Do you protect brokers?

Do you do 100% financing on purchase transactions?

What types of properties do you lend against?

Do you take second lien positions?

Do you do residential mortgages?

Do you require appraisals?

How is PAF funded?

Does PAF make Debtor-in-Possession (DIP) Loans in Bankruptcy Proceedings?

Do you lend outside of the US? 

What is the basic process to fund a loan?

PAF doesn’t ask for advance fees.  Give us a quick overview of the loan.  If we are interested, we’ll ask for additional information and then review the deal and do our due diligence at no charge.  If we like the deal, we’ll do an internal preliminary approval subject to a site visit and a range of the valuation we will need.

We’ll then ask for a travel deposit and any other third party costs we may incur and then go out to see your deal – generally a few thousand dollars depending on location, etc.

Thereafter, as long as the visit went well and we concur with an acceptable valuation, we’ll issue a formal term sheet outlining the basic terms of the loan.  If the borrower finds our proposal acceptable, then we ask for a legal deposit and the name of your lawyer to start the loan documents.

Once it gets to our lawyers, and assuming no title problems, we can close within days.

Do you protect brokers?

Absolutely always. 

Do you do 100% financing on purchase transactions?

Rarely and only if: 1) the value of the property supports the purchase price; and 2) if the borrower has other real estate property that can be used as additional collateral to replace a down payment.

What types of properties do you lend against?

We can lend against virtually all types of properties including:

Apartment buildings, office buildings, hospitality properties, medical facilities including treatment-centers, land, retail properties, strip malls, industrial properties, mixed-use buildings, etc. 

Do you take second lien positions?

On occasion we can take a second lien position behind another lender.  But only if the combined liens comprise no more than 50-60% LTV and we will require the right to take-out the first if there is a default.  We cannot take seconds behind seller notes, notes due to principals, etc.

Do you do residential mortgages?

No. 

We are a commercial private lender, and are not licensed, nor do we intend to get licensed, to do mortgages on primary or single family residences.

Do you require appraisals?

What we require is to get a very good sense of the value of the property, and as quickly as possible.  The true value of the property is ultimately what is going to make, or break, the deal.  Quality appraisals, therefore, are always appreciated, but not required.  We also work with Broker Price Opinions (“BPO”).  The most important factor is that the borrower/principal has a realistic take on the value, rather than an overly optimistic view.

Bad appraisals, for example, one prepared by an appraiser who is obviously not qualified to perform the appraisal or which is very obviously inflated, will likely stop a deal that may otherwise have merit at a more reasonable valuation.

How is PAF funded?

We are funded primarily by one large institutional investor who in turn is capitalized by several hundred million dollars of funding from large institutions and pension funds. 

The benefits to our borrowers of our funding is:  1) the capital is in place which allows us to focus purely on the transaction – we do not need to reach out to investors to fund each loan; 2) our structure facilitates rapid decision making and speed to close; and 3) it gives us the ability to handle larger transactions – up to $50 million per loan.