Learn To Be A Fix & Flip Investor: texas commercial mortgage brokers

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Friday, November 3, 2017

What Should I Look For In A Commercial Broker To Help With My Commercial Mortgage In Texas?

You don’t have the time or energy to pursue a commercial mortgage on your own. You know that you need the expertise and assistance of a professional commercial broker, but you don’t know where to start. Here is what you should be looking for in a professional broker.

Finding a commercial broker is easy. Finding a commercial broker that will be a good fit for you is not nearly as easy. In Texas, there are many firms and independent brokers that would happily take your contract and not do nearly as much work as you would like them to do finding an excellent commercial mortgage.

Many mortgage brokers are a part of larger firms. This not only allows them to reach more lenders, but also to give them access to greater resources. Finding the right firm and the right broker within that firm can feel daunting, however, you can make this process easier if you follow some simple steps to ensure that you find the right broker.

First is to examine the qualifications of the broker. This might seem like a no brainer, but many brokers have qualifications in areas that are not in the specific area that you might need. If you need a commercial mortgage for a multifamily housing unit, it really doesn’t matter if a broker is highly qualified in retail space. That is not what you need. So, do not be impressed by a list of qualifications, but instead be selective about a broker who has qualifications that will fit your specific needs.

In addition to qualifications, a broker’s area of expertise is important. This does not mean that a broker who has no specialization will not work for you. But it is important to know what type of deals a broker does the most of. This will give you a good indication of where they are the most successful. If you can find a broker that has both qualifications and the experience of success with a commercial mortgage in your real estate emphasis, that is an excellent start.

You will also want to make sure that your broker stays on top of the ever-changing financial world of mortgages and real estate development. A quick way to assess this is to ask what they do themselves, or what their firm provides, for continuing education. A broker that does not continually improve is a broker that is falling behind on current trends in the market.

What is the best way to find a qualified, hardworking commercial mortgage broker in Texas?

Even if you make sure that you are careful in looking for a broker, take your time and ask lots of questions, there is no guarantee. The best way to find a high-quality mortgage broker is through a referral from a friend or business associate who has worked with one before. In fact, this is the way that most decent mortgage brokers grow their business: through referrals. They know that if they work hard, meet the needs of their clients and are able to put together a list of satisfactory commercial mortgage options that they will receive excellent word of mouth. If you encounter a mortgage broker that does not worry about what his clients say, this is most likely a person that you are not going to want to deal with.

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

Thursday, November 2, 2017

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 1 – Pre-qualification

Venturing into the commercial real estate market is not something to be taken lightly. The process can be long and stressful, especially if you are not properly prepared. When you are seeking a commercial mortgage in Texas, there are a number of steps to take before you are going to be able to secure funds.

Before the official paperwork even begins, most lenders prefer to have potential borrowers go through a pre-qualification process. Not only does this ensure that the borrower is both serious about pursuing a mortgage, but it also helps lending institutions determine the direction that they want to go with the commercial mortgage, especially in competitive markets like Texas.

In many cases, the pre-qualification process consists of some basic questions about your goals and your basic finances. Many lenders actually have this process online, so it can be completed at your convenience. It is important to answer the questions on this pre-qualification application as honestly as possible, even if you do not have to back it up with financial statements right away. Again, this is process is not only to determine whether or not you can handle a loan, but also to justify which type of funding would work best for you and your commercial property.

There is also the instance of a lender reaching out to you, saying that they have already prequalified you. While this is more common with basic commercial loans for small businesses (remember, many lenders make money off of fees and interest rates, so it is in their best interest to have as many customers as possible), it does happen with commercial mortgages, especially if you have already received one or applied for one. If you have already been pre-qualified, you will still have to go through the application process to definitively determine if you qualify for the loan.

