The slogan that the residents of Dallas live and work by is "live large, think big." This same slogan can be applied to how investors are thinking about the prime Dallas commercial real estate. The city of Dallas is built upon blazed pioneer trails and the biggest of dreams. The residents of Dallas have a can-do attitude, where any dream is possible. It is because of this undying attitude and intense drive forward that Dallas has become a prosperous and thriving urban center. The city of Dallas is in a full real estate upswing, which is great news for investors.
Predictions for a Further Boom in Dallas Commercial Real Estate
Experts in the industry predict that the economy of Dallas will continue to grow and expand for the next two decades. This figure may even increase as the city continues to develop and to draw new businesses to the area. The Dallas office space market has grown tremendously in the past few years. This is a result of the expansion of the city's high-tech and manufacturing sectors. Some of the strong companies that reside in Dallas include EDS, 7 Eleven, Texas Instruments, Blockbuster, and Southwest Airlines.
Dallas is also considered to be the cultural and business center for the twelve county Dallas/Fort Worth/Arlington areas. The values for prime Dallas office space and lease property are affordably priced in the high two-hundred thousand ranges. Now, high-end office tower real estate property is well into the millions. However, this is to be expected in any successful city across the country.
Dallas commercial real estate is just at the beginning of its boom. Real estate, in the city of Dallas, has not experienced a downswing like most of the nation. In fact, Dallas real estate is selling at double the national rate. With the continued growth and dynamic economy, another wise investment for an investor to consider purchasing is Dallas industrial space. There are several new planned developments of industrial space in the city of Dallas that will continue to stimulate growth.
Why an Investor Should Purchase Dallas Commercial Real Estate
There are several reasons why an investor should consider purchasing Dallas commercial real estate. One of the biggest reasons is the fact that Dallas is the third largest city in the state of Texas and the ninth largest state in the country. The city of Dallas is considered to be an important hub, world-wide in the fields of computer technology, telecommunications, transportation, and banking. Dallas is a global center for international trade and foreign investment.
The rapidly developing city of Dallas has quickly become one of the most popular cities in the United States. More and more businesses and residents are relocating to the Dallas Texas area to call it headquarters and home. This is one of the reasons that the Dallas commercial real estate market is experiencing such an increase in demand. Each week in Dallas, new businesses, including shopping centers, restaurants, and entertainment options, are announcing their grand openings with great fanfare and success.
If you are looking for an investment with a high return, you should consider purchasing Dallas commercial real estate. The city of Dallas is profitably hot for office space, retail space, and industrial space. This is the best time to invest in this expanding city of prosperity.
Visit ICON Commercial Lending to get pre-approved for your commercial funding needs.
About the Author: Richard Soto
Learn more about the current Dallas Commercial Real Estate, Dallas Office Space, and Dallas Industrial Space markets!
Monday, November 26, 2007
Oakland Commercial Real Estate Investments
Investing in Oakland commercial real estate is something that you may want to consider if you are looking to expand your investment portfolio. Even if you do not live in the area, you can still consider buying real estate there. Believe it or not, more and more investors are buying out of state commercial properties as a way of diversifying their investments.
Before buying Oakland commercial real estate, there is one thing that you must absolutely do. You need to find a qualified agent who knows the real estate market in the area like the back of their hand. By doing this, you will have a professional on your side who has plenty of knowledge of finding the best deals. Can you buy Oakland commercial real estate without the help of an agent? Sure you can. But if you are not 100 percent familiar with the market, you could end up making a mistake that you will regret in the end.
After you purchase an Oakland commercial real estate property, you can then rent it out to businesses that need space. In turn, they will pay you rent which can then pay the mortgage; if you have one. If not, all the money that you receive from tenants will go straight into your pocket. The only thing that you have to worry about at that point is the overall upkeep of the property.
Oakland commercial real estate investments are quite popular. With that being said, there are always good properties available for the taking if you know what you are doing. This is why working with a real estate agent is so important. They can keep their eye out for the properties that fit your wants and budget, and then get in touch with you right away. As long as you are ready to act fast, you should be able to find an Oakland commercial real estate investment property in no time.
ICON Commercial Lending
Author:
Lake Merritt Commercial Real Estate
Before buying Oakland commercial real estate, there is one thing that you must absolutely do. You need to find a qualified agent who knows the real estate market in the area like the back of their hand. By doing this, you will have a professional on your side who has plenty of knowledge of finding the best deals. Can you buy Oakland commercial real estate without the help of an agent? Sure you can. But if you are not 100 percent familiar with the market, you could end up making a mistake that you will regret in the end.
After you purchase an Oakland commercial real estate property, you can then rent it out to businesses that need space. In turn, they will pay you rent which can then pay the mortgage; if you have one. If not, all the money that you receive from tenants will go straight into your pocket. The only thing that you have to worry about at that point is the overall upkeep of the property.
Oakland commercial real estate investments are quite popular. With that being said, there are always good properties available for the taking if you know what you are doing. This is why working with a real estate agent is so important. They can keep their eye out for the properties that fit your wants and budget, and then get in touch with you right away. As long as you are ready to act fast, you should be able to find an Oakland commercial real estate investment property in no time.
ICON Commercial Lending
Author:
Lake Merritt Commercial Real Estate
Sunday, November 25, 2007
Stalled Condo Projects Tarnish Trump's Name - Market Trends
By Alex Frangos
From The Wall Street Journal Online
Even the Trump name isn't bigger than the calamitous condo market.
Donald Trump's reputation as a real-estate developer could take a hit as some condominium projects emblazoned with his famous name run into trouble.
In recent years, Mr. Trump has lent his name, and in some cases his own money, to at least 20 projects in the U.S. and another half dozen abroad, including buildings in Dubai of the United Arab Emirates and Seoul, South Korea. While in some cities such projects are doing fine, others face slow sales, project delays and cancellations -- and irate buyers.
In Tampa, Fla., buyers who placed deposits of $200,000 to $1.2 million on units in the 52-story Trump Tower Tampa are fuming. Nearly three years after the $260 million skyscraper was started, construction has stopped.
Meantime, a Fort Lauderdale, Fla., tower with Mr. Trump's name on it was put on hold indefinitely last month, and a West Palm Beach project could be put on the shelf shortly. Construction on a Trump Tower in Toronto is just getting under way after years of delays and a reduction in height. And at Trump Tower Chicago, a hotel and condo project set to be the second tallest building in the city after the Sears Tower, 30% of the 825 units remain unsold as the condo market there slows.
Mr. Trump is known for focusing on the positive. "All of my stuff has been a great success," he said in an interview Wednesday. "Nobody has even come close to the track record that I have." He points to many other projects he is involved in that he considers outsized successes, including ones in Las Vegas, Hollywood, Fla., Miami, New York, Hawaii and the Dominican Republic. "Somebody says 'how's the market?' I say not good except for Trump," he says.
