Learn To Be A Fix & Flip Investor

Sunday, September 24, 2017

Securing A Texas Commercial Real Estate Loans: Common Mistakes

It is not an easy process to acquire a Texas Commercial Real Estate Loans from a lender. It is time consuming, stressful and, often times, confusing. There are some common mistakes that lots of potential borrowers make that you can avoid.

When you are applying for a loan to purchase real estate to enhance your business revenue, you want to make the process as easy as possible. While it is well known that you are going to need to organized, prepared and spend a significant amount of time in order to get ready for your loan application, there are also a number of things that you might inadvertently do that will hurt your chances of success. Here are some common mistakes that people make when applying for a Texas Commercial Real Estate Loans.

Not getting adequate legal consultation – Perhaps you think that you might be able to handle all of the paperwork and contracts on your own or perhaps you already have a lawyer that is less than stellar, but to whom you feel loyalty. In either situation, you need to make sure that you are getting the best legal advice that is available. You must remember that a Texas Commercial Real Estate Loans involves a lot of money, time and future planning on your part. Do you not want the absolute best as an advisor? It might cost a little more at the time, but excellent legal advice pays for itself many times over.

Failing to negotiate – This is key. It is never a good idea to take the first offer. Even if it is your only offer. Your lender will have no reason to lower the rate or fees if you do not try to negotiate. In fact, this becomes even more powerful if you are able to secure multiple offers, which you can then play off of each other. Lenders will not compete against themselves, so give them a reason to pursue your business by making them believe that you could walk at any time to go after something better. By doing this, you will gain the best terms possible.

Not having a firm grasp on your accounting – If this is not one of your strong suits, hire an excellent CPA. Again, while it might cost at the outset, the amount of money that you will save in the long run is going to be well worth the price. Business owners who stumble during the Texas Commercial Real Estate Loans process usually do so because they do not have a firm handle on their balance sheets and income statements. Not only do they not know how much their business is worth, but they also have no idea as to the month to month cash flow. This is a huge liability for a bank that is looking at a borrower. If a borrower does not have a grasp of their own financial well-being, how like is it that they will pay attention to the details of a loan?

Are there any other tips for a borrower who is pursuing a Texas Commercial Real Estate Loans?

Check with government agencies. Often times, they have resources, if not direct funding for those who are looking to build a revenue generating real estate business. Know that the application process might take more time, but you are likely to get a fair rate. If nothing else, they can point you in the right direction. When it comes to Texas Commercial Real Estate Loans, the more you know about potential options, the more educated you can be going into the process.

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

Disadvantages Of A Texas Commercial Mortgage: If This Is So Great, Why Doesn’t Everyone Do It?

Even though Texas Commercial Mortgages are a great way to launch your real estate revenue stream, there are a number of drawbacks. None of these negatives are insurmountable, but it is better to know about them ahead of time.

In spite of all of the benefits of leveraging a loan to help you acquire commercial property that will generate revenue, there are some dangers to using a Texas Commercial Mortgage to begin building a real estate empire.

The first hurdle that you will discover upon making the decision to pursue a loan, is coming up with the down payment. While a typical loan covers the majority of the purchase of the property, lenders typically only cover roughly 80% of the total cost. This means that individuals or business owners must come up with the additional 20% as a down payment. Depending on your current revenue stream, this could be a difficult pill to swallow. If you are business owner, you must weigh the factors of whether or not this is a smart investment for a good deal of your cash flow. A borrower must also take into account the additional fees, assessments and charges that will come with securing a loan. These are also not covered by the bank and must be covered, out of pocket, by the borrower.

Another potential drawback to a Texas Commercial Mortgage is the interest rate. This is also an advantage, but it is important that a borrower understand what type of interest rate they are getting. With a fixed rate mortgage, the borrower is locked into a specific rate for the term of the loan, whether or not interest rates as a whole rise or fall. Paying attention to the market will help determine if it is a good time to lock in a rate. However, a variable rate mortgage can be very dangerous to a business owner. When a loan is as large as most are for commercial properties, a fluctuation of even one point could spell disaster. This is dangerous because the rates and market as a whole are completely outside of the control of a business owner.

The decline in property value is also another drawback that borrowers might face. Statistically, overall, the real estate market is on a steady increase. However, this is an average and does not necessarily apply to all properties. There is a chance that you could find yourself holding one of these properties that declines in value during your ownership. While this does have the possibility of affecting your future borrowing potential, it is nothing to panic over. There are a number of strategies to implement so that you do not lose your property by such a down turn.

What can I do to minimize the drawback of a Texas Commercial Mortgage?