For some lenders, just the application and some basic questions are enough to begin the process of a formal application. For others, further documentation will be required. This can be anything from the previous two months bank statements to tax documentation going back two to three years. You might also have to prove additional income by disclosing investment properties or other assets. The larger the commercial loan you are attempting to acquire, the more documentation you should expect to provide up front.

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

Once all of the documentation is gathered and submitted to the lender, you will usually have an answer as to whether or not you are qualified pretty quickly. Often times it is even the same day. If you do this online, you can expect to know the answer, and hear from a representative, within 24 hours. In person, this process might go even more quickly as your documentation will be reviewed by a live person while you are present. After you are pre-qualified, the lending agency will then begin to move you through the formal application process of a commercial mortgage.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Sunday, October 1, 2017

Four Common Mistakes Among First-Time Texas Commercial Real Estate Investors

If you’re just delving into the lucrative investment strategy known as real estate, there is much to learn from those that have come before you. These, then, are the tried and true—the what not to do as you aim and take fire at your first Texas commercial real estate investment.

One of the most common errors first-time investors experience is what is known among the established set as “eyes bigger than their stomach.” Instead of starting small and getting their feet wet, many first time investors start with a major overhaul or a multifamily property instead of a simple rehab or rental. While real estate investing is about the numbers and the bottom line, it’s also about experience, which leads us to the other major faux pas among first-time Texas commercial real estate investors—not sticking with what they know. If you’re a contractor, you’ve got a great head start among those investors or fix-and-flippers whose experience has been derived from watching HGTV. But even you, my friend, who understands timetables and costs, can get in over your head. Team up with other experts such as a real estate agent who knows the markets or a mentor who can lead you down the path of profitable CRE.

Mistake number three is all about the money and not having enough capital reserves when the unexpected arises—and nine times out of ten, you will get a surprise. From water damage and rotting wood to bad wiring, keeping some funds set aside for these occurrences will keep you from having to search for funds mid-stream, never a good scenario.

Surprises are less likely to occur when you have a good team in place which leads to mistake number four—trying to do it all yourself. If you’re not a real estate agent, consider getting one on your team that knows the market and can suggest what upgrades are worth the price and which ones will price the home out of the market. If you’re not a contractor, find one that has your back, that is excellent at what they do and knows how to bid with precision, and that you can trust explicitly.

Location – Location – Location

The small business mantra—location, location, location—applies to Texas commercial real estate investments as well. It’s important that you understand the market—is it a growing community with a good job market? How is the school district? Is your target tenant or buyer a family, college student, or professional? This needs to be decided before you start your renovation because it will determine, to a large degree, the design.

Consider a private hard money lender for your first Texas commercial real estate project.

At Level 4 Funding, we provide hard money asset-based loans. These types of loans are quick to funding and do not require the stringent credit scores that traditional lenders are bound by. We offer competitive interest rates and terms as long as 60 months. We can also set you up with your next bridge or construction loan and have worked with many a developer to supply all of their funding needs for multiple projects.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Reason to Get a Hard Money Commercial Mortgage Texas

You might be ready to give up on purchasing a commercial property if you have been turned down for a conventional loan. But the solution for many issues can be a hard money commercial mortgage Texas.

You could be feeling that you have no options left if you have been rejected for a conventional commercial mortgage Texas. But the truth is that there are a lot of good reason to look into a commercial hard money loan. It is true that you will be paying a higher interest rate than you would on a traditional commercial mortgage Texas, but it could be well worth it to solve a problem or avoid one altogether.

The most common reason that borrowers seek a hard money commercial mortgage Texas is because they have financial issues that won’t allow them to qualify for a traditional mortgage. You might not have enough income or assets to prove to a bank or lender that you will be able to make the payments. Or your business might be too new and not have a long enough credit history to qualify for a loan. If you already have commercial mortgages that are outstanding, then you could also be considered a high risk and a conventional lender will not offer a loan.

