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

Thursday, November 2, 2017

How Will Changes in Real Estate Development Affect Commercial Real Estate Loans In Texas Post Hurricane Harvey?


4page_img5-bigWhether it be commercial properties to house offices, retail space to support small businesses or multi-family homes to address growing population density, commercial real estate loans in Texas have long been a source of income and expansion for small business owners. However, with the recent devastation of Hurricane Harvey, regulations might be implemented that could affect this landscape.

Whenever the idea of regulation, especially when it comes to sources of economic development, comes up, there is always a debate. Individuals from all over the spectrum weigh in on the benefits or drawbacks of such changes and the impact that they would have on the market and economy as a whole. However, with the massive repercussion that Hurricane Harvey has had on properties in Texas, it seems as though regulation is a foregone conclusion. This will most certainly impact commercial real estate loans.

One way that regulations might change the real estate industry after Hurricane Harvey is in zoning laws, especially in Houston. Prior to the latest disaster, there had been little in the way of zoning restrictions. Real estate development was given a free hand and the population and local economy was greatly enhanced. However, this did lead to significant losses with the flooding and other destruction from the hurricane.

Because of the unique landscape of Houston and the surrounding area, there are many residents that have been clamoring for increased regulation in zoning. Houston has been extremely fast growing in the past few years and this had led to many commercial real estate loans being used for rapid expansion into the surrounding plains, which have ultimately proven to be unsafe and right in the flood plain. This did, however, provide for lots of very economical development.

However, there is still a good deal of opposition to potentially more regulations. Opponents of these measures claim that there is little evidence to prove that the development cycle is actually to blame for the flooding. One solution that has been put forward is for the city itself to provide a more comprehensive drainage plan.

In either case, the resulting changes in commercial real estate that are bound to come out of this most recent disaster will certainly have an effect on the loans needed to develop, or re-develop, Houston and the surrounding area.

How will the fight over regulation specifically affect commercial real estate loans in Texas?
While this largely remains to be unseen, there are some trends that could be affected. For one, the application, appraisal and title process all have the potential of taking more time the more restrictions are in place. With any sort of regulation, government agencies usually get involved in the process and that is sure to bog down a commercial real estate loan. It remains to be seen how it will affect interest rates or terms, but with more agencies in the mix, it is a solid prediction that fees for closing, at the very least, will increase. If zoning regulations do go into effect, the availability of such loans (and properties in general) might also decline.

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

The Dark Side Of Commercial Real Estate Loans In Texas – What are the Drawbacks Investing?


iStock_000002512608_LargeIf investing in commercial real estate properties were easy and a sure thing, then everyone would be able to do it successfully. However, there is a tremendous amount of risk inherent in pursuing commercial real estate loans in Texas, considering the number of factors that are outside of the control of the investor.

There are most definitely opportunities present for anyone to get involved in commercial real estate. So why doesn’t everyone do it? Because for every reward, there is also a great deal of risk. Only those who are able to manage the risks, while capitalizing on the rewards are going to be successful in putting a commercial real estate loan to work for them with an investment property.

One of the biggest drawbacks of pursuing and following through with a commercial real estate loan and the property that will be acquired with it is the time that the owner is going to have to commit. With a commercial property, you are going to be dealing with many different leases of different time frames and terms, shared areas that are the responsibility of the owner, and an image to uphold. All of this takes a tremendous amount of time and energy. If a borrower has never owner commercial property before, the amount of time it takes for even the simplest of maintenance tasks is most likely to surprise.

Another hurdle that investors and owners will need to overcome with commercial property is the realization that it is impossible to do it all yourself. With the amount of maintenance, as well as their complexity, an owner is going to need commercially certified professionals. This often comes as a surprise to many owners who like to take care of things themselves. Not only does this establish a further layer of liability protection, but it will also save time. Just because you have the commercial real estate loan on the property does not mean that you should try to save on costs by lowering maintenance standards.