The best way to minimize your risk as a borrower and maximize your potential is to stay informed, stay organized and stay focused. There are a number of factors in the success of your business that you can control, so do the best that you can to maximize those successes. If all is going well in the majority of your business, the ups and downs of the market will not have as great of an effect as you might fear. Texas Commercial Mortgages are not without risk, but if managed correctly, they can greatly enhance your revenue stream.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Using A Texas Commercial Mortgage To Generate Income: What Are The Advantages?

Generating a revenue stream from a commercial property is a great way to develop a passive income portfolio. However, it is not always easy to get started. So why should you use a Texas Commercial Mortgage to help you reach your real estate dreams?

Commercial real estate properties consist of two different types of income-generating property. The first is an office or retail space, where a business owner pays the landlord to rent space in order to do business. It is common for the land lord to have an office in their own building and property. The second method of generating income through real estate is by owning a multi-family housing unit, which is a general term for an apartment building or similar piece of property.

Getting started in this industry might not be easy, as the application process to obtain a Texas Commercial Mortgage is often long, time consuming and stressful, but the benefits can far out weight the hurdles. Here are a handful of reason why you could pursue a loan to help you acquire property.

The interest rates are comparatively low – Because a loan to purchase property is secured by the property itself (if the loan defaults, the bank becomes the owner of the property), this often times means that interest rates will be lower than with other types of lending. Banks do not need to charge as much because their risk is greatly reduced by having a physical asset as collateral.

Rental Income – Whether it be office space or residential living areas, you can supplement your Texas Commercial Mortgage payments by renting space out to tenants. Not only could this income quickly exceed your monthly payment, but as you build equity in your property, it can be an excellent source of income on a regular basis.

Capital Gains – One of the greatest kept secrets of the real estate industry is capital gains. After you get your feet under you in the real estate market and start buying and selling properties, you will discover the beauty of capital gains. Essentially, the way the tax laws are set up, if you make a profit on a real estate sale, you may immediately roll that profit into another property and not pay a single penny in tax on that income. By doing this, you can grow your real estate empire, with the help of loans, without being penalized in taxes. It simply doesn’t get any better than that.

Is there any way out of a Texas Commercial Mortgage?

While it might not be easy, there are plenty of ways that a borrower can bring a Texas Commercial Mortgage to an end. If you decide to sell the property, you can immediately use the profits to pay off the mortgage and use the rest as capital gains. But even if you go out of business, there are actually options provided by lenders for just such an occasion. Again, it isn’t easy, but it is most definitely possible. Just make sure that you fully understand the terms and rates of your loan so that you do not get stuck in a situation that makes it difficult to move on.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Factors Determine My Texas Commercial Real Estate Loans Rate?

Coming up with an interest rate for your Texas Commercial Real Estate Loans is not just as simple as going with the current market rate. There are a number of factors that go into determining the rates for individual borrowers.
When it comes to Texas Commercial Real Estate Loans, the more you know about how the actual numbers are arrived at, the better off you will be, not just in understanding where you stand, but also as a potential point for negotiation with lenders. There are four main areas that will affect the rate of your loan.
Credit Risk of the Borrower-A lot of this comes down to the individual’s credit score and the transaction history of the business. To put it simply, if the borrower has a credit score that is very good, they will be receiving a much better rate from lenders. Banks see a high credit score as an indicator of financial responsibility and rates will be lowered because the bank does not have to worry as much about being paid back. With lower credit scores, rates will undoubtedly go up, as the bank is going to want to make sure that they are getting the most out of their loan at the beginning of the process rather than over the course of the loan. In fact, if a borrower’s credit score is too low, it might not even be possible for them to receive a Texas Commercial Real Estate Loans.
Amount and Length of the Loan-This is a tricky factor to nail down, as it depends on the type of lender that is offering the loan. It also has a tendency to go hand in hand with the credit risk presented by the borrower. As a general rule, the higher the credit risk, the higher the interest rate and the shorter the length of the loan. This is especially true with hard money lenders, who offer very short-term loans with higher interest rates for borrowers who have a low credit score. Traditional lenders often work opposite of this, with shorter loans receiving lower rates, while longer loans that require longer terms might have a higher rate.
Market Rates-There is no getting around it. The strength of the economy also impacts the interest rate that a borrower will pay on a Texas Commercial Real Estate Loans. As a general rule, if the economy is strong, the interest rates are going to be low in order to entice borrowers to take out loans and expand their businesses. If you are seeking a loan during an economic upswing, you will likely get a very good rate, but always try to get it locked in, just in case the economy takes a turn for the worse.
Type of Loan-The type of loan that is being acquired will also play a part in the interest rate that is applied to it. Hard Money loans are going to have much steeper rates than traditional or SBA loans. This goes back to the credit risk that is presented by the borrower. Another determining factor in the type of loan is how long the business has been in existence.
So why are Texas Commercial Real Estate Loans interest rates typically lower than other loans?
When a lender is able to have security on a loan in the form of real estate, it ensures them that they will at least get value out of the loan if the borrower is not able to pay. As such, they will lower interest rates because they are less worried about claiming their profit on the front end of the deal. They will allow it to be spread out over a longer term. Texas Commercial Real Estate Loans are a relatively safe loan for lenders because of this security.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Other Fees Can I Expect To Pay With My Texas Commercial Mortgage?

