Why Invest In Commercial Properties Instead Of Residential?

When investors were leaving the stock market in droves, they turned to investing in real estate.
And real estate is an excellent choice compared to stocks. The tax deductions and potential for price appreciation
are enough reasons for burned out stock market investors to make the switch.

But real estate is a wide open field, where should you focus your time and money?

Many people might believe that residential property investing is the best way to go. Just look at all the television
programs that are now on the air, such as "Flip This House" on A&E and "Property Ladder" on TLC. They focus on buying
residential properties as investments. But I think the better solution is investing in commercial properties. Here are 3
reasons to leave residential investing and start investing in commercial properties.

#1 No More Qualifying For Loans

With commercial properties, the properties qualify the loan...not the borrower. Commercial lenders concentrate primarily on the income produced by the property to determine the financing risks. So with a few financial calculations, you can determine if the property will qualify the loan amount requested.

#2 No More Personally Guaranteeing Loans

There is a term that is never heard of in residential financing...non-recourse. Non-recourse financing is a type
of debt in which the borrower is not personally liable. If you default on a non-recourse loan, the lender must recover the amount you owe by foreclosing on the property by which the loan is secured. This won't affect your personal credit score.

#3 Deal With Professional Tenants

Investing in residential property, you will eventually find yourself in the world of tenant hell. Where excuses and non-payment go hand in hand. And government entitlement programs, such as Section 8 can cause you to lose your mind with bureacracy.

But with commercial property tenants, you will find them to be more professional. They are in a business and treat their leases as such. With commercial leases, they can be long term (5, 10, 15 years) and the they can be written so that
the tenant pays for maintenance, taxes and insurance.

Most investors want to invest in commercial properties but let fear of the unknown stop them. But with proper training
and education, buying commercial properties is not that difficult.

Private Commercial Mortgage Lenders - Filling The Funding Gap - Investors Turn To Hard Money Lenders

Getting a Commercial Mortgage is Tougher Today

We are, indeed, in the midst of a significant and severe credit crunch. Conventional lenders, such as banks, Wall Street investment houses and insurance companies have greatly curtailed their lending activity. Even the very best investors and developers are finding it hard to get projects funded.

The collateralized debt market has dried up. Few bond buyers are interested in mortgaged backed paper today. Big institutional lenders are finding it impossible to turn the mortgages they originate into cash. Put in simple terms; no mortgage buyers, no mortgage loans.

Property owners, investors and developers are left frustrated and without financing.

Good Deals on the Sidelines

The dollar volume of pent-up commercial mortgage loan demand now measures in the hundreds of billions of dollars. Deals that, just a year ago, would have enjoyed quick funding are being rejected by banks out-of-hand. Not because they don't have merit, but because the banks and their counterparts are caught up in the liquidity crises.

With millions in profit potential at stake, commercial property investors are seeking out non-traditional sources of mortgage funds.

Private Commercial Mortgage Loans; Funding Deals When Banks Won't

Privately funded commercial mortgage loans are becoming increasingly popular during this mortgage meltdown. Private lenders, many funded by wealthy individuals, hedge funds or other large pools of capital, often lend their own money for their own portfolios. These unique lenders have not been crippled by the breakdown of the collateralized mortgage bond market. They can still originate loans at will without worrying about who may or may-not want to buy them.

Further, private loans (sometimes called "hard money" loans) can close in just days, as-opposed to conventional loans which, if you get one at all, can take 3 months or more to fund.
There are generally no loan committees, stacks of paperwork or complicated ratios to deal with. If they like your deal and you demonstrate that you can pay them back, they can and will close your loan no-matter-what Wall Street is doing.

What Private Commercial Mortgage Lenders Look for

Private lenders are equity based lenders; loan decisions are not driven by the credit of the borrower. It is essential that the collateral property have substantial equity in it. Most hard money commercial lenders won't lend more than 70% of the purchase price or, in the case of a refinance, the value of the commercial property. So be prepared for large down-payment requests or a good sized 2nd mortgage. Also, borrowers will need to have some cash, typically 10% or more, in any given deal. There is no-such-thing-as 100% financing today. Documentation requirements will be much less than conventional lenders would require but be prepared to back up any claims you make with some proof.
Income producing buildings are favored by hard money lenders but most are willing to consider all property types.

Hard Money Commercial Loans Have Become Indispensable

With the large conventional lending institutions frozen like a deer in the headlights, private, hard money commercial lenders have become indispensable to the commercial sector. They stand ready and willing to lend against quality buildings or well thought-out development projects. Investors should not give up on finding financing for their best deals until they have looked into a privately funded mortgage.

Colorado Commercial Mortgage Brokers

Commercial mortgages are loans taken for the purchase of property that is, only intended for business or commercial use. Properties like shopping centers, industrial centers, offices, golf courses, resorts, hotels, parking garages, and car washes are termed as commercial properties. In Colorado, the best way to apply for a mortgage for a commercial property is to contact a commercial mortgage broker.

Colorado commercial mortgage brokers are usually a part of the Colorado Association of Mortgage Brokers (CAMB). It is a non-profit organization, aimed at providing assistance to professionals specializing in real estate. Commercial mortgage brokers are provided with training programs to keep them up-to-date with the latest trends and practices through this organization. The Colorado Association of Mortgage Brokers is also a part of the National Association of Mortgage Brokers.

It is necessary to get commercial property financed, at a competitive rate as it directly affects the finances of the organization. Commercial brokers come into the picture once a company decides on the location and price of a property. Usually, organizations opt for a 'commercial interest only' loan, as it provides them with an option of paying, only the interest for the first few years of the loan. A commercial loan can be for period of anywhere between five to thirty years. The rate for these loans can be either fixed or adjustable.

To become a commercial mortgage broker it is necessary to get a license. The appropriate regulatory bodies that are set in place regulate all the brokers. A regulator body will ensure that the broker complies with the laws. However, to know how a broker treats the customers and if the services provided by the broker are satisfactory, it is advisable to get an opinion from other similar business companies.

Commercial mortgage brokers advice the companies in deciding the best loan option. They help their clients understand the whole method of writing a proper loan application, processing the loan file and closing the loan. This helps the companies save a considerable amount of time and money.

The Basics of Bridge Finance

The old saying goes, "I have a bridge I'd like to sell you..." Well, references to bridge financing have nothing to do with bridges, but the expense associated with them can be pretty brutal if you aren't careful. Let's cover the basics of bridge loans.

What price would you pay for more time? This is the essential question that is asked with bridge financing. The financing is designed to give you anywhere from a couple months to a year of time, but you are going to pay a real premium for that time.

In a vast majority of cases, bridge loans are used in real estate transactions. The bridge loan typically becomes a need to "bridge" the sale of a previous property from which the proceeds will be used to fund a new property purchase. Let's look at a classic example.

My business owns an office building. We have been growing like gangbusters and need a new office. We look around and find the perfect building. We need to sell our old office building to pay a chunk of money down on the new one. Since commercial real state takes time to sell, we need temporary financing. The answer is to use a bridge loan to buy our company 6 months or so by using the money to buy the new office building and wait for the old one to sell.

Qualifying for a bridge loan is a bit different than what one experiences with a normal loan. The loan is based almost only on the collateral offered. Since the loan is fairly short term, income projections and such don't really figure into it. The issue is basically do you have collateral and can you afford the loan costs.

Loan costs. They are very high with a bridge loan. Since the loan is short term, you can expect the lender to crank up the cost because they need to make a profit. Does this mean the interest rate goes up? Yes, but only one percent or so. Where you really end up paying is in the points. A bridge loan may carry 5 to 10 to 15 points. Remember, a point represents one percent of the loan.

