FREQUENTLY ASKED QUESTIONS
This FAQ section offers a variety of questions and answers on most of the Beyond the Banks' Capital Solutions. Please note that our Case Studies section offers a more detailed analysis of these questions. To simply your research into our programs, please note that the FAQ below offers facts about our platform in the following order: commercial loan programs, "fixer" investments, business loans, and then Referral Affiliates.
How are Beyond the Banks Real Estate Loan Programs different than others?
Many of our loan programs are similar to other platforms, but offer different rates, terms, and underwriting requirements. These are typical, bank alternative loans like non-owner occupied residential properties that need fast funding or second trust deeds, at reasonable rates residential 2nd trust deeds.
How do Bridge Loans work on Commercial Properties?
One of our primary bridge loan programs is offered nationwide, on a variety of major assets. First trust deed loans fro $3 million to $15 million for acquisition, refinance/cash out. Pay rates can be as low as 5% with accrual on negotiated rate. LTV about 65%. Fees are in the 1%-2.5% range.
Please describe an example of a Bridge Loan against an LLC ownership position
Equity loans can be placed against equity positions held in most organizational structures.
Here is an example: An LLC, with 6 members, owns a shopping center (96% occupied, with several national tenants) in Los Angeles. The pre-Covid value was $20 million in 2/2020. The value today is uncertain. During 2Q of COVID -19 the property received 65% of scheduled income. The property owner anticipates a 75%-80% occupancy, late in 2020, after some anticipated tenant closures. This is near a break-even point for the property proforma in the next 12 months. In addition, the proforma indicates a potential $1,000,000 overall cost to 2020 to re--stabilize (for tenant improvements, leasing costs, and rent relief).
In this case, the owners have requested a $1,200,000 loan for these uses, against their overall equity interests. This ownership group can qualify for this loan, without a personal guarantee, at a rate of 5%-7%, with modest fees, and funding in 30-60 days. Please contact us for similar situations in multi-family or office assets, as well.
Do you offer reasonable rates on traditional "EZ Money" loans for residential and commercial assets?
Yes, we do. We have funded hundreds of these loans over the past 25 years. In today's competitive market, on non-owner-occupied houses or commercial properties, we can offer typical rates on 1st trust deeds in the 7%+ range and 9.5% + on second trust deeds.
Some programs offer up to 70% LTV's.
On jumbo loans (over $500,000), with low LTV's (under 65%) in first position, rates can be sub 5%.
The "Fix & Flip" business is growing again. How do these loans work?
Loan rates and terms for "Fix & Flip" residential properties depend on a number of factors, including the experience and resources of the borrower, and the valuation, renovation budget, resale margins and market conditions of the property and location.
Loans can range from 80% of the Improved Value to up to 100% of the Purchase Price, and may include renovation, closing costs, and interest reserve.
Loan rates and terms can be quoted in one day, after information submitted.
Target funding is 7 to 10 days.
No Personal Guarantees.
Call for attractive rates and terms.
Please describe your background with "Fix and Flip" projects.
Robert Robotti has been involved as a principal, investor, renovator, broker, lender, borrower and joint venture partner in over 150 "fix and flip' scenarios for houses and 2-4 unit buildings, in the greater Southern California area. He has syndicated capital for over 120 of these projects, with a significantly positive net profit performance.
Marilyn Robotti, has acted as a project manager, project designer and real estate agent on over fifty of these projects. She has an amazing ability to quickly transform these assets into an enhanced resale value, in an efficient and cost-conscious manner.
As a Real Estate Broker can I locate/and sell deals for you?
Yes, we believe that 2020 and 2021 will offer an opportunity to once again enter this market. We are seeking multiple transactions that can offer high arbitrage profitability on resale.
Target properties will be acquired in the $500,000 to $1,200,000 range and typically require renovations of $25,000 to $150,000, which allow a significant value add resale price.
We welcome engagements with real estate agents. We prefer off-market listings or pre-list opportunities for best pricing scenarios on all cash offers, with closings in 10-14 days.
As an Investor can I participate in your Fixer acquisitions?