Commercial properties are also different than residential properties and this can be a drawback for investors that are not properly prepared for what that means as far as foot traffic is concerned. The reality is that the volume of people coming in and out of a commercial property is much greater than in a residential property. While this might seem like a no brainer, the implication is that the potential for damage to the property or to those who frequent it go up significantly. Everything from a minor accident in the parking lot to a significant injury to a patron has the potential to happen. This additional risk is often not realized by potential owners until it is too late.

Are there ways to mitigate the risks associated with my commercial real estate loan and commercial property in Texas?

Each state handles the issue of insurance differently, so it is critical to understand what the local laws are in regard to liability, maintenance fees and licensing. The last thing you want to have happen is to lose your livelihood and open yourself up to a lawsuit over something that you did not know was an issue. The best way to lower the risk and overcome these draw backs is to seek the advice and help of someone who has dealt in commercial real estate and commercial real estate loans before.

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, November 1, 2017

Big Data and Texas Commercial Real Estate Investment Trends

4page_img6-bigTechnology has impacted just about every aspect of our lives including the real estate industry and the tools that provide investors with better decision-making abilities at a moment’s notice. Here are just a few of the technical advances that are making a difference in Texas commercial real estate investment strategies.

Data analytics has transformed how and where developers, builders and investors make their next strategic move. This includes demographic data and predictive analytics. With the increasing ability to track more data over a given time period and the power to integrate and analyze at a rapid pace, risk management has increased and important variables are addressed which include job markets and population factors. Actionable trends and patterns are now dictating the current markets that those in the Texas commercial real estate circles are investing in.

How has this changed the face of real estate? Properties can go on and off the market in a moment’s notice and the next “big” market is often determined by those that use big data to determine trends. Now, more than ever, keeping up on the information highway gives investors and contractors that ability to stay competitive. Examples of data being used today includes predicting the worth of a property in five to ten years, traffic and consumer spending analytics if delving into retail investments and patterns that highlight up-and-coming markets which were previously difficult to detect.

Because of the lightning-paced data availability and the market trends they detect, now, more than ever, lucrative investment properties are snatched up as soon as they hit the market. In addition to changing the face of investing, it has also changed the process of funding. In order to snatch up these types of properties, capital is required in days instead of weeks and traditional Texas commercial real estate banking institutions are just not able to perform this rapid time to funding due to numerous regulations and requirements. This has prompted the rise of individual and group private investors that are often able to provide the needed capital in less than a week.

Private Hard Money Lenders for Texas Commercial Real Estate Loans

Private hard money lenders are one of the funding sources that many contractors and developers use in order to access quick capital. This type of loan is asset based and relies on the collateral of the property or other assets. Creditworthiness and credit scores play less of a role in lending determinations.

The full potential of big data has yet to be revealed. It is, however, guaranteed that the fast and predictive analytics it provides will continue to change the face of real estate investment strategies.

At Level 4 Funding, we work with hundreds of private hard money lenders. We provide up to 90 percent of the loan value and offer flexible terms from 3 to 60 months. Our fast and easy approval process allows for funding in as little as a few days.

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

Monday, October 2, 2017

How a Texas Commercial Real Estate Loan Differs from a Residential Loan


3page_img4-bigObtaining a Texas commercial real estate loan is a very different process than applying for a residential loan. Consider these tips when searching for funding for your next project.

Texas commercial real estate loans are capital that is obtained for business purposes, whether renovating an existing home to sell or rent, building an apartment or developing office space. These types of loans are typically secured by collateral or liens on the commercial property. How institutions and lenders determine if one is qualified is a much different process than a traditional home mortgage that requires bank statements, recent pay stubs, prior tax returns and your credit report.

When obtaining a loan for commercial use, the lender is first and foremost interested in the property or the project. If it’s an existing property, they will want to see photos of the inside and outside, operating history, cash flow and current schedule of rents. The net operating income (NOI) must be at least 25 to 45 percent over the commercial mortgage payment. Another way that lenders state this is that the debt service coverage ratio must exceed 1.25 to 1.45. The requirements are very different depending on the type of lender of which there are many including traditional banks and credit unions, insurance companies, Small Business Administration, pension funds, government agencies, CMBS lenders and private hard money lenders.

