11/12/14

Welcome to.
Cal Mutual

Construction Transactions and Financing:

Get more deals!

Shane Dailey

Since 2000
Broker /President - Cal Mutual
Director Residen,al Brokerage Services - American Spectrum
Radio Show 97.1 FM / AM 830
Taught Mortgage Financing at Pasadena Community College and
Cerritos Community College

Cal Mutual

Cal Mutual

Residen,al Real Estate

Since 2003
Previously The Smart Money Group
Real Estate / Mortgage Brokerage / Direct Lender

Over 30 years experience

Business Finance Consul,ng

Construc,on Financing
Construc,on Consul,ng
Development
SBA Financing

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American Spectrum Realty, Inc. is a real estate investment company that owns,
through its opera,ng partnership, interests in oce buildings, industrial buildings,
self storage, retail proper,es, and apartments throughout the United States.
Currently owns, manage, or lease 95 proper,es totaling over $1 billion of value in
18 states throughout the US.
Commercial Real Estate sales, mortgages, property management, leasing and risk
and insurance management.

Publicly traded since 2001 on the NYSE (AQQ)

A premier storage management company comprising of over 11,000 units and 1.7
million square feet.

Over 25 years experience in commercial and income property troubled asset and
receivership.

The Perfect Partnership

Cal Mutual

Cal Mutual
Topics for Today
Who Are Your Target Clients And How Do You Find Them?
What Are The Parts To A Construc,on Transac,on And
Loan?
What Kind Of Proper,es?
How To Structure The Transac,on?
Loan Structuring And Underwri,ng Guidelines.
How To Use Construc,on Loan Programs To Sell More
Property?
How To Build Long Term Repeat Clients?

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Cal Mutual

Construc7on Transac7on
Basics

Cal Mutual
Construc7on Transac7on Basics

Every Construc,on Loan has Many

Layers of Business for You..

Cal Mutual
Future
Deals with
the
Contractor

Acquisi,on
of the
Property
Construc,on
Loan

Renance
Loan

Buyer Loan

Buyer
Purchase

Lis,ng

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Cal Mutual
Construc7on Transac7on Basics

What is a Construc,on Loan?

Cal Mutual
Construc7on Transac7on Basics

Who gets a Construc,on Loan?

Cal Mutual
Construc7on Transac7on Basics

What kind of proper,es can get a

Construc,on Loan?

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Cal Mutual
Construc7on Transac7on Basics

Whats the Dierence Between an

Acquisi,on Loan and a
Construc,on Loan?

Cal Mutual

The Construc7on
Transac7on Process

Cal Mutual
Construc7on Transac7on Process
1. Write Oers and Acquire Property
Acquisi,on Loan
Cash Close

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Cal Mutual
Construc7on Transac7on Process
1. Write Oers and Acquire Property
Acquisi,on Loan
Cash Close
2. Package the Loan

Cal Mutual
Construc7on Transac7on Process
1. Write Oers and Acquire Property
Acquisi,on Loan
Cash Close
2. Package the Loan
3. En,tlement Period

Cal Mutual
Construc7on Transac7on Process
1. Write Oers and Acquire Property
Acquisi,on Loan
Cash Close
2. Package the Loan
3. En,tlement Period
4.Construc,on Loan
1. UW = 6-10 weeks
2. Wait for Cer,cate of Occupancy = 8-12 months
( SFR)

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Cal Mutual

Finding Poten7al Clients

Cal Mutual
Finding Poten7al Clients

The History and Mentality of

Construc,on Loan Clients.

Cal Mutual

Finding Poten7al Clients

Why Do They Need a Construc,on

Loan?

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Cal Mutual
Finding Poten7al Clients

Two Types of Clients:

Cal Mutual
Finding Poten7al Clients

Two Types of Clients:

1. Already has a Property.

Cal Mutual

Finding Poten7al Clients

Two Types of Clients:

1. Already has a Property.

2. You Find Them the Property.

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Cal Mutual
Finding Poten7al Clients

Whos a Poten,al Client:

Cal Mutual
Finding Poten7al Clients

Whos a Poten,al Client:

1. General Contractor

Cal Mutual

Finding Poten7al Clients

Whos a Poten,al Client:

1. General Contractor
2. Electrical Contractor

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Cal Mutual
Finding Poten7al Clients

Whos a Poten,al Client:

1. General Contractor
2. Electrical Contractor
3. Investor Experienced

Cal Mutual
Finding Poten7al Clients

Whos a Poten,al Client:

1. General Contractor
2. Electrical Contractor
3. Investor Experienced
4. Investor Non Experienced

Cal Mutual
Finding Poten7al Clients

Important Facts to Share with Poten,al Clients:

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Cal Mutual
Finding Poten7al Clients

Important Facts to Share with Poten,al Clients:

1. We ARE Your Finance Department.

Cal Mutual
Finding Poten7al Clients

Important Facts to Share with Poten,al Clients:

1. We ARE Your Finance Department.

2. We Package Everything for You for the

En,re Process.

