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Tuesday, November 21, 2017

Commercial Real Estate Loan Terms

HouseIf you are trying to decide between various loans from different lenders, there are bound to be different terms to compare. When deciding what loan is going to be the best for you, understanding commercial real estate loan terms will help you plan far into the future.

Understanding the various conditions of your real estate loan will not only alleviate a lot of the stress of planning for repayment and usage of your loan, but it will also help you choose the options that are going to be the best for your specific real estate needs. While each loan is going to have unique factors and terms, there are some basic things to understand about commercial real estate loan terms.

The first thing to understand is that the condition of the borrower will greatly impact the terms of the loan. This is especially true for more traditional lenders. As a general rule, if the borrower presents a higher level of risk to the lender, then the commercial real estate loan terms will be much more in the interest of the lender. Such issues could be less than stellar credit, or not much collateral to bring to the table to secure the loan. It only makes sense. Lenders want to make sure that the terms are in their favor so that they are able to gather some sort of return on their investment with the loan. A lack of any sort of record for the repayment of outstanding debt could also affect the terms, as lenders do not know what to expect from potential borrowers, in this case.

Another aspect of commercial real estate loan terms that can greatly impact a borrower and future plans is the length of the loan itself. While there are many options for extremely short terms loans that are designed for flipping properties or quick influxes of cash to generate massive returns on revenue, the majority of loans are geared toward longer lengths, although not as long as a residential mortgage. Usually they can be as short as 5 years and as long as 30, but they typically fall in the 10 to 20-year range. But the key to understanding your loan here is to understand how it is amortized.

Unlike residential loans, many commercial real estate loan terms will state an amortization period of longer than the actual repayment term of the loan. Typically, a commercial loan will have a standard payment period for the first portion of the loan and then end with a large payment that will take care of the balance of the loan, often called a balloon payment. Let’s say, for example, that your loan is for 10 years, but is amortized over a term of 20 years. This means that you will make payments for 10 years as if you were going to be holding the loan for 20 years (in terms of the interest and amortization). However, after the 10-year term is up, you will be responsible for the entire remaining balance in one payment.

How are commercial real estate loan terms beneficial to borrowers?

Even though they might seem daunting, commercial real estate loan terms allow borrowers to take leaps that they would not otherwise be able to. If used correctly, these loans will help borrowers to acquire properties and turn them into income generating investments.

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

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Monday, November 20, 2017

Commercial Real Estate Lenders

Handsome young man looking confidentlyCommercial real estate lenders come in many shapes and sizes. It is important to know the types of lenders that are available so that you can make the correct choice for who to work with for your real estate development funding needs.

Not all commercial real estate lenders are created equal. There are many different types that serve many different kinds of borrowers. They all have distinct requirements, timelines and terms, each offering their own specific benefits and drawbacks. Depending on your need as a borrower, certain enders may not be what you are looking for. Because of this, it is important to know the various types.

Banks – Perhaps the most recognizable and common, banks are very versatile commercial real estate lenders. They often have easy access to a great deal of funding. One of the strengths of using a bank for a commercial loan is that local banks are usually heavily invested in their local communities and seek to support small businesses. The problem with banks is that the application process is often quite extensive and takes a significant amount of time.

Life Insurance Companies – Obtaining a loan through a life insurance company is only available to those who are extremely well qualified because of their credit score. They offer the best terms and rates, but they are very difficult to obtain. With terms that often range for up to 30 years, these loans are an excellent bargain for a property investor who is highly qualified and has low risk.

Bond Market – These are often referred to as commercial mortgage-backed securities and are directly tied to other commercial real estate loans. They are handled by independent agencies, who minimize risk by sectioning off the loans. Lenders are then able to determine their level of risk by choosing which loans to obtain. For the most part, these loans are fairly stable and are a very common solution for borrowers that are not able to obtain loans from the more traditional outlets.

Debt Funds – Popular amongst commercial real estate lenders who specialize in construction, these loans are typically taken out by investing against other loans. There is often a higher rate, as the risk is greater, but for those who know what they are doing this is an excellent source of funding.

Government Entities – While the government does not specifically give out loans, they do assist traditional lenders by offering securities in order to drop rates and make it easier for lenders. However, this does not mean that these loans are easy to obtain. They must often meet strict requirements and apply only to certain aspects of commercial real estate investing. One such area is multi-family housing units.

With so many commercial real estate lenders, how will I know which is right for me?

It will depend entirely on the type of loan that you are looking for, the qualifications that you have and what you plan on doing with the loan. Knowing your goals and knowing your resources will help you narrow down which commercial real estate lenders will work best for you.

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

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Mortgage

4page_img5-bigxUnderstanding how a commercial mortgage operates in the commercial real estate development is essential for knowing how to use one for the most effectiveness. Even though they might seem similar, they are distinctly different from residential mortgages in important ways.

