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

Saturday, April 28, 2018

Benefits of Using Hard Money Lenders

Still in search for funding for your Real Estate Investment Project? There is a tremendous amount of capital available in today’s market and hard money lenders are funding their share.

From hard money lenders, bank credit cards, lines of credit, private lenders, retirement funds and traditional bank loans, real estate investors are finding the capital they need for their next big project. Hard money loans have not always had fair press, though these types of loans have been a dependable way to fund deals for decades.

The funds come from a group of individuals or a single individual who lends on their own terms. They base their decision on the collateral of the deal. With traditional lending, if your credit score falls below a certain amount then it will be impossible for you to get funded, regardless of the circumstances. Because hard money lenders set their own criteria, they can often fund projects that have been denied by traditional banks. The higher risk is associated with somewhat higher interest rates. They also work quickly to get projects funded, usually within seven days or quicker. A few of the benefits of using Hard Money Lenders are:

1) Speed--Regardless of what your offer is the speed in which you can close is more important. Conventional loans can take up to 45 days to close and many conventional lenders have been burned on deals that never closed due to the lengthy closing time. When you place your offer, a seller may take a little less knowing that the property can close in 5 to 7 days.

2) Volume – Over the course of a year, closing time within a few weeks means a few more rehab projects which will generate greater returns to the bottom line.

3) Quality--With Hard Money in your corner, you can be assured that what needs to be done will be done correctly and you do not have to cut corners to save money. You will earn a better reputation for quality work and more projects.

Bigger Projects

Knowing that you have a hard money lender behind you can help you build up to bigger projects over time. You start with a single family unit and build up to multi-family and commercial properties. Looking at various projects you may or may not want to use a hard money lender. There might be some projects that a four percent interest rate will benefit you while some rehab projects demand the speed that hard money offers. The goal, eventually, is to build enough capital that you are able to fund projects yourself without any outside funding.

With hard money lenders behind you, you have the option to look at all projects that come your way.

The fees and interest rates for hard money loans can be higher, but the speed in which you can get a project funded may be worth the extra expense. In a short-term deal, this is a small price to pay to finish a rehab and flip the property. It is worth the relationship with a hard money lender as well as other financing options for choice on a project-by-project basis.


Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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Monday, March 19, 2018

How Short Term Commercial Loans Can Help Your Business Dreams Come True

Can you really take your business to the next level? You can with the help of commercial loans to help you finance the next phase of your company, and Level 4 Funding explains how.

If you need cash fast to put a down payment on a property for a new location, for example, short-term commercial loans are the perfect option. Unlike conventional bank loans that typically have five- to ten-year terms, short-terms are defined by shorter repayment schedules that are designed to be paid off in between three months to three years. Usually these loans have higher approval rates than long-term loans, and can be paid in smaller daily or weekly payments versus a monthly lump sum. Ensure you can manage the daily or weekly payments prior to agreeing on the terms of this loan.

Short-term commercial loans are great for businesses because they are typically approved a lot quicker, which means you get cash in hand quicker in comparison to a conventional lender application and approval process. New businesses can get approved for these loans, which can actually make it easier for them to get approval for long-term or more traditional loans in the future. Prior loans — and proof of paying them off — give lenders peace of mind that you can pay off a loan.

Short-terms are also easier for new businesses to get approval or for companies that haven’t yet established a business credit history. Once credit history is established with a short-term loan that is another way to help future loan approvals from traditional banks. Usually lenders specializing in shot-term loans do not require a minimum on credit score as conventional lenders typically do, especially for long-term loans.

One of the best benefits of short-term commercial loans is that their approval time is fast – which means you can get your funding fast.

With these loans, businesses can receive their cash advance in just 24 hours, give or take. This is important for many reasons as a company is looking to expand, but it can also be just the thing a business needs if they are cash-tight and need to handle payroll or pay their vendors. Fast cash is one of the reasons short terms are so desirable for new and expanding businesses that are having growing pains or “tight” times.

It’s important to know that while there are many benefits to short terms, there are some disadvantages to be aware of, too.

