Jack and Marcy go into details and talk about Whats needed to have a 4 day closing on a investment or commercial mortgage. It happens all of the time, but all parties need to be engaged and prepared. This will help everyone become prepared for a fast closing.
“Marcy: Hey, Jack.
Jack: Hey, Marcy. We recently closed a loan in four working days. They signed the deal, our term sheet on Monday.
Marcy: Actually, I think it was late Friday night before the weekend, and then we started working on it on Monday.
Jack: Monday, and we closed the deal on, I believe, Friday. So what I’d like to do is take a minute or two to educate mortgage brokers and borrowers and talk about this deal—what the broker did, what the borrower did, what we did—because we get calls all the time, “How quick can you close? How quick can we close?”
Marcy: That’s like the most famous question: How fast can we close?
Jack: So first of all, how fast we can close from Gelt’s perspective, and tell me if my answer is wrong or right, when a mortgage broker or borrower speaks to us, you’re going to be speaking to a decision-maker, or if not the exact decision-maker, someone will be a decision-maker on the call or within 5 minutes of hearing about the deal. There’s a small group of us; we all work within 30 hours.
Marcy: We’re a team; we all work together.
Jack: As a team, we don’t have traditional loan officer processor underwriter sort of everyone does everything, so we can make a decision very quick. We can issue a term sheet very quick. It’s really dependent on how fast the borrower can get us the title report and things like that. So maybe tell everyone, walk everyone through because you were involved with this, so walk everyone through the process.
Marcy: For example, on this particular deal, how we were able to get it to close within four business days was because on Monday when we got the signed term sheet, they sent over the due diligence fee, we started working on it right away. We created the documents, got title ordered.
Jack: Can I back up? So, I believe Noah was handling this, and I believe Noah—I forget the exact thing—but I believe the broker and borrower let Noah know this is a super rush case, correct? So, we sort of work it within our work schedule.
Marcy: Yes, and we reach out to—if someone approaches us with a situation like this, and that’s exactly what happened before—we will answer that or even commit to it because it is a commitment. We’ll reach out to who we need to get the deal closed with. When I say “need,” you know, we do everything in-house, and we hire a lawyer to prepare the closing package, so we reached out. Everyone was on board; everyone was on board to get this done. Okay, you know, the title agent has to be on board; everyone needs to know the timeline. So it was 100% a team effort with all parties. When I say all parties, title agent, borrower, broker, my team, our attorney’s team, you know, and we got it done for this borrower. He was on a strict time schedule, and that’s how they approached us with the deal, and we took it, and we got it done for them, and everyone was extremely happy. But the only way to get something done like this is to be really prepared and organized, so the broker was great in this deal because they, you know, worked partner with us in collecting all the conditions needed to clear the loan to close, and you know, we got the title order right away. They rushed it; they got the information in as the information came, and we started sending everything over to our attorney so he could start preparing the closing package because as everyone knows, we lend—everyone we lend in different states, and every state has different laws. So, you know, that’s why we engage an attorney to do our packages, and you know, everyone was on board, and everything got done, and they closed Friday afternoon, and we made everyone happy, you know. And the point is, like, if you come to us, and everyone works together, we can close when the borrower needs to.
Jack: Yeah, that’s what I want to reinforce—everyone working together. Because what happens a lot to us, so look, we’re private lenders. People are coming to us for speed and for access to capital. We’re more expensive than a bank, and if you can go to a bank or a traditional—
Marcy: We recommend it.
Jack: Go, no problem. But people are coming to us because they need to close quick. So what we just talked about happens all the time here, all the time, every week. But I just want to focus on this one deal because what happens a lot is a broker or a borrower calls up, “How fast can you close? When can you get this deal to closing?”
Marcy: And they don’t send anything in.
Jack: Yeah, they’re not prepared on their end. So no matter who you go to, yeah, every loan in the country that closes is closing with a title report, so title is absolutely critical. So we can get a loan closed in 3 or 4 days without, you know, if the title’s ready. But if the title takes time—
Marcy: There’s nothing we could do about that.
Jack: It’s a delay. So really, a broker or a borrower may want to be prepared and order the title in advance.
Marcy: Yeah, I mean, I had a broker come to me a couple of days ago, and, you know, we were still discussing whether we’re issuing a term sheet or not, and the deal has to close really fast. And he was like, “I’m going to go ahead and have the borrower order a title,” and I’m like, “That’s perfect, go ahead and do that because no matter what, you’re going to need title to do the loan.”
Jack: But what I find is a lot of brokers and borrowers aren’t prepared, to be candid. I don’t mean to mock them, but what happens is they say, “I want to close, you know, Tuesday, Wednesday, Thursday, whatever,” but what they don’t do is they don’t give us and the partners the documents that are needed.