But the recent problems at developments bearing his name are evidence that no one is immune from the downdraft in the housing market. New housing projects throughout the country are suffering from weak demand and falling prices as banks tighten credit standards and a glut of empty units swells.
This time around, Mr. Trump personally is in little danger financially. During the last real-estate collapse in the early 1990s, he was pushed to the brink of bankruptcy because he was personally on the hook for hundreds of millions of dollars worth of debt. He later restructured his debt with the banks and worked his way back to doing real-estate deals.
In some recent condo projects, Mr. Trump has sold his name to developers for a fee and, in certain cases, he gets a portion of the sales in the building as well. In some he has contributed a minority slice of equity. This means, even if the projects fail, his financial exposure is limited, although his reputation may suffer. In other projects, such as in Chicago and Las Vegas, he says he is the lead investor.
At Trump Tower Tampa, which began its marketing in 2005, sales initially soared. The local development company, SimDag LLC, sold all 192 units and then, as the market skyrocketed, returned buyers' deposits, raised the units' prices and sold out again.
Then in August 2006, a city inspector examining a key part of the foundation known as the caissons discovered the plot of land wasn't solid enough to support design. Construction never resumed.
In May, Mr. Trump sued SimDag in federal court in Tampa, charging the developer with failing to pay him much of his licensing fee and failing to execute on construction and sales milestones promised in the contract. Court documents filed by Mr. Trump's lawyers say his involvement was limited to licensing his name to the developer for $4 million plus a cut of the sales.
But many of the buyers feel that they were led to believe that he had a much larger stake. "The only reason we bought into this was because of Trump," says Don Wallace, a local restaurant owner whose wife, Elaine Lucadano, has interests in two units. "He's bashing Rosie O'Donnell, and we're twisting in the wind," referring to Mr. Trump's tabloid spat with the talk-show host. Jugal and Maju Teneja, who paid $528,000 to reserve a unit in October, filed a suit against Mr. Trump and SimDag in Hillsborough County Circuit Court, claiming they deceived buyers into thinking Mr. Trump was closely involved in the development of the tower.
Mr. Trump says his role as a licensor was disclosed in offering documents given to buyers, a point Mr. Wallace disputes. Mr. Trump also noted that his ability to deal with construction problems has been limited. "When I license my name to somebody, I don't have the same power over a job," he says. "I could have pulled the Tampa job off easily. Other people can't pull it off easily." Now, Mr. Trump says, the Tampa project has become a victim of the deteriorating financing and sales climate. "If there was a job today that was going to start...I would most likely say let's wait a little while," he says.
Overall, though, he says his projects are successful, even in markets that are suffering problems, noting his name indeed sells units. "How many times is Trump supposed to be selling out a building before they move forward?," Mr. Trump asks. As for his brand image, he says: "Tampa doesn't hurt me."
SimDag pins the delays on construction problems. "This wasn't a story about a bad market. It's a story about bad soil," says David Hooks, a spokesman for SimDag. The developer says it is now being held up by a delay in obtaining construction financing and that the company is close to getting financing from a hedge fund it declined to identify.
The Trump name has driven the success of numerous condo projects. Mr. Trump says six months ago he received nonrefundable deposits for every unit on a project in Honolulu in one day. His says his interest in the project goes beyond licensing his name, but declined to give details. A condo-hotel tower in New York's Soho that he is affiliated with has 4,500 inquiries of interest for 450 slots, though they aren't for sale yet, he says.
But not all of Mr. Trump's ventures have been runaway successes. His casino company was forced to seek bankruptcy-court protection in 2004. It emerged in 2005 as Trump Entertainment Resorts Inc., but has since struggled.
In the condo market, some of Mr. Trump's projects may be suffering in part from brand dilution. One person familiar with the Fort Lauderdale project Trump Las Olas said it was shelved partly because Mr. Trump has lent his name to two other projects nearby.
Mr. Trump denies there was any brand dilution, though he says Trump Las Olas didn't make it because it "can't compete with the Graves site," a hotel and tower project that also bears his name in Fort Lauderdale, designed by architect Michael Graves. "Frankly, it's a better site...It's a more impressive building," Mr. Trump says.
Mr. Trump's delayed condo-hotel project in Toronto fell behind a competing Ritz-Carlton, and the building now going up has 13 stories fewer than originally planned. However, Mr. Trump says the project is in good shape.
In Atlanta, two condo towers with the Trump name are about to be launched at a time when 5.8% of the homes there are for sale, the second-highest inventory of unsold homes in the country, according to Zelman & Associates, a housing-research firm.
Mr. Trump says Atlanta is "a beautiful job going well." Asked about Atlanta's poor housing market, Mr. Trump said, "You know I can't be everywhere. It's like somebody says, 'why didn't you build here or there?' Who's done better deals than me?"
From The Wall Street Journal Online
Even the Trump name isn't bigger than the calamitous condo market.
Donald Trump's reputation as a real-estate developer could take a hit as some condominium projects emblazoned with his famous name run into trouble.
In recent years, Mr. Trump has lent his name, and in some cases his own money, to at least 20 projects in the U.S. and another half dozen abroad, including buildings in Dubai of the United Arab Emirates and Seoul, South Korea. While in some cities such projects are doing fine, others face slow sales, project delays and cancellations -- and irate buyers.
In Tampa, Fla., buyers who placed deposits of $200,000 to $1.2 million on units in the 52-story Trump Tower Tampa are fuming. Nearly three years after the $260 million skyscraper was started, construction has stopped.
Meantime, a Fort Lauderdale, Fla., tower with Mr. Trump's name on it was put on hold indefinitely last month, and a West Palm Beach project could be put on the shelf shortly. Construction on a Trump Tower in Toronto is just getting under way after years of delays and a reduction in height. And at Trump Tower Chicago, a hotel and condo project set to be the second tallest building in the city after the Sears Tower, 30% of the 825 units remain unsold as the condo market there slows.
Mr. Trump is known for focusing on the positive. "All of my stuff has been a great success," he said in an interview Wednesday. "Nobody has even come close to the track record that I have." He points to many other projects he is involved in that he considers outsized successes, including ones in Las Vegas, Hollywood, Fla., Miami, New York, Hawaii and the Dominican Republic. "Somebody says 'how's the market?' I say not good except for Trump," he says.
But the recent problems at developments bearing his name are evidence that no one is immune from the downdraft in the housing market. New housing projects throughout the country are suffering from weak demand and falling prices as banks tighten credit standards and a glut of empty units swells.
This time around, Mr. Trump personally is in little danger financially. During the last real-estate collapse in the early 1990s, he was pushed to the brink of bankruptcy because he was personally on the hook for hundreds of millions of dollars worth of debt. He later restructured his debt with the banks and worked his way back to doing real-estate deals.
