how the borrower will repay the debt.

Also, a bridge loan frequently has a loan to value ratio from 70 to 95 percent, whereas a hard money loan will not exceed 50 percent loan to value. Points and fees associated with a bridge loan are low and the rates are generally inexpensive, unlike a hard money loan, which is known for being costly.

Additionally, hard money loans, which do not look as closely at credit or cash flow, put the emphasis on collateral. The lender will scrutinize the collateral to understand if enough exists to liquidate the asset and collect the debt amount should the borrower renege on the loan. Because a bridge loan focuses so heavily on the exit strategy, the risk profile has been reduced significantly, meaning that the lender does not have to rely so heavily on using collateral to repay the debt should a problem arise.

What to Remember

Bridge loans are a valuable option for brokers to keep in their stable of lending options. It's fast, reliable and there is a broad swath of borrowers in need of such a loan.

The important thing to remember about a bridge loan is that a very real exit strategy is a must for any bridge lender. In this vein, a purchase agreement that verifies that there is no mortgage or structural contingency will signal to the lender that the loan can and will be repaid. Once this requirement is met, a bridge loan can move quickly at a higher loan to value and with lower rates, fees and costs.

Keep in mind too, that well over 75 percent of borrowers that say they want a bridge loan really qualify only for a hard money loan. It's very common for requested bridge loans to convert to hard money loans because the requirements for a bridge loan can not be met. So, simply because your client is not able to secure a bridge loan does not mean that the deal is dead in the water. Talk to your lending partners to understand the breadth of lending plans they offer; the best have a complete portfolio and will work with you and your client to find a loan that ultimately meets everyone's needs.

Andrew Bogdanoff has more than 35 years' commercial lending experience and founded Remington Financial Group in 1993. Bogdanoff has served as the company's president since its inception, and, under his leadership, RFG has closed billions of dollars in transactions. Andy can be reached at andy@remingtonfg.com. For more information on Remington Financial Group, please visit www.Remingtonfg.com

Hearing what your client is really saying during the application stage is crucial to funding
Andrew Bogdanoff, President, Remington Financial Group
As published in Scotsman Guide's Commercial Edition, November 2008

For commercial mortgage brokers, listening is a vital skill. When considering a business deal, brokers should interview their clients directly during the application process.

In this phase, listening carefully is important while gathering information about what a client has done in the past to secure funding for a particular deal.

Listening to answers about past efforts to secure funding is important for two reasons. First, brokers can use this information to determine the best loan type to secure. Second, clients may not be completely honest when answering this question.

Because the first information borrowers provide might only be brushstrokes of the real answer, brokers must be on their toes to spot any discrepancies.

The fact that borrowers are talking to a broker may be a clue that they have tried other routes to secure funding for their commercial deals. It makes sense for a client to first visit a banking partner to fund a new business deal. Why would clients be willing to pay a brokerage fee if they haven't explored fee-free options?

By really listening to clients' answers, brokers can start piecing together the previous-attempts-at-funding puzzle.

The confession

Brokers should consider that the information borrowers initially provided about funding efforts have been embellished. Good brokers rely on a combination of what they hear and what their gut tells them to determine when clients are telling the truth. Brokers should push for more data if they feel that accurate information is not being provided.

One way to approach borrowers is to ask them what about the deal would make a lender reluctant to provide financing. Because there are downsides to every deal, borrowers should be able to provide some thoughts. If they cannot, continue to ask questions.

For example, ask them how much experience they have with similar projects. If they have limited or no experience, it could be a red flag that they have been turned down for funding based on a lack of expertise.

Other indicators

Brokers can read between the lines to root out additional information that borrowers might not share directly.

For instance, the type of deal being presented is a means to access additional information. If the deal is a refinance of an existing project, ask if there is a current loan on the property and what its status is. Answers to these questions will help a broker determine why the borrower is not asking for funds from the existing lender, or if the loan is delinquent.

New projects leave the door open for brokers to discover vast amounts of information. For example, if the borrower is requesting funds to build a new housing development, the broker might want to ask if comparable homes in the area are selling well or if there are unsold units. The answers to these questions can determine the viability of the concept.

The broker also should discuss the borrower's credit history. Ask if the borrower has ever had any litigation, bankruptcy or foreclosures, and encourage the client to share this information openly and truthfully. If one of these things has occurred, there might be explanations that would allow a deal to still proceed.

The result

Feeling comfortable that a client is being honest about past attempts to secure funding is critically important. Many clients don't realize that small cover-ups will come out during the underwriting process or that a less-than-truthful answer can complicate the deal or even deem it invalid.

Brokers should listen carefully to a client's answers and be at ease asking further questions. By doing these things, commercial brokers can determine if their clients' deals make sense