Buying 12 units - Commercial lender wants to charge 2 points

[Clinton Riskus]

Commercial lender wants to charge 2 points plus $2795 app fee on a fixed 5.75% 30yr.

I have a 750 fico total cost is $330 loan is 280k. I thought this was a hot deal just wondering if you guys are getting better deals on similar loans right now. Please advise. Thanks.

[Joel Owens]

Wouldn't do the 2,795 app fee.

Could be a direct lender or just a point taker. The app fee equals about 50% of the point fees they are going to take so red flag.

You run into daisy chains where people are just affiliates of a lender and have no clue how to underwrite a property or loan. They can just keep taking fees and never close anything.

2 points PAID at closing is not out of the norm for a deal this small. 280k loan is very small.

I do larger commercial deals transacting. I have a hard time these days getting lenders to work on 5 million loans minimum. They have 50,100 million single property loans in the pipeline. They tend to get 1 point on those larger deals.

Friend of mine just closed a larger loan last month. After splitting with his boss he made 334,000 fee for his portion.