Speaks Fluent Italian and is a Gifted Guitarist
Dan Marotta’s first language was Italian, and he learned English by watching Sesame Street, he laughs about his first generation Italian-American upbringing. He continued to study Italian in college. Dan first says he thought about law in college but not before that growing up. He says he “majored in everything” and changed his major 4 or 5 times — English, philosophy, history, economics, that made the most sense to transition into law. Dan Marotta says, “I was good at reading, writing, and arguing, dealing with people. I like working.”
Dan Marotta is not only a successful real estate attorney, he once played guitar with the likes of Ziggy Marley and The Ramones ‘in another lifetime,’ He still plays guitar today. When he first got into law, he actually started practicing entertainment law, but realized he couldn’t handle the amount of time needed to devote to it. However, through entertainment law he found real estate law. James Prendamano notes how he has worked with Dan Marotta for more than a decade on a number of real estate deals.
James Prendamano emphasizes that while a lot of folks out there have had a hard time out there during the pandemic, Dan Marotta’s business continued to thrive. Dan notes that he’s had a lot of work and he is thankful for it. As luck would have it, I had started condo projects in Brooklyn previously that have come into fruition, says Dan Marotta.
Commercial Financing and Pushing Back
If you can’t paint a clear picture of what revenue will look like, says James Prendamano, it has become especially tough in commercial real estate financing with the banks. With an expert like Dan Marotta, you certainly can push back against some of these clauses. Clauses in loan documents now are not customary, says Dan Marotta. Requirements are now overreaching. You have to push back against the lenders. The driving force behind all these commercial loans is that the rates are low, adds Dan Marotta. The rate will get locked in at the closing, so you have to keep your eye on the ball. James Prendamano asserts – you are pushing back, you are getting traction with the banks. You actually can push back on some of these clauses.
Negotiating Points
Dan says one negotiating point to think about is the loan-to-value ratio. Is it 50% or less? If it is, you’re going to have a lot more negotiating power than you think. If the term of the loan is shorter, you’re going to get a better interest rate. James Prendamano sums it up – Dan represents the purchaser that is refinancing. If it’s a 20% down commercial deal, you’re not going to be able to leverage as much than if you’re a 50% borrower. James Prendamano goes on to say – open your eyes beyond the interest rate. Everyone is so hyperfocused on the interest rate. You may be able to leverage things in some of these clauses with the help of a professional attorney like Dan Marotta.
Debt Service Ratio Agreements
The Debt Service Ratio – explains Dan Marotta – is the net income divided by the monthly loan payment. The banks want to see a 1-3 or 1-5 ratio. They won’t approve the loan if you don’t have that. If you fall below, they can lockbox the account. Dan has able to write in the original agreements that there would be a cure period. If you were able to increase the rent revenue, or if you were able to make a cash infusion – in order to avoid the lockbox trigger. We’ve had long conversations with clients. What does your rent roll look like? Do any of your tenants seem to be problematic?
Other Items to Know
The Cash Sweep is when you have fallen below the debt-service coverage ratio, and they have now declared that all the rent you’re collecting needs to be deposited into an account, and you cannot access that account. That is known as the lockbox.
Single-Purpose Entity Requirements. They want your corporation or LLC to agree that its only business will be managing this single real estate asset. It won’t acquire other real estate assets. It won’t make loans to anyone. It won’t borrow money. It won’t do anything but collect rent, maintain and manage property, and maintain its mortgage.
The best way to contact Dan Marotta is through his company’s site — https://www.marottalaw.com/attorney/daniel-c-marotta/ Check out the entire Casandra Properties real estate podcast on our YouTube channel. Don’t forget to subscribe! https://www.youtube.com/channel/UC37IOvEe099tL7u9geQcm0g Read the Casandra Properties real estate blog for home tips, Staten Island real estate, trends, design and more. https://www.casandraproperties.com/blog/
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