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Showing posts with label commercial real estate lending. Show all posts
Showing posts with label commercial real estate lending. Show all posts

Wednesday, May 30, 2018

Advantages of Hard Money Loans Arizona

It is true that hard money loans cost more in interest and fees than most traditional loans. But there are several advantages of using hard money loans Arizona.

Most borrowers are focused on trying to find the most affordable lender when they are seeking a loan. And thinking along those lines is likely to keep many borrowers from taking advantage of all of the benefits of hard money loans Arizona. But investing just a few minutes in exploring the advantages of hard money loans could easily change some borrower’s opinion of hard money loans Arizona.

As a business person, your time is very valuable. And hours spent completing traditional loan applications are costing you money. The time could be better spent managing and growing your business. The much simpler application process of hard money loans Arizona is a great way to save yourself time and the stress that is associated with completing forms and compiling bank statements and other documentation.

Another advantage of hard money loans is the fact that you will not need to submit your personal banking and financial statements to the hard money lender as you would if working with a bank. Traditional lenders are interested in business creditworthiness and financial health as well as the personal financial situation of each owner of the business. However, a hard money lender is only focusing on the current market value of the property which will be the collateral for the loan.

Self-Employment is Not an Issue

Many banks and traditional lenders have very specific criteria for funding a loan when the borrower is self-employed. This can make it even harder than normal for a borrower to qualify for a loan. But a hard money lender does not see self-employment as a negative. And in some cases they prefer it as it shows initiative and the desire to commit to hard work to become successful.

Used Correctly Hard Money Is a Great Tool

Hard money loans are not the perfect solution for every borrower. If you are looking for a long term loan, or if you need to borrow the entire purchase price of a property, then hard money lenders will be of no help to you. But if you are looking for a short term loan that can be funded quickly, then hard money is for you. The application process is much less lengthy and the criteria for approval is related more to the actual current market value of the property than it is your credit score. So borrowers with poor credit or no credit will have a fair opportunity to secure a hard money loan.

Not only is applying to many banks time consuming but it is also humiliating to be turned down time after time. But you can avoid the embarrassment and the wasted time by presenting your request to a reputable hard money lender. With a solid plan to purchase and resell for a profit, you have a higher than average chance of getting the funding that you need from a hard money lender.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 45 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, January 31, 2018

Impact of Tax Cuts and Jobs Act on commercial real estate lending

Banner_imgCommercial real estate and commercial lending stand to benefit from specific changes under the Tax Cuts and Jobs Act. The full impact of these changes however remains ambiguous.

Specific changes that will benefit the owner's commercial real estate include new deduction options both for investment in pass through companies and value-add projects. Perhaps most importantly the bill retains the carried interest provision.

Pass-through entities, more commonly known as LLCs or partnerships, own the majority of real estate and conduct the majority of real estate investment. Investors in pass throughs can now deduct up to 20% of their total investment in these groups under the new law. This change will encourage investment and expansion by these pass through entities, such as real estate trusts. Commercial real estate will no doubt benefit as a result of these new deduction options.

Commercial property owners also stand to benefit from new deduction options. Under the new law the cost of value add projects on nonresidential property can be deducted. Specifically the bill revises and expands Section 179 of IRS code. Under Section 179 the amount that can be deducted for value-add projects is effectively doubled, from 500,000 to $1 million. The types of expenses that can be deducted by commercial property owners has also been expanded under the new law. “Roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems,” can now be expensed under the new law, according to Allistair Nevius of the Journal of Accountancy. In essence the new law will encourage commercial property owners to invest in and add value to their existing properties.

Commercial real estate lending and commercial real estate will benefit as the law retains the carried interest provision.

The carried interest provision allows returns on specific investments such as real estate to be taxed at a lower rate. Under the carried interest provision returns on investments can be taxed as capital gains rather than income. Hedge fund managers and real estate investors can continue to take advantage of the carried interest provision under the new law. However the new law does make some changes to carried interest provision. Specifically investors and investment groups must now retain investments for a period of three years In order to take advantage of the provision. Real estate investment is unlikely to be heavily impacted by this change, as these investments are usually held onto for longer periods.