In some recent condo projects, Mr. Trump has sold his name to developers for a fee and, in certain cases, he gets a portion of the sales in the building as well. In some he has contributed a minority slice of equity. This means, even if the projects fail, his financial exposure is limited, although his reputation may suffer. In other projects, such as in Chicago and Las Vegas, he says he is the lead investor.
At Trump Tower Tampa, which began its marketing in 2005, sales initially soared. The local development company, SimDag LLC, sold all 192 units and then, as the market skyrocketed, returned buyers' deposits, raised the units' prices and sold out again.
Then in August 2006, a city inspector examining a key part of the foundation known as the caissons discovered the plot of land wasn't solid enough to support design. Construction never resumed.
In May, Mr. Trump sued SimDag in federal court in Tampa, charging the developer with failing to pay him much of his licensing fee and failing to execute on construction and sales milestones promised in the contract. Court documents filed by Mr. Trump's lawyers say his involvement was limited to licensing his name to the developer for $4 million plus a cut of the sales.
But many of the buyers feel that they were led to believe that he had a much larger stake. "The only reason we bought into this was because of Trump," says Don Wallace, a local restaurant owner whose wife, Elaine Lucadano, has interests in two units. "He's bashing Rosie O'Donnell, and we're twisting in the wind," referring to Mr. Trump's tabloid spat with the talk-show host. Jugal and Maju Teneja, who paid $528,000 to reserve a unit in October, filed a suit against Mr. Trump and SimDag in Hillsborough County Circuit Court, claiming they deceived buyers into thinking Mr. Trump was closely involved in the development of the tower.
Mr. Trump says his role as a licensor was disclosed in offering documents given to buyers, a point Mr. Wallace disputes. Mr. Trump also noted that his ability to deal with construction problems has been limited. "When I license my name to somebody, I don't have the same power over a job," he says. "I could have pulled the Tampa job off easily. Other people can't pull it off easily." Now, Mr. Trump says, the Tampa project has become a victim of the deteriorating financing and sales climate. "If there was a job today that was going to start...I would most likely say let's wait a little while," he says.
Overall, though, he says his projects are successful, even in markets that are suffering problems, noting his name indeed sells units. "How many times is Trump supposed to be selling out a building before they move forward?," Mr. Trump asks. As for his brand image, he says: "Tampa doesn't hurt me."
SimDag pins the delays on construction problems. "This wasn't a story about a bad market. It's a story about bad soil," says David Hooks, a spokesman for SimDag. The developer says it is now being held up by a delay in obtaining construction financing and that the company is close to getting financing from a hedge fund it declined to identify.
The Trump name has driven the success of numerous condo projects. Mr. Trump says six months ago he received nonrefundable deposits for every unit on a project in Honolulu in one day. His says his interest in the project goes beyond licensing his name, but declined to give details. A condo-hotel tower in New York's Soho that he is affiliated with has 4,500 inquiries of interest for 450 slots, though they aren't for sale yet, he says.
But not all of Mr. Trump's ventures have been runaway successes. His casino company was forced to seek bankruptcy-court protection in 2004. It emerged in 2005 as Trump Entertainment Resorts Inc., but has since struggled.
In the condo market, some of Mr. Trump's projects may be suffering in part from brand dilution. One person familiar with the Fort Lauderdale project Trump Las Olas said it was shelved partly because Mr. Trump has lent his name to two other projects nearby.
Mr. Trump denies there was any brand dilution, though he says Trump Las Olas didn't make it because it "can't compete with the Graves site," a hotel and tower project that also bears his name in Fort Lauderdale, designed by architect Michael Graves. "Frankly, it's a better site...It's a more impressive building," Mr. Trump says.
Mr. Trump's delayed condo-hotel project in Toronto fell behind a competing Ritz-Carlton, and the building now going up has 13 stories fewer than originally planned. However, Mr. Trump says the project is in good shape.
In Atlanta, two condo towers with the Trump name are about to be launched at a time when 5.8% of the homes there are for sale, the second-highest inventory of unsold homes in the country, according to Zelman & Associates, a housing-research firm.
Mr. Trump says Atlanta is "a beautiful job going well." Asked about Atlanta's poor housing market, Mr. Trump said, "You know I can't be everywhere. It's like somebody says, 'why didn't you build here or there?' Who's done better deals than me?"
Business Opportunity Loan and Commercial Real Estate Investment
This overview will offer some candid thoughts about commercial financing and commercial real estate loans plus an overview of primary reasons for purchasing commercial investment property or buying a business. An increasingly disturbing climate for residential real estate investing has motivated investors to evaluate business opportunity options and business real estate investment property.
Special Purpose Real Estate Investment Property and Businesses
Business opportunity and commercial real estate investment property options include special purpose businesses such as gas stations and motels. The distinctive elements of these unique business investing options can be converted into added management possibilities for providing added value by differentiating a commercial property or business.
Special purpose business investments will dictate specialized commercial financing strategies like funeral home financing and gas station financing. Arranging a business opportunity loan or commercial real estate loan that is desirable for the business owner and the business will be a necessary factor in achieving a profitable business investment.
SBA Loan for a Commercial Mortgage and Business Opportunity Finance
The potential use of a Small Business Administration loan offers a business finance strategy not possible for residential real estate investments. SBA business loans are an option for most business owners and can be helpful in buying business opportunities or commercial investment property.
Business Opportunity Finance Choices to Avoid Real Estate Investment
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Purchasing a business opportunity does not involve commercial real estate. This means that business finance value will be driven by the business rather than real estate, and the absence of a commercial mortgage can prove to be a significant advantage in a declining real estate market.
How Income Effects Value of Commercial Property and Businesses
In comparison to residential real estate investment property value depending primarily on location, commercial real estate and business value is primarily determined by business income. This results in less sensitivity to local real estate property value trends. A business opportunity loan and commercial real estate loan will depend upon a business appraisal that will evaluate the recent business income levels.
Contact ICON Commercial Lending for more information.
About the Author:
Contact Steve Bush at AEX Commercial Real Estate Financing - Commercial Mortgage
Special Purpose Real Estate Investment Property and Businesses
Business opportunity and commercial real estate investment property options include special purpose businesses such as gas stations and motels. The distinctive elements of these unique business investing options can be converted into added management possibilities for providing added value by differentiating a commercial property or business.
Special purpose business investments will dictate specialized commercial financing strategies like funeral home financing and gas station financing. Arranging a business opportunity loan or commercial real estate loan that is desirable for the business owner and the business will be a necessary factor in achieving a profitable business investment.
SBA Loan for a Commercial Mortgage and Business Opportunity Finance
The potential use of a Small Business Administration loan offers a business finance strategy not possible for residential real estate investments. SBA business loans are an option for most business owners and can be helpful in buying business opportunities or commercial investment property.
Business Opportunity Finance Choices to Avoid Real Estate Investment
http://www.blogger.com/img/gl.link.gif
Purchasing a business opportunity does not involve commercial real estate. This means that business finance value will be driven by the business rather than real estate, and the absence of a commercial mortgage can prove to be a significant advantage in a declining real estate market.
