This month, The Niche Report would like to introduce you to a hard money lender that sets itself apart from other lenders in the industry by its flexibility, innovation, and outstanding customer service. Perhaps most importantly, Metro Funding Corp. prides itself on operating with the highest level of integrity. Vice-President of Metro Funding, Jennifer Smith, was kind enough to sit down with us to offer a behind-the- scenes look at the history of the company, the products they offer, and the advantages to utilizing their services in this real estate market. Give us a little bit of the history of how Metro Funding Corp. was started. As all businesses do, Metro Funding Corp. began as an idea in someone?s head. That someone in our case was David Hecht. After 20 years of working in the real estate industry, David recognized a need in the asset-based lending marketplace and formed Metro Funding under the premise that commitment fees would be paid at loan closing. He firmly believes that a lender should only be paid when the borrower gets paid. What can a borrower or a mortgage broker expect when they come to Metro? Metro offers borrowers quick closings on ?non-bankable loans.? By definition, a hard money loan is made using the value of the real estate collateral (or ?hard? collateral) that is provided. This differs from conventional lenders in the sense that a hard money lender will not focus on the borrower?s credit and income to qualify a loan and will not require a lengthy, paper-filled, underwriting process. Metro can close loans within a 2 to 3 week timeframe with the focus of the loan being the value of the real estate collateral. Most borrowers come to us because they need a ?bridge? to get them from point A to B. Frequently, Point B is a conventional or more permanent lender. Maybe they need time to repair their credit, maybe they need time to establish a steady income stream, or maybe they need working capital. Whatever the problem is, we are their temporary solution. So, what sets Metro apart from its competitors? Bottom line: lower upfront costs. You get a lender that cares. As I mentioned earlier, we are firm believers that we should only make money when our borrowers make money. For that reason, our fees are taken from loan proceeds at loan closing. Having said that, we keep the process simple and we keep the focus on closings. We know issues are going to arise for us or for the borrower, but it?s how you overcome the issues that set lenders apart. Each transaction requires a unique way of thinking. You can?t apply the same rational to a land loan as you do to a restaurant or a hotel. Likewise, each borrower?s circumstances are different and require creative solutions. We feel our borrowers deserve a lender that will ?roll with the punches? with them and ?think outside the box? when necessary. What recommendations do you have for borrowers or mortgage brokers that are working to get a hard money loan closed? The major requirements to get a hard money loan closed are a strong asset and the ability to contribute equity to the transaction. Without that, there is no loan. Assuming those requirements are met, then persistence and cooperation are essential. I work with a network of excellent mortgage brokers throughout the country. The brokers that really stand out are the brokers that stay on top of their loans. They work hard for their borrowers and educate them about the options that are out there for their particular loan. My advice to brokers right now is to keep trying and don?t give up. Now, more than ever, is when hard money loans are most useful and can provide the biggest benefit. How does Metro fund loans? Where does the money come from? We write the checks! I say it that way because there seems to be a growing epidemic of companies portraying themselves as lenders, but all they do is take loan applications and shop them to real lenders and collect a fee for this service. That is not the case with us. We have three sources of capital. The major one is our balance sheet - we have a revolving warehouse line from a major institution. The second source is our proprietary capital. Our principals personally participate in the funding of all our loans. Lastly, we have two hedge funds that were started by and, managed by our principals. The hedge funds are made up of family offices, institutions, and high net worth capital. These three sources make Metro Funding unique in that we are quick to approve loan requests and have the final say. How is Metro affected by the current market swing and what do you foresee for your future? We have been seeing an increase in the amount of loan requests and closings. We attribute this to the fact that institutional banks have tightened their underwriting guidelines and are turning away more loans. A loan that previously would have qualified for a conventional loan is not meeting the new requirements, so hard money is the next avenue for them. In general, we look forward to growing our portfolio in size and strength and offering added flexibility to our borrowers. Recent market conditions opened up some new opportunities for us. Our newest endeavor involves the establishment of a private equity fund designed to acquire distressed properties. Metro strongly believes in corporate social responsibility. As a result, we are also launching a ?Green Incentive Program? which will offer borrowers lower rates for projects promoting ?environment- friendly? technology.
