American Cash Solution's Blog

Known to be outspoken at times CEO and Founder of American Cash Solutions Inc voiced his concern regarding the Fed Bailout in a blog featured on the AAOA Website:

http://www.american-apartment-owners-association.org/blog/2008/10/08/bailout-the-banks-that-didnt-go-bad/

Today Secretary of the Treasury Paulson, a former Goldman Sachs employee announced that TARP funds would not be used for the sole purpose of bailing out the banks and gave a more detailed plan that will also develop as President-Elect Barak Obama steps into the Oval Office.

Below is the Official Press Release that highlights Secretary Paulson's Morning Announcement:

http://www.ustreas.gov/press/releases/hp1265.htm

American Cash Solutions Inc is a Commercial Mortgage Broker specializing in construction loans for builders and developers, and refinances and purchases for most building types.  To determine if your deal is ready for submission to one of over 100 lenders we work with if if your loan presentation needs "refinement" please contact the Owner, Charles G Hennebeul at 631-368-2219 or email him at amcashinc@aol.com

Sounds obvious right?  Well its not.  They don't teach this stuff in high school..on how to get a development loan which by the way comes before the construction loan.  Depending on the lender, the Loan may be granted if the developer has less than 5 years experience and if the borrower has less than excellent credit loans may still be granted approval.

This blog will be short and simple and repetitive:

Builders with Unimproved Residential or Commercial Land Need a Commercial Land Development Loan!!!

Hope this helps.

For all your commercial construction lending needs contact the Owner of American Cash solutions Inc, Charles G Hennebeul Directly at 631-368-2219.

You are a builder or a developer who has a builder on your team.  You call up a bank or commercial mortgage broker.  You are concerned about exorbitant fees.  you've heard that business owners are being asked to pay fees and then wind up with nothing.  What's more is the money in escrow you've handed over for the purchase of the land that you want to build homes on is at stake.

One thing is certain.  Builders can protect themselves by getting the terms and fees in writing.  Furthermore, if the bank or broker can not get anything in writing or you are dealing with only one lender then it may be time to deal with a commercial mortgage broker who works with more than one lender...but more specifically works with more than one commercial construction lender.

That being said, why do some banks charge $25,000 "application" fees?  Cost of Money.  Most builders and borrowers in general are concerned about rate and terms.  That makes sense because that is part of the cost of their construction project. 

An experienced builder understands that the bank has cost as well.  IF the bank is using their own money then its opportunity cost..and if its borrowed money (ie from investors, secondary market) then its a ticking deadline for the bank to produce a profit for the investor.  The borrower who thinks that the banks are rolling in the money and don't have to charge what they charge will in some way, usually not directly, allow this "you bankers are taking me for a ride" mindset to be exhibited to the broker or the bank loan officer.  An experienced builder/borrower knows that everything you say to the bank can determine your loan outcome.  As the process moves on the Bank will determine if you are a cooperative borrower or a combative borrower.  Bank representatives will conclude if the borrower/builder is trying to dictate the terms without regard to the cost of money and the bank's obligations to their investors. 

    Investors are number crunchers.  So lets give a simple breakdown.  Recently American Cash Solutions Inc obtained an $11.5 million dollar Letter of Interest for a Builder who will construct over 100 singe family residences and over 10 commercial buildings over a two year period or less.  From the time a letter of interest is issued to the time an appraisal is done can exceed 30 days(experienced builders know not all $11 million dollar loans will close in two weeks).  If a commercial construction lender is going to take on a high risk project then the rate will be over 10%.  10% of $11.5 million is for one year $150,000 which breaks down to about $12,500 a month.  so let's say the appraisal comes back with different numbers..maybe the builder padded construction cost...maybe the builder lied about the value of the project...maybe the seller mislead the buyer.  A real estate agent once made a very smart comment..you must first sell the price of the property to the buyer and then you must sell it to the lender through and appraisal.  Well now loan to cost and ltv are changed by the appraisal's outcome.  Both the lender and the Builder must go back to the drawing board.  This may take more time.  Maybe title issues come up.  Then the real nightmare begins.  The builder makes a bold and reckless misrepresentation to the broker or bank that the land was not farm land and the lender specifically said they will not touch(bank slang for lend on) farm land.  Well know the bank has wasted two months with no loan.  Remember that cost of money to the bank?  Well $12,500X2 months equals $25,000.00

    The bank declines the loan and now must rely on its own loan officers or broker connections to get another loan.  So if the next loan application is declined due to other reasons then the opportunity cost factor becomes more significant.  Imagine if a bank has $200 million of investors' money and has signed legal contracts that obligate the bank to pay a profit to the investors either on a quarterly, semi annual or annual basis.  Each day, each month cost the bank money.  Obviously if this bank fail to write any loans they would lose investor confidence and if the investors pull out the bank is doomed!