While these short terms are very helpful to businesses, there are some drawbacks. For example, the annual percentage rate tends to be much higher with loans like this than the APR of conventional loans because the amount of time the loanee has to pay back the loan amount is much shorter. While there are very short reschedule periods of three to six months, it might be more reasonable to negotiate a (relatively) longer payment schedule up to three years. There are also lender fees and other costs that may be associated with short terms so it’s important to know what those are before you proceed.

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

Sunday, October 1, 2017

What to Look Out for When Signing Commercial Real Estate Loans Texas


imagesppSigning commercial real estate loans Texas documents is an important step for your business. You need to be well prepared and be certain that you understand the document completely.

Borrowers are always told to read a document completely prior to signing it. But when signing documents for commercial real estate loans Texas, you might not have the time to read the entire document at the signing. And even if you had the time, you might not understand all of the technical and legal jargon. So you will want to be sure to request a copy of the document to review with your lawyer prior to the closing appointment to check out a few key pieces of information.

The first important information on the agreement is the loan payment agreement. This defines what is expected of you and includes provisions that protect both the lender and the borrower. This is where you will find the clauses about your payment schedule and if there is going to be a balloon payment due at the end of the loan term. These are basically all of the repayment terms that you are agreeing to for the money that you are borrowing.

Some commercial real estate loans Texas will also specify that you need to continue to provide the lender with financial information about the property and your business. This is to monitor the financial health of the borrower and ensure that payments will continue. There are also some commercial real estate loans Texas which will specify that you must maintain a certain debt to cash-flow ratio throughout the term of the loan. Additional covenants can stipulate asset sales, cash payouts and changes in the ownership of the business. These are all ways that the lender can ensure that the company remains solvent and that the business does not get too far in debt prior to paying off the loan.

Negotiate for Non- Recourse

One of the key stipulations in protecting your personal finances is negotiating a non-recourse covenant. This clause protects you in the event that your business fails and cannot repay the loan. If you have a non-recourse loan then the lender cannot force you to personally repay the loan. But if it is a recourse loan then you have personally guaranteed the loan and will need to find a way to repay it even if you close your business.

Check for Penalties

In the perfect world, your business will thrive and you will be able to accelerate your loan payments. This will allow you to pay the loan off early and save some of the interest that you would have paid the lender. But if your loan has an early pay off penalty, then you might be faced with paying extra fees. Some lenders will have a flat prepayment fee and others will charge a percentage of the interest that you would have paid. In most cases, you will still be saving some money, but you will want to be sure that you understand this potential penalty as well as all of the terms of the loan prior to attending the loan closing.

Dennis-Dahlberg-Mortgage-Broker-1_th

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

Wednesday, September 20, 2017

Key Terms to Understand When Considering Commercial Real Estate Loans Texas

2page_img2-bigCommercial real estate is valued differently than residential real estate. Knowing some key terms will improve your understanding of commercial real estate loans Texas.

Residential property value is determined greatly by the location and the size of the property as well as the amenities and finishes. But commercial real estate is a very different entity. The greatest value in a commercial property is the usable square footage. The ability to make money through the use of the property is all that really hold value so the current condition and features are not really as important as they would be in a residential property. Knowing and understanding the key terms used when evaluating commercial real estate will help you to better understand commercial real estate loans Texas and why certain properties hold more value than others.

Net operating income is a critical factor in determining the potential value of a commercial property. NOI is determined by evaluating the property’s first year gross operating income and then subtracting the first year operating expenses. As you would expect, you want to have a positive NOI. When a property makes money in its first year it is a strong indicator that it will continue to turn a profit and that is what increases the value of a commercial property. When a property has a positive new operating income then that property is going to be great collateral for commercial real estate loans Texas.

Cap rate is a term that is also used to evaluate an income producing property. This is an important term if you are purchasing a property and will be using part of it for your business and renting out the remaining portion of the property. The cap rate is used to project the net present value of the future cash flow generated by the property. Again, a property that is demonstrating good income is always going to be favored in commercial real estate loans Texas over a property which is not providing as much income. Purchasing a property with a strong income history will increase your potential for a commercial loan at a good interest rate.

