Table of Contents
Podcast Transcript
00:00:00:07 – 00:00:12:04 – Scott Dillingham
Welcome to the Wisdom Lifestyle Money Show. I’m your host, Scott Dillingham. Today, I have a very important guest that you’re going to love meeting. His name is Mike Peters. He runs our commercial mortgage division here, at LendCity Mortgages. Welcome, Mike.
00:00:12:09 – 00:00:18:18 – Mike Peters
Welcome, Scott. Pleased to be here. It’s about time that we were able to find the time. We’ve been so busy with commercial mortgages.
00:00:18:18 – 00:00:37:01 – Scott Dillingham
Yes. I’m so glad that you’re here. And I know our show is mostly based on, you know, for investors. But one of the things that we always do before we kind of dive into the nitty gritty is we go over, you know, your upbringing and how you got to, you know, from childhood to here. That’s it.
00:00:37:17 – 00:01:15:11 – Mike Peters
Well, I’m a born and raised Windsor. South Windsor boy, went to Massey High School, had a great childhood, lots of friends. My dad was a very successful businessman. And so we didn’t really want for anything. Took me a while to figure out what I wanted to do with my life. I always had a keen interest on why things were placed where they are, for example. Why is that Tim Hortons there versus there? How many pizza parlors can you have on a block? And so I ended up going to University of Waterloo, well, I took Urban Planning at the University of Windsor first.
00:01:15:11 – 00:01:15:21 – Scott Dillingham
Okay.
00:01:15:21 – 00:01:31:11 – Mike Peters
And then I decided to work for a while at Chrysler, on the line. I’ve held several jobs before I finally got serious about school, got into the University of Waterloo as an adult student, and got my master’s degree in economic development.
00:01:31:11 – 00:01:31:23 – Scott Dillingham
Okay.
00:01:31:23 – 00:02:22:07 – Mike Peters
And that took five years, came back to the city of Windsor because of my love for the city of Windsor. I was the youngest certified economic developer in Canada. I was the only one to hold both a master’s degree and certification and I was highly recruited across the country. But I came back to Windsor and immediately was part of what was called prosperity 2000. And this was a collaborative, about 300 community leaders during a recession where we knew we had to come up with a strategy because of how strongly we were tied to the automotive industry. And it was basically a diversification strategy that a lot of the strategies that you’re seeing come to fruition today. The foundation is back in those days.
00:02:22:07 – 00:02:22:12 – Scott Dillingham
Okay.
00:02:22:12 – 00:02:33:22 – Mike Peters
I was real exciting initiative to be a part of, but one of the things I found frustrating being in municipal government is just it moves like a tortoise.H
00:02:33:22 – 00:02:34:09 – Scott Dillingham
Yeah, super slow, yeah.
00:02:34:09 – 00:02:55:12 – Mike Peters
You know, we hear that about guys right now trying to get permits for various types of constructions, these third houses, the gentrification, that kind of thing that are real important to our city. So I just I just couldn’t take the slow pace. So I wrote an economic development strategy for Union Gas.
00:02:55:12 – 00:02:56:11 – Scott Dillingham
Okay.
00:02:56:11 – 00:03:22:09 – Mike Peters
Sent it to the president of Union Gas. And within a week I’m sitting with the vice president of marketing and he says, come to Union Gas and set this up because I saw where in the US the utilities were heavily involved in promoting regions. Everybody’s competing for the same dollars, right? It all boils down to you don’t want to trade local dollars. You want to bring in new dollars if your local economy is going to grow and expand.
00:03:22:09 – 00:03:23:01 – Scott Dillingham
Yeah.
00:03:23:01 – 00:04:32:20 – Mike Peters
We were for too long just trading dollars in Windsor. You know, automotive guys, income was going to the grocery store and other things buying new cars, but it all kind of stayed local. So if you’re going to grow the economy, it’s about promoting yourself outside the region. So I worked at Union Gas. That was during a period of a lot of acquisitions. We purchased Centra Gas and I ended up with 815 municipalities and a budget of about half a million bucks. And it was kind of difficult to figure out, you know, do you give it to the Stratford Festival? Do you give money to the new arena and put your name on it? What do you do? So there was a lot of hospitality suites and entertaining a lot of politicians. I went to all the annual conferences. I was, you know, AMO, you name them small municipalities, large municipalities, and just really got a good feel for the bigger province and each of their unique, you know, niche is one. One of the groups I was with was the Canadian Council for Public Private Partnerships.