You can see why lenders would like these loans. They can make large profits on lending money for a very short term. If you need a bridge loan, prepare yourself for sticker shock and be ready to make a clear decision as to whether the cost makes sense.

Loans Against Property - A Lucrative Prospect

What is a loan taken against property? Simply it is the money borrowed from the bank while giving it some kind of assurance which is in this case any tangible item like a land, or a commercial property, or a built up property or even a residential object like a house. Even people who live in flats in cooperative societies can take advantage of the useful features of this loan. The only thing that they require to do is to submit a NOC( No Objection Certificate) from the co operative society in which they are living in.

When the user applies for this kind of a loan, the first thing that the bank does is figure out the net market worth of the property which the user is deeming as an assurance for the bank. Then the bank also check the credit history of the applicant. This is natural as the loan is a venture for the bank and it has to make sure that this venture leads to profit and not loss. Hence persons who have a bad credit history with multiple cases of defaulting are not suitable for giving a loan to. The total amount that the user takes as the loan normally falls in the price band of 75 percent of the total market worth of the product. This amount is required to be paid in monthly instalments until the total amount of the loan has been recovered.

The prospect of taking a loan against any type of property is a fantastic one. Anybody who is in need of money for various purposes can avail of this opportunity. Hence a person can take these types of loans against home when they want to improve and increase their individual businesses. They can also take this loan when they want to send their children aboard for higher studies for a better future and also when they want their children to have a family of their own by forming the immortal bond of marriage.

The process and the formalities for taking a loan against property is extremely hassle free and simple. For people who are engaged in jobs all the documents that they have to give are a set containing a residence proof, an identity proof, a from 16 for the previous years and also a passbook which shows his earnings as being credited for the last six months. For human beings who are into business they need a residence proof, an identity proof, a passbook and also a financial statement which is certified and has the tenure of the last 2 years.

Hence the bank lends a helping hand to people who need money and also give that help as a true friend. There are also many interesting features about loans against property. India is now a growing economy and hence has its population on an higher spending track which is balanced by a higher level of income. However when people require that extra amount of money, they can always go for loans against home as compared to other loans these have a much lower rate of interest. These loans also have a much larger time period for paying off the loan. Then there are also various kinds of plans from which the customer can choose from.

The Indian market for these loans is a big one and has many major players offering loans against property. India has banks like SBI of the State bank of India, ICICI, Kotak Mahindra and HDFC offering various types of loans against home. Hence these loans are very useful and are given by many banks in useful formats. Therefore a loan taken against property in India is quite useful and should be taken whenever the customer needs money. The bank is always there to lend a helping hand.

Commercial Loan For Your Hotel Property

Getting a commercial mortgage for a hotel property is very similar to getting a commercial mortgage for an owner occupied commercial property with a few subtle differences. The driving force for the majority of most hotel income is the RevPar or revenue per available room. RevPar is most commonly calculated by multiplying a hotels average daily room rate (ADR) by it occupancy rate and is a key indicator of performance. Rising RevPar is an indication that either occupancy is improving; the ADR is increasing, or a combination of the two.

Although RevPar only evaluates the strength of room revenue, it is typically the most relevant indicator of performance. While many full service hotels generate revenue through other means such as restaurants, casinos, conferences, spas, or other amenities the majority of hotel properties are either limited service flagged properties or limited service unflagged properties. A limited service hotel is simply a hotel with out a restaurant. Because the operating costs of the restaurant component generally run higher than that of the hotel operations, it is common for the net operating income (NOI) as a percentage of total sales to be lower for a full service than a limited service hotel. For this reason the majority of commercial lenders prefer to finance limited service hotels.

Flagged vs. Unflagged Properties:

A flagged hotel property is simply a hotel that belongs to a national franchise. An example of a flagged property would be a Holiday Inn or a Best Western. For the guest, a flagged property provides the benefits of a uniform standard that is upheld by the franchisor. A guest could stay in a flagged property on the east coast and could expect the same flag on the west coast to have the same standard of cleanliness and amenities. The owner of the property gets the benefit of a nationwide reservation system and marketing. For this benefit the operator is expected to pay a franchise fee which can typically range anywhere from 5% to 10% of room revenue. Because of the advantages that a flagged property has, most commercial lenders prefer to finance them over an unflagged property. Sometimes it can be extremely difficult to get a commercial loan for an unflagged property, especially if the property isn't in what is considered a destination resort area. A destination resort area would be an area like Miami, Myrtle Beach, or Orlando FL. An unflagged property in a destination resort is easier to obtain a commercial loan on than an unflagged property in other areas of the country.

Exterior Corridor vs. Interior Corridor:

An exterior corridor property is a hotel property where you can actually see the door to the rooms from the exterior of the property. These are sometimes referred to as a motel instead of a hotel. The term motel is actually derived from the term motor hotel where most travelers would park their vehicle directly in front of their room. While there are disagreements between what defines a motel and what defines a hotel, there is typically very little difference between the two outside of a lenders perception.

Most exterior corridor properties are older and subsequently will not have the quality of furnishings and will have more deferred maintenance than an interior corridor property. An interior corridor property is going to be more energy efficient and would have a lower utility expense as a percentage of gross revenue.

Financing Your Hotel Property:

When trying to get a commercial loan for your hotel property there are a few distinct differences you can expect as opposed to financing other commercial properties. A hotel property is considered special purpose in nature which simply means that it is generally cost prohibitive to convert it to alternate use. An office building or retail space can accommodate numerous types of businesses whereas a hotel property can only accommodate a hotel. Because of this a commercial mortgage for a hotel is going to be considered riskier to the lender than a commercial mortgage for other general purpose property types. A lender will mediate this risk by taking a more conservative approach to underwriting a hotel property.

The loan to value (LTV) for a hotel property will be lower than other general purpose property types. For a limited service, flagged property 65% LTV is typical and that number can go down depending upon the age of the property and whether its interior or exterior corridor. The LTV is simply a ratio calculated by dividing the loan amount by the value of the property. The debt service coverage ratio (DSCR) for a hotel will also need to be higher than that of a general purpose property type. The DSCR is a ratio that determines the strength of the property or business income in relation to the proposed mortgage payment. A typical required DSCR for a hotel property by a commercial lender is 1.30 which simply means that for every $1.00 in proposed mortgage expense there should be $1.30 available to pay it. For other general purpose property types the DSCR is lower. A DSCR of 1.20 is common for general purpose property types and can go oven lower for a less risky property such as an apartment building.

Because the acquisition of a hotel property under a conventional program requires a large capital injection, many borrowers prefer to purchase a hotel property by utilizing the SBA 504 program. This program enables the borrower to put in as little as 15% and still obtain a better interest rate than a traditional commercial mortgage for a hotel.

Commercial Real Estate to Lease Vs Own

In my daily dealings with small business owners I see entrepreneurs struggle with the question of whether to lease or own consistently. The idea of owning can be very appealing, especially now as interest rates are still low (historically), new loan programs are popping up like 90% non SBA financing and 30 year fixed programs. And, building bargains seem abundant.

This question is certainly not new. Businesses have struggled with this for years - in good times and bad. The decision can become complicated quickly as objective (financial, space needs, etc.) and subjective factors (business image, growth plans, pride of ownership, etc.) combine. Forces outside of the business owner's control, such as the general economy, interest rates, future real estate values, further obscure the issue.

The most thought of advantage of ownership is the potential appreciation. However as we are seeing now, appreciation is not always guaranteed.

