Without a doubt, transitional assets are more complicated transactions. Not only do you have to qualify the property in the current state but you must also be able to qualify at its completed or stabilized state. This task differs greatly whether it’s a “for sale” asset or an “income producing” asset. Just to clarify what transitional assets are, here are a few samples:
□ Acquisitions
□ Development
□ Construction
□ Renovations
□ Stabilizations
We have found that in residential and commercial lending that most brokers shy away from these types of transactions for various reasons but mainly it is because they require a specific knowledge related to the development industry. They typically take 90 to 120 days if you know what your doing.
This is where Axis Capital steps in to help us all close more business. Our knowledge and resources for these types of transactions sets us apart from most brokers. We have dedicated ourselves to construction lending primarily due to the lack of support in the industry.
Approximately 25% of our business comes from brokers looking for assistance in placing debt and equity for transitional assets. All we ask is that when quoting your fees, to please keep them realistic so that we do not price the deal out of the market. Axis Capital will not be responsible for a chain of brokers expecting to get paid simply by passing a bunch of data.
We pride ourselves on great customer service with competitive pricing! Our business model is focused around repeat business.
Here is how our process works:
Step 1:
Fill out the application on www.WeFundConstruction.com or call 1.866.429.4756 and ask to speak with a Commercial Loan Officer.
Step 2:
The application or phone call will be forwarded to the transaction specific loan officer.
Step 3:
A Loan Officer at Axis Capital will request 3 items for initial review. Executive Summary, Pro Forma Analysis, and Net Worth Balance Sheets of all guarantors. The project is reviewed by Axis Capital [24 to 48 hours after receipt or 3 required documents].
Step 4:
If your project is accepted, an Axis Capital LOI (Letter of Intent) is issued with Fee & Non-circumvent agreements.
Step 5:
Signed LOI and agreements are returned to Axis Capital, along with any additional documentation that was requested.
Step 6:
Your transaction is officially submitted! [24 to 48 hours after receipt of signed agreements and requested documentation].
Step 7:
Lender issues the “official” LOI, term sheet, or pre-approval letter for Borrower acceptance [24 to 96 hours after submission receipt, depending on Lender].
Step 8:
Co-Broker Requirements Basic Guidelines:
• Axis Capital, LLC must be granted direct contact with the actual Borrower – your Client. Trying to keep us out to the picture usually leads to problems. It is best if, at the outset, you advise your client that you are cooperating with Axis Capital, LLC on their project.
• Co-brokers must remain flexible and realistic with regards to their own fee. We will not accept a submission if there is any chance it will get derailed because the submitting Broker demands too large of a payout. On average, submitting Brokers will receive 30% to 50% of the overall broker fee earned by Axis Capital, LLC (not including Processing Fees). This fee will be agreed to, in writing, by both the Co-broker and Borrower prior to the lender submission, and is determined on a case-by-case basis. In short, the Borrower will not be financially penalized because there are multiple Brokers involved.
• Submitting your deal online at Axis-Construction.net/constructionform.html is the very first step in this process. Please do not email or fax large files of documents pertaining to your loan request until we have had an opportunity to review the online submission and the 3 supporting documents. We will let you know what we need if your project is acceptable and anything received prior to your requests will be deleted or shredded.
• Please properly manage expectations – both those of your Client, and those of yourself. Once we receive a new submission it will take us anywhere from 24 to 48 hours to review it, depending on loan volume (you will receive an automated email advising current timelines and the documents you can be gathering in the meantime). If it is a standard submission, we should be able to get back to you relatively quickly with a LOI. However, for more difficult submissions that require lender consultation, the timeline for an Axis Capital, LLC LOI could be considerably longer. This does not include an actual lender LOI or pre-approval. Of course, many submissions can be turned around very quickly, but often times we are at the mercy of lenders who may be very busy. Make sure that you and your client are aware that, aside from the occasional 7-day hard money closing, this process will take much longer than a traditional residential transaction.
• When possible, email us instead of making a phone call. By no means do we shun true interpersonal relations but we prefer email over the phone. On certain days it is extremely difficult to keep up with the volume of phone calls we receive. An email will always be returned quicker than a phone message.
Step 9:
Axis Capital reserves the right to charge file prep charges or out of state processing charges. These fees are non refundable and are used to confirm values and pre underwrite the file before shipping it to the lenders. Client pays Axis Capital the required upfront Lender due-diligence and third party fees, as well as Axis Capitals own Processing Fee.
Step 10:
Third party reports are ordered, as needed (title; appraisal; environmental; feasibility; etc.). Lender continues underwriting and additional due-diligence.
Step 10:
Conditions are satisfied.
Step 12:
Loan closes [7 days to 6 months, depending on transaction type-the average transaction takes 45 days, start-to-finish].
Step 13:
Escrow mails out checks to Co-broker for their portion (no later than 30 days after we receive our check).
Important: Axis Capital, LLC accepts Co-Broker submissions on commercial, business-related and venture capital submission ONLY. RESPA guidelines prohibit broker collaboration on residential transaction and any such submission received will be immediately deleted and/or shredded.
Co-broker Agreement: .pdf or .doc