    Another factor that borrowers/builders don't think about are the loans that were actually made but become nonperforming...the builder fails to pay or produce construction results.  Now the bank is stuck with a construction project that they don't want to complete.  The bank will be stuck with the cost of selling the property, covering its obligations to its investors and if the property fails to cover the loan amount then the bank has to still pay back its investors or if its their own money then the bank lost out on an opportunity to lend the money to a builder that would have met its obligations under the terms of the loan.

American Cash Solutions Inc encourages builders and landholders who need to finish their subdivisions. to contact the owner Charles G Hennebeul directly at 631-368-2219.  Minimum loan amount is $2 million dollars.  Must be upfront about networth,cash on hand and potential partners/investors which ensures better placement with appropriate lender relative to your particular loan scenario.

Charles G Hennebeul

Owner

American Cash Solutions Inc

http://www.mybuildingfunds.com

631-368-2219

amcashinc@aol.com

The loan will allow for a Midwestern Builder to construct over 100 single family homes, over 5 Industrial Buildings and over 5 other Commercial properties.

What makes this project attractive to the lender are the demographics, loan to constuction compatibility and final loan to value coupled with a strong exit plan by the borrower.

The funds will be available to the borrower in various stages and the term will be a maximum of three years.

This project is a prime example of the fact that while we are going through a credit crisis, if a project has a strong exit plan a lender may step forward.

Builders who are trying to sell their subdivided or raw land should be aware that financing options on the commercial side may be available. "Builders  may be trying to complete their business transaction by incorrectly knocking on doors of residential lenders who only lend to consumers looking to buy homes and builders building one or two spec homes or the home that  the builder wants to live in.  If a builder has many homes or a project of homes that he/she wants to complete then they should be applying for commercial loan financing. Once those homes are built, then the consumer to whom those houses will be sold will then go for their FHA or FannieMae home loan.  You will never see a builder go to an FHA lender to complete their subdivision project which is a business venture." says Charles Hennebeul, Founder and current CEO of American Cash Solutions Inc.

Commercial lenders are still actively lending.  Most Hard money lenders have private investors that are not beholden to Wall Street.  The hard money lenders American Cash Solutions Inc works with like to be called private money lenders.  Some of them have no prepayment penalty.

One of these private money lenders just received a $50 million credit line from a Wall Street traded lender that has been around for over 80 years!

Construction Commercial loans will always exist.  Think about it logically...all of America was constructed.  Every building, every house was built all cash or from the proceeds of construction loans.  Commercial Construction Loans will always exist...sure some might lower there ltvs or LTC,some might require "more skin" in the game from you the borrower but there will ALWAYS be construction money available.

Conventional Commercial Construction Loans will be the hardest hit in terms of its reliance on Wall Street.  Most lenders on buildings require 20 to 30% downpayment and this reduces the risk of commercial foreclosure.  Credit score requirements will be raised and lenders will become more picky but will still lend.

There is a possibility that the next recession(a part of the US Business cycle so it will happen sooner or later...at least once a decade) will be more severe than the last two.  If the global market factors in a global reduction in profits that used to occur between many countries a global recession could occur.  That will come to pass as the leaders of the economy work hard to correct the problems.  There will be disagreement but from that will come an agreement that something must be done for the sake of the Nation.

Commercial Real Estate Lenders are nervous but NOT in the same boat as residential.  Just this past week American Cash Solutions Inc entered into a service agreement with a Real Estate Developer on a $15 million dollar project.  A conference call with our lender last Friday resulted in a meeting of the minds and the point is that the lender likes the project and didn't say"Are you serious..with the mortgage crisis, the bailout, a possible severe recession and you want us to lend????"  Instead this lender keeps calling our company!  Of course this is a good deal and that helps.

If you need a large commercial loan over $5 million and want to work with a Commercial Broker that can make a professional presentation to large lenders regarding your project call Charles G Hennebeul the Owner of American Cash Solutions Inc at 631-368-2219 to discuss your Commercial Construction Loans. 

First:It is common for sellers to accept good credit buyers with larger downpayments..maybe a 20% downpayment..but the extensive underwriting, the 30 to 60 day appraisal process and close scrutiny of the debt service coverage may lead to a declination.