Know What Lenders Are Looking For

When you are seeking a loan on a commercial property, lenders are concerned with the financial stability of your business and also your creditworthiness. But they are equally concerned with the value of the property that you are purchasing. Not only are they looking at the current market value but they are also looking at the earning potential of the property.

Finding the Best Property for Your Needs and the Loan Criteria

When you are shopping for a commercial property the requirements are somewhat different than shopping for a residential property. The residential property must meet only your needs. But a commercial property is often more desirable if it meets your needs as well as the needs of your lender. That means that if the property can generate income to decrease the risk on your loan then it is a better choice. You might not have considered being a landlord but having tenants who are helping to pay your monthly mortgage can be a big advantage for you.

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

Commercial Real Estate Texas: What Tenants need to know

iStock_000007292323SmallIf you lease commercial real-estate in Texas, your land lord is obligated to protect your health and safety. However if a land lord refuses to make reasonable repairs it is vital that you don't take preemptive steps.

There are two types of conventional commercial leases in Texas, the periodic lease and the term lease. The periodic lease gives the tenant having the option of terminating the lease at the end of each month. Under a periodic lease tenants are obligated to pay rent for a full month plus one day, before vacating the property. Term leases last for a period agreed upon between the land lord and the tenant. Under this type of lease generally no changes can be made until the lease is up for renewal. Under a term lease tenants may have to pay the cost of maintaining the property.

No matter what type of lease your business has the land lord is obligated to ensure your basic health and safety. The land lord must ensure basic fire protection and ensure that devices like smoke detectors are well maintained. The land lord must maintain basic security and keep locks and alarms are in working order. Apart from these basic conditions, the land lord’s responsibilities will largely be defined by the terms of your lease. If you believe poor conditions have a material impact on your health and safety, the land lord is obligated to make repairs. If your lord refuses to make repairs, it is vital that you avoid withholding rent or taking preemptive action.

If you lease commercial real-estate in Texas, take specific steps before taking any action against your land lord.

The Texas Attorney Generals website advises you to make any complaint directly to your land lord via a certified letter. Clearly outline the repairs needed to the property. Prior to taking this step, be sure your rent is current. Upon sending the letter, request documentation proving your land lord received it. The land lord must make repairs within a reasonable time frame. This is generally within seven days of receiving the letter. If the land lord doesn't take reasonable steps to make the repairs outlined in the letter, send the letter again and wait another seven days. If the land lord doesn't respond, you may be able to terminate the lease. You may also be able to make any necessary repairs yourself and deduct the cost from your rent. You may also sue your land lord in order to compel them to finance the repairs you believe are necessary.

With Texas commercial real-estate the land lord’s responsibilities are largely defined on a case by case basis

Generally the terms of your lease will outline the land lord’s responsibilities for maintaining the property. Although land lords are obligated to protect your health and safety, you may have to prove in court how conditions on the property negatively impact you and explain why you believe your land lord is responsible. Therefore don't violate the terms of your lease prior to sending a certified letter, to demonstrate that the land lord is aware of your complaint. Consult with legal experts if necessary.

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

Commercial Real Estate Texas: 2017 Trends for the Dallas Office Market

slide1The job market in the Dallas area remains robust. The demand for office properties will increase as business continues to expand. This is pushing prices higher in the short term. A common trend throughout the commercial real-estate market in Texas.

In 2016 Dallas area was the nation’s fastest growing metro. The employment base in Dallas expanded by the 3.5 percent in 2016. This growth in employment was the largest in the nation. Robust economic growth in the Dallas area will ensure a steady demand for office properties over the next few years. This increased demand is pushing prices higher. Although new construction is pushing up the price of office space in the short term, in the long term the Dallas area will likely remain affordable.

Prices for commercial office space are reaching record highs, with some competitive areas reporting prices as high as 50 dollars per square foot. These record high rents reflect the economic growth in the area. New companies are establishing themselves in Dallas and they are willing to pay the increased price for office space. Improved absorption rates in the area demonstrate this fact. Office space is being leased and sold off twice as fast in comparison to the same time last year. Not only are established companies looking for new locations, but new companies are moving into the area as well.