Or the property itself could be the issue. In the case of a more unique property it could be very hard to secure a loan which uses that property as collateral. The property could meet all of your needs but still might not convince a lender that it is a good risk as collateral. Another issue regarding the property could be that it has outstanding liens, judgements or other unpaid bills. If this is the case then most lenders are not going to want to carry that increased risk. If you are not able to pay the debt in cash then you will most likely not get a conventional mortgage for the property.

Avoiding a Huge Issue

If you already have a conventional commercial mortgage but are behind on the payments, then a hard money mortgage could be your only hope of avoiding foreclosure. If this is the case then paying a higher interest rate for the hard money loan to pay off the conventional loan is very wise. Not only will it help you to avoid losing the property but it will also help you to avoid ruining your credit. And even if the hard money loan is a short time frame, it allows you time to regroup and try to find a long term solution.

Know What You Are Getting Into

Not every problem has an easy solution. Paying a higher interest rate is never your first choice but it can be a way to avoid further issues and even the loss of your property and credit. Understanding the terms of a hard money loan and being willing to accept them can be a good idea. Just be sure that you have evaluated all of your options and that the hard money loan is the best short and long term solution that you have at your disposal.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Facts to Know Before Applying for a Commercial Mortgage Texas

Purchasing a commercial property is a more lengthy process than making a residential property purchase. Understanding a few facts about a commercial mortgage Texas will help you to be more successful when submitting your applications.

When you are applying for a commercial mortgage Texas from a conventional bank, you will likely be working with the commercial branch of the lender. This means that you will be working with higher interest rates and more restrictive conditions and qualifications than the residential side offers. This is due to the increase risk that a commercial mortgage Texas represents for the lender. This risk is due in part to the volatility of commercial property values and also in part to the connection between economic conditions and a business’s potential for success.

You will also learn very quickly that a commercial mortgage Texas offers a lower loan to value ratio. This means that you are only able to borrow around 70% of the actual value of the property. So you will need to have the cash available to make the more substantial down payment. The reason for this large down payment circles back to the volatility of the commercial property values. Because the loan is secured by the property that you are purchasing, it is the collateral, the lender wants to be sure that there is instant equity in the property. This is the final safety net for the lender in the event that you default on the loan the lender is forced to sell the property to recover their money.

You will also discover that commercial loan terms are much shorter than residential mortgage loan terms. A typical home can be financed for 30 years but most commercial property loans are written for a term or 15 to 20 years. With these shorter terms it is very critical that your business be able to demonstrate steady cash flow and the continued ability to make the payments on the loan.

There Are Many Costs to Pay

As a residential borrower, you are familiar with the cost of the interest on the loan and the points that you might have paid at closing. But a commercial property mortgage can have a lot more fees. And some of those fees might be due upfront or hidden deep within the loan document. Be ready to pay a loan application fee, a loan processing fee, survey costs, appraisal fees and even environmental testing to ensure that the property is not contaminated. Because the process is much more intricate than a residential loan processing, there are many more administrative and legal fees that are involved. And as you might expect, the lender is going to pass all of those costs on to you, the borrower.

Knowledge is Critical

Undertaking your first commercial property loan application can be intimidating. But taking the time to learn the terminology, the process and the qualifications for a commercial loan will help you to understand why the long process is necessary. It can also help you to tailor your application to meet the specific interests and needs of each lender that you might choose to work with.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Are Your Options When Seeking Commercial Mortgage in Texas

Commercial mortgage Texas brokers can help you discover what options are available to your business when trying to find the right loan. Even if you have less than perfect credit or are just starting to establish credit, a broker can help you navigate the unchartered waters of getting a loan.

There are always unforeseen situations in business that may leave you in need of hard cash – and fast. That’s where a loan comes in handy. However, trying to get one on your own, as a new business owner, can sometimes prove difficult. Working with a trusted broker for your commercial mortgage Texas is a great way to go, because they can help guide you through the process and make sure you have what you need to be eligible for a loan.