00:04:32:20 – 00:04:33:08 – Scott Dillingham
Okay.
00:04:33:08 – 00:05:52:17 – Mike Peters
Which was a really neat, organization. It was high level executives. And each quarter we would travel to a different jurisdiction in Canada, taste the flavor of Halifax. We went to Saskatoon and ate bison, saw the cliff where the native indigenous people would run the buffalos off the cliff. But I got to hear what CIBC was doing in their local communities and we went to one small mining town that had lost the mine and the individual owned it basically owned the town. He was one of the first to do the murals and the whole town went from mining to tourism just like that because of one strong individual. And so I brought that, that concept to Essex. Town of Essex was the first to adopt it. And you see murals all over all over the town, Essex. I then again became disgruntled with the slow pace of what basically is a monopoly. So it went from bureaucracy to monopoly. So my background in economic development, I did some cartography and I also designed the marketing strategy for this region, which required that I get in an airplane and take pictures of industrial parks and I’d fly over golf courses and I go, You know what? I want to get into the golf course mapping business.
00:05:52:17 – 00:05:53:06 – Scott Dillingham
Mm hmm.
00:05:53:06 – 00:08:11:10 – Mike Peters
And so that’s what I did. I actually quit Union Gas and started a golf course mapping business mainly in Florida. I had partnerships with all of the senior architects, the big name people, etc.. And then September 11th hit couldn’t put any planes in the air. And I, I had about $1,000,000 worth of contracts. So I got into Homeland Security mapping targets for potential terrorists, such as amusement parks, government campuses, university campuses. And then I got into fleet tracking. I got into equipment tracking. Just been an entrepreneur ever sets and that’s basically since 1999. Then I found that a lot. You know, so I have a personal desire to assist business, which goes back to my economic development days where trying to diversify, like getting the plastics companies that are making tail lights to potentially make Halloween baskets. You know, or anything out of plastic toboggans, etc.. And so I was successful at that and I enjoyed that. But I had the entrepreneur, entrepreneur flavor in my jeans from day one, partnered with an engineering firm. We were looking at remote monitoring water wells. There’s 800 water wells in Ontario that there aren’t being monitored. So, you know, contamination is an issue. One of our customers wanted some financing. So I got into business finance and represented a company out of Toronto. They knew because of my background being as diverse as it was an entrepreneur, my master’s degree and all my other experiences and my relationships in the province, that I’d be a good candidate to represent them. One of the first things I did was go to the local incubators, accelerators, etc., and see if there’s any small companies that needed some assistance in finding financing to grow their business. And as a result of that, I was invited to work with the accelerator to try to figure out some things to get them growing and expanding. And one of the things that we determined is that they should probably get a consolidation mortgage. And that’s how I met Mr. Scott Dillingham.
00:08:11:12 – 00:08:11:22 – Scott Dillingham
That’s right.
00:08:12:07 – 00:08:17:08 – Mike Peters
You were able to obtain a mortgage based on a site visit and COVID hit.
00:08:17:19 – 00:08:18:01 – Scott Dillingham
Yeah.
00:08:18:16 – 00:09:00:14 – Mike Peters
So things kind of slowed down for myself and I assisted, did some home renovations. And now that things have picked up, I am rocking and rolling in the commercial mortgage space. I’ve got a good team. I want to grow the team. I would like a new agent in the Maritimes and one in Western Canada. It’s complex, it’s shifting constantly. You know, we were doing all kinds of refinances on duplexes. Now I’m moving into plazas. You know, the loan, the values are changing, the whole dynamics every week is different and it’s keeping me on my toes. And I just love it.
00:09:00:20 – 00:09:23:07 – Scott Dillingham
That’s good. And so for an investor listening, he said duplexes. And so somebody might be like, What? You don’t get a commercial mortgage on a duplex, but you do. So could you elaborate why someone who maybe is declined from their bank on the residential side, who wants to buy a duplex, how going to you through commercial how that changes things?
