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Direct Funding Source - Commerical Real Estate Loans

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Brokers Questions & Answers

The most common questions asked by our brokers & referral sources.

Q: Is Direct Funding/Jadda Capital a direct lender?
A; Yes. We have our own funds and we are a direct lender from $1MM to $20MM, but only for hard and quasi-hard money loans. We also use private money sources and have access to large hedge funds.

For larger conventional loans we will generally use one of our highly competitive hedge fund partners or even the SBA (we are an SBA conduit lender).

Q: How quickly can decisions be made?
A: We try to get answers for brokers within 24 hours, excluding weekends. When a deal is submitted to us we will let you know the following (quickly).

Yes, we want to move forward with the deal.
No, we wish to pass on the deal.
We need additional information before we can make a decision.

Q: Are there any upfront fees?
A: No. Unlike many other funding sources we never charge any upfront fees for our services. It costs nothing to get a formal quote from us.

If both DFS/Jadda Capital and the borrower agree to move forward than there are occasionally fees included in the deal. These may include travel fees and closing costs. Our fees are reasonable and used to offset our actual costs.

Borrowers are responsibly for all related fees including appraisals, environmental reports, engineering and architectural costs, etc.

Q: How do brokers get paid?
A: Brokers generally get paid at the time of closing. Earned commissions are either wire transferred and sent to check directly to the referring broker(s).

There are basically two types of commercial real estate loans, conventional or hard money.

On a conventional loan the brokers fee (points) are built into the yield spread. For example, if we have a fixed loan at 7.5% over five years and the broker wants to add two points to the deal, the rate will increase to $8.25% over five years. The more points a broker adds on, the higher the rate to the borrower.

On a hard money loan points are added to the back end. We will honor separate fee agreements between the broker & borrower.

To pay out points, we require an invoice from the borrower stating that they agree to pay the points at closing. We cannot pay out points without permission from the borrower.

Q: How much can a broker make?
A: 1 to 2 points is standard on smaller loans. Any more than that we may risk losing the deal because our rates/points are too high.

Q: Are brokers always protected?
A: Yes, brokers are protected for the life of the account. If a borrower comes back to us three years later with a new deal, the broker is still protected.

Q: How much broker involvement is required?
A: A lot, or none at all. Either way it doesn't effect how much brokers get paid.

We are prepared to work with brokers anyway they seem fit. Some brokers want t stay in control, gather all information, etc. Other brokers want to just pass a lead to us and let us handle 100% of the transaction.

Either way, we like it when a broker stays in touch with the client and makes sure the client is happy with our services and pleased that the deal is moving forward.

Q: Is direct access to the borrower necessary?
A: No, but we have found that it greatly increase the odds of getting funding completed. We prefer to have an underwriter assigned directly to the deal with direct contact with the principles.

Q: What type of deals do we prefer?
A: We will look at any commercial real estate and commercial business funding deal over one million dollars. We prefer construction and development deals over two million dollars.

We will consider any credit situation or any special circumstances.

We are very interested in special purpose & bailout rescue loans. These include stalled real estate projects, workouts, restructures and bankruptcy bailouts.

Q: How does a broker submit a deal?
A: We have forms that we prefer to use depending on the type of deal being submitted.

Here is a link to my basic real estate submission form. {Click HERE} Please note that it is in MSWORD so the header can be changed by your company. The information on this form usually tells us everything we need to make a decision on moving forward with a deal.

Please do not send us any additional information, financials, appraisals, etc unless we request them. Let's make sure the deal interests us before we swap tons of information.

Q: How is a broker protected on a deal?
A: Great Question. This is how we like to work.

A broker sends us an e-mail saying (for example) that they have a condo development in Charlotte N.C. with a borrower looking for $3MM.

We confirm via e-mail that we received the inquiry and that the sender is the broker of record. The broker can then send us the completed (ES FORM} knowing they will be paid when the deal closes.

For more information on our broker program and or funding programs please contact Mike Sacks at mike@dfscorp.com or by phone at 866-838-7084.

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