While individuals generally obtain home mortgages—corporations, partnerships and trusts are often formed in order to obtain Texas commercial real estate loans and develop projects. There are both non-recourse and recourse loans. A non-recourse loan means that the only “recourse” the lender has should the borrower default is to take the property. A recourse loan means that the borrower is personally responsible and the lender has the right to try and collect any balance owed even after taking the property back. Another consideration that is often different between these two types of loans is the prepayment penalty which often accompanies a commercial mortgage.

Loan-to-Value and Debt-to-Income Ratios

Recently, Fannie Mae and Freddie Mac increased their debt-to-income ratio limit from 45 to 50 percent of pretax income, making it easier to qualify for these types of loans. While standard requirements for a home mortgage, they also come into play for commercial mortgages if the borrower is considered a secondary source of payment such as in a recourse loan. The loan-to-value is another important underwriting ratio that differs from home and commercial loans. It represents the value of the loan against the value of the property, determining how much equity the borrower requires. It is the amount of the loan divided by the purchase price. Commercial loans generally require an LTV of 65 to 80 percent while home loans will sometimes allow up to 100 percent LTV.

Consider a private hard money lender for your next Texas commercial real estate loan.

At Level 4 Funding, we work with hundreds of investors that offer private hard money loans. These types of loans are based predominantly on collateral and offer quick funding as well as interest-only payments and no prepayment penalties. Call us for a no-obligation quote today.

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

Sunday, October 1, 2017

For Texas Commercial Real Estate Investors—Check out Irving / Las Colinas


p1_img4Dallas has been on the mark in terms of job growth and affordability, traits that Texas commercial real estate investors search for when looking for their next project. Las Colinas, located in the Dallas suburb of Irving, is bringing in corporations and needed multifamily units at a tremendous rate.

The Texas commercial real estate developers who have already delved into this lucrative market, probably already know about the growing corporate hot spot known as Irving. In particular, Las Colinas, the upscale area in this Dallas suburb that seems to be attracting corporations and encouraging corporate relocations. Its location is part of the draw—located between Dallas and Fort Worth and close to DFW International Airport and DART. Irving is also home to several universities, providing, for those incoming corporations, an educated workforce. Another calling card is simply that the town has made it their mission.

There are several steps that this area has taken in hopes of drawing in big business. This includes offering rich incentives to corporations looking to move and the creation of the Toyota Music Factory to add to its entertainment sector. This entertainment destination consists of an indoor concert hall, outdoor amphitheater, retail, restaurants and a movie theater. According to an article in Bisnow, Parmenter Southwest Region Senior Vice President Josh Hedderich said, “The combination of amenities, affordability and access to the metro sealed the deal in a recent lease his firm negotiated.”

Las Colinas is home to more than 2,000 companies including ExxonMobil, Kimberly-Clark, AT&T, Citigroup and General Motors Financial. Rumor also has it that they are vying for the next headquarters for Amazon—a move that will be providing some fortunate city with 50,000 jobs. About the only criteria they do not fit that Amazon has deemed necessary is its population which doesn’t quite make the million mark. It does, however, rest in the arms of Dallas, a city of close to 4.6 million. As the jobs, people and corporations arrive, this town of 85,000-plus is continuing to see an increasing demand for multifamily units.

Multifamily Unit Development in Las Colinas

Alexan Las Colinas, a 307 multifamily unit, was completed at the end of 2016 and features garden courtyards, a pool, and amenities such as a bike shop, wine tasting lounge and virtual golf. JPI, one of the top Texas commercial real estate developers in the multifamily unit segment in this area just purchased another development site in Las Colinas’ growing Urban Center. It also has two new apartment developments on nearby properties. Last year, JPI had over 3,100 units under construction.

Private hard money lenders are often the go-to for developers looking for capital for this segment of Texas commercial real estate.