00:09:23:14 – 00:10:49:13 – Mike Peters
Yeah well first of all one of the reasons they may have been declined by the bank is that they’re personally, you know, at their limit. Right. And that’s the main reason or that their income went down during COVID could be a number of reasons why they got declined at the bank. The first thing that a bank will look at on the commercial side of the thing on a commercial mortgage is the income generating capabilities of the property. Its property first and foremost, it’s the appraisal. It’s the rent role against expenses. And, you know, the big banks are looking for about a dollar 30 an income for every dollar in expenses. Credit unions are a little more lenient and even a little better higher loan to value. So they look at that first. Is that whole property’s financial situation and then they’ll back it up with a personal net worth statement. It doesn’t have to be all that strong a personal net worth statement. It just has to basically say that this duplex, if somebody was to leave today, you know, walk out on their lease, can that mortgage be covered for one or two months until it’s back on the market? And so I highly recommend that it’s done on the commercial side because then, you know, again, remove some of the stuff on your personal side and allows you as you move forward to buy a bigger primary residence because it’s not all tied to your personal net worth.
00:10:49:15 – 00:11:09:18 – Scott Dillingham
I love it. So just to recap, because I understand your terms, but maybe somebody this is all new to them. And before I actually reiterate that, just to confirm, though, would you say because I tell people it’s like 90 to 95% about the property in commercial and maybe 5 to 10% about the borrower? Would you say that’s accurate?
00:11:09:23 – 00:11:15:09 – Mike Peters
Yeah, I’d say that was accurate till about two weeks ago. And I’d say she’s about 80 20 now.
00:11:15:16 – 00:11:18:03 – Scott Dillingham
80 20. Okay. Yeah, good for me to know.
00:11:18:03 – 00:11:27:14 – Mike Peters
Yeah. Because just because of the they are evaluating the commercial properties a little more stringently today than they were a couple.
00:11:28:01 – 00:12:49:09 – Scott Dillingham
And they’re doing that on the residential side too. But just to go back to recapping, so pretty much what Mike is saying is like say your bank does say no, your at your debt ratio limits you can’t afford anymore. Or like you said, your income went down from COVID. On commercial, maybe 20% of your application now is based on your income and the other 80 is the property and what it generates and what it can do. So I have seen Mike actually get clients who are on the residential side. We couldn’t help them. I mean, we could get them a private mortgage. But then through commercial, Mike was able to move forward. So when I knew and I actually knew about these opportunities before starting the commercial division or having Mike start it. But the idea to start it and I knew that this was an avenue for investors to really grow and expand their portfolio that other, you know, brokers or agents or people were not looking at. Because if you look around, very few people actually have a commercial team in house, where we do. So it’s really, really cool. So I think that summarizes that. But could you talk maybe a little bit more about so the lenders are tightening up. We do know this right, because the market’s cooling. We’re at the end of 2022 pretty much by, you know, the time we’re recording this. What are you seeing in the marketplace so that the investors can be aware of this and maybe strategize a little bit better?
00:12:49:10 – 00:14:01:13 – Mike Peters
One of the new things that I’m seeing is fair market rents. Now, one of the issues that that just kind of has happened recently and why less duplexes are getting refinanced, is everybody thought that, wow, my property just almost doubled in value and that I’m going to be able to take out half of the value of the property. It’s all about what the rents will support. And so there was some confusion among clients in that area. So the best scenario or the best avenue is actually a vacant property and going in there and doing some renovations. So you get a short term private loan or a short term variable some of the lenders are doing or short term fixed, some of the lenders are doing that with money for renovating on the condition that without a penalty for breaking the mortgage as soon as the property is done and it’s really reappraised, then it goes to a conventional mortgage. So I’m seeing more of that. The rate slightly higher than a regular fixed one year rate because you don’t have to pay the penalty when you’re done, you reappraise refinance and you’re in business now you can set fair market rents.
00:14:01:22 – 00:14:02:03 – Scott Dillingham
Yeah.