This year 2.5 million square feet of office space was sold or leased. 1.4 Million sq. ft. of which was new construction finished in either 2016 or 2017. The availability of new office space in the area is forcing some land lords to make drastic renovations to their properties to retain existing tenants. Although rental prices this year reached a record high of 25 dollars per square foot, the availability of new construction will make the market more competitive, pushing prices down in the long run.

Speculative construction remains high and this is pushing prices higher. Similar to much of the Texas commercial real-estate market.

New premium office space is selling off quickly in the Dallas area, fueling speculative construction. The total amount of office space under construction is down slightly from last year to roughly 8 million sq. ft. However rental rates are up, with an increase of 5.4 percent year to date. Half of the new premium construction is already leased. Clearly speculative construction is paying off for developers and tenants are willing to pay higher prices. But with construction and demand remaining steady in the area the price of office space is likely to stabilize.

As with much of Texas commercial real-estate, increased supply and steady demand may cause prices to stabilize.

Dallas’ robust economy ensures the demand for new offices will remain steady, fueling further construction. As the supply of office space increases, prices are likely to stabilize from their current highs. The construction of new office space is pushing up average rental prices in the Dallas area this year. However compared to other metropolitan areas, the Dallas area remains relatively affordable. This affordability will make the area attractive to employers for years to come.

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

Enter a post titleCommercial Real Estate Texas: 2017 Trends for Office Real-estate in San-Antonio

slide3The commercial real-estate market in San Antonio remains resilient, particularly when it comes to office space.

Nation-wide the market for offices seems to be declining or stagnating. The San Antonio market is a unique exception. The market for new offices is rapidly expanding. New jobs are pushing up demand for offices in the area and new construction is filling up fast. Even with record breaking construction, the market may not be keeping pace with demand, pushing the price of office space in the area even higher.

The San Antonio area, like much of Texas, is seeing increased job growth. According to a CRBE analysis 24,900 total jobs were created in the region as of May of 2017. Office-related jobs have expanded by 2 percent this year. This job growth is accelerating the demand for new offices, making the San Antonio market a unique exception when compared to the rest of the nation, where demand appears to be leveling off or declining.

The price of office space in the area is at a record high, with an average price per sq ft at 22.54. This price is 2.7 percent higher than it was when compared to the same time last year. The rental price for Class A properties, with triple net leases, went up an astonishing 10.9 percent just since the last quarter. New properties are charging record these record high rental rates. The average price for office space is likely to increase, as new construction in the area escalates. 1.2 million sq. ft. of office space broke ground this year. Low vacancy rates in the area indicate that many tenants are willing to pay the increased prices.

Low vacancy rates, particularly in the case of new offices, indicates rising demand in the area. 40 percent of the 390,000 sq. ft. delivered so far this year is already leased out. The CBRE analysis quantifies 1.2 million sq. ft. of additional office space will be needed to keep up with future demand. Even with all the recent construction in the area, vacancy rates are lower this year.

As is the case with much of Texas commercial real-estate, the market for offices in San-Antonio is expanding.

Even with record breaking levels of office construction, new offices are filling up fast. As jobs move into the area, the demand for office space will only increase. The speed with which new construction is being sold off could indicate that construction is not keeping pace with current demand.

Increased demand will push rents higher in the area. A common trend with Texas Commercial Real-estate

San Antonio will remain an attractive place to do business for many years to come. The low vacancy rate, even in the face of record prices indicates that tenants in the area are willing to pay a premium for office space. With the vacancy rate tightening and the supply of new offices seemingly insufficient to meet current demand, land lords will continue to have greater leverage to charge even higher rents.

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

Commercial Real Estate Texas: How will Harvey impact the multi-family real-estate market?

HouseHarvey's impact on Texas commercial real estate will be felt for many years to come. But the multi-family housing market in particular stands to see the greatest impact.

Co-star estimates that some 72,000 apartments were immediately damaged by Hurricane Harvey. The group’s updated analysis puts 75.1 billion dollars of property at risk, with multi-family apartments representing 18.5 billion of that total. With so many residents displaced in the wake of the disaster, the dynamics of Houston's multi-family housing market will change dramatically.

