@Jaysen Medhurst
Here is the rest of the agreement I am concerned about opening a bank account with them sounds fishy. Also after in year 6 he mentioned the rate can float or I can refi with them as he says Ted it’s most likely what the will do. My frustration is I’m paying closing cost at the beginning and again at year 6 is my understanding. This makes no sense I’ll be paying closing cost of ~ 60 k to get a lower rate though-out the life of the loan and that will come form my equity right ? unless I’m Getting this all wrong
Good Faith Deposit:
13. Conditions/ Documents prior
to Loan Approval:
$6,000 to cover third party costs (due with executed LOI)
a. Submission of complete loan application package and other documents required by the Lender for underwriting, closing, and disbursement, including without limitation the financial information of all affiliated legal business entities for the most recent fiscal period;
b. Personal Financial Statements with Bank's Schedule of Real Estate Owned of all sponsors signed and dated within no more than 6 months of LOI date;
c. Subject to satisfactory review of lease agreements with lease payment verification;
d. Minimum of 2 years of Borrower Tax Return(s);
e. Minimum of 2 years of Personal Tax Return(s) (Federal Returns with K-1s);
f. Verification of Liquidity of Borrower(s) and Guarantor(s);
g. Subject Debt Service Coverage Ratio shall be 1.30x and above;
h. Global Debt Coverage Ratio shall be 1.25x and above;
i. All outstanding building violations (including HPD “C” violations) should be cleared before closing (if applicable);
j. Most recent DHCR filing summary (de-regulation documentation if applicable);
k. Satisfactory Mortgage Verification (if applicable);
l. Borrower shall open its primary operating account with the Bank with a minimum quarterly average balance equal to 50% of its monthly rental income. A primary operating account means an account owned by the property owner (borrowing entity) for all revenues and expenses associated with the subject property;
m. Borrower shall open a security deposit account with the Bank containing all tenants’ security deposits generated from the Collateral Property.
a. Bank Approved Appraisal with maximum LTV of 65%; b. Satisfactory Phase I report ordered by the Bank;
c. Satisfactory Title Report.
14. Third Party Report Requirements:
15. Post-Closing Requirements:
Page 2 of 4
a. Borrower shall open its primary operating account with the Bank and shall maintain a minimum quarterly average balance of 50% of its monthly rental income plus entire security deposit. Borrower shall maintain Automatic Payment Transfer for life of the loan;
b. Borrower shall maintain its primary operating account with the Bank with a minimum quarterly average balance equal to 50% of its monthly rental income for the life of the loan;
c. No subordinate financing permitted on the properties;
d. Annual submission of Tax Return for Borrower(s);
e. Annual submission of Tax Return for Guarantor(s);
f. Submission of Personal Financial Statement(s), Liquidity Statement(s), Rent Roll(s), Lease Agreement(s) upon request by the Bank;
g. Subject Debt Service Coverage Ratio shall be maintained 1.30x and above;
h. Global Debt Service Coverage Ratio shall be maintained 1.25x and above;
i. Property tax escrow with the Bank is required with a 2-month cushion;
