Jun 27, 2023
In this episode of "The Entrepreneurial Agent," host Paul Neal sits down with Scott Diberardinis to discuss the intricacies of real estate finance. They delve into the structure of a particular line of credit product, unique in its potential to fund up to 100% loan to cost, and Scott's personal stake in it.
Scott explains the loan product as a line of credit, not a revolving one, designed for purposes like ground-up development, expansion, refinancing, and acquisition. With a broad range from $15 million to $2 billion, this credit line is available for deals within the United States and selected international locations.
The loan product's appeal lies in its flexibility - it's an interest-only payment product, with terms of five years and an optional one-year extension. It's non-recourse, with standard bad boy carve-outs and no pre-payment penalties, meaning it's favorable to borrowers looking to capitalize on market changes.
Scott's "skin in the game" refers to the lenders' requirement for borrowers to have significant personal investment in the project. In the case of this loan product, borrowers need to bring 20% of the project cost to the table as an interest reserve. This mitigates risk for the lender and enables the provision of 100% loan-to-cost funding.
The conversation also includes a look at market trends, the challenges facing business owners with impending balloon payments, and the need for borrower experience. Scott concludes with an instance where he had to decline a loan due to lack of borrower experience, emphasizing the importance of proven ability to complete the project.
Overall, this episode provides valuable insights into the complexities of real estate lending and underscores the importance of experience and personal investment in securing large-scale funding.
Meet the Host: Paul Neal is the founder and Principal Funding Strategist at Vantage Point Commercial Capital, a firm that focuses on helping entrepreneurs, businesses, and real estate investors win by funding their growth and dreams in nontraditional ways.
Paul’s unique perspective has been honed over 30 years as an entrepreneur, financial strategist, professional speaker, and executive coach. He took the road less traveled choosing to leave engineering right out of college to become a serial entrepreneur. From great early successes in the 90s and 2000s, to completely losing his primary business in the Great Recession of 2008, to bouncing back and just recently selling another business for a healthy 7-figure sum…he’s experienced it all. Paul offers a wealth of experience and passion to the entrepreneurial community in an engaging, upbeat, encouraging, and witty way.
Connect with Paul:
Visit his website: https://paulneal.net
Connect with him on LinkedIn: https://www.linkedin.com/in/paul-neal-47b8478
Vantage Point Commercial Capital: https://vpc.capital