Everyone knows that loans of any kind are not simply just the principal and the interest. Texas Commercial Mortgages are no different, in this respect, as they come with a listing of fees.

This is one area where it truly does pay to read the fine print and be absolutely sure that you, as the borrower, have a water-tight seal on your understanding of your Texas Commercial Mortgage. This is, after all, going to affect your hard-earned profit.

There is no way around the fees that you might face as a borrower, however. You could have charges for legal fees, property assessments or even application fees. Sometimes these fees must be paid before you are even given an answer as to whether or not you have been granted your Texas Commercial Mortgage. This fee structure is actually one of the reasons that many find it difficult to apply for more than one mortgage offer, as the fees that must be paid ahead of a loan can sometimes run into many thousands of dollars.

With little exception, the fees associated with obtaining a mortgage are the sole responsibility of the borrower. The lender is allowing you to purchase property, so in their eyes, the borrow must front the cost of ensuring that everything surrounding the property and the loan. This usually also includes some sort of property appraisal so that both the lender and the borrower are able to amicably determine the true value of the property.

It is for this very reason, and the costs associated with the mortgage, that it is incredibly important for a borrower to know where they stand with their chances of acceptance with a lender before going through all of the cost and time that will be needed to complete this process. These fees are not something to take lightly. However, do not let this discourage you! If you are in a solid position to be accepted, then these fees are simply a cost of doing business. Be careful and thoughtful when it comes to understanding the fee structure of the application process and other associated fees.

What else do I need to understand to be able to accurately track my Texas Commercial Mortgage?

One final thing that you need to understand to truly figure out how your loan and interest rate work together with your Texas Commercial Mortgage is how “points” on an interest rate work. Essentially, one point is worth one percentage point off of your loan’s interest rate. This is something that is determined by the lender and goes rich into their pockets. For example, if your loan is 10% with 3 points, that means that you are effectively paying a 13% interest rate, with the extra 3% (the 3 points) being paid directly to the lender. While these points are negotiable before the loan is signed and delivered, once the mortgage is in effect there is nothing that the borrower can do to reduce this. The only option, if you feel as though your rate is too high, is to refinance for a lower rate or seek out an entirely new loan.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

I’m Repaying My Texas Commercial Loans, Why Do I Have To Provide Additional Documents?

Your Texas Commercial Loans was approved, you signed the dotted line and now you are entering repayment. It’s just that simple, right? No. Many lenders require much more from their borrowers.

Obviously, it is your main responsibility as the borrower of a Texas Commercial Loans to uphold your financial responsibility by paying back your loan according to the terms that were agreed upon at signing. Whether this is a long term or short-term loan, that remains a constant. But what many borrowers do not realize is that with many lending institutions, this is not the only requirement that is ongoing.

Borrowers are prepared for the application process by getting all of their financial documents in line. This has to be done before the loan is even processed. But what many small business owners don’t realize is that many lenders require an ongoing sharing of financial information to assess the progress of their loan.

This is where it is essentially for you to be very clear on what your lender is going to require of you after the loan is dispersed. Some lenders require annual statements (balance sheets and tax returns), while other require the borrower to check in with an income statement on a monthly basis. In many cases, failure to provide the documentation that is required in a timely manner will put your Texas Commercial Loans (and property) at risk.

In addition to reporting requirements, some lenders require borrowers to meet certain benchmarks to maintain good status. These conditions of your Texas Commercial Loans will be disclosed at the time of approval. They will not be sprung on you after the fact. Often times this means being able to maintain a certain level of cash flow and not taking on much new debt. This will require you to watch your operating budget very carefully from month to month. It might even require changing some of your day to day operations to meet the financial requirements. You might also need approval for any other debt-incurring expenses that would affect your debt to cash flow ratio.

The good news is that you will know all of this ahead of time, but you must recognize, that when it comes to your loan, these are not optional portions. They are just as serious as your monthly payments. You must keep this in mind when deciding upon a loan, especially if you are in an industry that has periods of stagnation.

So what happens if I am able to make my payments, but cannot meet the other conditions of my Texas Commercial Loans?