Yes, most of our acquisitions are made with one to three investment partners, plus our own capital. Terms are negotiated on a per deal basis. We list in-house, with MARKETING AFFILIATE AGENTS on resale to increase net profit. Here is an example of a transaction with investor capital, with hold period of 6 months.
Property Type: SFR in North San Diego County
Resale Price: $1,200,000
Purchase Price: $1,000,000
Purchase closings costs/loan fees = $ 20,000
Renovation Estimate: $ 40,000
Carry Costs - 6 mo.: $ 54,000 *
In-house List, resale costs $ 50,000
Total investment with buy/carry costs = $1,164,000
Net Profit on resale $ 36,000
Cash Placed: $214,000
Loan Placed: $900,000
Cash on cash net profit: $ 36,000 on $214,000 in 6 months = 16.8%
Rate of return, annualized: 33.6%
Target rate of return: 25.0%
* Carry Costs: ($900,000 loan @ $8000/mo. + tax, insurance ($1000/mo.) = $54,000
As a Buyer of a Fixer property what kind of Loan Programs do you offer?
We offer a wide variety of Beyond the Banks' Loans, typically provided by high net worth private investors or Family Funds.
Rates vary from 7.5% and up. Fees range from 1.5% and up.
LTV's, for qualified borrowers and projects, can climb to the lesser of 80% of the resale value and 100% of the purchase price.
Who is Avenue 3? Why will they remodel my home with their own money?
Avenue 3 is an affiliated resource, where Beyond the Banks can participate as a referral source of clients, or as the only investor in a particular remodel transaction.
What kind of Business Loans do you offer?
Beyond the Banks has affiliate relationships with well-established small and mid-size business lenders, nationwide. Lending platforms are highly reputable and experienced, featuring standard operating procedures, underwriting and funding guidelines.
The types of loans that can be placed include: Automotive related properties, SBA, Equipment Financing, Energy Lending, Factoring, Merchant Cash Advances, Wholesale Purchase Order Financing, International Projects, Inventory Lending, and all types of Real Estate related financing.
What is Purchase Order Financing?
Purchase Order Financing is a cash advance from a specialty finance lender that is used to pay a supplier for goods that the buyer is reselling or distributing to their customer.
Funding requires a bona fide purchase order. Note: a purchase order is a legally binding document between a supplier and a buyer. It details the items the buyer agrees to buy, at a specified price point, and outlines details of the shipping and delivery dates, and terms of payment for the buyer.
What is a Merchant Cash Advance (MCA)?
An MCA was originally structured as a lump sum payment to a business in exchange for an agreed-upon percentage of future credit card and/or debit card sales, based on a forecast of future sales activity. MCA can also apply in general, to short term business loans. This is traditional for restaurants and retail stores.
How does an SBA loan work?
Beyond the Banks has a strong affiliate lending source, previously, a banker, offering a variety of SBA loans, which can be extremely valuable in the next stages of the 2020-2021 recovery.
The SBA (Small Business Administration) does not make direct loans, it guarantees up to 85% of the loan amounts and sets guidelines for its funding partners (lenders, banks, community development organizations and micro-lending institutions, among others).
The typical loan programs max at $5 million. SBA loans can be used for start-up costs, buying an existing business, working capital, equipment, land and real estate, refinancing debt, and more.
How does Accounts Receivable Financing Help Small Business owners?
Small Businesses with significant monthly receivables can apply for an Accounts Receivable (A/R) loan from a Factor to improve their cash flow, especially in a seasonal, or growing business. A/R is a current asset on the balance sheet (collectible in less than 12 months).
How does your Affiliate Referral Program work?
Beyond the Banks Affiliate Marketing Program offers significant opportunities to engage in our referral program. You can earn a valuable, new and easy stream of income. At the same time, you may enjoy learning about the world of alternative business and real estate loan programs.
Affiliates can be highly involved in each transaction and can earn significant fees from each referral. Others can earn "finder's" fees for only submitting a qualified name and contact number for a referral transaction.
If I become an affiliate do you have any marketing training programs?
Yes, there is a series of valuable marketing techniques offered through George Blackburn, on a wide range of topics, specifically for this purpose.
Do you offer any other educational material to further enhance my learning this business?
Yes, we have included in this program, several valuable articles by industry legend, Dan Harkey. Please visit our educational landing page here.