You have several options when it comes to getting a loan – and it all depends on your needs. You can seek an equipment loan, specific to the purchase of large machinery or equipment needed to start or expand your business, property loan, short and long term loans. There are even loans specific to green building. Do some research to find out what type of loan you need before meeting with a broker or a lender.

You can also do some research as to the commercial mortgage Texas loan amount you might need or be eligible, then find out what your approximate monthly repayment amount might look like. There are variables that may affect this such as fees, interest rates, and down payment amount that you are able to initially invest.

A hard money commercial mortgage Texas might be the way to go if you have less than desirable credit or are just starting out in business and traditional banks don’t want to take the “risk” of approving your loan.

A broker can advise you on a hard money lender that can get your loan approved without all the bureaucracy that conventional lenders and banks have to go through. As long as you can prove that you can pay your loan back, and on time, that is all that a hard money lender really cares about.

Take some time to research what this type of loan can do for you and your business. Whether you need some cash fast to get up to speed on what you owe vendors, getting your payroll going smoothly, or purchasing new equipment to better your business services for your customers, getting a hard money loan can catapult your business to a whole new level. Talking to a broker, getting advice on the type of loan that is best for your needs and getting all your documentation in order prior to the loan approval will increase your chances for eligibility. So what are you waiting for? Talk to a broker, you won’t be sorry!

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Saturday, September 30, 2017

What You Need to Know about Repayment Terms of Commercial Loans Texas

There are many details and “fine print” to understand how to pay back your commercial loans in Texas. Here we break down what you need to make sure you can repay your lender.

First, it’s important to have realistic expectations about obtaining and repaying a loan. Terms are much different than they are with say a home mortgage, so it’s important not to compare the two — they are totally unique to one another. Residential loans can often have a repayment schedule of up to 30 years, while commercial loans Texas are broken down into tow major categories depending on the length of the repayment terms and schedule.

An intermediate term loan is a shorter-term loan that is three years or less. These loans can be more difficult to repay a large loan amount because the repayment requirements and interest may be quite high. Longer-term loans vary from between five and 20 years. Repayment loans are also amortized loans, meaning the loan will need to be repaid in fixed installments until the entire loan has been repaid. This is similar to what homeowners pay for their home mortgage – making a payment monthly at a “fixed” amount, including principle and interest.

However, amortization of commercial loans Texas are rare, and typically you are required to pay a balloon payment at the end of the terms. This means you will be required to pay the remaining portion of the loan in one large lump sum. This can prove difficult for many small or start up businesses. During the loan repayment, interest is paid, but not principle, so at the end the business owner is responsible for nearly the entire principle amount. The alternative to paying all at once is refinancing the amount of the balloon payment into a new loan

It’s important to know that you are responsible for prepayment terms, too, and can actually be penalized for early payment.

While you may be tempted to “prepay” your loan amount and save on interest, you may be in for a surprise. Unlike a home mortgage, commercial loans Texas often include clauses to the contract that outline a prepayment penalty fee, calculated by multiplying the present outstanding balance by a prepayment penalty amount stated in the contract. This protects the lender or bank from any loss that might be associated with early payoff. An interest guarantee also protects the lender – stating that they are entitled to receive a specific amount of interest when the loan is paid off prior to the terms of the agreement. This is sometimes refereed to as a “lock out,” meaning the business owner has to wait until this time has passed (five year, for example) to them pay off the full loan amount without penalty.

Before signing your loan agreement, make sure you understand what is required of you

Once you sign the documents, you are responsible for the repayment terms stated in the commercial loans Texas agreement, so it’s important that you go through all the paperwork with a fine-tooth comb and seek legal counsel to review it as well. Understanding exactly what is required of you will make it easier to budget and plan for your repayment schedule.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Texas Commercial Lending: Report sheds light on how local banks may respond to Hurricane Harvey.