Private hard money lenders can offer rapid funding for developers needing to make a quick bid on a property that just hit the market, one of the common reasons that real estate investors obtain these types of loans. At Level 4 Funding, we provide funding for multifamily projects up to $50,000,000 with an LTV up to 90 percent. We offer a quick response and competitive rates. Give us a call for a no-obligation quote.

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

Financing with Texas Commercial Mortgage-Backed Securities


4page_img2Texas commercial mortgage-backed securities are a choice of funding for real estate developers. Here are the facts concerning this type of commercial real estate loan.

Texas commercial mortgage-backed securities (CMBS) are fixed rate bonds that represent an investment in a portfolio of varying property types and sizes, and that are backed by commercial real estate mortgages. Generally, the loan-to-value is 60 to 70 percent with a 10-year loan term, interest-only payments, and a balloon payment at the time of maturity. When they came on the market in the 1990s, they proved very useful to commercial real estate developers due to the improved loan availability and rates.

As of May 26, 2017, $27 billion in commercial mortgage-backed securities have been issued—down 6.6 percent from the previous year. The reduction is due, in part, to the risk-retention regulations that require the issuer to hold 5 percent of the securities. These regulations favor bigger banks, leaving many of the smaller lenders to observe from the sidelines. Another factor is based on the cyclical nature of things and the growing concern that the market has reached the summit and is heading for a decline.

In 2016, banks made up most of the capital providers—a little over 50 percent of investors. Fannie Mac and Freddie May came in at 18 percent of debt investors while life insurance companies made up 11 percent of the group. The remaining were securitized debt holders such as CMBS. What’s interesting to note is the dramatic drop in CMBS lending, peaking at $229 billion in 2007 and dropping off to $76 billion in 2016. This drop off has been blamed on rising fears of saturation as well as the mounds of loans that were issued in 2005 to 2007 and that are now maturing. The numbers, however, suggest that there is little cause for concern as the $65.6 billion in debt that reached maturity during the first six months of 2017 only showed a 6.4 percent delinquent rate

Obtaining your next Texas Commercial Mortgage

Texas Commercial mortgage-backed securities can be a good choice for longer-term acquisitions; however, the prepayment penalties often associated with these types of loans can serve as a deterrent. In addition, the new requirements have meant that obtaining these types of loans can be more difficult and time to funding longer as underwriting has tightened its belt. Loans are also based on LTP or loan-to-purchase as compared to LTV or loan-to-value which may require additional equity. Modification and additional fees such as insurance review fees can add up. These types of loans have certainly served their purpose and helped many a developer obtain the needed capital. Just be sure to add in all the varying factors when laying out a budget and consider alternative options.

Consider obtaining capital from a private hard money lender.

At Level 4 Funding we work with hundreds of private investors, one who might just be interested in your next project. Our private hard money loans provide quick access to capital, terms up to 60 months and competitive rates. Call us for a complimentary quote.

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

Obtain your Texas Commercial Mortgage and be prepared for Amazon’s Newest Headquarters


images (4)ffghjSeveral cities are vying for the right to be known as home to Amazon’s second and newest headquarters. Be prepared and look into a Texas commercial mortgage in order to jump on the bandwagon and take advantage of the 50,000 employees expected to emerge upon this fortunate town.

Did we say Texas? That may be a little premature, though there are several cities from the Lone Star State jockeying in place in hopes to be the new home for Amazon’s second headquarters. This massive mammoth known as Amazon requires space—some 8 million square feet of it—and employees—some 50,000. That’s a lot of people and a lot of land and, though many cities look to the revenue and job growth Amazon would provide, not all can compete with the type of space they require or that type of labor force—one that often requires a highly technical education. The other element a city must provide is tax incentives, a reasonable cost of living, and easy access to an international airport. According to Amazon’s press release, they are looking for metro areas with at least one million people and ones that think big and creatively in regards to real estate options and also offer a high quality of life. So, just where might this mega-company be headed?

Texas is known as the state where everything is bigger, so Amazon would certainly fit in with this type of culture. Many with their crystal balls in place see Austin as a strong contender. After all, Amazon just bought Whole Foods which is based out of Austin and it definitely has a growing economy and tech-oriented labor pool. Just as important, it has no income tax. Texas commercial mortgages and funding for these types of projects are just another day in the land of Legacy West Developments—the $3 billion development that could rival any western town.