Historically, financial experts have broken down the question by quantifying the factors such as the difference between the down payment/monthly mortgage vs. lease payments (among many others factors such as tax rate, tax benefits, interest rate, inflation, depreciation, expected holding period, expenses, etc). The point is to come up with an estimate of the buyers Internal Rate of Return on the down payment injected into the purchase.

Internal Rate of Return is commonly discussed, analyzed and dissected. Many factors can be manipulated, such as the anticipated appreciation rate inflation rate etc, to come up with different projections. Some of the major pros and cons of ownership include:

Pros

o The creation of equity
o Monthly mortgage payment is usually lower than comparable lease payment
o Potential future rental income
o Assisting owners with wealth/retirement
o Building an asset that will assist in securing business lines of credit and other forms of loans
o Pride of ownership
o Stability
o Control
o Business image
o Not being exposed to increases in rental market
o Not being exposed to whims of landlords
o Dramatic tax benefits

Cons

o Property management responsibilities
o Interest rate exposure on adjustable mortgages and/or if mortgage balloons
o Opportunity costs of down payment not being in a more liquid asset, or being used for business operations
o Decrease in functionality of building
o Building value subject to market conditions
o Length of time in selling building
o Decrease in space flexibility

These types of analysis can be very useful and give a clear perspective on a complicated issue. But, for most small business owners in general and in our Michigan economy, the question really boils down to money, and long term plans.

First of all, can the business really afford to inject 10% or 20% into a facility? Equity is hard to "tap" in commercial real estate. Many businesses need that capital for daily operations. Secondly, what is the difference in the potential mortgage payment vs. lease payments? Is owning going to increase cash-flow for the business (as it commonly does)?

Long term plans. Owning can be the wrong strategy for companies with strong growth potential/ expansion plans as selling on the short term can be expensive and difficult. Also, companies seeking venture capital may want to shy away due to how real estate ownership affects their books.

So, without overly simplifying the issue, the economy seems to be making purchasers think more of "now", how holding real estate affects their business immediately vs. traditional long term hold IRR type mentality. Many buyers are discovering that despite concerns over the market, ownership still makes a lot of sense for their business and personal wealth.

Tips For Investing in Commercial Property

Whether you own a commercial property, or are looking to invest in one, now is a great time to shop. The economy may be down, but exciting new prospects are one way that it is going to recover, and with commercial property costs at an all-time low, there has never been a better opportunity to invest.

Buying a Commercial Property

The idea of buying a commercial property is to turn a profit from it. Therefore, you want to invest, not collect. Don't buy something that you don't have a plan for, as it will just sit around unused, costing you money.

However, if you see a good deal on a commercial property and think you can make something of it, now is a great time to purchase that building. Some things to keep in mind if you have a plan for a business is to scope out the area for how similar business are faring, set aside money for any problems that might arise, and have a back-up plan for the future. Decide what you will do if, in a year, the investment is just not making any profitable returns.

Shop online. There are literally hundreds of websites available at your disposal. Compile all of the listings that interest you, and being researching them. Try to find as much information as you can about the buildings, including what they were used for and what the area is like. Then, you can contact their listing agents for a showing.

Selling Commercial Property

While it is true that lots of commercial properties and buildings are sitting empty and unused all across the United States, that does not mean that your listing has no chance of selling. In fact, there are lots of things you can do to boost interest in your commercial property and not feel like a dead duck.

The first thing to do is to gather up all of the available information about your property. Know all there is to know about the building including its age, whether repairs or updates have been made, and any problems with it. Include any relevant information that you think will help sell the property.

Get a good agent to help you sell your commercial property. You don't have to settle on the first one you find. Read online reviews and choose the agent who has the best track record of selling properties that are similar to yours.

Be willing to market your property. A good agent will give you a leg up in this game, but things such as word of mouth and utilizing online listings can help you spread word that your building is for sale. The more people hear about it, the more interest you will generate.

Prepare the building for showings. Clean up anything in the parking lot, sweep and mop floors, and give it a fresh coat of paint. Make the building presentable to potential buyers so that they can focus on the property itself and not all of the little repairs that they will need to do themselves.

How to Find Strong and Accurate Comps for Commercial Real Estate

When you are trying to get comps for commercial real estate it is imperative that the comps you get are up to date, since you need to know what the property you are looking at is currently worth. This will help you get an accurate idea of what the market value of the property is. When you go with comps that are too old, it will not give you an accurate idea of the value in today's market. Usually you'll want to go with commercial real estate comps that are less than six months old. The comps you get also need to be "like" comps as well, since you'll want the comps to depict the accurate value of the property you are interested in. Basically you don't want to compare an industrial property with an office building, since this won't enable you to come up with the accurate value. Be sure that the comparables you get are similar to the size and type of the property you are looking into.

Considerations When Researching Comps

When you are researching your comps in order to acquire accurate data on the commercial real estate you are considering, there are several factors you'll need to keep in mind. The following are a few things to consider in order to get the best possible comparables.

Consideration #1 - Similar Properties - The comps that you choose need to be similar properties, in both type and size, to the commercial real estate you are planning on purchasing.

Consideration #2 - Price Range - The price range of the properties that you use for comps should be close to the asking price of the commercial real estate you are planning on purchasing.

Consideration #3 - Location of the Property - Another consideration to remember when you are looking for the best comps is the property location. You should choose comparables that are on a similar piece of property that your prospective property is on. If you are looking at commercial real estate on the water, then make sure your comps are on the water as well. Geographically speaking, your comps should be within a mile for the best comparables, although you can go up to five miles away if you have to.

Consideration #4 - Property Condition - You should also be sure that you take the condition of the property into consideration. If the commercial real estate you are considering is in great shape, you won't want to look at comps that are on run down properties.

Consideration #5 - How Long on the Market - You should also check how many days the like kind comps were on the market before they were sold. If the property took a long time to sell, then there is probably a reason. Also, if it sold fast, there is probably a reason behind that as well.

Consideration #6 - Amenities of the Properties - Another thing to keep in mind when researching comps, is the amenities of the properties. Make sure that the comparables have very similar amenities to the commercial real estate that you are planning to purchase.

The Exceptions to the Rule

In some cases you may not be able to find comps that are in the immediate area, in which case you'll have to look for comps in the same city. If you have looked for comparables that are within 5 miles of the property you are considering and you cannot find them, it will usually be okay to go ahead and go for comps in the same town or city.

In some cases you may not be able to find any up to date comparables for your prospective property. This may cause you to use comps that are as old as 2 years if there are just no matching recent comparables. If these are the only comps you can find, then you'll probably have to go with them.

Locating Your Comps

You may be wondering how you can find good comps. Well, there are several different ways to find good comparables. One great way to get the comps you need is to ask the broker that you are working with for comps. Another option is to use the MLS system that is used by realtors if you can get access to it. There are several online sites, such as CoStar.com and Loopnet.com that can supply you with the comps you need. The more comparables you can get, the better, so work to get as many as you can.

3 Types of Comps

There are three different types of comps that you may be gathering, depending on the type of property you are looking into. Here are the three types of comparables you'll need to be familiar with.

Comps that are "As Is" - These comps are properties that are similar to the commercial real estate you are considering in the current state of disrepair and current zoning. You cannot use comps that have been rezoned or improved.

After Developed Value Comps - This is a comp that involves land that has been improved with the infrastructure needed for building construction. This can include sidewalks, curbs, streets, utilities, gutters, and sewer.

After Repaired Value Comps - These comps are used when you have a building that needs to have some repairs done. This deals with the price that the property will be worth on the current market after you have restored it to good condition.

As you can see, having accurate comps is very important when getting into a commercial real estate deal. If you cannot get your broker to give you the comps you need, then you may want to tell them you'll have to either get out of the deal or find another broker that can help you find the comparables you need to make an informed decision. Usually, this will help motivate the broker to get the comps you need, since the broker won't want to lose the deal or their commission. Either way, make sure you find strong and accurate comps that allow you to make an informed decision on your commercial real estate deal.