How Income Effects Value of Commercial Property and Businesses
In comparison to residential real estate investment property value depending primarily on location, commercial real estate and business value is primarily determined by business income. This results in less sensitivity to local real estate property value trends. A business opportunity loan and commercial real estate loan will depend upon a business appraisal that will evaluate the recent business income levels.
Contact ICON Commercial Lending for more information.
About the Author:
Contact Steve Bush at AEX Commercial Real Estate Financing - Commercial Mortgage
Getting the Best Commercial Mortgage Rate
Trying to get the best commercial mortgage rate is perfectly understandable, after all a fraction of a percentage point can make a huge difference to the repayments on a larger commercial loan. However, when searching for a competitive rate you should bear in mind that the broker or lender is going to need plenty of information to support the enquiry.
Imagine if you will that someone puts a box containing a 300 piece jigsaw puzzle in front of you, shows you only ten pieces and says "Describe the picture to me" – what are the chances you would be able to do it? You may be able to say "Well, it looks as if it's a sunny day and I think I can make out part of a tree" but apart from that very little.
This may sound like an irritating evasion of the issue but the question "I'm looking for a commercial mortgage, what's the best rate you can get me ?" is equally difficult to answer if a useful response is expected. Not least because different people have a quite different understanding of what types of commercial mortgage will qualify for a headline rate.
Of course there are some brokers who will quote you a very favourable rate "off the top of their head." This is a little disingenuous in that any rate will be largely meaningless and is probably made in the hope that they can impress the potential client and give him reason to return to them first.
Without doubt the best commercial rates are only available from the mainstream banks, including the likes of HSBC, Barclays, RBS etc. and some other commercial lenders such as The Skipton and Norwich & Peterborough Buildings Societies.
Remember though, before these organisations will consider offering their best rates they are going to want to know quite detailed information about the business they are lending money to, the people who control the company and full details about the property.
Typically speaking the best rates are only available for established businesses with a clean credit history and plenty of good quality and verifiable accounting information. Professional property investors are also generally considered good quality applicants, but only if the rental income stacks up. The following points should explain what a lender would generally look for:
1. Established Business: Would mean that the business has been profitably trading for about 3 years.
2. Good quality and verifiable accounting information: Accounts that have been professionally prepared by a qualified accountant and if appropriate filed at Companies House.
3. Clean Credit: All existing loans and mortgages are up to date, no late payments to suppliers. No CCJ's either in the business name or the individual director's personal names.
4. Investment properties would usually need to have a formal lease in place with a good quality tenant. The rental income will need to cover the mortgage payments by a healthy margin.
The above points only relate to applicants chasing the headline rates. There is now a good degree of flexibility for businesses who cannot fulfil the above criteria.
When approaching a lender or broker with a view to obtaining the best possible commercial mortgage rate (or re-mortgage) an applicant should be prepared to divulge all the above information before expecting a sensible answer. At the very least it would be recommended to have the last three years' accounts, brief CV's for each director, an up to date business plan and as much information as you can muster about the property in question.
There is no doubt that there are some very competitive mortgage rates available for the right businesses and researching the market has never been more important. By all means approach your existing bankers first as they most likely to be keen to keep your business but having other options available puts you in the strongest position when looking for the best commercial mortgage rate.
Contact ICON Commercial Lending to get the most competitive rates.
Imagine if you will that someone puts a box containing a 300 piece jigsaw puzzle in front of you, shows you only ten pieces and says "Describe the picture to me" – what are the chances you would be able to do it? You may be able to say "Well, it looks as if it's a sunny day and I think I can make out part of a tree" but apart from that very little.
This may sound like an irritating evasion of the issue but the question "I'm looking for a commercial mortgage, what's the best rate you can get me ?" is equally difficult to answer if a useful response is expected. Not least because different people have a quite different understanding of what types of commercial mortgage will qualify for a headline rate.
Of course there are some brokers who will quote you a very favourable rate "off the top of their head." This is a little disingenuous in that any rate will be largely meaningless and is probably made in the hope that they can impress the potential client and give him reason to return to them first.
Without doubt the best commercial rates are only available from the mainstream banks, including the likes of HSBC, Barclays, RBS etc. and some other commercial lenders such as The Skipton and Norwich & Peterborough Buildings Societies.
Remember though, before these organisations will consider offering their best rates they are going to want to know quite detailed information about the business they are lending money to, the people who control the company and full details about the property.
Typically speaking the best rates are only available for established businesses with a clean credit history and plenty of good quality and verifiable accounting information. Professional property investors are also generally considered good quality applicants, but only if the rental income stacks up. The following points should explain what a lender would generally look for:
1. Established Business: Would mean that the business has been profitably trading for about 3 years.
2. Good quality and verifiable accounting information: Accounts that have been professionally prepared by a qualified accountant and if appropriate filed at Companies House.
3. Clean Credit: All existing loans and mortgages are up to date, no late payments to suppliers. No CCJ's either in the business name or the individual director's personal names.
4. Investment properties would usually need to have a formal lease in place with a good quality tenant. The rental income will need to cover the mortgage payments by a healthy margin.
The above points only relate to applicants chasing the headline rates. There is now a good degree of flexibility for businesses who cannot fulfil the above criteria.
When approaching a lender or broker with a view to obtaining the best possible commercial mortgage rate (or re-mortgage) an applicant should be prepared to divulge all the above information before expecting a sensible answer. At the very least it would be recommended to have the last three years' accounts, brief CV's for each director, an up to date business plan and as much information as you can muster about the property in question.
There is no doubt that there are some very competitive mortgage rates available for the right businesses and researching the market has never been more important. By all means approach your existing bankers first as they most likely to be keen to keep your business but having other options available puts you in the strongest position when looking for the best commercial mortgage rate.
Contact ICON Commercial Lending to get the most competitive rates.
Tuesday, November 20, 2007
Commercial Real Estate Lending Trends
One of the signs of the times that indicates how any nation's economy is doing can often be determined by how well businesses are expanding in real estate. Right now, there is a continued expansion of commercial real estate and loans for these new projects. The current commercial real estate lending trends indicate that now is a good time to expand your business with a building program or new land purchase.
While the housing market has certainly taken a real dip, and has hurt the sub prime lenders in particular, commercial lending goes on. Many new projects, especially in the income producing properties realm, is seeing solid expansion. This includes the construction of office parks and buildings, multi-family dwellings, hotels, and other general land development programs.
One particular market that has held up its own is office rentals. The demand for office space – even at increased rent values - has grown. This is especially true in New York City (Manhattan), and some other large cities, too. This means that the available office rental space has actually decreased as office space is being filled - much to the owner's delight. In New York City, office space is being grabbed up - even though the rent has risen to nearly $70 per square foot.