Marcy: Sometimes not even the whole picture, Jack, to be honest.
Jack: 100%. So, you’re always going to need, you know, a title, 100%. We only lend to LLCs and entities, so you’re going to need your entity documents.
Marcy: So have it all organized.
Jack: That’s sort of the point. Get it. We’ve made other videos. Get it in advance. So again, we could probably close a deal in a day or if you would call us, for example, today, we’re caught up, our attorneys are caught up, and you have everything, if you have the title, the entity docs, everything together, we could probably have you to closing tomorrow. But the big holdup is all of these other pieces, and it’s really a partnership. I find, I think you agree, we talked about it, that the deals that close the quickest and the smoothest is where you have all parties working together, pushing in the same direction. If there’s a question because there’s a lot of—you have the title companies, sometimes there’s buyers, sellers, payoffs, attorneys, brokers—there’s always these five or six, seven people—
Marcy: And also, what happens sometimes too, Jack, is honestly, we get title back, and then there’s stuff on title.
Jack: We’ve talked about that before.
Marcy: You know, as an owner of a building or whatever the case may be, the borrower, you know, if you don’t know what’s on your title and then it comes back and there’s all these open, you know, mortgages or liens that need satisfaction, that delays things too because we can’t clear your title. The borrower has to clear the title.
Jack: So, look, it’s a team effort, and all parties need to be available and jump on things quick for it to close. Not every deal has to close quick. You don’t have to do a fire drill on every deal. You know, plenty of our deals just, you know, they close, you know, a week or two. There’s time. But I wanted to highlight this one because we do, do a lot of them that are super, super rushes. Usually, what happens is they got to the table with another lender. It didn’t close for whatever reason. There’s a whole host of reasons, but whatever reason, the reason doesn’t matter to us, and there’s a fire drill, and we’re fine with that. That’s our niche. I’m not complaining about it. Don’t misunderstand me. We love those deals.
Marcy: No, we’re looking for more. We’re just trying to say to you, like, have all your paperwork together and be organized, and then we can just go.
Jack: That’s correct. Conversely, brokers, you know, a niche in the marketplace, and a lot of mortgage brokers watch our channel. So, this is messages to them. You can have a niche in the marketplace if you really focus on closing quick and to do that—
Marcy: Because you have a lender that can get it done for you.
Jack: Yeah, to do that, you need to be able to size up the deal on the very first call, and you can do that with experience. You really can. You don’t need to get too complicated with it. You know, I think all of our staff here can tell if we like a deal within the first 3 minutes of a call or first email. In fact, sometimes brokers get annoyed, “How come you’re rejecting it so quick?”
Marcy: Right, or they—I just had someone say to me, “Why’d you pass on this?” And I’m like, “To be very, very clear, we pass on the real estate. It—it’s, you know, we pass on some real estate, absolutely, but we do approve.”
Jack: Brokers should—if I was a broker, what I would do is I would really get to know two or three or four or five or six lenders, know them inside out, spend time with them on the phone or zoom or however you do it and really learn what they’re looking for and what they’re not looking for. And don’t try to squeeze, what’s the word, around peg in a square hole or, I don’t know—
Marcy: Yeah, or push something that’s not our niche, you know.
Jack: Every lender has a niche in the marketplace, and a broker should really learn what the lender’s niche is and focus on that niche. And then when you understand that niche, go out and find deals that fit that niche, and then you can charge a premium for it. You know, a broker—the truth is, I don’t know what the broker charged on this deal, but the truth is a broker can charge more on a super-rush deal.
Marcy: They’re getting it done for the borrower, so—
Jack: A broker can charge a premium. You can charge an extra point or whatever it is on a super-rush deal. So, if that’s your niche, learn it. Understand what the lenders want. Learn to size up a deal. Learn what’s needed to close a deal. It’s not that hard, and you can call—you know, any one of us, and we’ll be more than glad to spend time with you on a call and walk you through it.
Marcy: And also, I mean, we spend as much as, like, we’ll spend time with the brokers too. I spend so much time with brokers, like, when they bring me a deal, and I’ll say if you bring me A, B, C, D, and E, I can look at the whole thing and give you a good answer. You know, I’m not doing it just to, like, postpone a term sheet or not do a term sheet. I’m just saying to them, gather all this information on the specific collateral so that we can make an intelligent decision. So, the bottom line is, brokers, gather as much information as you can when you’re working with a borrower.
Jack: Okay, remember we’re non-bank commercial and investment real estate lenders. We do one to four single-family homes as long as it’s non-owner occupied. We close quick. Remember when your bank says no, we say yeah. Like us on wherever you’re seeing this video—like us TikTok, Facebook, leave—we answer questions, subscribe to the channel, and have a great day. Take care.”
Category: Education
Tag: fast closing