Do Hard Money Lending Rates Vary From State To State or Are They The Same Nationwide?

In most of the United States, there is no cap on hard money lending rates. That's why it is so important to shop around, if you want to get the best deal. The majority of private loans are made to real estate investors for construction, remodeling or improving existing houses, in order to resell them at a profit, rent them out, or simply refinance them at a later date. If you are looking for funding for one of those purposes, you will find that the best source is a private lender that specializes in rehab funding.

It is true that interest rates for hard money loans are typically higher than those charged by commercial banks, but there are other things to consider. Rehabbers generally deal with motivated sellers, people who need to close quickly. It takes 4-6 weeks to close on a conventional loan. Private lenders can close in two weeks or less.

Most financial institutions charge early repayment penalties. The cost of those penalties could be equivalent to more than the interest charged by a private company, especially since those who specialize in funding rehab projects often charge nothing for paying the loan off early.

Since it is a short term loan, typically running for 12 months or less, the annual interest rates for hard money are less important than say the APR for a 15 year mortgage. If you know what you are doing, it is not going to take you very long to repay this loan. If you are investing in rental property, you would take the hard money to close on the property quickly and then look for conventional financing, with a better long-term rate.

If you are rehabbing, you should be able to repair and resell the property within six months, but you have a year and your monthly payments are interest only. If you dealt with a bank because the interest was less than the hard money lending rates, your monthly payment could still be higher, because it would include principal and interest. Higher monthly payments restrict your cash flow and can limit your ability to make improvements or make additional purchases.

According to a recent article in the New York Times, the experts say that typical interest rates for hard money are at least 12%. But, that information can be misleading. Some lenders charge 10%, others charge 5% and of course, some charge more. You have to do some comparison shopping. Since, the "experts" say that they charge at least 12%, you might be tempted to sign up with the first provider that you find. You could be making a mistake.

Even between two providers that have the same hard money lending rates, the services that they offer could vary. The differences could mean less money in your pocket and less profits overall. If you take a little time and find the right provider, you will probably find that private funding is a good choice for your future rehab projects.

Business Owners Need To Examine New Commercial 30 Year Fixed Mortgage

Business owner that own their commercial building need to take a hard look at the new commercial 30 year fixed program that has become available. It has some features that set it apart from the typical 5 year fixed, 20 year amortization bank loan.

First of all, as the name implies, this loan, just like the traditional residential 30 year fixed is fully amortizing over 30 years and the rate is fixed for the entire term. Further the program is designed for owner users (business that own the facility they operate their business out of) and is a suited for a broad range of building types, not just the typical office, industrial, retail. Properties like automotive, restaurants, daycares etc are acceptable.

Besides the obvious benefit of not having to worry about an adjusting rate or pending balloon, the cash flow savings can be a significant for a small business that is trying to reduce monthly costs. On average we see a 20% cash flow savings when compared to a 20 year amortization loan.

To be fair, the reduction in payment is due more to spreading out the loan, than a true savings, but many business owners are more concerned, especially in our struggling economy, on keep their monthly outlay down and cash flow up. Other benefits include ability to pay the mortgage down by 20% per year without incurring the prepayment penalty and that rates/fees are right in line with traditional loans.

How and why haven't you heard of the Commercial 30 Year Fixed before?"

Couple of reasons. The evolving commercial secondary market is one of the sources behind this loan program (and others). Historically, banks originated and funded loans basically with their own money, primarily from deposits. They were (and still are) at direct risk of losing that capital should the borrower default.

The secondary market is different than the traditional system. Loans are instead "pooled" together and sold to investors in the form of bonds, creating greater diversification and less risk for the entities holding onto the loans. This diversification is one of the fundamentally differences, that enable major lenders to create and underwrite loans outside of the norm.

What are the negatives? Few. Prepayment penalties are higher than traditional loans. Most banks will ask for a 5,4,3,2,1% while this loan may have a straight 5% for five year or as high as 10% for five years depending on the particulars. Interest rates are typically .1 - .4% higher than on traditional programs but the increase in amortization, as stated above, normally increase cash flow by 20%.

Commercial Mortgage Loan Types - Mezzanine Loans, More Than Just 2nd Mortgages

Many people, even some experienced commercial real estate developers, mistakenly believe that a mezzanine loan is simply a 2nd position commercial mortgage loan against a commercial property. It is not, mezzanine financing is a highly sophisticated form of lending that requires specialized business and banking knowledge.

Many acquisition and development projects require additional financing beyond a traditional first mortgage. The simplest, fastest and least expensive method of borrowing in these situations is to have the seller or another lender write a traditional 2nd mortgage. Unfortunately, especially in today's era of tightened credit, 2nd position liens are often impossible, due to an equity shortage, or disallowed by mortgage covenants mandated by the 1st position holder. The-fact-is that there are many scenarios where the option of a simple 2nd is just not available. These scenarios give rise to what's known as mezzanine lending.

Unlike a mortgage, a mezzanine loan is not a lien against a piece of commercial real estate. It is a loan secured by the assets of a business entity. A title search will not turn up mezzanine loans because they are not attached to a properties ownership documents. In this way they do not violate any provisions of a 1st mortgage that precludes a 2nd.

With the cooperation of the borrower, a mezzanine lender sets up a single purpose, business entity, such as an LLC or a Trust. Title and ownership of the target real estate and corresponding businesses are placed in the entity so the whole project is owned by the new company. The company is run by the borrower. The actual mezzanine loan is made to the company but is also personally guaranteed by the principle borrowers. The loan is secured by the assets of the company (the real estate and its operations) and allows the lender to take over full ownership and operations in the event of default.

Although simple in concept, mezzanine lending is complex and difficult in practice. Attorneys for both the borrower and the lender must be very involved in drafting the provisions of the loan and making sure the new entity is properly set up and maintained. Borrowers want their rights protected while lenders need to make sure their security interest in the firm and, indirectly, the real estate is legally binding. Often the real estate, the borrower and the lender are domiciled in different States making the whole enterprise subject to interstate commerce regulations and further complicating the loan.

The legal and closing costs as-well-as maintenance costs associated with mezzanine loans are extremely high compared to conventional lending. For this reason mezzanine financing structures are wholly inappropriate for small deals. It's very difficult to make mezzanine capital cost effective in projects worth under $10MM.

Mezzanine loans certainly have their place; their loan volume can be counted in the tens of billions of dollars. When they're needed and when done correctly they are true deal savers. A partnership with a mezzanine lender can be an invaluable resource to a developer or commercial real estate investor. However, investors and developers need to understand exactly what a mezzanine loan is and be ready for the costs that come with them.

How Commercial Property Can Pay Off Your Las Vegas High Rise Condo

With the way the mortgage industry is these days, it's getting harder and harder to find solid investments. Couple that with the fact the stock market isn't much better than real estate, the question arises "Where should I SAFELY be investing my hard earned money TODAY?" Note the two bolded words: Safely and Today. Now consider those words when you hear the question: How can you turn one solid investment into two... without your pocketbook or bankroll even feeling it? Luckily for you there's a way to do just that. Here's how it works:

Say you have $600,000 that you're looking to invest. It could be in the form of cash, a bank CD, an IRA, whatever. There are commercial property sponsors out there that allow you access to grade "A" commercial real estate, including office buildings, retail centers, multifamily, etc. where you can purchase Tenant in Common (TIC) interests depending on how much money you need to invest. This is not timesharing! This is fee simple deeded real estate with all the benefits of traditional real estate ownership. What's great about TIC properties in general is that they're totally hassle free investments with absolutely no management issues on the investor's part. You'll never have to find a tenant, evict a tenant, do repairs, or anything else associated with investment rental property. The sponsor takes care of that all. You're left with a completely no-hassle investment in high class commercial real estate.