A few other cities, however, still show a slow office rent market. In fact, much office space remains unoccupied. In those cities, though, where office space is in demand, the number of office buildings and office parks are certainly on the rise, as developers rush to fill in the gap. Commercial lenders are also seeing the need and providing the necessary bridge loans and commercial loans for these massive projects.
When compared to last year, there is an increase in the overall amount of activity in commercial real estate lending. This shows a growth of about 0.8 percent that is expected in the third quarter of 2007, according to the National Association of Realtors.
Over the last few years, commercial real estate lending has shown a strong increase. The Federal Reserve (Philadelphia) indicates that large mortgage lenders have gone from about 150% of loans (compared to non-commercial) back in the 1990's, to over 300% last year.
The number of commercial real estate loans is increasing and lenders are continuing to offer excellent interest rates. The market has begun to show a slight decrease in recent days, but for right now, the rates needed to expand business could not be much better. The qualifications needed to get such a loan also could not be much softer than they are right now, too.
Seeing this kind of commercial real estate trend, and the market’s favor for this kind of loan, you also may be able to benefit greatly by investing now in a new building project or land development program. Check on availability of office space (in particular) in the area, find out how fast it is being secured by new businesses, and if it is in demand, be ready to move on the opportunity. Scope out possible land available, or existing structures that can easily be renovated into office space, get your paperwork in order, and talk to a commercial lender about your goals before someone beats you to it. Now is the best time for action on this kind of opportunity, while commercial loans are still available at great terms.
For more Commercial Lending info, Contact ICON Commercial Lending.
Read more articles by: Eric Morgan
Article Source: www.iSnare.com
While the housing market has certainly taken a real dip, and has hurt the sub prime lenders in particular, commercial lending goes on. Many new projects, especially in the income producing properties realm, is seeing solid expansion. This includes the construction of office parks and buildings, multi-family dwellings, hotels, and other general land development programs.
One particular market that has held up its own is office rentals. The demand for office space – even at increased rent values - has grown. This is especially true in New York City (Manhattan), and some other large cities, too. This means that the available office rental space has actually decreased as office space is being filled - much to the owner's delight. In New York City, office space is being grabbed up - even though the rent has risen to nearly $70 per square foot.
A few other cities, however, still show a slow office rent market. In fact, much office space remains unoccupied. In those cities, though, where office space is in demand, the number of office buildings and office parks are certainly on the rise, as developers rush to fill in the gap. Commercial lenders are also seeing the need and providing the necessary bridge loans and commercial loans for these massive projects.
When compared to last year, there is an increase in the overall amount of activity in commercial real estate lending. This shows a growth of about 0.8 percent that is expected in the third quarter of 2007, according to the National Association of Realtors.
Over the last few years, commercial real estate lending has shown a strong increase. The Federal Reserve (Philadelphia) indicates that large mortgage lenders have gone from about 150% of loans (compared to non-commercial) back in the 1990's, to over 300% last year.
The number of commercial real estate loans is increasing and lenders are continuing to offer excellent interest rates. The market has begun to show a slight decrease in recent days, but for right now, the rates needed to expand business could not be much better. The qualifications needed to get such a loan also could not be much softer than they are right now, too.
Seeing this kind of commercial real estate trend, and the market’s favor for this kind of loan, you also may be able to benefit greatly by investing now in a new building project or land development program. Check on availability of office space (in particular) in the area, find out how fast it is being secured by new businesses, and if it is in demand, be ready to move on the opportunity. Scope out possible land available, or existing structures that can easily be renovated into office space, get your paperwork in order, and talk to a commercial lender about your goals before someone beats you to it. Now is the best time for action on this kind of opportunity, while commercial loans are still available at great terms.
For more Commercial Lending info, Contact ICON Commercial Lending.
Read more articles by: Eric Morgan
Article Source: www.iSnare.com
Friday, November 16, 2007
What can your commercial mortgage broker do for you?
A commercial mortgage broker can offer you a wide variety of products and services - such as a commercial mortgage or a commercial bridge loan - to fit the needs of your company, whether you are rapidly growing or just chugging along slowly but surely.
The following are examples of some of the products and services a commercial mortgage broker might be able to offer your business:
Commercial Mortgage
Like you might imagine, any commercial mortgage broker will be able to extend you a commercial mortgage. A commercial mortgage is essentially a mortgage on the building and land that your business occupies. If you are looking to refinance your commercial mortgage you would be wise to talk with your commercial mortgage broker and see what kind of rates he can get you. Currently rates are at or near all time lows so now would be an excellent time to refinance your commercial mortgage and lock in those rates for the future.
If your business has just experienced a jump in growth then now might be a good time to build your office space and get out from under those lease payments. Again your commercial mortgage broker can help you by drawing up a contract for a mortgage that meets your needs.
Commercial Loan
Perhaps your business has experienced strong growth and you want to continue to push for more growth but your company is lacking the capital to do so. Your commercial mortgage broker can help you in this scenario as well by offering you a commercial loan. A commercial loan will give you the cash you need now and as your business grows and you are able to improve your profitability margins you can pay down the commercial loan. The size of the commercial loan your commercial mortgage broker is willing to extend to you will of course depend on the credibility of your business plan, the experience of your management team, and the risk involved, just to name a few of the factors that go into the lending decision.
The only surefire way to know what your commercial mortgage broker requires is to visit their office and find out what it will take to get their financial support.
Commercial Bridge Loan
Your commercial mortgage broker should also be experienced in issuing a commercial bridge loan. A commercial bridge loan is a financial instrument that helps companies acquire financing for mortgages in a relatively short period time. Likewise, a commercial bridge loan is typically only issued for a short period of time. You might need a commercial bridge loan if your primary mortgage is coming due and you do not have time to refinance. In this case you can work with your commercial mortgage broker to push through a commercial bridge loan rather quickly so that you are able to cover the mortgage that has come due. Then you can work with your broker to roll the bridge loan into a more long term form of financingComputer Technology Articles, such as a commercial mortgage.
If you have any further questions visit ICON Commercial Lending Today!
ABOUT THE AUTHOR
Adam Smith is an informational author for 10X Marketing.com To learn about an investment property, visit SNCLoans.com
The following are examples of some of the products and services a commercial mortgage broker might be able to offer your business:
Commercial Mortgage
Like you might imagine, any commercial mortgage broker will be able to extend you a commercial mortgage. A commercial mortgage is essentially a mortgage on the building and land that your business occupies. If you are looking to refinance your commercial mortgage you would be wise to talk with your commercial mortgage broker and see what kind of rates he can get you. Currently rates are at or near all time lows so now would be an excellent time to refinance your commercial mortgage and lock in those rates for the future.
If your business has just experienced a jump in growth then now might be a good time to build your office space and get out from under those lease payments. Again your commercial mortgage broker can help you by drawing up a contract for a mortgage that meets your needs.