Cal Mutual
Finding Poten7al Clients

Important Facts to Share with Poten,al Clients:

1. We ARE Your Finance Department.

2. We Package Everything for You for the

En,re Process.
3. Make it simple to start:
Business and Personal Taxes
Personal Financial Statement
Bank Statements
Credit Report

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Cal Mutual

Finding Poten7al Clients

You Must Set Up a First Mee,ng

Face to Face.

Cal Mutual

Finding Poten7al Clients

You Must Set Up a First Mee,ng

Face to Face.
1. Structure the Goals

Cal Mutual

Finding Poten7al Clients

You Must Set Up a First Mee,ng

Face to Face.
1. Structure the Goals
2. Review Fees

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Cal Mutual

Construc7on Types

Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

2. Buy and Scrape Mul, Family R2-R4

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Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

2. Buy and Scrape Mul, Family R2-R4

Small Lot Subdivision
Condos

Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

2. Buy and Scrape Mul, Family R2-R4

Small Lot Subdivision
Condos
3. Buy and Scrape Apartment

Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

2. Buy and Scrape Mul, Family R2-R4

Small Lot Subdivision
Condos
3. Buy and Scrape Apartment
4. Rehab

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Cal Mutual

Construc7on Types

1. Buy and Scrape SFR R1

2. Buy and Scrape Mul, Family R2-R4

Small Lot Subdivision
Condos
3. Buy and Scrape Apartment
4. Rehab
5. Construc,on Comple,on

Cal Mutual

Underwri7ng

Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)

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Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans

Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines

Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons

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Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons
Hard Money

Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons
Hard Money
Construc,on Loans

Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons
Hard Money
Construc,on Loans
Fund Money Fix and Flip

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Cal Mutual

Underwri7ng
1. Hot Areas -- How to iden,fy Hot Areas and good opportunity
(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons
Hard Money
Construc,on Loans
Fund Money Fix and Flip
Conven,onal

Cal Mutual
Underwri7ng

1. Hot Areas -- How to iden,fy Hot Areas and good opportunity

(opportunis,c observa,on)
2. Type of Loans
3. Qualifying Guidelines
4. Loan Comparisons
Hard Money
Construc,on Loans
Fund Money Fix and Flip
Conven,onal
Investor

Cal Mutual

Example

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Cal Mutual

Part 1

Land Acquisi7on

1. $1.2MM Purchase Price x 2.5% = $30M

Cal Mutual

Part 1

Land Acquisi7on

1. $1.2MM Purchase Price x 2.5% = $30M

2. 75% LTV of 1.2MM loan amount = $900M
- $900M Loan Amt x 1.5% points = $13.5M

Cal Mutual

Part 1

Land Acquisi7on

1. $1.2MM Purchase Price x 2.5% = $30M

2. 75% LTV of 1.2MM loan amount = $900M
- $900M Loan Amt x 1.5% points = $13.5M

Total commission collected $43.5M

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Cal Mutual
Part 2

Construc7on Loan

$900M (Re current loan into construc,on loan (no 2nd Mtgs)
$850M (Construc,on budget)
$350M (loan fees, interest reserve, con,ngency)

$2MM (Total)

Cal Mutual
Part 2

Construc7on Loan

$900M (Re current loan into construc,on loan (no 2nd Mtgs)
$850M (Construc,on budget)
$350M (loan fees, interest reserve, con,ngency)

$2MM (Total)

2MM total cost x 70% Loan to cost = $1.4MM loan amt

$1.4MM loan amt x 1.5% points = Total Commission $20,000

Cal Mutual
Part 3

Home Sale

$2.9MM x 2.5% commission = $72,500

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Cal Mutual



Total commissions generated =

$136,000

Cal Mutual
The important Stu..

Commissions!

Cal Mutual or Outside Agent Referring the Loan

Cal Mutual Real Estate Sales Commission

Cal Mutual Mortgage Commission
(Based on Experience and NMLS)

35%

Individual
50-70%

Cal Mutual

The Benets of Being a Cal Mutual / FMB Agent or Loan Ocer!

Highest splits in the business.

Diverse services Commercial and residen7al sales, SBA,
mortgages, construc,on nancing, property management, leasing,
insurance, accoun,ng, advisory, investor rela,ons, bankruptcy and
receivership.
Dozens of experienced professionals in every facet to assist you.
Being backed by the great names and assets of, Cal Mutual, Fund
My Business and American Spectrum!

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Cal Mutual

Upcoming Classes and Seminars

Receivership and Bankruptcy Trustee

Residen,al Real Estate and Mortgage
Commercial Real Estate Basics
Various Commercial Seminars
Lead Genera,ng

Cal Mutual
Calmutualhomes.com
Calmutualmortgage.com

fundmybusiness.biz

Americanspectrum.com
asrmanagement.com

Thank you.
Cal Mutual

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