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"Your Financial Relationship Partner"
Choosing A Commercial Lender

with

Trust Management Services Inc.

Success in originating commercial mortgages begins with a professional team having expertise, with experience and knowledgeable understanding of what creates value in income producing properties. Unlike residential mortgages, which focus on the BORROWER, commercial lending concentrates primarily on the PHYSICAL REAL ESTATE; specifically the INCOME PRODUCED by the real estate, and that income's ability to service the loan debt to be incurred. For these reasons, the proper development and prudent analysis of the property operating statement is paramount to understanding and structuring justifiable modifications concerning a property's underwriting

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Origination of Commercial Mortgages requires this component, Trust Management Services Inc., through their associations and recommendations is your knowledgeable team.

KNOWING and UNDERSTANDING...

of the borrower's wants, needs/requirements and desires regarding their transaction, and

KNOWLEDGE.......

of the Commercial Mortgage process, underwriting, risk analysis and creation of a correct loan package.

It is true that a borrower can contact his/her local friendly banker and apply to obtain a commercial mortgage, but will their friendly banker be able to obtain more attractive and more suitable financing, at a more competitive rate than the borrower will access through the engagement of the services of Trust Management Services Inc.?

When the first thought of need for a commercial mortgage emerges, everyone speaks of seeking out the lowest rate; however, there are key elements to understand before you can determine if "rate" is the primary factor, some of these elements include:

webassets/luxembourg_dexia_building.jpgRequested loan term
Fixed or variable rate
Tolerance for prepayment penalty, lock out or yield maintenance (eg. How long will the borrower hold the property)
Willingness to pay upfront fees (eg. Underwriting, appraisal, engineering, environmental, etc.)
Recourse options (will the borrower realize a tax benefit from structuring a non recourse loan transaction verses full recourse? If the borrower requires non-recourse financing, is it a likely conduit deal?)
Cross fault, cross collateralization, ability to obtain release provisions (ability to obtain lease provisions; does the borrower require the ability to obtain lease provisions?)

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webassets/commercial_buildings.jpgAfter investigating, the borrower may come to realize they may be best suited for a conduit type of transaction, as compared to a local bank transaction. Our ability to suggest and present several financing options creates significant value to the borrower. It may very well be that there is more than just ONE BANK or LENDER interested in your particular circumstance and property!

Some determining factors to originate a commercial loan are: the quality of the property, the amount of a particular loan, the level of analysis and data collection, the application of knowledgeable professionalism in demonstrating the main underwriting issues of the property, and the ability to justify and support compensating factors, regarding the loan underwriting.

Knowledge of the underwriting process and risk analysis add value for the borrower; often the appearance of a deal at the time of first submission differs from the end result of the final term sheet. Why? Because cash flows vary for every commercial property, and unless there is an understanding of the issues, the underwriting risks in the loan package therein may arise lender difficulty to provide an accurate quote.

For example, for a lender to provide an accurate quote on a retail property, the lender often reconstructs the operating statement, subtracts a vacancy reserve, normalizes income, determines expenses using expense growth rate, and then applies property specific underwriting parameters in order to stabilize the Net Cash Flow, direct capital value, Loan to Value and the Debt Service Coverage Ratio. These items are all part of the "first cut" activities that knowledgeable associates complete as part of the presentation package provided on your commercial property.

Commercial loan approvals are quoted by the lender reflecting the perceived risk factors of the loan, which reflect the rate of interest to be offered and other terms and conditions including lender fees. A professional presentation of the property prepared for the lender to know how the property fits the general underwriting guideline matrix, is all important to attain the best possible loan offer.

General criteria, that assist a lender to know if the application presented is suitable for consideration, will set the basis for a loan approval or decline. Some of the general criteria include: webassets/office_bldg.jpgshopping_center.jpg

Property Type
Lending Limitations
Geographical Location
Loan Term and Amortization
Occupancy
Loan to Value Ratios
Debt Service Coverage Ratios

It is all important to cover this information, and more, in a loan request - along with the appropriate support to justify the income and expenses, including how the determination of Net Operating Income, Net Cash Flow was calculated with the procedures implemented in arriving at the proposed Loan to Value and Debt Service Coverage Ratios.

The key to originating a commercial mortgage include understanding the deal points of the borrower and knowledge of application in analyzing the underwriting risk of the transaction (completing of the "first cut") prior to presenting the submission to lenders. Completion of the presentation on the property will enable a mutual understanding of the property issues, and provide an ability to communicate these issues to the lender and negotiate the best terms and rate for the borrower.

Contact us today to discuss submission of your Commercial Mortgage needs and we can prepare an excellent presentation for the lender to make a final decision to maximize your position and request for financing.

Either you, as the borrower, or the Trust Management Services Inc.'s team of associates can negotiate the detailed presentation with a lender of choice. You may fill in the online application, once completed you are directed to the Shopping Cart where you pay for the initial application review fee.  Our experienced represenative will then contact you to discuss the follow through procedures to achieve a succesful loan.  We look forward to working with you!

"Your Financial Relationship Partner"

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