00:14:02:16 – 00:14:40:21 – Mike Peters
Versus, legacy rents that has been a that’s been a tough thing is that the rents have not gone up to support the new mortgage amount. If somebody is trying to, you know, take some money out. What I do find is that the more units in a residential commercial property, the higher loan to value you’re going to get. For example, if you purchase a condo, you’ve got one tenant, that tenant leaves, then you’ve got a couple of months of repositioning the condo, whereas you if you have a duplex and you’ve got that other lease to continue to support so it’s less on you personal, you get to a four plex, each one of those stages, the loan to value increases.
00:14:41:02 – 00:14:41:11 – Scott Dillingham
Okay.
00:14:42:01 – 00:14:49:12 – Mike Peters
So that’s something to consider and those properties are Windsor had an abundance of them.
00:14:49:12 – 00:14:49:22 – Scott Dillingham
Yeah.
00:14:49:22 – 00:14:53:09 – Mike Peters
Until you know they got a lot of them got consumed or.
00:14:53:09 – 00:14:54:13 – Mike Peters
Yeah.
00:14:54:13 – 00:16:01:04 – Mike Peters
Over the last, with the rates the way that they were. So I really think that, you know, these programs that the banks or the banks are adjusting. I mean, this is you know, they’re adjusting in there. And I’m just seeing this stuff change every day. And for example, I have a client that’s buying a unique property, has plans for it, has limited down payment, but the bank is prepared to work with that client and give him a short term higher interest rate, 7.7% higher interest rate to get the work done, enough money to get the work done, reposition the property, and then refinance it without a penalty. So that’s one of the areas I see things moving. And that is also not just commercial residential that’s happening with plazas because plazas were devastated. Right. You know, you still have so many empty storefronts. They’re looking at that. If the investors are willing to take some of the proceeds, upgrade the facility because a lot of these plazas are somewhat older and then get it back on, reposition that property. The banks are with some.
00:16:01:09 – 00:16:01:12 – Scott Dillingham
Okay.
00:16:01:17 – 00:16:02:17 – Mike Peters
The banks are with them.
00:16:02:17 – 00:16:17:14 – Scott Dillingham
No, that’s cool. Now, without saying the business name or the exact property, can you go over like the different class of properties like retail or apartment buildings? Like could you touch on some of the stuff that we do in the commercial division?
00:16:17:18 – 00:16:50:18 – Mike Peters
Well, we’ve done just about everything. We’ve gone to the goal line on, you know, a $12 million industrial complex. You know, we’ve done industrial, where it’s the office up front and the small manufacturing in the back that’s sort of like a tool and die start up or fixture and gauge start up that falls pretty heavily on the business itself. You need two years taxes.
00:16:50:18 – 00:16:51:17 – Scott Dillingham
Okay.
00:16:51:17 – 00:17:20:06 – Mike Peters
One of the other things I want to mention before I go there though, on the commercial residential is that if you set up a hold company or holdco to make these next purchases, your commercial purchases, it will fall on you personally or PNW to support that new holdco. But after two years, you know, the holdco has generated enough revenue and you acquire properties under the holdco. So there’s some advantages to that.
00:17:20:06 – 00:17:20:11 – Scott Dillingham
Nice.
00:17:20:11 – 00:18:02:00 – Mike Peters
So that’s what we’re seeing a lot of right now with these smaller, call them, commercial condos where you’re kind of living up front. But that’s the operation, that’s the business you’re working up front, you’re manufacturing in the back, you know, and so you kind of you even may have two tenants. Somebody in the back and somebody in the front. And you put that in the holdco. Again, it’s the strength of the lease. So we’re seeing more of those now on the plaza side. You know, if there’s an anchor tenant the property is usually very favorably seen in the bank’s eyes.
00:18:02:00 – 00:18:02:11 – Scott Dillingham
Okay.
00:18:02:11 – 00:18:04:21 – Mike Peters
Versus a bunch of what I would call boutique.
00:18:05:08 – 00:18:07:01 – Scott Dillingham
Like mom and pop type store.
00:18:07:01 – 00:18:15:01 – Mike Peters
Right, right. So you want to try to find an anchor like Devonshire Mall, right? You got Sears, you got the Bay. That’s kind of the concept of.
00:18:15:06 – 00:18:16:18 – Scott Dillingham
Although Sears is a bad. Example.