Stepping out of Texas, Denver made the list due to its high quality of life that offers plenty of outdoor recreation along with a strong and growing high-tech workforce. Google and Twitter both have offices in the mile-high city. It’s also still affordable compared with other cities of similar size. And then, of course, there’s Chicago where a developer has already found a site for Amazon—a former steel plant. The developer is Sterling Bay and the plant is a former A. Finkl & Sons. This mixed-use development could take a decade to develop and cost in upwards of $10 billion. Will Amazon consider a city, however, where the taxes are some of the highest in the nation? The 100-plus acres will, if Amazon buys in, be home to a new train station, office and residential towers, restaurants, a brewery and a water taxi stop. With enough tax incentives and hand shaking, Chicago just might be in the running.

Developers are Strategizing

Walk into a boardroom filled with developers and investors and you’ll find their interactive whiteboard filled with arrows pointing to the “wants” of Amazon and the cities that offer these solutions. No, they may not be the developer that transforms 8-million-plus square feet into Amazon City. They do, however, want to be positioned to take advantage of the burgeoning population and high-paid employees by offering apartment units or entertainment venues in the surrounding area.

Once you’ve determined your next market for development, consider a private hard money lender for your Texas commercial mortgage.

At Level 4 Funding we offer nationwide and Texas commercial mortgages from private hard money lenders. These loans are quick to fund and are available up to $50,000,000 with terms that range from 3 to 60 months. Call us for a no-obligation quote.

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

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

What You Need to Know About Commercial Loans Texas


credit score at level 4 arizona hard money lenderIf you are not familiar with commercial loans Texas then you might believe that they are similar to any personal loan that you applied for. But the short answer is that they are not.

The first and largest difference between commercial loans Texas and a residential mortgage loan is that it is not backed by a guarantor such as Fannie Mae. This means that commercial loans Texas represent a much greater risk for the lender. For that reason, commercial lenders are much more selective about who they are willing to lend money to. Interest rates are higher and down payments are also much larger and that is just the beginning of the differences.

Balloon payments used to be common in residential mortgages but they are not any more. However, they are quite common in commercial loans Texas. So you will make payments that would pay off a loan in 30 years but the term of the loan will only be 3, 5 or 10 years. The result is a large balloon payment that is due at the end of the term. Most businesses are not in a position to pay the balloon payment and must refinance the final amount and keep paying on the property. Another option is to select a higher interest rate in return for a longer payment term.

Down payments are also quite different in the commercial property world. Unlike the 10% required to secure a home loan, commercial mortgages often require 25% or more down. A big reason for the larger down payment is the greater risk involved in a commercial property loan. Values on commercial property tend to fluctuate more frequently than residential values. For that reason the lender want to be certain that there is instant equity in the commercial property which is the collateral for the loan.

Understand the Cost of Borrowing

Commercial lenders are in business to make money and they do that in many creative ways. You know that you will be paying interest on the loan amount but that is not all you will be paying. Some lenders will charge points to cover their administrative costs while others will break the fees down and charge you per line item. Some fees can include an application, fee which is normally nonrefundable even if you are not approved for the loan, a loan processing fee, appraisal fees and survey fees.

There can also be Penalties

As a borrower, we are trained to think in terms of saving money. This means that paying off a loan early is always a good thing. It is a way to save on the interest or finance costs of a loan. But commercial lenders are counting on a specific amount of interest, or earnings, from your loan. And they are not willing to let you avoid any of those costs. Many lenders will include a prepayment penalty in the terms of your loan. This can mean that you will pay a flat fee for the right to pay off the loan early or it could be a percentage of the interest that you avoided paying. In some cases the savings on the interest is greater than the fees but in other cases the fees will cost you more than the continued interest. Be sure that you understand all of the terms of any loan before you sign or you will be forced to adhere to them.

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
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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.

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