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| | Commercial Real
Estate Escrow Loans - Continued...
The commercial loan and/or
commercial mortgage closing costs program fills your funding gap needs on a
temporary basis to give you the time you need to complete your capitalization
activities and close your loan out with maximized financial leverage.
Funds can be used for escrowing refundable points and fees associated with your
loan that are subject to certain pre-approved conditions.
Program Terms,
Conditions & Limitations
This commercial finance program
is available based upon the following fee considerations:
 | The initial fee is equal to
15% of the amount of the funds placed in escrow on behalf of the client.
This is accomplished thru the title company with a simple escrow instruction
that releases the initial 15% fee and instructs the title company to wire the
funds to the nominated account upon receipt by the title company of the funds
for the escrow funding. That's right, there is a fee whether you are
successful or not. Pay attention as these people all play for keeps - caveat
emptor! |
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Each 90 day period (or part
thereof) requires a payment of 15% of the amount of funds advanced on behalf
of the client. So, if the client extends their contract feasibility/soft
period beyond the 90 day limit, then an additional 15% initial fee payment
will be required. |
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If the escrow closes (loan
funded and/or purchase contract closed out), then the payment of a fee equal
to 100% of the funds advanced is due and payable at closing to the nominated
account. This is accomplished via an irrevocable escrow instruction
served on the title company by the client upfront. |
The conditions and limitations
of the program are:
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The maximum amount of funds
currently available changes, so you should check with us. Currently the
maximum amount of funds available for a given transaction is $500,000 (USD). |
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All transaction documentation
is subject our sole approval. |
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The processing time for a
transaction is 10 days. |
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There are no upfront fees. |
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Funds are only made available
to satisfy an escrow obligation that is refundable. No funds are
provided on an at-risk basis. This means:
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For commercial loans, we
will only fund refundable points and fees that are placed in escrow with the
title company - and not transmitted into the account of the lender. |
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For commercial real estate
acquisitions, we will only fund purchase escrows with the title company for
the period of time that funds are refundable as specified in the purchase
agreement. |
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If the funds advanced are not
replaced by the end of the feasibility/soft period, the transaction will be
terminated and the funds returned to the nominated account and not the
client's account. |
Example:
You wish to purchase a piece of
commercial property. The purchase price is $10,000,000 and you need 90
days to put together your financing, but your funds are limited. The
purchase agreement specifies a good faith deposit of one percent (1.0%), or
$100,000 is required upon your execution of the contract. The funds are to
be held at the title company and are refundable if you cancel the contract for
any reason for a period of 90 days, after which, the funds are non-refundable.
You then have 90 days to close from the expiration of the 90 day
evaluation/feasibility period to close out the transaction. If you pay the
$100,000 out of your own fund, you won't have enough for your required due
diligence documents, funding costs, and third-party reports necessary to close
the transaction.
Subject to our conditions, we
will fund the $100,000 purchase escrow and you pay $15,000 for us having done
you this service. This frees up $85,000 for you to use on the other
necessary reports, studies, designs, loan submittals, etc. and "buys" you 90
days to get your funding together and replace our $100,000 escrow advance.
If you do not replace it by Day 89 of the feasibility/due diligence period, then
we terminate the agreement and receive back the $100,000 - case closed. If
you do get your funding lined up by Day 89, you wire us the sum of $100,000 and
you move forward. At the closing of the purchase escrow, we are paid an
additional $100,000 success fee inter alia with the closing of the purchase
escrow, via an irrevocable escrow instruction to the escrow agent - case closed.
Go
with the leader. Go with Rainmaker.
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