Now let's say you put that $600,000 into a TIC property that's paying you 6.5% interest contractually, even if the property is unrented (we'll go into that later). You've now bought a substantial real estate position which is earning you an interest payment each month in an appreciating asset. Then what you do is you put a deposit on a high rise condo unit. Let's just say you buy a unit at Juhl for $400.000 and put down 15% as an investor. Even in today's crazy market, you'll still find an investor loan at less than 6.5%. So what you do is you have the interest from your commercial purchase (which again is guaranteed and hassle-free) pay off your mortgage on your Las Vegas high rise condo unit. You'll never have to physically make a payment plus you'll be getting the spread difference from whatever your mortgage rate is and the 6.5%! So fast forward a few years and you'll not only be the owner of an appreciated commercial real estate asset, but you'll have your mortgage paid off and substantial equity in your condo - without even feeling it!!!

I'm surprised more investors with the means aren't already doing this. The key to all this is selecting the right TIC property sponsor. The Spectrus Group is one of my favorites due to its impressive and consistent record providing outstanding results to their investors. In 28 years of operation, they have never missed a payment to an investor and never have been late either. They provide investors with outstanding solid commercial property investments via their NNN Plus lease, which as mentioned previously, pays the investor on a contractual term regardless if the property is even rented or not. And if that's not enough, when it comes time to sell the property, 100% of the profits goes straight to the investor as well. It's low risk and you can do this today.

Cash flow..., appreciation over time... quality Class "A" commercial investment property. And if you do it right, a high rise condo to boot! What are you waiting for? Let's do this!

Commercial Office Space Things to Look For

In today's economy there are many ways to insure that you get a great deal in the real estate market. This is especially true in office space in the dallas keller uptown grapevine plano areas of the DFW metroplex.

A few things to look for are:
1. As in any area of real estate location, location, location! This is important for many reasons. Will customers be visiting your office? If so it should be easy to access. Are drive by customers an important part of your business? If so the location on a major street with no construction is huge. You can find out from the city if construction is being planned for the next year.

2. Talk to the current tenants and discover how the feel about the landlord. Do the phones work all the time? Is the internet service working? is this office clean? Would the current tenants rent from the landlord again?

3. What is the financial position of the owner of the building? It is not a fun experience to find out one day that you have to move because you building is being closed down.

4. Use services like google to discover the reputation of your landlord in the community

5. Is the current market value fair? Search all office space within the $ per square footage? Search local office space and determine what the price per square foot average is in your area and do not pay more than this!

6. Does your office offer phone answering service, fax service, copy machine service, conference rooms and other services?

7. If you don't like the number of months offered in the lease contract then suggest a different number of months

8. Many landlords will offer a graduated rent scale. This means the first month you may pay $500 then $600 then $700 and work your way up to your final rent total. This is justified as a new business getting started and office expenses you will have such as furniture

9. Keep a copy of your lease contract in a safe place and never let the landlord charge you for something that you don't owe!

10. Research and ENJOY!

Commercial Property Loans Are the Friends of Your Business

People interested to buy property, extend or develop own business premises for owner occupation can easily materialise their dreams with the help of specific loan plans available in the UK loan market. The UK loan market offers flexible, tailored loan plans to structure your commercial mortgage loan finance according to your needs. These are specific to the purchase of commercial property only with scores of borrower friendly features.

The borrower can select a mortgage repayment period between 2 and 30 years while taking these loans. They are secured in nature and the loan applicant can borrow up to 75% of the purchase price or professional valuation, whichever is the lower.

The minimum loan amount is £25,001, and there is no maximum as the real estate price fluctuates on daily basis. According to your personal and financial condition, you can select a fixed or variable rate mortgage. You can also choose to pay mortgage interest either monthly or quarterly.

You can choose to take capital repayment holidays for all, or part of the first 24 months while the repayment of Commercial Property loans is continuing. There is also option to defer up to two commercial mortgage loan repayments in any year. Protection against interest rate rises for loans of over £250,000 is associated with these loans. The most beneficial things are these loans are easy and straightforward to arrange. A quick response to your lending requirements is given by the lender as there is stiff competition in the UK loan market.

The Commercial Property loans can finance the property you are looking to fund is office, retail, warehouse or industrial premises. You can also avail these loans for the purpose of letting under formal tenancy agreements. These loans also offer the residential Buy to Let landlord a choice of market leading. At the forefront of these loans the convenience of the loan applicant is being given the utter priority. This loan available for almost all property and tenant types, including more difficult to fund niche property types including HMOs, block of flats and DSS tenants. The expert consultant and administrator of the lenders will work with you throughout the mortgage process to ensure that your loan application goes as smoothly as possible. The loan decisions in principle can be obtained within minutes. Currently 85% loan to value and 100% rent to interest cover calculation are offered to the borrowers.

Credit scoring is used by the lenders to reject or deject the Commercial Property loans application. The credit score includes detailed past records of the relationship an individual has established with other creditors. These loans are the secured plans and differ from the unsecured loans in a large magnitude. In case of new businesses ventures you do not yet have established accounts, or cannot prove your income, and have a limited amount of equity or limited cash deposit. In such cases, the Commercial Property loans help you. Many people are more suited to interest only mortgages which the online lenders lenders are willing to offer. There are lenders who specialise in non-status interest only commercial mortgages and lend against the "bricks and mortar" value of your property. They require no accounts or proof of your personal or business income for loan approval.

What You Should Do During Due Diligence Period For Commercial Properties?

Now that your offer for a commercial property has been accepted, your purchase contract will specify that you have somewhere between 15-30 days due diligence period to investigate about the property. As a result of your investigations you will decide either to:

Cancel the purchase and get your full refund of your deposit. It's important to know that during this due diligence period you can cancel the transaction for any reasons and are not required to justify your reason with the seller.
Continue on with the transaction.

So it is important that you investigate thoroughly about the property. Once the due diligence period expires, you can only cancel the transaction if the loan if not approved. While your real estate advisor will assist you with the following tasks, you may want to know the whole process to make sure you understand what is going on.

Physical Inspection: This may be the first time you visit the property as it may be located far away from your home. You could either visit by yourself or make an appointment with the current property manager to show you around (if so, use this as an opportunity to meet and evaluate a potential property manager). It is very common that the seller does not want potential buyers to talk to existing tenants and let them know that the property is for sale. Refer to the articles "What 'Location' Means in Commercial Real Estate" and "Things to Consider When You Purchase a Commercial Property" written by the same author. You may want to plan ahead and have a list of things that you want to find out about the property and the method you use to get the information. You may need to be creative in your method of getting the information. For example: you may want to find out:

If the restaurant tenant is doing well by having lunch there.
If the Dry cleaner tenant plans to renew the lease by asking casually if the business is doing well.

You will get a lot of information by talking to the tenants (don't let them know the property is for sale) in the center without letting them know you could be their landlord.