Commercial Loan
Perhaps your business has experienced strong growth and you want to continue to push for more growth but your company is lacking the capital to do so. Your commercial mortgage broker can help you in this scenario as well by offering you a commercial loan. A commercial loan will give you the cash you need now and as your business grows and you are able to improve your profitability margins you can pay down the commercial loan. The size of the commercial loan your commercial mortgage broker is willing to extend to you will of course depend on the credibility of your business plan, the experience of your management team, and the risk involved, just to name a few of the factors that go into the lending decision.
The only surefire way to know what your commercial mortgage broker requires is to visit their office and find out what it will take to get their financial support.
Commercial Bridge Loan
Your commercial mortgage broker should also be experienced in issuing a commercial bridge loan. A commercial bridge loan is a financial instrument that helps companies acquire financing for mortgages in a relatively short period time. Likewise, a commercial bridge loan is typically only issued for a short period of time. You might need a commercial bridge loan if your primary mortgage is coming due and you do not have time to refinance. In this case you can work with your commercial mortgage broker to push through a commercial bridge loan rather quickly so that you are able to cover the mortgage that has come due. Then you can work with your broker to roll the bridge loan into a more long term form of financingComputer Technology Articles, such as a commercial mortgage.
If you have any further questions visit ICON Commercial Lending Today!
ABOUT THE AUTHOR
Adam Smith is an informational author for 10X Marketing.com To learn about an investment property, visit SNCLoans.com
Monday, November 12, 2007
3 Reasons Why Owning A Commercial Property May Make You More Money In Real Estate Investment
If you ever have been a landlord for residential property, I am sure that you get complaints from tenants about leaking roofs in the middle of the night. But what keeps most people back from investing in commercial real estate is the fear of the unknown since not many of us are born commercial landlords. However we can learn from Donald Trump who spent his energy developing large office complexes and that’s where he made his money. This article will highlight three reasons why commercial property real estate investment is better than private real estate investment.
Reason #1: Rental Yields may be better for commercial properties
For commercial property like shop space, the rental yield that you can command depends directly on the human traffic in the area. Thus if you invested money in such a property investment, the monthly cash flow would be more than an equivalent costing residential property investment in the same area.
In addition, most business owners when they come to view your property have already identified your street as a good one for their business in terms of human traffic and usually want to start renting from you, thus you have the upper hand in negotiations. Contrast this to most residential tenants who have a huge variety of properties to choose in your vicinity and if they do not like your property or your rental they can just as easily go to another property.
Reason #2: Improvements on the property
Business tenants generally treat properties different from residential tenants. A business owner who is renting property would generally fix small defects in the property so that he can carry on business and would not bother the landlord about such small problems. But additionally, most small business owners would generally carry out small improvements in the property that could boost the property value of your commercial property.
An example of this could be the installation of a PABX System and wiring up the whole office for a local area network. This could save your new tenant a lot of time and could be used to give additional value to the terms of the rental that you are providing.
Another example I heard recently involves office partitions. Law firms and accountants generally have the same set up in their offices and when law firms move, they generally would have to spend money renovating so if you have existing partitions in your commercial property, you might be able to get a whole professional firm over to rent your property. Note in contrast, in most residential property, tenants tend to love to puncture holes in walls without permission, repaint certain rooms and at the end of the lease and as a result most landlords have to do lots of repairs just to return the property into its original condition.
Reason#3: Rental Collection
Typically there are some tenants that are not very prompt with their rental payments and therefore the ability to choose tenants who would pay would save you lots of money and make you even more in the longer term. Imagine having to loose a few months of rental payment and spend money on lawyers to evict the defaulting tenant from your property.
If you have a commercial property, you can choose a tenant that has lots of goodwill established in your premises. This would mean that the tenant has a lot vested in your property and would therefore pay his rent on time to stay out of rental disputes. Contrast this with a residential property where the tenant can run away without paying your monthly rental and has nothing very much to loose. Collecting rental from residential tenants seems to be more difficult as well for some strange reason.
In conclusion, this article has highlighted three reasons why commercial property real estate investment may be better than private real estate investment. That said, making money with real estate is like value investing in stocks, the profit is made in the buying. The time spent looking for a good property will reap its rewards later in the form of good rental yield and capital appreciation over time. Take massive action today and look for the real estate investment property that you think meets your real estate investment needs.
Check out more tips @ ICON Commercial Lending
Thursday, November 8, 2007
Commercial Loans
Commercial loans are available at competitive interest rates and repayment terms from our lending market leaders. These can be used to start or expand and develop your business or for the purchasing of equipment. Commercial loans could be the most flexible solution to meet your financial needs but it’s also important to consider the effect of loan repayments on your cash flow and business assets.
When looking at commercial loans you will need to assess your requirements for repayment terms and compare interest rates, known as the Annual Percentage Rate or APR, of different lenders in order to decide which loan is best for you. The repayment term can be anything between one and fifteen years on average and you have two choices with regard to interest rates: fixed interest rates and variable interest rates.
Fixed Rate: The interest rate is set at the beginning of the term of the loan, the percentage given to you being determined by your circumstances, the amount of the loan, the term and your assessed ability to repay the loan by the due date. Your monthly repayment amount remains constant, regardless of changes in the bank base rate which is an advantage if the rate increases but a disadvantage if it drops.
Variable Rate: The interest rate you pay is linked to fluctuations in the bank base rate and can therefore increase or decrease depending on what is happening in the open market. You will consistently pay the current market rate plus an agreed premium but because the base rate can change, your monthly repayments could go up or down. This is an advantage if interest rates fall but you may end up paying a lot more if rates rise.
There are a number of reasons why commercial loans can be a beneficial way of raising the money you need. The first is cash flow. Because your loan repayments are agreed and set for the term of the loan your cash management can be more predictable from month to month. Secondly, you have a large degree of flexibility on how you use the loan, including paying off other higher interest loans. Commercial loans also enable you retain ownership in your company by making it unnecessary for you to raise funds by selling an interest in your company to an outside investor. Interest payments on commercial loans are also tax deductible and are made with pre-tax money. A further advantage is that if you back your loan using capital equipment then you remain the legal owner of the equipment. You must be aware however that if you do not pay back the loan and default on repayments then the lender is able to foreclose on any assets backing the loan and to sell them to pay back the money owing.
Comparing the APRs of commercial loans is a good indication of how competitive loans are but it is also important to pay attention to the small print on the loan agreement. If you think you may be in a position to pay back the loan before the due date then you’ll be wise to check the early redemption policy of the lender. Some lending companies charge up to two months interest if you settle the loan within 3 to 5 years and before the due date, which can increase the total cost of the loan. It may be cheaper to take a loan with a slightly higher APR but with no redemption penalty.
Contact ICON Commercial Lending today to see what we can do for you.
Original Author: Paul Davies
Monday, November 5, 2007
Commercial Loans - Cost Effective Way of Funding Business Needs.
