Q&A: Portfolio Analyst at Non-Bank Lender (Real Estate Lending)

Hey guys, thought i would give back with a Q&A as this community has helped me quite a bit. I'm what you would call a porfolio analyst for a non-bank lender in Canada...think more along the lines of CMLS/MCAP/First National. Been here for almost a year and it's down time now so I can answer some questions/talk about growth in this position.

 

Not too sure how familiar you are with the Canadian landscape however there's 5 big banks...(TD,CIBC,BMO,RBC and Bank of Nova Scotia). I've only seen openings come up for CIBC and BMO and as a result, I decided to look into non bank lenders which have a lot more opportunities.

I had worked at one of the banks mentioned previously at the branch level prior as a teller for a few years and was about to apply for the manager role as they thought i'd be a good fit but i was dreading the branch environment.

 
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What size is your fund? $___MM? What does the team look like? How many analysts/originator? Are you all basically hard money? What are your usual terms? We are 2 points and 11% for the most part with an average loan of around $5MM on a $220MM fund. Are you geographically constrained to Canada only? Within Canada are you diversified or focused on a single area? Do you have a large asset management team to handle foreclosures?

 

I'm going to try and stay anonymous as much as I can

  1. We have about 20-40 billion* commercial mortgages under management
  2. There's about 15-20 originators with most of them having about 2 analysts under the team
  3. Yes Canadian only and diversified for the most part however it's mostly multi-fam/mixed use
  4. We have a defaults team however I can't comment on default rates on the portfolio as a whole
  5. Fund's competitive advantage is that we really try identify quality borrowers and build on their portfolios
 

Can you comment on how in-depth your underwriting typically is for term deals? Are you typically running full cashflow models over a given fixed loan term, or strictly to an 'as is' DSCR and LTV? Some colour on the granularity of underwriting for construction debt would also be much appreciated.

 

I don't touch underwriting at all however i've reviewed the underwriting binders before and can comment to some extent. Yes we run full cash flow models. We're currently working on a risk management team per se to reevaluate loans on an annual basis by assigning risk/debt ratings now.

My portfolio is comprised of mostly construction loans actually and I haven't gotten into reviewing the underwriting yet however I may go in this weekend and review some as I'm reading the credit manual this weekend.

 

Could you provide compensation estimates by years of experience up the ladder?

Ex: Associate 1 (3 years of experience) - $150K VP (7 years of experience) - $300K

 
  1. What type of non-bank lender? LifeCo? Debt fund?
  2. What size deals does your group do? What range? What's an average size?
  3. Where in the capital stack do you lend?
  4. What property types do you lend on? What property types will you explicitly not lend on?
  5. What is the range of loan tenor?
  6. What type of upfront fee do you charge? What about extension fees?
  7. Do you do construction lending? Bridge lending? Term loans?
  8. Variable or fixed rate debt?
  9. What range in pricing are you seeing?
  10. What LTV is your group comfortable with?
  11. What is reasonable comp in your role?
  12. What are the hours like?
 
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  1. Debt fund
  2. My specific coverage group has an average deal size of 5MM to 80MM as most of these are construction loans
  3. Not sure what you're asking here
  4. We lend on all asset types however it all depends on who's willing to fund the deal whether it's in house or one of our investors
  5. Up to 10 years with renewal opportunities
  6. Not too familar with fees
  7. Yes all that you've mentioned
  8. Yes to both
  9. Range in what pricing? the rates? they're fairly low because they're secured by domestic bonds for the most part
  10. I've seen LTV as high as 70ish
  11. As a portfolio analyst it's 40-60k....the title sounds way fancier than it is because it would be called commercial administration in Canada however i've seen the title being portfolio analyst in the states given comparable job postings
  12. for my group and the underwriters....some people come in as early as 8 and leave latest around 6ish.
 

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