Book & Records: Normally within 10 days the seller will provide you with information about:

Income and expenses: this includes rent, reimbursements from tenants from the last 2-3 years. Ideally the income should go up from year to year due to rent increase. If the income fluctuates from year to year, then it's a red flag that you need to understand the reason. You also want to know if the tenants pay rent on time or not. Regarding expenses, you want to make sure you receive property tax statements, trash bills, utilities bills, sweeping bills, and landscaping & maintenance contracts. In California, property taxes will be automatically adjusted based on the purchase price. They could be a much higher if the purchase price is much higher than the current assessed value. However, in many other states properties are re-assessed for property taxes purposes every few years and are not necessarily based on the purchase price. As a result, new property taxes may not increase as much as in California. The bottom line is you want to verify the Net Operating Income (Income after all expenses or NOI) is correct as advertised.
Leases: commercial leases are typically 20-40 pages long. However, they are often identical except the tenant name, unit, rent and lease terms. You will need to verify the rent, lease term are the same or better than the numbers in the rent roll. If the seller says that the leases are NNN, verify in the lease which expenses paid by the landlord are reimbursed by the tenants. You also want to find out who pays for property management fee and the repairs of roof and structure. Sometimes the listing broker advertises that leases are NNN but does not mention the landlord has to pay for those expenses or include these expenses when calculating NOI.

Property Inspection: There are 2 main reports for commercial properties.

Your advisor will order a property inspection report from a commercial property inspection company and provide you with a report. This report will assess the condition of the property including the description of the building, site drainage and paving, structural components, roof composition, parking lot and landscaping, cursory inspection of electrical systems, plumbing systems, heat/ventilation/AC systems, fire protection, and compliance to Americans with Disabilities Act (ADA). The report also provides a rough estimate to correct critical deficiencies. You should take time to read this property inspection report, talk to the property inspector if needed and let your advisor know if you want the seller to repair anything, preferably at seller's costs. As a rule of thumb, you would like all deficiencies related to health and safety, e.g. emergency exit light not working or exposed electrical wiring to be taken care of before close of escrow. The language in some of these inspection reports may sound very scary as property inspection companies try to limit their exposure to liabilities for not warning the buyers about some of the deficiencies.

The lender will order a "Phase I" or Environment Assessment Report. This report will tell you if the soil is contaminated or not. It also provides a list of contaminated sites within ½ miles from the property. The report could be several hundred pages long. You should at least read the summary which is 1-2 pages long to see if there are any recommendations and anything unusual. Normally there are 2 possibilities:


There is no evidence of contamination so there is nothing to worry about;
There is evidence of possible soil contamination, e.g. underground tank. The inspection may recommend a more expensive Phase II Report. This involves testing the water and soil to measure the level of contamination if any. If the level exceeds a certain governmental standards, the lender will most likely decline the loan.


Title & Survey: You will receive a title commitment which insures that you have a clear title to the property. It will tell you who owns the property so this owner should be the seller in the purchase contract. You should review the requirements and exceptions to the title insurance to make sure you are comfortable with them. The survey should tell you the lot size, foot print of the building, the number of parking spaces (is there enough parking spaces for tenants & customers?) and notes from the surveyor. You may want to read some of the notes to see if there is anything unusual, e.g. the roof may encroach the adjacent property.

Financing: your advisor should assist you with getting financing for the purchase by sending the loan application to several commercial lenders. Preferably you should receive a couple Letters of Intent (LOI) from commercial lenders stating

How much loan you can borrow
Interest rate
Terms
Loan fees

While the LOI's are not final loan approval, they give you a rough idea if you have enough money to close the transaction and what your cash flow will be. This in turn helps you decide if it makes investment sense to move forward. Once you complete all the above steps, you should have enough information to make a decision to move forward or cancel the transaction.

Demographics Impact on Commercial Real Estate Investment

Americans are very mobile. They are willing to move to new areas that offer well-paid jobs and low cost of living. The US population has a net gain of roughly about 1% annually in the last 30 years to about 301 million people in 2007. However, the increase is uneven, i.e. in some areas the population increases rapidly while some areas the population decreases. As a commercial real estate investor, you want to invest in a growing and/or stable area to capture high rents and potential appreciation. Investing in declining areas may offer strong income now but potential for appreciation is slim and it may be difficult to sell the property later on.

As Americans move around, there are 3 major patterns of migration: from Snowbelt to Sunbelt states, from the coasts to inland, and from big cities to the suburbs. On top of those 3 patterns, there is a demographic impact of the Baby Boomers.

Migration from Snowbelt to Sunbelt States

Snowbelt states, e.g. Michigan, Ohio, and Philadelphia tend to have high concentration of heavy industry: steel, auto, etc. These states have lost jobs due to foreign competition from Asia where the labor costs are much lower. As a result, the population in many Sunbelt states has continued to decline.

Migration from the Coasts to Inland

About 153 million Americans are living within 50 miles from the coastline. They are moving from big cities along the coasts, e.g. San Francisco, San Jose, and Los Angeles. Inland areas in Sacramento, Riverside/San Bernardino counties, Las Vegas, Phoenix, Dallas, Houston, and Charlotte experience very rapid growth. There are 3 main reasons for the migration:

Many companies and people are moving into these inland cities to take advantage of the lower housing costs and higher quality of living. A software engineer working in the suburb of Dallas will get paid a little bit less compared to working in Silicon Valley. However, his home in Coppell, TX is about 60% less expensive and 2 times the size.

The San Francisco/San Jose lost about 10% of the high-tech jobs after the dot com bubble.


The city of New Orleans lost about 50% of its residents after the hurricane Katrina as people moved to higher grounds.

Migration of middleclass from big cities to the suburbs

Within various metros, the high income families tend to move from the cities to the master-planned suburbs looking for newer, bigger homes and better local amenities. This is evidenced in

Dallas metro: the population is either declining or growing slowly in Dallas within loop 635 while in Plano, Coppell, Keller and Grapevine it is growing rapidly. The people in these suburban towns are also more affluent.


Houston metro: the population is also declining or growing slowly within Houston. However; in Sugar Land, Pearland, Katy, The Woodlands, and Spring the population is growing rapidly.


Atlanta metro: the Northern part of Atlanta, e.g. Duluth, Alpharetta, Lawrenceville is experiencing phenomenal growth. The median house hold income in these areas is between $65-110K compared with $25-45K within the city of Atlanta where the population is declining.

The Impact of Baby Boomers

The Baby Boomers consist of about 77.5 million people who were born between 1946 and 1964. During this time, the US population increased by over 50 million people and grew an average of 1.7% annually instead of the typically less than 1%. Starting from the next few years, these baby boomers will be heading toward retirement. One or all of the following will happen:

Many will move to retirement communities in the Sunbelt states.


They will realize that (for those who wait till the last minutes) they need another source of income to supplement their limited social security income. They also discover that commercial properties offer strong cash flow which meets their investment objectives. It's likely that the demand for commercial real properties, especially ones with NNN leases will be even higher in the near future as a result.


They will need even more medicine. This means Walgreens, Rite Aid, and CVS should do well. They should continue to be good tenants as they always have. The properties they lease should hold value and continue to be in high demand especially in stable and growing areas.

Commercial Mortgage Loans, Conventional Vs Hard Money

Property owners, investors and developers have choices when it comes to commercial mortgage loans. National and regional banks, Wall Street firms and all major insurance companies offer, fully underwritten, full documentation conventional mortgage loans.
Wealthy individual investors and privately owned lenders offer a wide variety of private, often called hard money, commercial mortgage platforms.

Both private and institutional loans have their place; each offers separate benefits and each have their own drawbacks.

Transparency

Federally chartered banks, public Wall Street investment houses, finance arms of public corporations and insurance companies are all highly regulated and have strict disclosure and reporting standards. It's easy to know when you're dealing with a legitimate firm. All the companies' financials and business information is public and easily accessed by borrowers wishing to check them out.