How will Texas commercial lenders re-tool their lending efforts in the after math of Hurricane Harvey? A report by the Cleveland Federal Reserve may shed light.

The study demonstrates that the need for financing by disaster victims won’t be immediate. Lending activity subsides in the after math of major disasters. But within a six month period, as impacted economies recover, lending activity picks up considerably. The study indicates that small local banks increase lending by 25 percent in the year following a major disaster. How do these small banks manage to lend more money, when no doubt such disasters result in immediate loses?

The report outlines three specific strategies Texas commercial lenders may implement to raise capital and meet the increased demand for loans.

New loans will increase in areas of Texas directly impacted by Harvey and lending will decline in areas that saw little to no impact from the storm. The report claims banks shift their activity in order to meet the increased demand for new loans in impacted areas. This shift is demonstrated in Home Mortgage Disclosure Act (HDMA) data citied in the report. Every dollar lent in a disaster area is a 42-50 cent decrease in lending in areas that remain unaffected. While banks concentrate on impacted areas, capital becomes harder to access in other markets. This spreads the economic influence of major disasters throughout the economy.

New mortgages will be securitized and sold off at a higher rate. Selling new mortgages onto secondary markets helps local banks meet increased demand for loans in disaster areas. The new mortgages will be for smaller amounts, under the conforming loan limit in order to qualify for government backing. The government guarantee helps prop up lending activity in disaster areas. HDMA data in the report confirms this trend. Banks avoid the risk of doling out long term loans on the basis of short-term deposits. Local banks can therefore replenish capital each time they issue a new loan by securitizing and selling off new loans. Having this money on hand helps banks meet increased demand for loans in impacted areas. However the conforming loan limit may impact the size of mortgages issued by local banks in the long run. Local banks are therefore less likely to issue large mortgages in the immediate future.

Banks will increase interest rates on deposits in the short term, in order to attract additional capital. Local banks will compete with one another in order to secure new deposits and meet the demand for new loans. This competition requires banks to raise interest rates paid on savings accounts. Such competition is likely to occur in markets connected, but otherwise not impacted by Hurricane Harvey. Ratewatch data cited in the report finds local banks increase the interest paid on short term CD’s by 20 percent when compared to average rates.

Texas commercial lenders may or may not implement the strategies outlined above to meet the increased demand for loans.

The study indicates that lending will increase in areas that felt the brunt of Harvey’s impact, that new mortgages will be for smaller amounts and savings accounts will pay out higher interest rates. Whether this will hold true in the case of Hurricane Harvey remains to be seen.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Texas Commercial Lending: Could local banks benefit as a result of Hurricane Harvey?

Texas commercial lending will feel the impact of Hurricane Harvey. But commercial lenders in the Houston area expect certain sectors of the local economy to see an uptick. Could a short term boost in economic activity help the regions banks?

Houston based banks will see an increase in both lending and deposits, this could prove beneficial in spite of the short term losses incurred as a result of Hurricane Harvey. Recovery efforts after disasters can inject new life into the economies of impacted areas. During Hurricane Ike, Houston reported an increase in sales tax revenue. The case could be similar with Hurricane Harvey. A burst of economic activity in specific sectors could benefit the regions banks. In particular lending related to those areas of the economy that could benefit as a result of the storm.

Commercial lenders anticipate certain sectors of the region’s economy to experience an uptick in the wake of Hurricane Harvey. No doubt hotels will see a short-term spike in business and the multi-family market will experience increased demand as well. Commerce CEO, Ralph Babb Jr, noted in at a recent conference that “As a result of Hurricane Harvey, leasing activity has picked up substantially.” Displaced residents are looking for temporary housing, increasing the demand for apartments. Consumer loans, construction loans and auto loans will rise as well, as residents seek funding to replace damaged property. Short term increases in these areas of the local economy will help prop-up lending activity for local banks and this may even translate into a long term benefit.