If that happens, then the bad credit buyer may have been a better bet.  A Buyer using hard money has to put down 30 to 35% down payment.  Debt Service Ratio will be calculated and must make sense next to a look at the last two years tax returns of the buyer by the hard money lender.  Some hard money lenders will close in 14 business days and will not require an appraisal(as is the case for one of my lenders whose minimum loan amount is $1 million).  One of my lenders does require an appraisal and may even require a toxic report.

In terms of getting the deal done quickly, if a buyer wants to us hard money and wants the property REALLY bad and the seller NEEDS to sell "like yesterday", a bad credit buyer using hard money may be the better bet.  This is especially true if their have been very few "bites" by the buyers and your seller is getting nervous.  If the property is not in the middle of a heavily populated town/city and is located in a small town where word of mouth has not been doing a good job, that one buyer may be your best bet...and in retrospect, may turn out to be your only buyer!

Hard money lenders may have high interest rates but some of our lenders have no prepayment penalties allowing the loan to to be a bridge to a better loan a year or so after the loan closes.  Most commercial property owners refinance after their initial purchase loan so the buyer wins in this case because they get the property, commercial credit history and are not surprised that a refinance will be in order in the next few years (as opposed to refinancing and being put into a loan whose terms will force a refinance.

Call Charles Hennebeul, Owner of American Cash Solutions Inc at 631-368-2219.  Fax the rent roll yield to date, last two years of the Hotel or Motel  tax returns, real estate agents, attorneys involved to 631-270-3935.  We will take an application over the phone and obtain a rate quote from our hard money lenders. More paperwork may be needed but these documents are a good way to give me a better view of the deal.

I have been getting bombarded with calls from residential appraisals asking me what they need to do to get signed up. I feel bad for all these appraisers because I know its a rough market out there and many of these appraisers have family and children to feed.

American Cash Solutions Inc places commercial loans only.  We do not place any sort of residential loan in any state.

We do invite all residential appraisers to view our referral fee page.  Its a great and honest way to make a few extra bucks as long as you are not the appraiser on the deal.

If you are a commercial appraiser in any state I urge you to email me your website and contact information.  I am putting together a state by state list of appraisers.  While we do not do commercial loans in every states(we are in about 40 states) we do intend to BE in every state within the next ten years.

Lastly, as the Owner of this Company, let me make one thing clear.  As my company grows and hires loan officers sometime in 2009 you can be assured that all appraisers will be treated with respect and coercive behavior by loan officers will not be tolerated.  I am aware this seems to be a growing practice by certain loan officers. Such behavior leads appraisers to think poorly of a company and that is not the kind of company American Cash Solutions Inc wants to be.

Kindly

Management

Your on the road, your in a rush to meet a customer, a vendor, a business contact or you just closed shop and mother nature calls.  Here comes the stop sign...too many of them your thinking...you come to an incomplete stop..no one is coming out of the side road anyway.  The car in front of you has no where to go and is perfectly content going 30 mph but you could go 50 mph in this 30 mph residential neighborhood.  you think this car is going so slow a turtle would even complain.  In fact if the turtle was behind this car the turtle would likely experience road rage.

You live five minutes up the road and have been there for over 20 years.  You know these roads better than Scottie knew the USS Enterprise (recall he knocked himself out on an overhead beam after stating he knows the ship better than the palm of his hand). 

You decide the car in front of you is not a car-its a rock in the middle of the road and YOU can and MUST go into the oncoming lane and pass this 30mph rock.  As you are giving the elderly driver one of those "How can you still be on the road?" looks you fail to realize he or she is aware of your rage but has a good reason to stare straight ahead....its not because you are uglier than roadkill...its because a safe driver has to focus on the signs, side roads, and what is in front of you.  YOU however are in the oncoming lane, foot hard against the accelerator, highly "caffeinated" from a Starbuck's Tall Mocha Frappuchino and while giving the driver a nasty look fail to see a car ...really a large mini truck (but they have five kids and needed a bigger car) is in the lane where you are trying to break the laws of physics.

In this scenario people could get killed, go to court, and much more.  For simplicity's sake just imagine your insurance premium renewal is just due and this recent Dare Devil Tactic has caught the attention of your insurer.  NOW your insurance premium has gone up by 50 bucks per month.  Now I don't know what its like to have my premium go up because knock on wood I have never been in a major car accident.  When I first started riving I had a minor blip but its gone.  After reading my insurance policy I found out I am a "Ultra Preferred Pro 1(there is 2,3 or 4 and these are lower levels) " rated driver.  The policy says this is permitted by Regulation 150 of New York State Insurance Code.  The next lower rated levels are Preferred Pro, Standard Pro, Standard, Middle Market Pro, Middle Market, NonStandard Pro, and then the lowest is Nonstandard.  Each of these have 4 levels within the Tier.  That means out of 32 (32 being the highest grade you can get) I am rated as one of the MOST desirable driver that my insurance company can have.  This also means that when I shop around to another major competitor I can get a better price reduction. 