Private mortgage lenders, on-the-other-hand, are, by definition, private; it's often difficult to check them out and confirm their claims. It is imperative that borrowers make sure they are dealing with a bonafide lender with a reputation for funding deals. This can be accomplished by using the services of a professional commercial mortgage broker or intermediary. A good loan agent knows who's for real and who's not. They don't get paid on loans that don't fund so they won't waste time submitting files to questionable lenders.

Speed

Conventional loans are made by regulated institutions and will require full documentation and adherence to strict underwriting parameters. The process takes time, especially if a borrower is trying to take advantage of a Government loan guarantee, such as those offered by the Small Business Administration (SBA) or the Veterans Administration (VA). Institutionally funded conventional loans typically take 30-60 days to close. Loans affiliated with Government Agencies (SBA) have more requirements and take between 60-180 days to complete.

Private commercial loans can close at lightning speed. There are no restrictions or special regulations on hard money commercial lending (residential hard money lenders must adhere to all state and federal mortgage lending rules). Loans can close in as-little as 3 days, but 14-21 days is normal.

Rates and Terms

Conventional lenders compete with each other on rates and terms and the banks and financial firms that issue them are extremely well capitalized. The interest rates, points and the variety of mortgage platforms offered can't be beat by private funding sources, which, by their nature have limited funding capacity. When banks loan out money they have many methods of recapitalizing. They can sell the loans to one of many outlets and they can, of course borrow against the loans. Banks offer low rates and attractive terms because they can originate a seemingly unlimited amount of mortgages. They make a little money on a-lot of loans. It's the sheer volume and the continuous movement of funds that keeps them swimming in profits.

Private lenders often "portfolio" or hold their loans. Their source of profit is the interest and points they charge borrowers. They have target yields they strive to achieve and would rather not make a deal than make a deal that puts their capital at risk without the corresponding yield benefit they desire. Rates and origination points will be significantly higher and product offerings significantly limited when dealing with a private funding source.

Conventional vs. Private

If you have the time and if you can qualify, it makes economic sense to use a bank or large financial firm. You will have more choices as-to the structure of your financing and you will secure superior rates and terms.

If time is of the essence or you can't provide full documentation or have poor credit. You may have to go with a private lender. It will cost more in absolute terms but will be cheap when compared to not getting a loan at all.

Buying Commercial Property - Using Options

An option is just what it sounds like. You have the option to buy the property or not. The option will state the time period in which you can buy the land and at what price. If you have found some property that you like but have not been able to obtain the contingencies or escape clauses that you feel you need, then perhaps an option would be in order.

Let's assume you have found a tract of land that you really like but the owner in not accommodating and will not finance the purchase, and you can not borrow the purchase money. But you want the tract for its resale value and feel that you can successfully market the entire tract, or the smaller parcels, over the next few months.

You could tell the seller that you desire the option to buy his land within say, a 6 or 12 month period, at a certain price. This would be after having negotiated the price of the property, of course. If the seller agrees to the terms of the option, he will tell you how much the option will cost you. He may state that for $1,000 you can buy the property anytime within six months at the price you have agreed upon. Or he may raise the price somewhat. One way or the other, the option is going to cost you something because the seller takes the property off the market and expects compensation. The price of the option is the price you pay to have the ability to accomplish the investigation, planning and advertising that you normally would do with a delayed closing.

If you determine from the advertising response that your planned subdividing of the tract will probably be successful as you have had a number of presales, you could exercise the option and close on the purchase. Or if you don't feel that the development would be successful, let the option expire. Another choice you might have is to sell your option. Depending on how the purchase agreement is worded, you could possible sell your option to a third party for a profit. Always ensure the contract you sign states "your name or assigns", IE, John Doe or Assigns.

Types of Commercial Real Estate

Throwing down a wad of money on a new business venture is a risky endeavor any time, no matter what the economy looks like. But for a confident, adventurous business person interested in expanding their investment portfolio and generating multiple streams of income, commercial real estate is one of the many options that they can consider picking from when the urge for new business growth strikes them.

There are quite a few different kinds of commercial real estate properties to investigate when looking at the big picture. In fact, the only type of properties that cannot be categorized as commercial real estate are single family homes and single home land lots. Multi family units, such as brownstones in urban areas, duplexes and multi family apartment buildings are all considered to be examples of commercial real estate. This investment is also known as a residential property. Families and individuals leasing the space pay rent to the owner of the residential property each month, but it is the owner himself who is responsible for making repairs, maintaining the buildings and insuring that all taxes are insurance is paid in full. The dividends pay well in this type of commercial real estate venture, but not without quite a bit of work on the part of the owner. Just managing and maintaining the grounds and tenants can be a full time job.

Another type of commercial real estate is the retail space. Clothing stores, coffee houses, and retail businesses of all kinds fall under this category. Chances are that when you walk into your local book store, the people that own the store do not own the building that houses the store. This means that the store is leasing the space from the commercial real estate owner. If you are said owner, chances are you are making bank. The interesting thing to note about retail spaces is that they typically sign up under what is called a Triple Net Lease. This is music to the ears of the commercial real estate owner. Under the terms of a triple net lease, or NNN lease, the tenant pays for all repairs and upkeep, the insurance as well as all of the property taxes. Add to that the fact that NNN leases are usually long term leases, perhaps between five to twenty years, and your smile will just get bigger and bigger, if you own the property that houses the store. Rent goes up, but your investment in the property remains the same. Not a bad gig, all things considered.

Another type of commercial real estate property is the warehouse and office space. Just like retail space, the warehouse and office space is typically rented out by a NNN lease, and just like retail space, the warehouse and office space is a good bet for a would be commercial real estate owner simply because once a warehouse is built, it is there, ready for leasing, with not too much effort expended on the part of the owner. The NNN lease comes through once again, and that means more money in the bank for you, if you have taken the plunge and dove into the world of commercial real estate. Lets face it, everything in life entails some kind of risk. Investing in commercial real estate can benefit the investor as well as the local economy and the businessman to whom you lease the property. It can be a win-win situation, if you play your cards right.

Bad Credit Commercial Mortgage

While credit profile is an important consideration in the lending decision it is not the only one. A bad credit commercial mortgage or loan is available to individuals and businesses with less than perfect, or poor credit rating. These are also called "sub-prime" loans.

Bad credit commercial loans and mortgages are available for any sort of commercial purpose. Bad credit commercial loans can be used to remodel a manufacturing plant to make it run more swiftly, for example. Bad credit commercial mortgages can also be used to restructure or expand the existing business. Also, much like bad credit home loans, bad credit commercial loans can be used to actually pay off debt and improve your credit.

Bad credit may not stand in the way of obtaining your loan or mortgage request, only a clear detailed plan of your commercial purpose for the loan is needed, as well as a plan for repayment. With bad credit commercial loans and mortgages, bad credit may not hurt anymore, but rather it gets improved. And then, with timely payments, you can eventually improve your credit score and overall credit report even further.

Not all commercial property owners and prospective commercial property owners are alike and thus we treat each loan request as a unique scenario and try to maximize our clients' opportunities to get the commercial property loan that meets their objectives, even if their credit history is less than perfect. New and creative financing techniques are available to make our services more effective and responsive to borrower's needs. Rates can vary quite dramatically across products, so it is important that we understand your situation as thoroughly as possible so we can secure the best product for you.

Securing the right bad credit commercial mortgage or loan is a very important decision. Equally as important is speaking with the right people. If this is an area you wish to explore, contact us today.

Temecula Commercial Real Estate Provides Both Profit and Adventure

The possibilities of Temecula commercial real estate are quite impressive, as you can focus beyond the typical house and apartment complex investment. There are plenty of office buildings, retail properties, apartment complexes, condo spaces, and plots of land waiting for all your ambitious business ventures.

