Loan FAQ
How is Dobson different from my bank?
At Dobson, our two main goals in any transaction are 1) to create a competitive environment that forces capital sources to compete for the borrower's loan and 2) to manage the transaction workflow so the borrower can focus on executing their business plans.
Banks are constrained by loan products and underwriting guidelines that don't necessarily fit the borrower's needs. The Bank's loan officers are incentivized to maximize profits while pushing as much of the risk as possible onto the borrower. Banks also force borrowers through a variety of hoops and typically provide only limited assistance managing transaction workflow.
Dobson's approach is fundamentally different. Our fiduciary obligation is to you, the borrower. Since we are not limited by our affiliation with any one bank, we are able to present your loan to a broad spectrum of potential capital sources and secure the best terms and pricing that the market can offer. Equally important, Dobson remains very much involved in the transaction, sharing the burden of collecting and processing information, coordinating third party reports and driving towards a smooth and successful close.
Do we end up paying more by working with Dobson?
There are several components that make up the ultimate cost of financing. Among them are interest rate, term, origination points and fees.
Dobson’s fees vary with the type and size of the loan however because Dobson is able to negotiate direct pricing with most lending sources Borrowers often incur no additional costs by engaging us to negotiate and manage their transaction. Lenders appreciate the effort Dobson puts forth to compile the information they need to make a funding decision. Even if an individual origination fee varies from loan offer to loan offer, the value of the loan to be Borrower exceeds the fee paid to Dobson.
In addition, Dobson saves its clients time and money by creating an environment that forces the market to compete for the borrower's business. Ultimately, clients get all of the benefits of a more effectively managed transaction and can focus on their new acquisition.
How does Dobson choose its clients?
Dobson prides itself on taking a private consulting approach to supporting client objectives. By choosing to engage a client we are committing all of our resources to making their opportunity a success. clients that work with us know that this often means going beyond the role of a typical advisor.
By company mandate, each Dobson professional is limited to engage no more than five new clients below the application stage at any one time. Our clients are qualified on many of the same criteria that banks use in evaluating loans. However, beyond identifying whether we are capable of effectively helping a client meet their objectives, we typically require an exclusive engagement letter that obligates both parties to the relationship. By limiting the number of real estate investors we agree to represent, we are able to provide a full service, advisory experience that is unique in today's capital markets.
Who are Dobson's typical lending partners?
The goal at Dobson is to add value to client transactions by offering a wide range of financing alternatives and direct access to top national, regional, and local lenders. We have funded deals through agencies, life companies, conduits, and "out-of-the-box" lenders. In addition to permanent debt financing, we regularly structure transactions using high-leverage bridge loans, mezzanine debt, construction loans and straight equity.
What documentation will I need to supply?
• Contact information including your name, address, and telephone number.
• Loan and property information such as the loan amount, loan purpose, property
rent roll, operating statements, purchase contract, and desired terms.
• Credit reports will be obtained by the lender.
• Last 12 months’ payment history for your primary residence and, if a refinance,
for the subject property.
• Schedule of properties currently owned indicating amount of liens, gross rental
income, operating expenses (including taxes and insurance), current mortgage
payments, and payment history.
Once I have the loan, how much financial reporting is required,
and what financial covenants must I make?
Conventional lenders generally require periodic financial reporting, such as quarterly or
semi-annual financial and operating statements, for as long as you have the loan. Banks
may reserve the right to make you pay off the loan prior to its due date if you violate a
covenant or don’t submit financial statements. Other lenders, especially direct lenders,
do not impose any reporting requirements and are simply concerned that the mortgage
payments are current.
What are the total costs associated with getting the loan?
Ask your lender about associated costs such as lender fees, origination points,
application fees, commitment fees, and any legal fees. Some lenders will have less
expensive alternatives or will bear these costs altogether. A little research upfront
could save you thousands of dollars. When shopping for a commercial mortgage,
compare complete programs, not just interest rates.
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