The first thing that you should do is to make sure that you have a good CPA. This will alleviate much of the work load and stress. Then you are not attempting to keep up with all of it by yourself. Sure, it will cost you, but a good CPA is going to pay for themselves many times over. Second, talk to your Texas Commercial Loans lender and tell them your plan to get back on track. You cannot afford to ignore this problem, as there is a lot of money and assets undoubtedly riding on its success.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Type of Terms Can I Expect On My Texas Commercial Mortgage?

Handling the financial responsibility is as much rooted in educating yourself about your roll as it is about having the financial resources to pay back your loan. If you are considering a Texas Commercial Mortgage, it is important to know the terms under which you will enter repayment.
One of the distinct differences between a residential mortgage and a Texas Commercial Mortgage are the terms of repayment. While this is a good thing for many small business owners, it is important to understand these terms so that you do not inadvertently make a mistake or agree to a loan that is not beneficial to you.
The biggest factor of a Texas Commercial Mortgage to understand is the balloon payment. This consists of a large, principal payment at the end of the loan term. In this case, the loan is amortized out as if it were for a much longer term and the borrower makes regular interest / principal payments during the term. Then, after the shortened term is up, the borrower will be required to pay the remaining balance in one large payment. The idea behind this is that the small business owner will use this time to ramp up revenue so that by the time the term is up, they will have saved enough (and grown enough) to be able to handle the payment.
1. This is not always the case, however. If a small business owner is not able to increase their revenue stream in short a shortened time period, there are options available. One such option is to refinance the Texas Commercial Mortgage with the same lender. This is, often times, the best option, due to the fact that the business owner now has a rapport with the lender and might also be able to refinance at a lower interest rate (making payments on time for the length of the term is bound to have a positive impact on your credit as well).
Another option would be to seek out another lender for another loan for the express purpose of paying back the original. It might also be possible to increase the amount of the loan to include some funds for property improvements or expansion. Again, the would depend on the qualifications and assets of the borrower.
This is risky, however, as there is a possibility that that borrower might not qualify for another loan and the property would be at risk. This is a problem if the business has had cash flow problems or has had difficulty meeting other financial obligations, like failing to meet repayment terms.
Are there any terms on a Texas Commercial Mortgage that do not include balloon payments?
Yes. If you are looking for a Texas Commercial Mortgage that does not come with a balloon payment, there are options available. Non-traditional lenders often specialize in these types of loans and often have lower sets of requirements for borrowers to obtain them. However, the interest rates on these loans are often higher in order to make up for the greater risk that the lender is taking on.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

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Sunday, September 24, 2017

Securing A Texas Commercial Real Estate Loans: Common Mistakes

It is not an easy process to acquire a Texas Commercial Real Estate Loans from a lender. It is time consuming, stressful and, often times, confusing. There are some common mistakes that lots of potential borrowers make that you can avoid.

Are there any other tips for a borrower who is pursuing a Texas Commercial Real Estate Loans?

Disadvantages Of A Texas Commercial Mortgage: If This Is So Great, Why Doesn’t Everyone Do It?

Even though Texas Commercial Mortgages are a great way to launch your real estate revenue stream, there are a number of drawbacks. None of these negatives are insurmountable, but it is better to know about them ahead of time.

What can I do to minimize the drawback of a Texas Commercial Mortgage?

Using A Texas Commercial Mortgage To Generate Income: What Are The Advantages?

Generating a revenue stream from a commercial property is a great way to develop a passive income portfolio. However, it is not always easy to get started. So why should you use a Texas Commercial Mortgage to help you reach your real estate dreams?

Is there any way out of a Texas Commercial Mortgage?

What Factors Determine My Texas Commercial Real Estate Loans Rate?

Coming up with an interest rate for your Texas Commercial Real Estate Loans is not just as simple as going with the current market rate. There are a number of factors that go into determining the rates for individual borrowers.

So why are Texas Commercial Real Estate Loans interest rates typically lower than other loans?

What Other Fees Can I Expect To Pay With My Texas Commercial Mortgage?

Everyone knows that loans of any kind are not simply just the principal and the interest. Texas Commercial Mortgages are no different, in this respect, as they come with a listing of fees.

What else do I need to understand to be able to accurately track my Texas Commercial Mortgage?

I’m Repaying My Texas Commercial Loans, Why Do I Have To Provide Additional Documents?

Your Texas Commercial Loans was approved, you signed the dotted line and now you are entering repayment. It’s just that simple, right? No. Many lenders require much more from their borrowers.

So what happens if I am able to make my payments, but cannot meet the other conditions of my Texas Commercial Loans?

What Type of Terms Can I Expect On My Texas Commercial Mortgage?

Handling the financial responsibility is as much rooted in educating yourself about your roll as it is about having the financial resources to pay back your loan. If you are considering a Texas Commercial Mortgage, it is important to know the terms under which you will enter repayment.

Are there any terms on a Texas Commercial Mortgage that do not include balloon payments?

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