While there are a number of similarities between a residential and a commercial mortgage, there are also a number of differences. Perhaps the most obvious is with whom the loan is made. For a residential mortgage, the principal party is an individual (or in some cases a married couple). The rates and terms, or even their eligibility, is determined based on credit worthiness. For many individuals this can be a cause of great deals of stress.

A commercial mortgage is granted to a business, rather than an individual. This is slightly different because many business entities cannot really be assessed based on their credit worthiness. There are two different ways to determine whether a borrower is eligible for such a loan. The first is by the business entity putting up assets to secure the mortgage. This guarantees to the lender that if something goes wrong, that they will be able to recuperate some, if not all, of their investment. The other method that is used for an individual within the business entity to be the principal for guaranteeing the loan. This then provides the lender with a specific person to help determine credit worthiness.

Another distinct difference between a residential and a commercial mortgage is the terms of repayment. For a residential loan, a term, say of 30 years is set. The loan is then amortized over that time period so that each payment includes both principal and interest. While it is possible, in many cases, to pay the mortgage off early, it is not expected. However, the terms of a commercial real estate loan are quite different. They can range anywhere up to 20 years (usually not longer), but the amortization is figured differently. For many mortgages, the amortization period extends past the expected end date of the loan. The reason for this is simple. The lender expects the borrower to pay off the remainder of the loan in a single, large payment after the term is up. For most commercial investors, this is not a problem, because they will have easily made back the amount of the loan through sales or through rentals.

Will I be able to pay off my commercial mortgage early?

It is entirely possible that you will be able to do this. However, it is not always an option with certain lenders, and if it is, there are often penalties and fees associated with prepayment. One such method is an interest guarantee, where the lender is contractually obligated to receive a certain amount of interest, no matter how early the borrower pays off the loan. Another stipulation that might be placed on a borrower is a lockout period, during which the borrower is not allowed to pay off the balance of the loan. If you plan on trying to pay your commercial mortgage off early, make sure you know what your lender will be expecting.

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

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Is Hard Money?

4page_img2-bigIn the complex world of real estate investment, there are often terms that beginning investors are not familiar with. Hard Money is an integral part of many commercial real estate projects and understanding how it fits into the overall financing of real estate is critical.

Hard Money is a source of funding that falls outside of the traditional methods of receiving loans for commercial real estate investors. In many cases, the time that is required and many strict guidelines for acceptance prevent borrowers from being able to have access to traditional funds. Banks and other lending agencies can take weeks or months to come through with a loan and some borrowers need access to fund much more quickly. These loans can often be accessed in a matter of days, as opposed to the much longer waiting period for a traditional loan.

This is where hard money steps in. These loans are often from individuals or smaller groups, which gives them a great deal of flexibility in both terms and security. These loans do not depend on the credit worthiness of the borrower, instead these loans are asset-based and are often secured by the value of the property that is being purchased with the loan. In some cases, the hard money loan will be secured with assets that the borrower already has on hand, such as other properties.

Typically, hard money loans are for very short terms and are at a higher interest rate than a traditional longer-term loan. It is also common for a borrower to be granted terms that allow them to only pay the interest during the term of the loan and then pay the balance of the loan off in one balloon payment at the end of the term. This method allows the borrower to utilize the entire amount of the loan for improvements, instead of having to worry about monthly payments that include both principle and interest.

Another benefit of this type of loan is that borrowers usually have access to the entire amount required, whereas in a traditional loan, the borrower will have to put down a certain amount to secure the remainder of the loan. For borrowers who have little cash on hand, this can often be a lifesaver and might mean the difference between a successful development or an absolute bust.

What type of investor would benefit the most from hard money?

Hard money loans are not for everyone. Sure, they provide easy access to funding and cuts through a lot of the bureaucracy of traditional lenders, but not everyone is cut out for it. Those who are planning on improving and quickly selling a property will find a great deal of value in a hard money loan, as they will essentially be making a profit off of other people’s money. If a developer can improve a property very quickly, this is an excellent use of the loan, but it is dangerous, as the property might not have sold by the time the hard money loan comes due.

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

Friday, November 17, 2017

Important Things to Consider When Working with Commercial Real Estate Lenders

Call I Seo PhoenixThere are many commercial real estate lenders to choose from, but not all of them are going to be the right fit for you and your needs. If you are looking for a successful process when applying for a real estate loan, then try to focus on some of these factors that are going to play a role.

Applying for a commercial real estate loan can be a stressful process which is why it is important to find the right person to work with. The relationship with commercial real estate lenders can make the whole loan process much easier. It really comes down to trust and communication. You want and really need to work with someone that you can trust and that will communicate with you fully throughout the entire loan process, from the beginning of the application to closing.

Remember, you always have options so don’t just settle for anyone that is going to approve your loan. It could take some time to research and find the right fit for you, but in the end, it will be well worth the extra efforts. Some commercial real estate lenders specialize in certain types of loans and properties, so work with one that offers the light loan for you and is experienced in that specific area for the best results.