00:18:16:18 – 00:18:19:06 – Scott Dillingham
Yeah. Yeah. Now is the Bay still there?
00:18:20:04 – 00:18:21:05 – Scott Dillingham
The Bay is still there. Yeah.
00:18:21:13 – 00:18:27:02 – Mike Peters
Yeah. So I don’t know, you know, that’s a bad example, but that was the same concept that we wanted here in the city.
00:18:27:05 – 00:18:29:12 – Scott Dillingham
The concept applies for sure. You want a big key name player.
00:18:29:13 – 00:18:33:01 – Mike Peters
Casino there, a convention center there, another recreation center there.
00:18:33:01 – 00:18:33:15 – Scott Dillingham
Yeah.
00:18:33:15 – 00:18:40:08 – Mike Peters
Draws people within the corridor. So we are seeing a lot more retail plazas.
00:18:40:08 – 00:18:40:22 – Scott Dillingham
Okay.
00:18:40:22 – 00:19:12:09 – Mike Peters
We have had a couple of recent deals that are multi multi-unit apartment buildings and those instances we’ve had fair market rents, let’s say 1750 for a two bedroom apartment, but then you get the legacy rents and at 750 bucks for the same unit that somebody is paying 750. So the loan to value on those, that’s a deeper pocket type investment, 50%, 50 to 60% loan to value on those types of units.
00:19:12:16 – 00:19:14:22 – Scott Dillingham
If it has as older, a lot of older tenants yeah.
00:19:15:01 – 00:19:16:00 – Mike Peters
Legacy leases.
00:19:16:16 – 00:19:28:03 – Scott Dillingham
But we work with investors to turn those over because sometimes investors turn over those properties, they renovate them whatever. We rent them for higher amounts, right? And then they come back and they get really good like CMHC financing.
00:19:28:03 – 00:19:33:13 – Mike Peters
Yeah, they get they get that. Plus they get reimbursed for renovation costs. If it’s…
00:19:33:13 – 00:19:33:23 – Scott Dillingham
Yeah.
00:19:33:23 – 00:19:59:18 – Mike Peters
Significant enough piece of property that there’s multiple units, CMHC changes the rules pretty frequently. CMHC, you know, kind of originates, you can probably say better than me because it’s more residential, but you know, helping the first time home buyer, etc.. What their goal is, is in the multi-tenant residential commercial space is affordability.
00:19:59:18 – 00:20:00:05 – Scott Dillingham
Okay.
00:20:00:05 – 00:20:09:03 – Mike Peters
To continue to maintain a base of inventory of single and two bedroom units that are affordable.
00:20:09:03 – 00:20:11:05 – Scott Dillingham
It makes sense as a crown corporation right?
00:20:11:05 – 00:20:40:21 – Mike Peters
So if you’re willing to reduce your energy footprint, if you’re willing to have your base rents about 80% below market rent across 80% of your building, etc., they’ve got some programs, where they’ll give you 100% financing, but you’ve got to maintain that for ten years. So if somebody is looking for a long term investment in a in a building that they really like and they, you know, feel it in ten years, you know, like my kids can inherit this or whoever.
00:20:40:21 – 00:20:41:04 – Scott Dillingham
Yeah.
00:20:41:14 – 00:20:44:18 – Mike Peters
Then, you know, CMHC is there to help you.
00:20:44:18 – 00:20:44:22 – Scott Dillingham
Okay.
00:20:44:22 – 00:21:01:14 – Mike Peters
But their goal is to keep people off the streets and affordable housing under market rents. And so we’ve set a number of deals to them recently and they just haven’t quite fit because a lot of investors don’t want to wait that ten years.
00:21:01:22 – 00:21:02:03 – Scott Dillingham
Yeah.
00:21:02:15 – 00:21:05:20 – Mike Peters
You know that that clause in the in the contract.
00:21:06:02 – 00:21:28:21 – Scott Dillingham
Yeah. Which makes sense. I mean everybody has different goals when they invest. So that’s, you know, it differs for sure. So I know we talked about just the different options and stuff. I know some of our lenders and again, not saying any lenders names, but some of the cool things that I’ve discovered is on your commercial side. Some we don’t we don’t have stress tests anymore. Is that right?
00:21:30:00 – 00:21:31:04 – Mike Peters
Yeah. Really.
00:21:31:04 – 00:21:32:13 – Scott Dillingham
Or just a handful?
00:21:32:13 – 00:21:53:09 – Mike Peters
Yeah, I used to for every lender have to write do a calculation which is debt coverage ratio, which is the stress test and they’re not asking for that anymore. They’re just asking for the file. And actually they’re doing it on their own. And the test is not as stringent as it was.
00:21:53:09 – 00:21:54:10 – Scott Dillingham
Okay.
00:21:54:10 – 00:22:44:16 – Mike Peters
Yeah. I’m pleased not to have to actually do that. They’re taking that upon themselves because, you know, it used to be that I would run the stress test and it would be kind of be consistent across all lenders that I may introduce a deal to. And one of the things that I will mention that’s different, I don’t shop lenders. I send a deal to one lender and that lender reviews the deal and has the right of first refusal before I’ll pass it on to another lender. Because in the commercial space, it’s lender relationship based. And I’ve worked as hard at that establishing those relationships with lenders as I, you know, have trying to get deals done. Because if, if you can if I can get a lender, I’ve got a real tight line deal that, you know, commercial again takes 45 to 60 days usually.
00:22:44:16 – 00:22:45:03 – Scott Dillingham
Yeah.
00:22:45:03 – 00:22:59:03 – Mike Peters
And when, you know, when I see a deal that I personally in my heart, I want to get it done, I know that I can call a lender that will look at it within hours of me calling him. And that’s really important.
00:22:59:03 – 00:23:19:09 – Scott Dillingham
I would say to just to add to this is you do try to research and see the lender that will approve it, but also give the client the best rate. You’re not just going to someone who’s got a high rate. You know exactly what the lender can and cannot do. And you’re going to them the first time because I agree, there’s no reason to send it to 50 lenders when, you know, only two will do it.
00:23:19:09 – 00:23:19:14 – Mike Peters
Yeah.
00:23:19:14 – 00:23:23:01 – Scott Dillingham
And one’s a low rate and one’s a high rates. Of course, you’re going to send the low rate one.
00:23:23:04 – 00:23:34:12 – Mike Peters
And they know the, you know, if a deal is being shopped. And so that’s what part of our letter of engagement that we have with each client is we engage the client and we would like them to list who has seen the deal.
00:23:34:12 – 00:23:34:21 – Scott Dillingham
Yeah.
00:23:34:21 – 00:23:50:12 – Mike Peters
So that we don’t send it. If it’s been declined by a lender and they’re now coming to us, we’re not going to send it to the same lender. And yeah, because they don’t they don’t like it. If the deal has been the commercial deal has been widely shot.
00:23:50:14 – 00:23:50:23 – Scott Dillingham
Yeah.
00:23:52:04 – 00:24:13:07 – Mike Peters
Because they can see if the credit got pulled a week ago from, you know, because they’re looking at someone’s PNW to support a deal and they pull the credit and then this guy goes and plus credit goes. Mike, this was just pulled yesterday. You know, what are you sending me here? So it’s important that our clients are upfront about, you know, who they have dealt with in the past.
00:24:13:07 – 00:24:13:10 – Scott Dillingham
Yeah.
00:24:13:21 – 00:24:53:16 – Mike Peters
But the thing about us, Scott, and I know you know this, is that, you know, a lot of a lot of our commercial clients have a long established relationship with an institution. I’m finding this I won’t mention the client, but in Kenora, for example, you know, guy’s been working with the big five forever as their policies change and don’t fit the needs of the client anymore. And you can have a massive portfolio with a big institution. We’re starting to see a lot of those come our way. And, you know, they just they want something different. They want something that fits their needs and their ability to grow because a lot of the big banks won’t let them grow beyond a certain threshold.
00:24:53:19 – 00:24:54:03 – Scott Dillingham
Okay.
00:24:54:07 – 00:24:55:14 – Mike Peters
So we’re seeing quite a bit of that.
00:24:56:01 – 00:25:11:12 – Scott Dillingham
And so speaking of thresholds, let’s say I want to buy a bunch of investment properties and I’ve decided commercial is the best way to go. Or maybe I’m actually looking at commercial properties, not just to have the commercial guidelines. Is there a cap to how many rental properties you guys can do on the commercial side?
00:25:12:06 – 00:25:52:05 – Mike Peters
No, there’s no cap. Now, some of our lenders. So we deal with the front line deal assessor at the institution establish that relationship. They have caps. So for example, if a one of our clients wants a blanket across eight properties, that could put it at a $5 million total blanket, whereas our front line individual has the ability to approve a mortgage on their own, send it to adjudication or credit department at anything under a million to okay. So if it goes up the ladder, higher rate, less loan to value.
00:25:52:05 – 00:25:52:15 – Scott Dillingham
Okay.
00:25:52:15 – 00:26:14:15 – Mike Peters
So in that instance, it’s one at a time. So some of our lenders have, you know, our front line people have certain amounts they can approve. And as I say, if it is a 5 million deal and it’s over their their limit, it tends to go up to the next level executive. And I’m finding that when it gets there, the rate is higher and the loan to value is.
00:26:15:00 – 00:26:17:00 – Scott Dillingham
Yeah, they’re tougher. Management is always tougher.
00:26:17:00 – 00:26:37:05 – Mike Peters
Yeah, especially when it’s a big deal. So yeah, it’s a stage strategy I would recommend for most investors we’re doing a refi right now on numerous properties and two are getting in at a time because they fall within under the 1.2 million that this person can approve.
00:26:37:15 – 00:27:11:15 – Scott Dillingham
Okay, cool. No, it’s interesting to see. But now, of course, so there’s no caps, which is great. So that’s another way. Like if somebody is, not that they’re maxed out on the residential side because there are options we can still do for investors, but sometimes the options become too costly and they don’t make financial sense. So we’ll often refer them over to you guys as well because it’s best for the client. So now that’s really cool. And you mentioned the team that you have a team already. I know there’s three of you and you’re looking to expand, so you’re looking for two more, you said?
00:27:11:15 – 00:27:35:00 – Mike Peters
Yeah, I love work because of your marketing engine, sir. I’m getting deals. Just got mobile home parks in British Columbia. I’m getting deals all over the country and so, yes, I’d be looking for an experienced residential person in either one of those areas that are thinking that they might want to become full time commercial.
00:27:35:00 – 00:27:35:07 – Scott Dillingham
Okay.
00:27:35:07 – 00:27:38:08 – Mike Peters
So I haven’t really started to put feelers out.
00:27:38:15 – 00:27:38:21 – Scott Dillingham
Okay.
00:27:39:09 – 00:27:48:00 – Mike Peters
But will be doing so soon because we do have enough deals throughout the country to, to start to spread some of the some of them around.
00:27:48:06 – 00:27:52:15 – Scott Dillingham
That’s awesome. That’s cool. And I have some big things planned, so you guys are going to be even busier.
00:27:52:23 – 00:28:02:10 – Mike Peters
I look forward to it, as I say. I mean, I’ve done a lot in in my life, but this keeps me it kind of pulls everything, all my experiences together.
00:28:02:10 – 00:28:03:00 – Scott Dillingham
That’s cool.
00:28:03:00 – 00:28:14:13 – Mike Peters
And it’s just it’s just so much fun. I get up in the morning, I go, Oh, damn, that happened. And like that happened this morning. And it’s like, how do we figure this one out? Because each day’s a challenge, right?
00:28:14:13 – 00:28:14:18 – Scott Dillingham
Yeah.
00:28:14:18 – 00:28:18:01 – Mike Peters
And each person’s situation is unique.
00:28:18:01 – 00:28:18:13 – Scott Dillingham
Yeah.
00:28:18:13 – 00:28:37:22 – Mike Peters
And you have to move with the flow. I don’t like not being able to do a deal. But with these rates changing, you know, we were getting discussion papers, but they got to put the word out there that the rates are not what they were, you know.
00:28:37:22 – 00:28:38:05 – Scott Dillingham
Yeah.
00:28:38:05 – 00:28:43:23 – Mike Peters
So I’m you know, I’m hopeful that it stabilizes and potentially, you know, in the third quarter or next year.