The pace of commercial real estate transactions and commercial real estate lending could slow as a result of the specific changes to the carried interest provision.

“There is the possibility that it could reduce the number of CRE transactions that occur on an aggregate basis,” said Vince DeCrow of Origin Investments. “The reason for this is that the chunk of CRE investments that are typically held for less than 3 years, CRE developments for example, would then have comparably higher odds of changing hands at a slower relative pace once the construction is complete (if complete in less than 3 years).” New developments completed in less than three years are likely to be held on to by investors for longer periods, so that these investors can take advantage of the carried interest provision. With fewer new developments on the market the price of commercial real estate could rise as a result of the specific changes to the carried interest provision. The full impact of the new tax law on commercial real estate remains uncertain.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008
About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, January 30, 2018

Commercial real estate transactions and commercial real estate loans expected to rise in 2018

4page_img3-bigThe sluggish pace of commercial real estate lending seen in the first half of last year is expected to improve in the coming year. Commercial real estate transactions are on the rise, but are likely to be tempered by new fears among investors.

The first half of last year was marked by new lows in terms of real estate transactions. By the midpoint of 2017 commercial real estate investment trusts have completed only $46.7 billion in sales, far below the 71 billion in sales the same trusts achieved over the same period in 2016. Investors were gripped with uncertainty about interest rates and the new political realities of the incoming administration. “The slowdown in transactions at the start of [2017] came with the jump in interest rates and the [uncertainties of the] election. As people have readjusted to the new order, deal flow has started to pick up,” said 10-X Chief economist, Peter Muio. As investors adjusted to these realities the total sales volume of commercial property rose by 15.6% over the second quarter of 2017. Transaction volumes are also expect to continue to increase over the coming year.

Buyers and sellers of commercial property also had varied expectations about the commercial real estate market at the beginning of last year. “The other challenge is the falloff in transaction activity due to the wide gap between seller and buyer pricing expectations,”said Muio. “This widening of the bid-ask spread was sourced over doubts over the continuation of the cycle on the buy-side, a rise in interest rates heading into the year and seller expectations for robust pricing increases. We believe this gap will begin to close in 2018, and it will do so due to sellers accepting the new paradigm.” In other words property owners held out for higher prices in the expectation of rising property values while real estate investors remained unwilling to pay these higher prices. Both sides are expected to continue adjusting their expectations as the year continues, which will make buying and selling easier.

As sales of commercial real estate increase, commercial real estate lending is likely to increase as well.

Investors have adapted the new realities of last year and both buyers and sellers of commercial real estate have new more realistic expectations in terms of pricing. These trends which helped boost commercial real-estate transactions last year are expected to continue into 2018. Analysts perceive a large amount of capital set aside specifically for investment in commercial real estate. “ After a year of slow activity we are hopeful that sales volumes will rise in 2018. One important reason for this is the large amount of capital targeting real estate,” said principle economist at Kushman and Wakefield, Ken McCarthy.”There is an estimated $152B in dry powder waiting to be deployed. And while investors were cautious in 2017, we anticipate the healthy economy at home and abroad [will] give investors more confidence, leading to stronger sales.” Analysts predict most of this money will be used for investment in multifamily and industrial real estate. Sales of office ,retail and hotels will continue to struggle in 2018.

Investors in commercial real estate face new uncertainties this year which makes the pace of commercial real estate lending hard to predict.

Commercial real estate transactions are unlikely to reach last year's historic lows. The dramatic spike in sales, which began in the second half last year, is expected to wane as the year continues. investor face new uncertainties about an upcoming market correction and ambiguity remains about the impact of the recent Republican tax bill. as investors address these issues commercial real estate transactions are unlikely to rise dramatically over the coming year, but are expected to return to historic averages.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008
About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage