Back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. And today, we have Jennifer Champion and Christine Trainor with us today. So welcome.
Christine Traynor:Hi, Scott.
Scott Dillingham:Hi. So we wanted to talk to you today because we see this all the time. Obviously, as lenders, we see clients go direct to their lender or we see them go direct to a broker who lacks experience, and that causes a lot of issues. So we really wanted to highlight in this episode is about the benefits, and we're gonna list some examples of why going with the correct broker who's tapping into your multifamily financing and what that could look like, you know, not only from a financial standpoint, but just ease of application and avoiding these mistakes. So I'm going to start today with an So there is this investor who has rehabbed the whole property and now it's 57 units and he rents it to a large tenant.
Scott Dillingham:Now this client went direct to his major bank where he gets his banking from, and they offered him a $13,000,000 loan at first. Now once they discovered that it was one tenant, it was a corporation that's renting all 57 units and then they rent them out. They sublet them under that. Once that was discovered, this lender said no. That won't work.
Scott Dillingham:Okay? So they came to us and we got it all priced for the lenders and everything and it's looking like they should be able to get around 1,600,000.0. So $3,000,000 more, better rates as well from what he's telling me. He was saying, you know, mid fours or we're below, you know, 1% below that. So that's a massive difference as well for his property.
Scott Dillingham:And then come to find out, they declined him because of everything being on one lease where we had spoke to the lenders and confirmed with CMHC that all that was fine. And so the deal is working out. So obviously there's still due diligence and documents and different things like like that that's that's needed to to finalize this file. But what a drastic difference. Right?
Scott Dillingham:Saving 1% of the rate, getting 3,000,000 more in lending, and going from a no event, right, to a yes. So that's a massive, massive difference that having that expertise and additional lenders bring to the table. And Christine and Jen, I'm going turn it over to you guys, but I know you have tons of examples like this. I'd love to hear from you. It doesn't matter who's first, but let's talk about some of these challenges and wins that you guys have seen out there.
Christine Traynor:Okay. Thanks Scott. I'll jump in with a couple examples here from this end. So one of the things that we see quite often is different lenders have different appetites at different times in the market for different types of loans. It might be like, we're not doing this type of lending right now, but you know we've got other lenders that will.
Christine Traynor:So if you are going direct to that lender and they're not interested in doing a construction loan, for example, they might say, we're not going to do this deal. But by working with a broker who has access to multiple lenders, you can get it one example that we see often too is the different locations. So sometimes certain lenders aren't interested in lending, you know, let's just say a million dollars in a certain location or even just a million dollars in general might be too low for them. But we do have a pool of lenders that will So I think you just get so many more with a broker who has access to multiple lenders. The other thing too is that a lot of lenders that we have access to don't work direct with consumers.
Christine Traynor:So you can't actually access that lending period if you don't go through a broker.
Scott Dillingham:Yeah. That's a great point. That's a great point. You're right. I actually forgot about that, but I I think more than half the lenders will not work with the client.
Scott Dillingham:It's literally only through the broker.
Christine Traynor:Yeah. Especially in the commercial space.
Scott Dillingham:Yeah. Yeah. So thanks for sharing that, Christine. Jennifer, what, what are some examples you have?
Jennifer Champion:I think just in terms of, like, working with, an investor focused broker, you know, like, Christine and I are both investors ourselves, Just having like that lens on looking at, you know, refinancing your portfolio or new purchases moving forward and being very strategic with the lenders you're using, the approach you're taking conventional CMHC, MOI Select, and just sort of, like, working with a broker who has that overarching goal in mind for your portfolio instead of, you know, let's get this one deal done and then move on to the next and not sort of have that, like, forward vision.
Scott Dillingham:No. I agree. I agree. And people don't always know what's not there. So what I what I think is if you're somebody who's listening to this and your gut instinct is, like, let's go to the bank.
Scott Dillingham:Right? I have all my banking there. They know the product. Just give us a call. It's just literally a strategy call.
Scott Dillingham:I'll give another example. So I know before the call we were talking about this client of ours who he has a large multi family commercial property portfolio and he kept going to the bank. Now he's not anymore but the bank offers CMHC multifamily insurance. So he could have got a forty year amortization, 85% loan to value, all that good stuff. But what the bank was giving him was just conventional loans and they weren't even doing it.
Scott Dillingham:And the bank offers this. Like the bank that he went to offers CMHC. So once he discovered that this is the thing and he can move forward with it, he got so excited. So he told his bank, You know what? I'm canceling.
Scott Dillingham:I want to do the CMHC applications with Scott. I don't want to do these conventional deals. It doesn't make sense. And they're like, Oh, we do those too. And so, like, I was dumbfounded.
Scott Dillingham:Like, why would you not offer that to the client from day one when he's building his portfolio? Right? Why would you put him in these things with twenty five year ams at 75 LTVs, which is exactly what he got on all of his properties when he could've got way more. Right? He'd have more funds in his account so he can leverage better, purchase additional properties, stronger cash flow with that forty year amortization, and it just doesn't make sense.
Scott Dillingham:So even the banks that offer this program, I think they're taking the easy path, right? And they're not going down this pathway and it costs the client who knows how much an interest too because conventional loans are much higher in interest expense than CMHC loans. So I think it's always good to speak to an expert. So we are going to put the links in the bottom of the show notes. So if anybody wants to book a call with Christine, Jen, myself, doesn't matter, book that call.
Scott Dillingham:We'll help you out even if it's literally just a conversation. And right now, it's the June. So I also want you to know that from now until the July 2025, we're actually having a raffle. So by doing a preapproval or portfolio review with us, you're gonna be entered in to win a cruise in February. It's a Caribbean cruise.
Scott Dillingham:I think it's seven days. Maybe it's eight days, actually. I forget. But it's, yeah, literally in February. We're we're giving it away.
Scott Dillingham:So get in your preapprovals. Let's get you into enter the contest, and let's let's help build your portfolio the right way. Now before we go and sign off for the day, Jen and Christine, do you have any other examples or things that you want to touch on? No? Okay.
Scott Dillingham:Well that's it then. So everybody have a great day. Tune in next week. We're going have a lot more good content for you guys and we'll see you soon.