I need a professional evaluation of this loi- why would a company request 7500 non refundable fee after the first company requested 3500- ? And never promise funding- do their best effort? If you email me I will fwd the letter to a professional for advice as to is this a legit company or a scam. Thanks, Val
huh? is this company a lender?
My partners and I have contracted with a broker company that has a loi from a lender that wants 7500 up front non refundable in addition to the upfront 3500- non refundable and will do their best to fund. I feel this is a bad deal the broker company never told us that the lender company would also want an up front fee. (I tried to explain that we should not give any cash non refundable up front- they didn’t listen) Advice? Should we RUN???
We can’t give good advice because we don’t have much info. We don’t know your offer price, terms, what you’re buying, rate of return, setup, etc. $7500 on a Mmllion-dollar property is not much.
Sounds like you aren’t experienced and probably shouldn’t do the deal because you don’t really even know how to ask questions. That’s not to pick on you. I’m being genuine when I say that you should get an expert who knows what they’re doing or back out.
When you ask for help, there are basic questions people are going to ask. If you don’t know what info to provide to get the right help, you’re in a bad spot.
First time on lending side over 23yrs on building side What is and can I expect in a commercial loan process. Thanks
Be very careful here. Most upfront fee based companies are either a scam or they aren’t confident enough to place the loan. Never pay upfront fees to a broker - I learned that the hard way.
Lenders will typically have upfronts fees such as application, appraisal, engineering and environmental reports - I have seen $2500-$7500 on commercial properties. Some properties maybe more depending on the total price but this money is put to good use with the lender. It’s the $3500 that is questionable.
Brokers should never be paid upfront. Their job is to close loans and that’s when their fee should be earned and payable.
What company are you dealing with?
Starlite Funding
I’ve heard mixed things on starlight funding and I would be very apprehensive to put forth any sum of money to brokers before a deal was closed.
Could you post your commercial deal roughly?
If let me start by saying we have poor credit related to health issues. We are now trying to repair our life etc… My husband has over 23 yrs in the construction industry and decided it was time to use his job experience to benefit our family. We created our own company. We were not able to get approved on our own and had to find a few partners. I met someone and her to partners agreed to form a joint venture. The project is 30 duplexes being built in Knob Noster Mo we need a 4 million dollar acq. and dev con loan. The project completed will be worth 5.7 mil. One of the partners who has the funds to put into the project submitted to the company I mentioned above. They requested 3500.00 up front before they would even show us a loi from a lender. The loi I got was a fake name for confidential reasons they said. If we sign and accept the terms brought forth they were requesting 7500- up front and all of these requests are not refundable. I keep telling everyone that this is off and we are going to loose the project because we need a closing date of June 2. They are all angry at me for wanting to submit to a new lender and call the 3500 a lost but valuable experience. I just have alot of flags in my mind from all of my research on paying upfront fees if we are still shelling out money privately for the enviromentals, appraisl , title wk etc… I wish I could find a new joint venture company who would give me and my husband the help we need w/o all the costly mistakes. I don’t want to throw in the towel but I feel like the ones shelling out the money are going to suffer a loss. If anyone can help me figure out a way to get this done quickly please give me some serious advice. I personally only have a dream to lose but others have money involved. If you have any other questions feel free to email me I also have a small opportunity to buy the partners out and work with someone else if they are willing to help me get this straight. I am running out of time. Val
For a deal like this any lender is going to require you to bring money to the table, off the top of my head you’re probably looking at minimum $400,000.
If you have the money to bring and sufficient experience I would keep Star Light funding on the back burner and look for different forms of financing, specifically a direct lender; they are not that hard to find for these types of deals.
What kind of financing are you looking for? Hard Money, traditional loan etc?