When your little idea, your dream starts taking a real shape – you know it is time you garnered your finances to make it grow. At times your effort fall short and there you are filing for loans. Commercial loans can help business interests with uninterrupted capital supply.
Commercial loans can be used to buy business premises or commercial building for both new or establish businesses. They can be used to buy any business asset or to finance the expansion of any established business.
Different commercial loans lender have different way of processing commercial loans. You can start with pre-qualifying for commercial loans. This determines how much as a borrower you can afford as commercial loans and which commercial loans programme will suit the best.
Commercial loans are the biggest way of financing business projects. While providing you with commercial loans, the loan lender will look at general information as your income and existing debts. Your application will be reviewed by a loan officer.
Commercial loans lender will take keen interest in
• Credit history
• Reason for loan
• Collateral
• Ability to repay
• Your investment in the business
Documents to gather while applying for commercial loans are –
Loan request – the amount of loan requested, how the funds will be used, loan type and amount of working capital on hand. Commercial loans lender will feel more secure knowing that you have invested your own money in the commercial plan.
Business plan - If the commercial loans are used for starting a new business, the business plan is crucial. It should include cash flow projections for first 24 months. Information should be concise and clear. Its feasibility will be fundamental in getting commercial loans approved.
Personal financial statements - In case commercial loan is used for expansion of business, it will be required for you to give business profile. Personal financial statements would be required for anyone who owns 20% or more of business. Complete information about current debts balances, payment schedules, maturity, and collateral used to secure other loans. You can be required to provide more documents during the loan process.
In case you are purchasing real estate, you might be required to submit preliminary environmental reports, area maps, title reports, property appraisals, and lease summaries.
Decisions for commercial loans take usually 1-5 days. During this time, you might be required to give further information. Commercial loans broker can help you submit your loan application to several lenders for approval. Your job is to select the most attractive offer and returning the final letter of intent. After all the conditions are satisfied, the commercial loans are approved and the lender will give a final loan commitment. At the closing, the commercial loan will be transferred with a cashier’s check, draft, or electronic wire transfer.
Commercial loans are either secured or unsecured - with or without collateral. Secured commercial loans are more commonly available as commercial mortgages. Commercial mortgage are provided at better terms, interest rates and repayment options. Commercial loans are available with fixed and variable rate options. Fixed rate commercial loans will mean that your interest rate and monthly payments will be fixed at the beginning of the loan and will remain so throughout.
Businessmen apply for fixed rate commercial loans for it helps in effective financial planning because they know how much they are giving out every month. With variable rate the interest rates changes in accordance to the changes in the market. The benefit with variable rate is that they start with lower interest rate than fixed rate. But interest rate can increase during the term and therefore you will have to pay more. On the contrary fixed rate commercial loans will leave no space for change in case the interest rates drop.
Investigate before you make a commercial loan claim. Be prepared to answer some questions. Commercial loans are cost effective way of funding business needs when you need it. Commercial loans can strengthen your competitive position; increase your working capital and maximum profitability. Investigate your opportunities with commercial loans and see how your business becomes a commercial success.
If you have any more questions please feel free to visit ICON Commercial Lending.
Wednesday, October 31, 2007
Make your Business Happen with a Commercial Lender
If your home business is starting to overflow from the office into other parts of the house, it may be time to consider finding a building large enough to handle your startup’s rapid growth. However, most businesses are unable to generate enough revenue at this phase of growth to allow for the outright purchase of a new facility. In fact, businesses of all sizes commonly go through a commercial lender when acquiring new real estate.
There are literally hundreds of commercial lenders waiting to provide new businesses with growth capital. You’ve probably seen their advertisements pop up on your browser offering the lowest rates and best service. With so many lenders to choose from, how can you get past the gimmicks to find the one that will fill your needs?
Let’s start with the type of business you want to open. Are you thinking of a manufacturing, retail, agricultural, or service business? There are many different types of business, all with their own unique facility requirements. However, not every commercial lender will finance every property type. Here’s a brief list of the different types of property that a lender may (or may not) finance:
· Agricultural (Ranches, Farms)
· Automotive (Gas Stations, Car Washes)
· Hospitality (Hotels, Motels)
· Industrial (Heavy/Light Manufacturing)
· Leisure (Golf Course, Amusement Parks)
· Mobile Home Parks
· Office Buildings/Complexes
· Parking Lots
· Retail (Shopping Centers, Strip Malls)
· Tenant Buildings (Apartments, etc.)
Besides finding a commercial lender who will finance the type of property best suited for your business needs, you also need to consider what kind of loan options will be best for you. Some lenders are fairly flexible in their loan offerings; non-recourse, mezzanine, and bridge loans may all be useful options depending on your individual requirements and circumstances. In addition, many commercial lenders also provide construction financing for borrowers who would prefer a custom facility. Renovation and repair financing is also a common offering by many lenders.
Before you borrow from any commercial lender, first make sure that your anticipated loan amount falls comfortably within the dollar range that the lender is willing to provide. Most lender’s have a minimum loan amount of 100k to 300k although you will find the occasional institution willing to make loans as low as 25k. While the majority of lenders have a loan ceiling reaching $10 million, a few of the largest have no limit.
Some commercial lenders also provide opportunities to refinance property that you’ve previously purchased. While the a .5% decrease in interest may not seem like a big deal on a $25,000 loan, it can save you a substantial amount of money on your $50 million loan. A flexible lender may even give you the option of borrowing to avoid foreclosure. While this should always be the option of last resort, it may buy you enough time to make your business profitable enough to survive a sudden cash flow crisis.
Whether you plan to purchase an apartment complex, industrial facility, or retail outlet, there are few people you’ll work more closely with than your commercial lender. When it comes to starting or expanding a business, make sure that your lender is as vitally concerned with your success as you are. It’s important to find a commercial lender who is small enough to give you the personal attention you will need, but large enough to support your largest commercial real estate acquisitions while giving you options and interest rates that will allow your business to take off.
Here at ICON Commercial Lending we hope you will give us a change to be that for you.
There are literally hundreds of commercial lenders waiting to provide new businesses with growth capital. You’ve probably seen their advertisements pop up on your browser offering the lowest rates and best service. With so many lenders to choose from, how can you get past the gimmicks to find the one that will fill your needs?
Let’s start with the type of business you want to open. Are you thinking of a manufacturing, retail, agricultural, or service business? There are many different types of business, all with their own unique facility requirements. However, not every commercial lender will finance every property type. Here’s a brief list of the different types of property that a lender may (or may not) finance:
· Agricultural (Ranches, Farms)
· Automotive (Gas Stations, Car Washes)
· Hospitality (Hotels, Motels)
· Industrial (Heavy/Light Manufacturing)
· Leisure (Golf Course, Amusement Parks)
· Mobile Home Parks
· Office Buildings/Complexes
· Parking Lots
· Retail (Shopping Centers, Strip Malls)
· Tenant Buildings (Apartments, etc.)
