moskowitz capital broker presentation
TRANSCRIPT
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7/31/2019 Moskowitz Capital Broker Presentation
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Private Investing and LendingCommercial | Residential | Special Situations
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7/31/2019 Moskowitz Capital Broker Presentation
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Private Investing and LendingCommercial | Residential | Special Situations
Lending Landscape
PRIVATELENDERS
Alternative MortgageProvider
BANKS
CREDIT UNIONS
Friends, family,and high net worth
Return/Cost
Risk
Banklendingshrinking
Our segmentexpanding
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Private Investing and LendingCommercial | Residential | Special Situations
About Us Eleven year track record $150,000,000 in funded mortgages
Brian Moskowitz is a past Director of IMBA
Member of various Homebuilders Association
We are lenders: Moskowitz CapitalManagement Inc. (FSCOBroker & Administrator)
Moskowitz CapitalMortgage Fund II Inc.
(Mortgage Lender)
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Private Investing and LendingCommercial | Residential | Special Situations
Why Choose Us? You deal directly with the decision makers You get an honest answer
We deliver on our commitments
We protect the referral source
Our borrowers and referral sources arehighly successful
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Private Investing and LendingCommercial | Residential | Special Situations
Our Underwriting Philosophy Common Sense Security value
Ability to repay
Flexible deal structure
Quick turnaround time
Cash Flow .Total Debt Obligation
Debt Service =
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Private Investing and LendingCommercial | Residential | Special Situations
Loan Criteria Summary Loan Amount: $250,000 to $6,000,000
Term:
6 to 36 months
Rates:
6.95% to 12.50%, subject to risk
Lender Fee:
2% to 4%
Amortization:
Often interest only
Prepayment:
Flexible
Personal guarantee:
Required in most situations
Security:
1st mortgage, 2nd mortgage on aselective basis
Timeline:
Term sheets in 24 hours uponpresentation of good information
Funded deals in two weeks
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Private Investing and LendingCommercial | Residential | Special Situations
Loan Criteria Summary Purpose: Term, construction, environmental
remediation, special situations
Property Types:
Single and multi-family residential,commercial, industrial, land
Non-traditional uses:
Assisted care, alcohol serving
establishments, auto service, drycleaners
Location:
Ontario, Nova Scotia, NewBrunswick, Newfoundland and
Saskatchewan
Loan to Value: Max:
75% on residential, 70% oncommercial, higher loan amountswith additional real estate collateral
Reporting:
NOAs and Job Letters
Rent roll for rental properties
Notice to Readers (we can
consolidate) Debt:Service Ratio:
1.1:1, flexible
Due Diligence:
Appraisal
Often Phase 1 ESA on commercialproperties
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Private Investing and LendingCommercial | Residential | Special Situations
Pricing LandscapeFees (% of loan amount) Interest Rate
Bank 0.5% 4% - 7%
Credit Union / BDC 1%-2% 5% - 10%
Moskowitz Capital 2% - 4% 6.95% - 12.50%
Other Privatesfriends and family
5%-15% 12% - 30%
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Private Investing and LendingCommercial | Residential | Special Situations
What we need to size up the loan One page summary Application (with net worth summary)
Credit Bureau
Income support
Financial statements NOA
Forecast
Rent Roll
Photos
Follow-up phone call
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Private Investing and LendingCommercial | Residential | Special Situations
Tips to submitting a deal A picture is worth a thousand words Send a complete package in one email
If it is easier for us to track, youll get a quickerresponse
Make your case with facts
Show us that the Borrower can pay
Cash flow analysis
Set realistic expectations Plan for a three way conference call
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Private Investing and LendingCommercial | Residential | Special Situations
Characteristics of a good broker Integrity Transparency
Action oriented
Working knowledge of deal
Strong communication skills
Attention to detail
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Private Investing and LendingCommercial | Residential | Special Situations
What is in it for you? 1% - 2% commission Actual Recent Examples:
$30,000 Broker Fee - $3,000,000 loan $12,000 Broker Fee - $800,000 loan
$3,250 Broker Fee - $220,000 loan
Lower E&O rates than private lenders
Repeat business, often within 12 months Adding value by placing a current clientsdifficult deal
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Private Investing and LendingCommercial | Residential | Special Situations
