The Encyclopedia of Commercial Real Estate Advice

CHAPTER 10Trade Secrets for Getting the Best Rate, Loan Fees, and Terms

The man on the phone was cool, calm, and definitely in charge, even though he was the one asking me for a loan. “Here's what you are going to do if you want this loan,” he told me. “You are going to get back to me within two days with a better offer than my bank. If you take more than two days, I am taking the deal I already have. I will email you a complete loan package in one hour.”

When I train a new loan officer, I always tell them to establish a friendship with the client first. I suggest they ask about their jobs, kids, and hobbies. But this guy was not going to do any small talk. He was an expert at negotiating the best rate and terms. Win-win was certainly not his style. On one hand, I really wanted to tell him to shove off. On the other, I rather admired the guy for stating exactly what he wanted and not wasting anyone's time. And what difference did it make anyway? With my 20-plus years of experience, I could hear my mind clicking out of neutral and going into high gear. I was not going to make much on this deal, but I was sure going to fight for it.

He told me he wanted a $24 million loan on a high-end apartment complex in the Nob Hill neighborhood of San Francisco. He had finished construction five months prior. Occupancy was at 92% and climbing, and he was looking for a 55% loan-to-value perm loan. He said that if I could give him a 3.85%, 10-year fixed mortgage, I would take the deal away ...