Prior to the storm the Houston multi-family real-estate market was considered oversupplied and by some accounts up to 62,000 units of excess housing existed in the area. 89 percent of multi-family properties were occupied before Harvey's arrival and the market had seen its first up-tick in 5 years. A combination of oversupply and consistent demand gave renters greater leverage prior to the storm. The competitive market forced land lords to offer lower rents in order to lease out excess housing. The amount of available apartment space will no doubt shrink in Harvey's aftermath.

The market will be changed by a shrinking supply of multi-family housing. More and more locations are likely to be condemned due to storm damage. Demand will increase as residents and aid workers seek undamaged places to stay. It is estimated that 200,000 homeowners are currently seeking temporary housing. Ed Wolff, President of Beth-Wolff Realtors, claims occupancy rates for multi-family housing have risen to 97 percent as a result of Hurricane Harvey. Teresa Guidotti Lowery of Colliers International estimates the inventory of multi-family housing has shrunk to some 51,000 units with 30,000 residents already displaced. The available units will obviously fill up in record time. Lowery estimates the outlying suburbs of Houston might not recover for two years, increasing the demand for apartments in the area.

The dynamics of the multi-family market in the Houston area and Texas commercial real-estate will change as a result of Harvey.

The market has clearly shifted in favor of land lords. Apartment space will likely remain at a premium in the Houston area for several years. The obvious flood risk may reduce new apartment construction in the future as insurers charge builders higher premiums. Lowery estimates a sustained increase in rental prices of 4.5 percent. This uptick is not only due to the increased demand from residents seeking temporary housing, but due to insurance pay-outs to landlords. As landlords rebuild and remodel they can charge even higher rental prices. Wolff claims that rebuilt properties can appreciate in value by as much as 10 percent.

Harvey may have changed the landscape of Houston and Texas commercial real-estate forever.

In the short term the supply of apartments will dwindle as storm damaged is assessed and more properties are condemned. The demand for temporary housing on the part of displaced residents should cause a steep rise in rental prices. The obvious flood-risk of the area will decrease new apartment construction in the long term. The greater question is how fast can outlying suburbs be repaired? If repairs are delayed long-enough, displaced residents may choose to remain in temporary apartments, permanently. If that is the case the landscape of Houston may be permanently changed.

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

Commercial Real-Estate Texas: How will retailers be impacted by Hurricane Harvey?

imagesppThe unprecedented scope and scale of Hurricane Harvey ensures that all retailers in the Houston area will feel some impact from the storm. However the long term implications of the storm, for retailers, and for Texas commercial real-estate remains unclear.

Planalytics estimates a billion dollar loss in retail sales due to Hurricane Harvey. This is money that won’t be recovered in the long run, even after the local economy recovers. The analysis claims all retailers will feel the impact of the storm in some way or another. But the impact will be felt differently depending on the retailer. Undoubtedly local consumers will change their spending habits.

Out of all retailers, restaurants are likely to suffer the greatest impact from Hurricane Harvey. Restaurants were forced to close during the storm and this immediate impact on sales may have been devastating. Baird’s analyst David Tarnitino, estimated that if Jack in the Box, for example, closed half its locations for five days during the storm it would lose roughly 1 percent of its total sales this quarter. But the brief decline sales for local restaurants are immaterial, as the spending habits of residents change and fewer people go out to eat.

A change in spending habits by residents will hit clothing retailers hard as well. Harvey interrupted the critical back to school shopping season. This is a crucial time for many apparel retailers and clearly in Harvey's immediate aftermath few consumers will be buying clothes. Meaning this crucial shopping period will be a write-off for many businesses. As potentially damaged stores remain closed, customers are likely to shift to online shopping. A boost in e-commerce may have a long term impact, as retailers consider whether the cost of repairing a damaged location is worth it. This assessment by retailers could accelerate store closures in the area. Analyst at B.Riley & Co. LLC, Jeff Van Sinderen said “ (Retailers may) wonder whether it will be worthwhile to repair damage in certain stores. Maybe this will accelerate closures of some marginal stores.”