00:28:44:04 – 00:28:44:11 – Scott Dillingham
Yeah.
00:28:44:11 – 00:28:55:00 – Mike Peters
Maybe we start to see a little bit of drop. But the reality is, that unit three weeks ago that you might have been able to take 200 grand out of you can’t right now.
00:28:55:01 – 00:29:00:05 – Scott Dillingham
Yeah. You take maybe I’m making a number up, maybe it’s 150 now. Yeah. Because the rates went up.
00:29:00:07 – 00:29:01:02 – Mike Peters
Yeah exactly.
00:29:01:02 – 00:29:06:08 – Scott Dillingham
Yeah. And that happens on the residential side too, right. As the rates go up, the stress test increases and it shrinks there.
00:29:06:08 – 00:29:16:20 – Mike Peters
The opportunity in that instance is, as you know, as the property values are going down. So that 200 might have been able to buy the duplex two months ago. Well the 150 will, now.
00:29:16:20 – 00:29:17:04 – Scott Dillingham
Yeah.
00:29:17:04 – 00:29:18:08 – Mike Peters
Right? So it’s a tradeoff.
00:29:18:16 – 00:29:30:17 – Scott Dillingham
Yeah, I agree and that’s awesome. So let’s say you’re listening to this, you’re an investor and you want to move forward with the commercial type of application or to speak with you about the options. How would they get in touch with you?
00:29:30:18 – 00:29:40:03 – Mike Peters
Well, there are several ways you can email me directly at Mike@LendCity.ca You can call our phone number here and they can put you through to us.
00:29:40:03 – 00:30:05:02 – Scott Dillingham
And our office line is, (519)960-0370. And I know you’re going to help me. I know we’re wrapping this up, but we are working on an investing course. And I look forward to having you be part of that from a commercial standpoint to show the natural flow and help investors that are stuck with their financing that don’t have those options. The course is going to show them how to unlock that.
00:30:05:02 – 00:30:39:14 – Mike Peters
That is one of the things I’ll say in closing is that I am spending 25% of my time coaching and I love it. So if you are interested in investing in commercial properties or it just you’re moving commercial because of what we just said about PNW etc. And so you contemplate doing commercial. First thing to do is get in touch with us and we create a file. I can tell immediately where it fits in terms of what kind of property, you know, that you might be able to acquire and grow your net worth. Like, I can do that in a half hour.
00:30:40:02 – 00:31:15:01 – Scott Dillingham
Which is incredible. And it’s cool because I mean, regular investor doesn’t know this, but I mean, I guess it’s not cool, but there’s a flow of where you should apply for your mortgages first. And if you do that out of order, you limit the properties, you limit getting the best rates, the lowest fees, that type of thing. So there is a process. So if you’re getting started, it’s always best to work with an expert where if you already have a portfolio, I’m often seeing I don’t know if you see it, but I see it on the residential side. We’re redoing most of their financing.
00:31:15:01 – 00:31:15:10 – Mike Peters
Yeah.
00:31:15:10 – 00:31:19:02 – Scott Dillingham
Because it was set up incorrectly or just not for growth.
00:31:19:02 – 00:31:19:10 – Mike Peters
Yeah.
00:31:19:10 – 00:31:22:08 – Scott Dillingham
And we’re redoing and making it for growth.
00:31:22:08 – 00:31:43:00 – Mike Peters
And again, all those people that have significant portfolios with one institution and a long standing relationship, that institution is going to want to continue to keep your business, but it’s not always in your best interest to stay with that institution because we see all the programs, they just see that one institution’s programs.
00:31:43:00 – 00:31:43:11 – Scott Dillingham
Yeah.
00:31:43:11 – 00:31:46:10 – Mike Peters
And we’ve got, you know, the Bible on what’s out there.
00:31:46:19 – 00:31:49:22 – Scott Dillingham
I agree. Awesome. Well, thanks so much for coming on, Mike. It was a very good show
00:31:49:22 – 00:31:50:02 – Mike Peters
Thanks for having me.
00:31:50:02 – 00:31:53:04 – Scott Dillingham
I loved having you and we’ll see you guys next time.