Upfront Lending Fees? Is This B.s.
Would you pay for somethign w/o and assurance they will fund. This sounds like another advance fee scam. Or if this the nature of commercial lending today?
Lender will commence formal due-diligence of the subject transaction upon receipt of
a nonrefundable deposit of $20,000 made payable to Lender. This fee will cover the services to be provided by Lender to Applicant under this letter, including its review of third party reports and studies (including surveys, engineering reports and environmental assessments), but it will not cover costs incurred by Applicant in obtaining and providing to Lender such third party reports and studies. If the Project is financed by a financing source obtained by Lender on behalf of Applicant, the deposit will be credited against any commission or other fee that may be payable by such financing source to Lender upon consummation of the financing (see paragraph 13 below). Any travel expenses will be approved in advance by Applicant and paid by Applicant.
Sounds like a commercial loan. None of the regulations that apply to residential lending apply to commercial so up front fees are common. Usually a processing fee to package and assemble the paperwork into a file that a lender will accept. Check that the lender can and has actually funded loans similar to yours in the last 6 months. Make sure you get a list of required documents ahead of time and be prepared to actually produce everything the lender will ask for. This is because most commercial loans do not close due to the borrower not submitting all the requested documents.
Yes, the fact that it is "Non-Refundable" raises red flags.
While I have heard of payments upfront for some brokerage services, they should always be contingent on the services provided. What is their incentive if they already have $20K from you?
JS.
I just asked them to perform. Give me a loan COMMITMENT and I will pay the fees... I found 2 compants searching the firm name +scam
Actually it is quite common to charge fees for researching to find a loan.
The only reason I know this is because of my friend who is on this site is a commercial lender, now with CIT.
He charges a 2k retainer, plus a 1 point success fee.
Commercial lending sometimes takes up to 6 months to complete.
The program and rules ae there. The issue is no banks are loan underthat program.. Only 1 was funded last year.
I found a CU in OR that does them, but you have to be a member which means living, working or worshiping in a specific geographic area in OR.
I was think that since this is so underutilized, I would start a SBA approve lender that would be THE CAPLine lender in the nation.
My opinion only: not legal advice. Set your expectations on price and if they do not meet or exceed it, protest the valuation. If you still are not satisfied, contact a competent eminent domain attorney in your state.
Regarding "How would you evaluate this property considering the zoning change and income stream?" A current independent appraisal would provide this information. The appraiser would provide valuation via comparable sales, replacement and the income approach. The city most likely would do a similar thing within their own department... my guess is that the numbers would be relatively consistent across appraisals.
even with the R3 zoning, what is the land use (4units/acre, 50/acre), and do you have enough land to take advantage of it?
R3 might have a 1/2 acre as a minimum parcel size, where as the R1 allowed at 8K parcel size.
IMHO, income only contributes to value if the buyer will use it as an income property.