Financial Compound, a prolific commercial real estate finance broker based in Los Angeles, California has been an innovator in identifying and structuring capital markets opportunities for commercial loans. Financial Compound and its staff have closed over $4.2 billion in transactions, running the gamut from low leverage first mortgages on trophy assets, to structured debt and equity placements for properties in need of renovation, to construction and unentitled land financing. For example we assembled a 100%-of-all-in-cost investment property loan package (including land, hard and soft improvement costs, interest reserve, and closing costs) for the developer of a shopping center with minimal pre-leasing. The transaction was crafted so that the developer kept all of the upside after a 7.5% IRR to the financial partner.
Financial Compound is experienced with many types of financial structures for commercial mortgages, including acquisition, predevelopment, construction, mini-perm, refinance, bridge, rehabilitation, value added, credit lines, forwards, mezzanine loans, joint venture equity, preferred equity, highly leveraged participating debt, unsecured debts, pledge of partnership interests, personal loans, tax exempt bonds, tax credits, credit enhancements, letters of credit, improvement district bonds, and balance sheet financings including inventory and accounts receivable loans.
Financial Compound has longstanding relationships with many types of capital providers including institutional equity, private equity, life company, bank, CMBS, hard money, hedge funds, venture capital, and “friends and family” as well as lenders specializing in non-conventional projects.
Financial Compound and its staff have financed a variety of product types, including (in alphabetical order) apartments, bingo parlors, car washes, diners, entertainment center, farms, gyms, homes, industrial buildings, jewelry building, karate studios, land developments, mixed use, nightclubs, office buildings, peaches, quiznos, retail centers, supermarkets, theaters, USTs, vacant lots, warehouses, x-ray machines, yards, and a Zany Brainy.
Financial Compound also has the skills and proven track record to assist borrowers and lenders with commercial real estate loan workouts, having performed numerous successful modifications in a distressed context. We have resolved complex financial problems with our proven methodology and helped the parties determine the best course of action. With Financial Compound no up-front fees are required and we receive compensation only upon the closing of a restructure. This pricing model is an outgrowth of our company philosophy and is unique in the industry. Our long history and relationships with the capital providers, coupled with our in-depth market knowledge, have helped us complete restructurings efficiently. Its the Financial Compound stimulus plan- When we work out your loan, we make a beneficial impact on the economy and capital markets of greater magnitude than the transaction itself.
Financial Compound's got your back, presenting the most relevant current commercial mortgage rates, to serve as your commercial real estate loan calculator
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Financial Compound maintains the highest standards of integrity and ethics in its business practices. Our processes and practices are an outgrowth of our analytical approach and keen market observation. Financial Compound’s commitment begins by carefully analyzing the client’s needs and the characteristics of each transaction. We underwrite and package a commercial real estate financing request, and confer with the client regarding its content and marketing approach. We often structure a creative solution derived from our extensive knowledge of the capital markets. Depending on the client’s desires, Financial Compound can “make a market” by contacting numerous capital providers and managing a competitive bid process, or we can undertake a more focused marketing strategy, for example, working with one capital provider that fits well for a specific transaction.
Once we obtain preliminary financing terms for a transaction, Financial Compound then evaluates the options in light of the client’s objectives and makes a recommendation. We often provide an ‘apples-to-apples’ comparison of financing proposals by quantifying the present value of terms such as amortization methods, promote and waterfall structures, escrows, holdbacks, lender fees, defeasance and other prepayment penalites, etc. Additionally, Financial Compound’s work ethic, attention to detail, and passion for the business- characterized by customer service, minimizes the client’s involvement with processing and paperwork.
Capital providers offer cutting edge commercial loan terms to Financial Compound and often their senior level commercial real estate lenders work with us because of our technical expertise and large business flow. We can work quickly and place a transaction within hours if necessary. We have closed an institutionally priced loan in eight business days and “hard money” loans in two days.
Financial Compound’s networking advisory board of leading finance experts, accountants, tax specialists, investment bankers, appraisers, title officers, engineers, and lawyers facilitates efficient processing of transactions. We remain a leading mortgage broker in Los Angeles
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Our work ethic, attention to detail, and passion for the business – characterized by customer service, minimizes the clients’ involvement with processing and paperwork and has helped us enjoy a strong client retention ratio in the commercial loan broker arena.
The Financial Compound logo, “aleph to the root of pi” shown below, challenges us to pursue creative and innovative solutions to real estate finance problems, which is the basis of our brokerage business. Our pursuit of this knowledge has benefited our clients in the form of financing costs and transaction structuring.
More about our logo: Financial Compound believes that in order to stay abreast and a step ahead of the capital providers’ preferences it is important to understand the mathematical aspects of the real estate capital markets, sometimes using a different notation such as aleph and pi.
Aleph is a math symbol used to express the cardinality, or size, of infinite sets as pioneered by Georg Cantor, a prolific mathematician in the late 1800s. The cardinality of a set of 3 people at a dinner table is 3, and the cardinality of the set of 100 people at a movie theater is 100. Cantor discovered that infinite sets can have different cardinalities.
Pi is an irrational number. It’s the relationship between the area and radius of a circle, equal to approximately 3.14159… with digits continuing forever and never repeating a pattern. One cannot point to pi on the number line. We can point to a rational number very close to pi, such as 3.1416, but we can never pinpoint pi or any other irrational number.
One of Cantor’s set theory conclusions is that there must be an infinitely greater amount of irrational numbers compared to rational ones, as there is always an infinite amount of space for numbers between any two points on a number line, no matter how close together they are. Yet mathematicians have only discovered limited amounts of irrational numbers to-date. Some mathematicians have driven themselves crazy searching for the next irrational number. So let us not get carried away thinking about it for too long. Financial Compound uses a subset of our logo for its marketing materials in part to symbolize the hidden nature of many financing solutions. By studying and working on our clients’ transactions tirelessly, Financial Compound is often able to discover a hidden and creative financing solution.
What is the pieth root of aleph? Financial Compound thinks it’s approximately the cubed root of aleph, which is equal to about aleph. What do you think? We celebrate pi day on 3/14 or the closest business day to 3/14, and you are invited to join us in our office for some pie, the traditional food for pi day.
"Commercial mortgage broker Michael Schwartz and his team got me out of a financial pickle and obtained a cash-out loan for me where nobody else could."
Valerie - Property owner
"Financial Compound has done a great job on some of our refinances and acquisitions. Commercial mortgage broker Michael Schwartz and his team are service oriented professionals. We obtained the best loan terms and this commercial mortgage broker did all the paperwork for us, making the borrowing process easier than we’ve ever had it."
Steve - Principal
"I’m a real estate developer in the City of Los Angeles. I have used Financial Compound on many occasions to procure loans. Michael is one of my favorite commercial mortgage brokers."
Ralph - Principal
Education & Industry Background of Our Team
American Red Cross, IMN, ARM Organization, LACMA, Beit T’shuvah, Los Angeles County Arboretum, B’nai B’rith, Moriah Society, Boy Scouts of America, Mortgage Bankers Association, CMBA, Real Estate Cabinet, Calpirg, Shelter for the Homeless, Crittenden, The Urban Land Institute
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If you engage Financial Compound, you are engaging us to attempt without obligation to obtain financing, with our only obligation being not to commit willful or intentional misconduct against you. We normally don’t charge any up-front fees. Our fee is due simultaneously to the client’s receipt of financing. We can provide references from many satisfied clients and industry participants.