Commercial real estate includes any piece of property that can deliver revenue for whomever chooses to own it. Sometimes, you may want to purchase land or property for a specific reason, which means location becomes an important aspect of the Temecula real estate process.

For instance, farmers looking for a place to cultivate a fruits and vegetable business may want fertile land located close to Old Town Temecula, as it provides a great advantage when the local Farmers Market unfolds during the week and weekend!

Before you settle on a final piece of property in Temecula, you should analyze all the pros and cons of a location. I suggest you ask yourself questions that will determine future success and any possible drawbacks. How much traffic will pass by your site? How far are the nearest grocery store, shopping mall, restaurant, and hotel? Is it easy to access the property.

Commercial Temecula Real Estate Suggestions

To get you started on the right path in the world of commercial real estate in Southern California, I suggest taking a look at high traffic locations, including the shopping centers scattered about Temecula Valley.. For instance, the Promenade Mall is home to more than 100 popular stores like Footlocker, American Eagle, and Macys. This site also offers access to a collection of restaurants and a movie complex, which makes the mall more appealing to shoppers. Purchasing property here also opens a gateway to make profit with the visitors who frequent the Farmer's Market held every Wednesday.

The Importance of a Temecula Real Estate Agent

The property itself is not the only information that becomes vital throughout this process, but this is why a Temecula real estate agent plays an important role. These professionals are trained to clarify the fine print in contracts and illuminate the significant details that can make or break a business deal. It is their job to look into rates, read over terms and conditions, as well as explain every aspect of a property agreement.

Commercial Real Estate Leasing Tips

Perhaps you are not ready to make a permanent commitment to a piece of property and would rather start off leasing Temecula commercial real estate. An important factor to consider is that this process greatly differs from the leasing of an apartment or residential property. I recommend shopping around in order to locate the deal that best fits your personal goals and needs. Paying a visit to potential sites, analyzing the landscape, and double checking amenities is a must!

Seeking flexible leasing agreements rather than settling on a long term leasing contract will come in handy in the long run. Pay attention to the lease details, as you must work within the confines of your leasing conditions. This means if you want to paint the outside of your property, you must make sure the contract allows this action. Never sign a lease agreement if you do not think you can abide by all of the terms.

It is also OK to negotiate with property owners, as most have already made allowances for price hagglers. Do not purchase more space than you really need, as most businesses usually thrive on about 200 square feet per employee. Checking the references of the primary owner of potential property is a wise move that can determine if the owner is responsible. I also suggest consulting with a Temecula attorney so that you are clear on the legal documents you will sign to finalize your real estate deal.

Commercial Financing Deals Across America- Is it Possible?

Deals can come from here, there, and everywhere. Are you getting your share?

Maybe you have deals from here covered. Now, what about there and everywhere? Is being in the right place at the right time all it takes for you to be successful in the commercial finance industry? It may not be all it takes, but it is certainly where it starts. If a potential client doesn't know you and doesn't know that you are the right broker for the job, then you will never get the deal. Is this a fair assumption?

No matter how hot the national commercial finance industry may be as a whole, hot and cold markets are a fact of life. Working a limited geographic area puts you at the mercy of the local market. If the market happens to be hot, you are booming. If it is cold, then you are scrambling to make ends meet. By working a national client base you will insulate yourself from the effects of hot and cold markets. The key is to find those hot markets and make sure that investors know that you are the right broker for the job. If the commercial industry is hot in Miami, but you live in Dallas, you still want to have a shot at getting those deals, right?

What are the requirements to work deals on a national level? Some states, such as California, require a higher level of licensure than most other states. Many states however, do not have any limitations for commercial finance brokering. These states provide a wealth of opportunity for a broker with vision, commitment, and the right partner on their side.

In addition to commercial industry licensing requirements, you will need to ensure that you are licensed to do business in the state where the borrower is located. This means that if you are licensed to do business in Virginia and the borrower is located in Virginia you can broker any deal that borrower may have despite the location of the property. In most cases this requires a simple registration with the appropriate state government office. By becoming registered to do business in multiple states, you will increase your geographical reach. This translates into a greater potential deal flow and more money for you. The only thing left is to devise a plan or locate a partner that can get you in the right place at the right time.

Loans to companies for women - Easy financial support of affordable

At that time, women are also part of the business. Men are also in many large enterprises and small businesses. Although, to lead a large company, and they all need money, and this problem can be solved for women only in the form of loans to businesses. As an entrepreneur, you can easily check this loan and solve your problem to help with money. The loan application process is relatively simple and easily accessible with easy-going nature.

For it isfor the treatment of commercial loans to companies for women comes in two forms secured and unsecured. Now select the form of a loan at your needs and apply directly online. The funds that you can access the secure module vary from £ 5000 and £ 75,000 for the duration of 5-25 years. On the opposite side, with the people in the form of access to unsecured loans of up to € 1000 to € 25,000 for a period of 1-10 years.

The amount and term of two forms of creditSpaces of each other and the reason may be that his criteria for safety assessment. Similarly, the interest of the two types of loans, the other changes for security reasons. The shape follows the high level of interest in connection with a guarantee by the lack of security guarantees. With this amount of the captured individuals can satisfy their needs without many problems. You can pay the payment of overdraft fees, pay wages and salaries, many taxes, buy a new building, purchasenew machinery and equipment, etc.

The process of applying for loans to small enterprises are very simple and without problems as it is completed online. All this is just a simple online form with the required information and submit online to complete a further examination. In less time will be credited to your bank account. Bad creditors can also examine the loan will need in real time, regardless of their bad credit record. Moreover, the absence of shouldNo formalities of faxes and documents to make this loan agreement with the ideal financing options and valuable. SWIFT Now you can collect your money for many purposes.

Commercial Real Estate Financing Basics

Application of commercial real estate financing is a big step. It is not easy to obtain loans, real estate, especially if you are a borrower for the first time. Before you apply, there are certain things you should expect to be produced in its entirety.

Commercial real estate financing is different from residential real estate in a big way, according to the lender. With residential property, the property looks likeValue, and not worry too much about how to do it in the future. Residential Property values generally in the course of time. For commercial properties, however, in future profits.

That is, they are less affected by the current value and the value as possible. Following this, I am very pleased that concerns what kind of company profits. It is therefore very important for you to sit and overcome. How do you think will it take?

This also means that you, as you have the property to be clear. What activities will it be? This is all a business, or six units for rent? These considerations are important for the vendor, so be sure to have a detailed plan for such statements.

The geography of the property will also be a factor in determining whether you credit or not. Given the position of> Real Estate and how they relate to the company. They have difficulties in obtaining financing from a position in the sticks in place on a road outside the track.

The size and type of property are also factors. You want to check on the history of the place and to ensure that no small problems such as environmental problems that could lead to.

Risk is the most important consideration for creditors. Discuss the future of theRisk and, in particular, what could go wrong now.

Much of it is the state of the global market. You can save problems later with the commercial real estate financing through the market and understanding of current trends. This is what your potential lenders will be reviewed, so it's good for you to understand. If the future is for the type of property you are trying to acquire is uncertain, it canconcern about granting the loan.

Before completion of the transaction, it sends a "letter of commitment." This is a message from the lender to inform you that you are officially approved. Even more important for the letter of commitment for the provision of the terms and conditions of the loan. In other words, what are the rules.

Displays the details of the closing conditions, the rules on what can and can not do with the property and a summary of all to be doneYour acceptance of the conditions which it officially. Take a good look at this and make sure it does not prohibit you from doing what you wanted when you asked for funding.

Find the commercial real estate financing is a long and tedious, but if you know a few things before you apply, check the headaches of dealing with something unexpected to avoid later.