Commercial Real Estate Financing… Made Easy

Mortgage Concepts:“A Refresher”

Debt-to-Income Ratio (DTI) – amount of your bills divided by your gross income before taxes. In other words, it is the % of your monthly income that goes to bills. The lower this number, the better.

Loan-to-Value Ratio (LTV) – amount you owe divided by what the house is worth. Subtract % of downpayment from 100% and this is your LTV.

Combined LTV Ratio (CLTV) – amount owed on all combined mortgages. Can have a 2nd loan for as much as 20% of the property value with a 1st loan for as much as 75% of the property value. This combination allows you to put down less money for your downpayment.

Commercial Mortgage Concepts

Debt Service Coverage Ratio– Equals debt payments on a piece of real estate divided by net

operating income from that piece of real estate. If you make exactly the amount of income from the property as

what is due for the payment, this ratio = 1 The higher this number, the better; preferably 1 or higher DSCR of less than one means negative operating income

Payment ÷ Income from Property = DSCR

Overview of AmeriNET’s Program Loan from $100k to $1.5 million Both owner-occupied and investment properties Up to 97% LTV on some types of Owner Occupied

properties Up to 95% CLTV on some types of investor properties Both purchase & rate/term or cash-out-refi Stated Income/Stated Assets Available No upper limits on cash out component

Traditional Commercial:Other Lenders

Based solely on cash flow of the property Takes 3 to 4 months to close loan! Linear Process Lower CLTV, no more than 80% Limited property types – no mobile home parks !

How Are We Different?

Usually require periodic inspection of “books” Usually have a balloon payment and shorter time-span

than home mortgages, i.e. 10 years or less to pay back

With AmeriNET Mortgage: NO inspection of the books with timely payments

Amortized up to 30 years (15 and 20 year terms

available)

Other Companies:

AmeriNET Commercial Lending:A Residential Approach

We concentrate on personal financial strength, rather than property cash flow alone

Incorporate all income sources, assets, cash flow Look at DTI and ability to pay, not just DSCR Non-linear process allows loans to close sooner

Results in financing to more borrowers

Underwriting Philosophy

Rate based on combination of 4 factors:1. Property type2. Term length3. Credit4. LTV

Types of Commercial Properties

Self-StorageMixed UseBed & BreakfastsLight IndustrialMulti-family 5+Funeral HomesDaycareRooming HousesHealthcareDry Cleaners

Office BuildingsOffice condosMobile home parksRV parksGas stationsRestaurantsRetailWarehousesApartment complexesAutomotive

We finance the following types of properties:

Interest Rate Pricing Tiers Tier 1 Multi-family or Mixed-use properties Tier 2 Mixed-Use, Office, Retail, Warehouse,

Light Industrial, Mobile Home Park, Self-Storage, Bed-and-Breakfasts

Tier 3 Industrial, Automotive, Funeral Home, Rooming House, Flagged Hospitality

Tier 4 Gas Stations, Healthcare, Daycare, RV Park, Unflagged Hospitality, Restaurant, Special-Purpose

The higher the tier, the riskier the investment, thus interest rates reflect this.

Ineligible Property Types

We do NOT finance the following: Traditional churches Agricultural use Repairs greater than $50,000 (uninhabitable) Adult entertainment facilities

Eligible Borrowers

Individuals Corporations Partnerships LPs Certain Trusts

AmeriNET’s LTV & CLTV

Purchases: Up to 97% standard LTV on OO Up to 75% LTV with seller 2nd of 20% = 95% CLTV on

Tier 1 properties

Refinance: Up to 97% LTV on Owner Occupied Tier II Properties Up to 90% LTV on Investor Properties

AmeriNET Offers… 15, 20, & 30-year Fully Amortized Loans 6-month Adjustable Rate Loans 2, 3, 5 and 7-Year Fixed Loans Declining Fixed-Rate Loans (reduces .5% every 5

years for on time payment history) High loan to value (LTV)

• Up to 97% of property value on OO Tier 2 properties• Up to 95% CLTV for Tier 1 properties• Up to 90% LTV for all Tier 2 and 3 properties

Qualifying for a Commercial Loan:Full Doc

Middle credit score of at least 580 * 2 years of IRS tax returns to prove income At least 2 months of P & I payments in liquid assets as

reserve Loans from $100k to $1.5 million May have negative operating income **

Average credit score for most loans 640+ unless strong DSCR *

Provides the opportunity to buy property that may not currently have positive cash flow **

Qualifying for a Commercial Loan:Stated Income/Stated Assets

Loan Request Fannie Mae 1003 Tri-merge credit report Loans from $100k to $1 million

Adjustable Interest Rates

Based on Wall Street Market Prime Index Initial cap of 2% at reset except 6 mo adjustable Periodic cap of 1.5% Life of Loan Cap = Fully Indexed Rate + 6% All 6-month adjustable rates adjust equally by

1.5% every 6 months

Documentation Needed

Rent Roll Agreement of Sale YTD Profit & Loss Statement Commercial Leases Property appraisal (usually more complex, time-

consuming, and expensive than residential) Property description & photos

Discount Points

2% up front = .75% rate decrease

1% up front = .375% rate decrease

Cannot be combined with lock-outs.

Our Pre-Payment Penalty

Standard is 5% for 5 years Optional 3-Year 5% with 3-Year Lockout (adds .375% to rate) Optional 3-Year Lockout (subtracts .25% from rate) Optional 5-Year Lockout (subtracts .5% from rate) Optional 7-Year with 7-Year Lockout (subtracts .75% from rate) Optional 7-Year with 10-Year Lockout (subtracts 1% from rate)

Lockout = all interest due for entire lock out period if paid off during the penalty period. This is strongly discouraged unless keeping the property for lengthy period.

Pre-Payment Penalty Details

5% of the unpaid principal balance if paid off during the penalty period

Declining option of 1% per year until no PPP After 5 years there is no fee to payoff the loan For .375% upward rate adjustment, can get 3 year

PPP option instead of 5 years

Loan Details Rates locked for 45 days except 5, 7, and Declining Fixed

(can be locked at .125% higher than quoted rate) Conditional Pre-Approval Letter stipulates the terms of the

loan, fees to close, & docs needed Fully assumable upon approval for $500 fee Application used is the Residential 1003 All loans must be personally guaranteed by borrowers,

even if a legal entity

Borrower’s Fees

$500 Lender Fee *** (non-negotiable)

If not auto-bill-pay, add $250 (non-negotiable)

Origination fee of 1% (negotiable)

All out of pocket expenses, i.e. title fees, appraisal fees, survey, environmental insurance fees, etc (non-negotiable)

$500 Refund If All Documentation Received Within10 Business Days of Conditional Approval Letter

Review of AmeriNET’s Program Loans take less time Terms amortized up to 30 years More property types accepted No balloon payments No periodic inspection of “books” Credit Scores of 580+ Up to 97% LTV on some OO properties Up to 90% LTV on some investor properties

Why would you want to take yourcommercial loan anywhere else?

We Finance Your Real Estate Dreams

At AmeriNET Mortgage!

Whatever you can do or dream you can, begin it.Boldness has genius, power, and magic in it. -Goethe

Kelly FestLoan Officer940-239-0507fast-loan@hotmail.comwww.lending-tx.com