Home improvement retailers stand to benefit, as residents begin to repair the damage. Home Depot, in particular, is known for its pro-active approach to events like Hurricane Harvey. Prior to natural disasters, Home Depot takes immediate measures to ensure its locations in affected areas are stocked with essential supplies like shovels and flashlights. This approach has served Home Depot well in the past, the company saw a 242 million dollar increase in sales at locations in areas impacted by Hurricane Sandy. Burt Flickinger, of the Strategic Resource Group estimates that Home Depot’s response to Harvey will likely cost the company 50 million dollars. But according to Flickinger, the company’s investment is likely to yield returns some 10-15 times greater than the initial cost of preparation.

The spending patterns of consumers will change in the short term, having an immediate impact on Texas commercial real-estate.

In the immediate aftermath of the storm consumers will spend more on basic needs and on repairs to their property. Restaurants and clothing companies will suffer the most from this change in spending habits, in the short-term, while home improvement stores will likely benefit. However as Houston's economy recovers, customers spending habits will no doubt normalize.

The long term impact on retailers remains uncertain. Considering the impact of similar disasters, Texas commercial real-estate could be impacted for many years to come

Some retailers may not recover from Hurricane Harvey. Taking into account the national average, 40 percent of businesses don't recover from natural disasters of similar magnitude. It is unclear whether this average will hold true in Harvey's case, but no doubt the storm will have some impact on the commercial real-estate market.

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 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

Commercial Real Estate Texas: Is Federal Flood Insurance the help small business owners need?

4page_img8-bigThe Federal governments National Flood Insurance Program will offer little relief to small business owners in the wake of Hurricane Harvey This lack of sufficient relief could have a dire impact on Texas commercial real-estate.

The National Flood Insurance Program (NFIP) covers 444,000 properties in the areas directly impacted by Hurricane Harvey. Small businesses make up just 1 percent of the total policies under the program. Even so, the NFIP remains the only option for many small business owners to protect themselves against flood damage. Small businesses in the Houston area are likely to suffer economic damage as their customer base dwindles. The few that have federal flood insurance won’t find these economic damages covered.

Small businesses find the maximum coverage offered by the NFIP is inadequate. The 500,000 dollar maximum hasn't increased since 1994. Since then not only has inflation increased the price of doing business, but there is an increased frequency in record breaking storms. 20 storms accounting for at least one billion dollars in damage, have occurred since 2010. The increased amount of damage inflicted by these storms reflects the need for greater coverage particularly for small businesses. This need is demonstrated by the fact that 40 percent of business owners, with a flood insurance policy, opt for the maximum amount of coverage. But even the maximum coverage offered by the NFIP doesn't meet the needs of many business owners.

Unfortunately there are few private alternatives to NFIP insurance. Catastrophic flood insurance is simply not an attractive bet for private companies. Business owners at the greatest of flood damage are often the only ones who purchase this type of coverage. This concentrates risk for insurers, forcing them to raise premiums. Because the NFIP subsidizes its premiums, private insurers simply can’t compete and are priced out of the market. While private insurers have found innovate ways to assess damages, the NFIP’s evaluation methods remain antiquated by comparison.

The greatest fault of the National flood insurance program is its lack of Business interruption coverage. This lack of coverage may greatly impact commercial real-estate in Texas.

Perhaps the greatest fault of the NFIP is that the program lacks business interruption coverage. The program evaluates risk based on the physical characteristics of structures, rather than conditions within the local economy. This leaves the program unable to assess business losses. Many businesses find themselves exposed not to physical damage, but to economic damage. A striking example of the NFIP’s inadequacy to help small businesses was demonstrated by the programs response to Superstorm Sandy. A joint study by the Federal Reserve of New York and the University of Pennsylvania’s Warton School, found more than half of small businesses with flood insurance received no pay out. The greatest impact of the storm for 60 percent of these businesses wasn't physical damage, but a loss of customers. The study’s lead author, Benjamin Collier, concluded that small business is more than twice as likely to suffer economic damage rather than physical damage. The NFIP doesn’t cover this type of damage, leaving many small businesses at risk.

Businesses, small businesses in particular are not sufficiently protected from floods. The NFIP’s inadequacies create uncertainty for commercial real-estate in Texas.

The NFIP needs revisions to protect smaller businesses from future disasters. Without sufficient business interruption insurance, many small businesses in the Houston area may simply disappear as a result of Hurricane Harvey.

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