Does anyone know much about A10 Capital? Any brokers have experience interacting or closing with them? Any borrowers have experience with them? I've heard they are expensive and have a lot of guys running around trying to do smaller bridge deals. Good originators? Any feedback would be much appreciated. Thanks
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I haven't done any deals with them but I did meet Bruce. I am sure some people in my old company used them for smaller bridge deals. They didn't have a bad reputation and while not the most price competitive like a Streamline, Emerald Creek or W Financial for smaller bridge deals I don't think they were turning deals away like EC or W have been doing recently. So I think you used to pay 10 +1+1 for a deal but it would have some hair like a BK or credit problem.
Holy cow, I just looked at their website, they have like 20 originators, this seems like overkill for their market segment.
They close deals for sure. I like the guy I know there, doesn't seem as sleazy or salesy as other bridge loan shops
Beware of retrades. Happened on more than one occasion and I hear about it from others as well. We avoid them. To add to this, they have the most infuriating non-committal term sheets (as in fees, rates, leverage are quoted in ranges as opposed to set numbers). That said, I'm not talking about hard money deals here, but quality bridge deals that price in the 5-7% range where they try to compete as well.
I just went through a horrible experience with A-10. Completely re-traded after they took our $50,000 deposit. The underwriting was worse than Bank of America. Its understandable to re-trade if the collateral strength declines during there investigation but nothing changed. They just pointed out one clause in the fine print of the term sheet and stood by it. They refused to return even the portion of the deposit that wasn't spent on reports. My guess is this happens all the time. Has anyone else experienced this?
Is this where I say I told you so? But seriously, yes I've seen this happen so many times, not only on our deals but on my friend's deals at other shops.
Just talked with a guy who opened a regional office - seemed pretty nice and I liked him. Can't speak for the experience part.
Are any of you guys doing deals in CA?
Edit - If so, what is your typical deal size/asset class/LTV, etc?
They have an interesting B.S. Perm Product. I wouldn't go to them for bridge. A lot more players out there
These guys placed sub-debt below our position, which strictly prohibited any an such action, with an untrustworthy sponsor, all behind our back. Not sure you'd want to work at a place like that...
Rumor has it that A10 is firing their entire Dallas office.
That makes sense, seems like they are desperate to trim expenses given they just had a private equity company take a majority interest in the company.
Guess it just goes worth saying to stay away from these guys.
What a dump of a company.
Sucks for the people in that office, but I wouldn't be surprised to hear about A10 being firesaled in a couple of years.
Nothing of value left in that company.
they closed 600M in loans last year. Chopped some people this year with the PE buyout, so who knows. They play in a difficult space, especially in ny market
They were supposed to hit $1B in loans closed. $600M was less then their previous year.
The PE buyout was due to their old backers starting to pull funding after the CEO pissed them off. He had no choice but to try and shop for a buy-out so he could keep his army of Yes-men and fire the ones who actually knew a thing or two about debt & real estate.
If you don't believe me, just read the Glassdoor reviews.
No doubt that they play in a difficult market. But it doesn't help them that they have some incredibly high cost of funds and one of the most restrictive/harshest loan committees and a terrible reputation of getting borrowers pregnant and then re-trading their deals.
I think Rice and Fires is on the right track.
We have not closed a deal with A10 for a few years, but they have very high turnover on originators. That signals to me it is likely hard to get deals done over there. Their program on paper is pretty attractive, which allows them to hire some good/experienced originators. We know a few respected guys who have gone there. Seems like once they get over there they cant get the higher ups to work with them to get anything done. No originator we have known there has stayed more than ~2 years.
Saw an LOI of theirs for a smaller bridge loan ($2mil'ish). It was at 7.25% for a few years. Can't remember the points or it there was an exit fee.
I do a ton of these bridge deals with my private lender at about 8% I/O for 5 years. Max loan dollars is about $3-5mil. California only. No BS and close in three weeks.
I just closed a bank bridge loan at 6%...sure my client saved 2%, but a lot of these deals are ARM's and they will be going up. And what a mess to get that money. They should have just taken 8% fixed for 5yrs without exit fees. I have larger bridge sources for the $5mil+ that would hover around 6%.
What kind of NW/Liquidity requirements do these deals require? Thats just so high to me., but my background is with GSE/DUS debt and the sponsors have NW of 1x loan amount and liquidity at 10% of loan amount.
Its just shock to see someone going for a 5YR, full term I.O. bridge loan with 6,7,8% coupons. What are the DSCR requirements for underwriting these deals?
You're thinking like this is a bank. There are no DSCR requirements at all. Background and experience matter a lot. There is no solid metric for liquidity either. My guess is after the initial equity, if you were to borrower $2.5mil and had $300k in the bank that would be ok.
PacNumber Mind PM'ing me info on you're private lender? Looking to form a relationship with a lender with the profile.
for ARM, did lender require borrower to buy interest rate cap?
5% over the start rate is standard banking caps.
Where do you meet the lenders you work with? From trade shows, conferences, word of mouth? Thank you!
5% over rate at closing??
If the start rate is 6%, the lifetime cap at 5% over start rate (6%) is 11%....
Most (if not all ) ARM loans require some type of cap or rate hedge. And if you don't get one, you are incredibly ballsy, stupid or both.
That being said, it's normally paying a certain fixed amount for a cap over a certain time period.
Lets take a 10YR ARM Loan for example: -You would have the loan sized and quoted -Look at caps (normally with your broker, if they are good) - They will advise you to buy a 4yr-4yr-2yr cap (as an example not always) - So you buy the first cap for 4yrs at a 3% rate increase meaning you are capped at 3% max over the initial rate. -After 4yrs, you would look at caps again and buy another 4yr cap with the same 3%. The pricing varies widely. Sometimes its much more favorable/cheaper to buy a 2 or 3yr cap vs a 4yr cap.
Most of my experience is with CMBS (like A10) or GSE lending so it'll probably different with other lenders.
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