Major disasters can be a net positive for local banks. Outreach efforts by local banks to disaster victims could strengthen customer relationships and help attract new business. Hovde Group analyst Joel Fenech cites Hurricane Katrina as an example of how disasters can benefit banks both in the short term and the long term, stating “the timing of Katrina, in my view, actually helped to shield the affected banks from the more devastating impacts of the Great Recession.” Fenech claims that banks that lent after Katrina emerged from the recession stronger and some even became acquirers of struggling banks.

Higher insurance prices will impact Texas commercial lending in the long run, but short term job growth for reconstruction may bolster construction loans.

The storm might deter new construction in Houston, but it could also prop up job growth in the short term. Major disasters increase risk for insurers, inflating the cost of policies. Higher insurance rates might deter new construction, unrelated to rebuilding efforts in the long term. The demand for new construction in Houston however has been tepid for some time. Efforts to rebuild could prop up jobs related to construction and bring about short-term employment opportunities in this struggling sector of the local economy.

Texas commercial lenders will benefit from Harvey in the short term, it is unclear whether this short term boost will translate into long term growth.

The hospitality industry will benefit and apartment sales will increase as a result of Hurricane Harvey. Consumer loans and loans related to reconstruction will also rise as residents seek to repair and replace damaged property. Reconstruction efforts could prop up employment in the short term. Whether these short term benefits due to the storm will translate into long term benefits for regions banks remains uncertain.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Featured Post

Friday, November 3, 2017

You don’t have the time or energy to pursue a commercial mortgage on your own. You know that you need the expertise and assistance of a professional commercial broker, but you don’t know where to start. Here is what you should be looking for in a professional broker.

What is the best way to find a qualified, hardworking commercial mortgage broker in Texas?

Thursday, November 2, 2017

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

Sunday, October 1, 2017

If you’re just delving into the lucrative investment strategy known as real estate, there is much to learn from those that have come before you. These, then, are the tried and true—the what not to do as you aim and take fire at your first Texas commercial real estate investment.

Location – Location – Location

Consider a private hard money lender for your first Texas commercial real estate project.

You might be ready to give up on purchasing a commercial property if you have been turned down for a conventional loan. But the solution for many issues can be a hard money commercial mortgage Texas.

Avoiding a Huge Issue

Know What You Are Getting Into

Purchasing a commercial property is a more lengthy process than making a residential property purchase. Understanding a few facts about a commercial mortgage Texas will help you to be more successful when submitting your applications.

There Are Many Costs to Pay

Knowledge is Critical

Commercial mortgage Texas brokers can help you discover what options are available to your business when trying to find the right loan. Even if you have less than perfect credit or are just starting to establish credit, a broker can help you navigate the unchartered waters of getting a loan.

A hard money commercial mortgage Texas might be the way to go if you have less than desirable credit or are just starting out in business and traditional banks don’t want to take the “risk” of approving your loan.

Saturday, September 30, 2017

There are many details and “fine print” to understand how to pay back your commercial loans in Texas. Here we break down what you need to make sure you can repay your lender.

It’s important to know that you are responsible for prepayment terms, too, and can actually be penalized for early payment.

Before signing your loan agreement, make sure you understand what is required of you

How will Texas commercial lenders re-tool their lending efforts in the after math of Hurricane Harvey? A report by the Cleveland Federal Reserve may shed light.

The report outlines three specific strategies Texas commercial lenders may implement to raise capital and meet the increased demand for loans.

Texas commercial lenders may or may not implement the strategies outlined above to meet the increased demand for loans.

Texas commercial lending will feel the impact of Hurricane Harvey. But commercial lenders in the Houston area expect certain sectors of the local economy to see an uptick. Could a short term boost in economic activity help the regions banks?

Higher insurance prices will impact Texas commercial lending in the long run, but short term job growth for reconstruction may bolster construction loans.

Texas commercial lenders will benefit from Harvey in the short term, it is unclear whether this short term boost will translate into long term growth.