This also translates to saving money.  If your bad driving has you paying an extra $50 dollars a month that is $600 per year and over a ten year period that is $6,000!!!!!  Something tells me for New York I am being conservative....perhaps bad drivers are getting increases of $100 or $150 a month.

Some of the things I do to try to avoid accidents are as follows:

1)Come to a FULL and complete stop at Stop signs even if some idiot is right up my car butt!

2)Avoid trying to cross two lanes where you have to pass oncoming traffic..ie we all know of some fast food joint in our town where multiple accidents happen from cars pulling out of the drive thru and are forced to make a dash past oncoming cars.  I always make a right turn and will go around the block to avoid crossing busy roads.  Remember $6000 over a ten year period!  And for some its alot more! In fact when UPS started this same policy I was already doing this for many years!

3)Let other people go if they are in a rush or have already cut you off.  Who cares if these reckless drivers are one car ahead of you?  They usually wind up stopping at the same red light thats up ahead anyway!  I always laugh when that happens!  In fact one time this happened and I had friends of my Dad in the car and I said "Watch them race ahead so they can get tot eh red light...there you go ..get on up tot hat red light!"  Sure enough the light turned red and the we drove right up behind the car that had just guzzled so much gas for nothing.

4)NEVER get angry on the road.  OK I get irritated and yes sometimes I do let other drivers know to back off...I am not a pushover.  Rage and anger are not allowed when driving. 

5)Remember that your reckless driving might take the life of a parents only son, a Son taking care of a mother dying from cancer, a husband whose wife is at home in her last dying days, a baby in the back seat of a car you just hit.  So its also not about saving money as a small business owner trying to keep cost in control..its also about other people who have the family members that rely on them or just love them dearly.

My parents grew up in Newburgh.  I have family in Newburgh.  My grandparents lived there as well.  Most people know the town due to what was previously known as Stewart Air Force Base.  The Air Force National Gaurd is still there and when you drive by you can see large dark green Boeing Jets that are clearly Militiary.  Once you pass Stewart Airport you will come upon Orange County Choppers.  Feel free to visit their website at www.orangecountychoppers.com  In fact, there is a Big brand new looking Hotel adjacent to the huge 10,000 square foot facility.  Inside there is the chopper for Lance Armstrong, another designed as a space shuttle, another with a leather seat and knife blades covering the wheel.  You can buy a leather jacket, and much biker gear.  A few sales rep are available for serious buyers.  There are about 20 plus bikes on display and many bikers come to this store.

Newburgh is not far from Middletwon and Montgomery....nice towns with horse farms, corn farms and long country roads.  You take 17 East or West to 211 and head on over till you hit 84.

In Newburgh on Broadway, about 20 to 40 years ago the street was a busy business district.  My Grandfather was a manager at what was once Woolworth's and apparently according to my Dad active in the Town.  My mother worked at EB White Insurance Company which is still there!  Apparently it is a family owned business.  My father was attending Iona College and had fallen in love with my Mother at first sight.  My father always tells me that the owner warned my Dad to stay away from her since she is a good decent lady.  Well my Dad didn't stay away from her, they married at West Point (where my Grandpa was a retired Army Mechanic) and as of this November 2008 they will have been married for 41 years!

My Dad used to work at an apple farm.  He drove me up there once and was all excited to show me the apple trees and when we got over the hill we saw a farm lined with dead apple trees.  My Dad looked so sad I said come on you have to show me that huge tree that is in the middle of the street.

There are some churches in Newburgh..two that I know of, where my cousins have gotten marries..one of which is 100 years old.  As you travel down Broadway many stores have closed,,,,hit by the change in the US economy like many other Main Streets across America.  Newburgh has become diverse.  There is clearly a hispanic community and other minorities.  Whatever the change that is happening it is clear that many of the original people still live in Newburgh and have no intention of leaving.  Others have left with no intention of coming back as told to me by a waitress that I met in a Diner down in Florida.

Newburgh is a prime example of where a company like American Cash Solutions Inc. clearly can help.  The areas that our company can help include a)Business Consulting b)Small Town Revitalization Engineering c)Obtaining Small Business Financing for Small Businesses.

Small business owners and people hoping to start a small business are encouraged to contact the Owner Mr Hennebeul to discuss their needs.