Whos making the money? Commercial property owners Developers
Home builders
Small Business Entrepreneurs
Target those that are action oriented
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Private Investing and LendingCommercial | Residential | Special Situations
Benefits of a Construction Mortgage
Assemble the appropriate credit mix
Finance land, materials and labour
Own the land, control the project
Shop around for deals on materials
Clear set of terms; no demand clauses Lien rights are powerful and disruptive
Build a long term relationship
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Private Investing and LendingCommercial | Residential | Special Situations
Residential Construction Spec infill construction of a semi-detached family dwelling First time builder
Loan Value: $645,000
Position: First
Location: Ottawa
LTV: 75%
Debt Service: Interest Reserve Reporting: NOAs
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Example Construction Loan Breakdown
Use of Proceeds Source of Proceeds
Land cost 341,000 Land Facility 225,000
Hard Cost 423,000 Construction Facility 400,000
Interest Cost 20,000 Interest Reserve Facility 20,000
Soft Cost 40,000 Moskowitz Capital Loan 645,000
Fee, legal, etc 26,000 Builder Equity 205,000
$850,000 $850,000
Sale Revenue: $1,150,000
Profit: $300,000Return on Equity: 146%
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Private Investing and LendingCommercial | Residential | Special Situations
Multi-Family Construction Experienced home builder needed funds quickly Spec construction
Loan Value: $1,950,000
Position: First
Location: Fredericton, NB
Debt Service: Interest Reserve
Reporting: Review Engagement
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Example Construction Loan Breakdown
Use of Proceeds Source of Proceeds
Land cost 300,000 Land Facility 200,000
Hard Cost 2,450,000 Construction Facility 1,600,000
Interest Cost 150,000 Interest Reserve Facility 150,000
Fee, legal, etc 100,000 Moskowitz Capital Loan 1,950,000
Builder Equity 1,050,000
Total $3,000,000 Total $3,000,000
Sale Revenue: $3,673,000
Profit: $673,000Return on Equity: 64%
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Private Investing and LendingCommercial | Residential | Special Situations
Renovation Home renovator and property manager seized lucrative opportunity Deal done in an afternoon
Loan Value: $760,000
Increased from $433,000
Position: First
Location: St. Johns, NL
LTV: 100% Debt Service: 1:1 during renovations
Reporting: Rent Rolls
and Notice to Readers
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Private Investing and LendingCommercial | Residential | Special Situations
Rental Housing Frequent bank borrower needs equity for new project 72 unit Multi-family rental housing
Loan Value: $800,000
Position: Second
Location: Moncton, NB
LTV: 64%
Debt service: 1.04:1 on subject, 4.5:1 with corporate guarantee Reporting: Rent roll and Notice to Readers
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Private Investing and LendingCommercial | Residential | Special Situations
Short-Term Stay Purchase and improvements to a 10-unit short-term stay building
Loan Value: $340,000
Position: First
Location: Grand Falls - Windsor, NL (14,000 pop.)
LTV: 65%
Debt service: 1.04:1 on subject, 3.2:1 with personal income
Reporting: Rent roll
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7/31/2019 Moskowitz Capital Broker Presentation
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Private Investing and LendingCommercial | Residential | Special Situations
Poor Financial Reporting Refinance of a commercial building, tenanted by various companies
owned by the same principal
Loan Value: $360,000
Position: First Location: Saint John, NB
LTV: 67%
Debt service: 1.03:1 on subject, 1.22:1 with personal income Reporting: Non-consolidated Notice to Readers
Four companies
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Private Investing and LendingCommercial | Residential | Special Situations
Litigation ETO to construct Tim Hortons
Certificate of Pending Litigation registered on title
Loan Value: $1,400,000
Position: Second
Location: Toronto, ON
LTV: 70%
Debt service: As is 0.72:1, with Tim Hortons 1.78:1 Reporting: Non-consolidated Notice to Readers & Rent Roll
Three companies
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Private Investing and LendingCommercial | Residential | Special Situations
Environmental Remediation Environmental remediation of dry cleaner
Major bank would not renew
Loan Value: $300,000
Position: First
Location: Dartmouth, NS
LTV: 47%
Debt service: 1.50:1 Reporting: Review Engagement
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Private Investing and LendingCommercial | Residential | Special Situations
Contact Us
Administration Lic # 11928 Brokerage Lic # 10922
1701 Hollis Street, 8th Floor
Halifax, Nova ScotiaB3J 3M8
2200 Yonge St., Suite 1002
Toronto, OntarioM4S 2C6
115 2ndAvenue North, Suite 107J
Saskatoon, SaskatchewanS7K 2B1