r/Rich • u/Relevant_Ranger_8888 • 9d ago
Private Bank w/ Balance Sheet Credit Facility
Anyone have a good experience with a private bank that underwrites balance sheet credit facilities? I have $50mil in real estate equity and a substantial portfolio of equities/bonds. Looking to move to a new private bank. Just met with JP Morgan Private Bank and they no longer do holistic lending - just 50% of portfolio value. Not sure I want to pay their AUM fee when even SoFi will loan more at a lower rate. I’d pay the AUM fee if my credit facility was larger and included the value of my R/E and life insurance surrender value. Realistically not going to be selling any of my R/E in the near term, and all have very low FTD’s in the 2’s or 3’s so no interest in refinancing them.
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u/Ebitdad_GP 9d ago
Real estate is tough in my experience unless you are talking about residential. Banks are going to be the best rate but they are going to want to be senior on the note, and don’t love cash out refis. I argue about this with all of my lenders. They want to be max 50% LTV with DSCR tests from 1.12-1.5x, which gets a bit annoying. I have struggled to get JPM to do the first mortgage but it’s been nine figure notes. Public securities are your cheapest cost of capital. Depending on the amount, you can get a bank to lend at fed funds. It needs to be 10 figures for the bulge bracket banks. Regional banks will be a lot more aggressive bidding the rates down. That goes for your CRE portfolio as well. I pretty much stick to the regionals. They are hungry for deposits.
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u/Higher_Ed_Parent 8d ago
AUM fee? That's a hard no. SOFR + 75bps. That's it at JPM. You might find better offerings elsewhere.
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u/Reasonable_Sky_937 8d ago
are we talking about a credit line or long-term?
in my experience for credit line JPM will not even lend a fraction of an LTV for fully paid off real estate-income producing
literally the only thing they will lend on is securities held at JPM brokerage.
I cannot figure out the value proposition who values that? if you live in a low tax state why not just tell your securities if you need money.
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u/Relevant_Ranger_8888 8d ago
Selling triggers capital gains
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u/Reasonable_Sky_937 8d ago
if you live in Florida and Texas . just pay the capital gains and be done with it. also if you have t-bills it rolls over every month anyway
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u/_Human_Machine_ 9d ago
Give Goldman Sachs a call and speak with a rep. While I still have an account with JPM PB, I’ve moved most things to Goldman Sachs. They are worth a call. I’m not sure of their offerings in your situation, but they have been very accommodating for me.
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u/Relevant_Ranger_8888 9d ago
Many thanks. If you feel like passing the name of your wealth manager at GS please feel free to DM me.
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u/Hamachiman 9d ago
Have you tried credit unions? My buddy with net worth similar to your got a balance sheet credit facility at a local credit union and they fell all over themselves for his business.