Another factor to consider is the interest rate. Of course, don’t make a decision based on interest rate alone, but do take the interest rate, along with other fess and agreements terms into consideration. These factors are going to play a large role in finding the right loan and person to work with regarding your financial needs.

Referrals are a helpful way to find the right commercial real estate lenders

It is a big step to decide to work with commercial real estate lenders. Just like when banks are reviewing your small business for loan approval, you are actually reviewing these lenders back, but before even starting the process. Character is going to be a big factor, so listen to others that you trust who have gone through this process. Working with the right fit can make all the difference in the world and recommendations can make the search easier and can be a good idea.

Commercial real estate lenders are there when you need a helping hand

Applying for a real estate loan can be a mixture of emotions, excitement, fear and stress. The entire process from starting the application to getting approved to the actual close can take a lot of time and is dreaded by many. But when you find the right commercial real estate lenders to work with, that will be there the answer all of your questions and concerns, then the process won’t be that bad. Find someone that you trust, communicates effectively and will help you with all of your financial needs.

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

Asking What is Hard Money Can Be Beneficial to You and Your Small Business

yu247-8bdf23d1-f2b4-4f4f-97ea-688740c07d9e-v2It is a common question among many in the real estate market, what is hard money? Before diving into your next big real estate and financial decision, you should know all of the expectations along with the benefits when dealing with hard money.

There are some people, especially those in the real estate market that could answer the question, what is hard money, easily. But most probably do not have a clue or good understanding of what it is. In most cases, private individuals or small groups are the main lenders of hard money. One of the big differences with this is that the lenders really focus on the value of the property and not credit score or financial history.

One of the biggest things to keep in mind is that because hard money loans are not based on credit score or financial history, but are instead based on the actual value of the property that is being purchased, they are going to come with a much higher percentage rate compared to other mortgages. On top of higher interest rates, it isn't uncommon to have also higher additional fees and to have a mortgage that could be twice as high as traditional mortgage prices.

The common question, what is hard money, isn't the only question that lenders often hear. Many people also ask the question, who needs it? Since you can usually get approved to borrow up to 100% of the price of the property being purchased, then people who flip houses along with developers can really benefit from this. But, be prepared because you will usually have to prove real and valuable assets of the property as credit score doesn’t play a role in approval.

When asking, what is hard money, many developers are pleased with the answer and see many benefits from it

It is often the case that sometimes you can't easily get approved for a standard loan. So, if you plan on buying a property that you know you will be able to turn into a big profit and quickly, then hard money might be the most beneficial option for you and your small business. It can also be used to fund projects to help raise the property value for the future and this is a smart way to go as well.

If you are struggling to find financial help, asking what is hard money might be able to help you finance your desired project

Of course, it can also come down to who you know and that can be very helpful during this process. If you know of a local lender that you can trust to ask the question what is hard money, then go for it. Speaking with someone you trust and know will give you a direct answer that you will understand will come in handy in the long run. Plus, having a trusting relationship along with great communication with anyone helping with your finances is always important!

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

Thursday, November 16, 2017

How Commercial Loans can help Your Business Prepare for the Holidays

Arizona-Home-Loan-Mortgage-Broker-150x150The holidays are quickly approaching up, but is your small business ready for the hectic season? If you aren’t quite prepared for the chaos that the holidays bring, don’t stress! Commercial loans can lend your business a helping hand.

Not only are the holidays a stressful time, but it is also the 4th quarter and the end of the year, which can always put pressure on any business. Consider looking for financial assistance during this season. Commercial loans are offered by a number of lenders including the Small Business Administration so you will be able to choose from plenty of options to find the right one for your business needs.

Inventory if often a good reason to need extra financial help. Many businesses who sell goods usually see a spike in purchases during the holidays. So, you want to make sure that you have plenty of inventory for your customers to get through the busy season. Especially if you have seen a spike in business during this time of year in the past. Ordering more inventory ahead of time can cause you cut into your cash flow and take a pretty good chunk out of it. That can hurt your business so taking out a loan can help avoid this.

On top of extra inventory, you might need to get additional employees and help as well. Many businesses hire seasonal workers, but that also means adding more people to your payroll. You can have peace of mind hiring these new employees and not stress about finances by looking into commercial loans that can help with the extra costs on the payroll.

Commercial loans can also help pay for extra holiday efforts

Your business can spend a lot of money and time on marketing and this can increase during the holidays. Not only do you need to pay for extra and most likely more extravagant marketing campaigns, but you also need to pay for the extra work that it is going to cause. Since you won’t see the benefits right away from your marketing efforts, it is best to get the fund up front to help establish a marketing plan for the season. Your extra marketing will draw n more customers and create more revenue down the line, so the extra expense at first will pay off in the end.

Also, consider the idea of needing extra equipment during the holidays and get the financial help from commercial loans

With your business needing more inventory, more workers and drawing in more customers, you may need additional equipment during this time of year as well. Commercial loans can help pay for any extra equipment or supplies that are needed. This can be a big expense and it can help to spread the payments out over time instead of dipping into your cash flow to pay all at once.


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