Besides finding a commercial lender who will finance the type of property best suited for your business needs, you also need to consider what kind of loan options will be best for you. Some lenders are fairly flexible in their loan offerings; non-recourse, mezzanine, and bridge loans may all be useful options depending on your individual requirements and circumstances. In addition, many commercial lenders also provide construction financing for borrowers who would prefer a custom facility. Renovation and repair financing is also a common offering by many lenders.
Before you borrow from any commercial lender, first make sure that your anticipated loan amount falls comfortably within the dollar range that the lender is willing to provide. Most lender’s have a minimum loan amount of 100k to 300k although you will find the occasional institution willing to make loans as low as 25k. While the majority of lenders have a loan ceiling reaching $10 million, a few of the largest have no limit.
Some commercial lenders also provide opportunities to refinance property that you’ve previously purchased. While the a .5% decrease in interest may not seem like a big deal on a $25,000 loan, it can save you a substantial amount of money on your $50 million loan. A flexible lender may even give you the option of borrowing to avoid foreclosure. While this should always be the option of last resort, it may buy you enough time to make your business profitable enough to survive a sudden cash flow crisis.
Whether you plan to purchase an apartment complex, industrial facility, or retail outlet, there are few people you’ll work more closely with than your commercial lender. When it comes to starting or expanding a business, make sure that your lender is as vitally concerned with your success as you are. It’s important to find a commercial lender who is small enough to give you the personal attention you will need, but large enough to support your largest commercial real estate acquisitions while giving you options and interest rates that will allow your business to take off.
Here at ICON Commercial Lending we hope you will give us a change to be that for you.
Tuesday, October 30, 2007
Things to Consider Before Buying Property
The frequently talked about phenomenon of real estate bubble refers to the condition under which the values of residential or commercial or both types of properties rise very fast. This causes the market to be over-priced where the buyers buy the properties at a price much higher than the normal value even though they are afraid of the fact that the bubble may burst and the prices may fall even faster than they soared. It is risky for those buyers who are unable to bear the loss of their investment to purchase properties in such a market.
There is the risk of getting into unwanted financial condition for the people who purchase properties under the situation of real estate bubble, especially if their equity for the property is very less. Equity refers to the share of the property the buyer own against the share of the lender or the bank. If the bubble bursts while the buyer still has a huge amount to pay back, the buyer will have to pay back the debt amount for the property that does not have a higher or even similar value of the debt any more. It goes without saying that this kind of loss is in theory and may happen only if you sell the house in reality.
However, if the buyer possesses a higher equity of the property or has the financial capacity to sustain a loss, the situation is comparatively much better. Under such a circumstance, if the bubble bursts, it's more of an irritation as opposed to a monetary disaster.
If you plan to buy any property located in some area that is experiencing the conditions of real estate bubble, and you have an average earning, get enough information before you actually make the purchase. Weigh the probable odds against the goods and be prepared for the possible financial loss before making any progress with your purchase decision. You need to do some homework before you actually make the purchase. You should track the market fluctuations for that area for few months, follow the trends of sale and pay heed to what the experts opine about the place, even though they may have conflicting opinions. You should then use the entire information that you have gathered to weigh the pros and cons of the purchase.
Take these things into consideration, when making the investment that you are. This just an example of what positive and professional direction ICON Commercial Lending can provide. Contact us with any further questions.Monday, October 29, 2007
Rental Management for your properties? Do you Hire or Do it yourself?
Rental management fees vary around the country, and according to the property type. They can be as low as 4% of the gross rents for large properties, to as high as 12% for single family homes. Managing your rental properties yourself can theoretically save you a lot of money, especially if you own a collection of single family rental homes.
Should you do it yourself, then? That depends on the property, and on your own long term goals. Let's look at some of the advantages and disadvantages.
Rental Management - Do It Yourself
The obvious advantage is that you save the property management fees. On a fourplex renting for $700 per unit, the fee might be as much as 10%, or $280 per month. That might be all of your cash flow or more. You could save $3360 per year by doing it yourself.
Even if you have sufficient cash flow, that $3360 makes it a safer investment, doesn't it? If the roof needs repairing, or some other surprise comes up, you would be more prepared. So there is a safety factor in doing it yourself and saving the money.
Additionally, the personal involvement means you can find cheaper ways to do things. A rental management company will just call a plumber, for example, if a toilet is clogged. You might save $80 for a minute of plunging.
Rental Management - Hire It Out
Property management companies have prospective renters coming to them weekly, so they can rent that vacant apartment out quickly. For this reason, the fee may not cost you as much as it seems. If an apartment is vacant for an extra two weeks, because you are too inexperienced and busy to get it rented quickly, that can cost you hundreds of dollars.
It may be true that doing your own rental management is safer, and you can control costs more. A job is safer too, though, and that is what you end up with. Time spent showing units, collecting rents, and plunging toilets takes away time from finding other good investments. Saving hundreds can cost you thousands in lost opportunities.
Property management companies have experience in dealing with late rent, making tenants pay for clogged drains that they caused, getting apartments ready to rent, and every aspect of the process of running a rental property. Do you? Even if you do, you have to ask yourself whether you want to invest in properties or work in them.
Buy properties that have sufficient income to cover all expenses. Include a property manager as one of those expenses when analyzing an investment. Then, when you make your investment, pay for rental management, so you can get back to investing.
Sunday, October 7, 2007
Commercial Real Estate Heats up on U.S. Coasts
Source: RealEstateJournalMany multifamily real-estate investment trusts have been ramping up their development pipelines, but increasingly are building in only a handful of U.S. cities along the coasts.
About 96% of the new apartments being built by REITs at the end of the fourth quarter were concentrated along the East and West coasts, according to a Feb. 28 report by Morgan Stanley. That compares with about 87% in the fourth quarter of 2004.
Archstone-Smith Trust, for instance, had about $1.3 billion in apartment projects under construction at the end of the fourth quarter -- more than double the amount it spent on projects under construction three years ago -- with nearly all of it concentrated in a few coastal cities.
Part of Archstone-Smith's strategy is to target areas such as Boston, New York and Southern California, where there is a high cost of homeownership and barriers to competition, such as a shortage of developable land and an often-lengthy permitting process. "It's hard to find those characteristics in a market that isn't coastal," says R. Scot Sellers, chief executive of the Colorado-based REIT.
Bryce Blair, chief executive of Alexandria, Va.-based AvalonBay Communities Inc., says the apartment REIT started expanding its development pipeline about three years ago, when the national apartment market was relatively weak and there was less competition for developable land. At the end of last year, AvalonBay had about $1 billion in apartments under construction -- most of them on the coast.
"It's been a big part of our strategy forever," Mr. Blair says of concentrating on the coasts. "It is becoming more in vogue today."
View the full article.Commercial Lending - The 3 Ratios that determine the Commercial Lending
Getting money for your commercial real estate project can be quite a challenge if you do not know how to analyze and present the property properly to a commercial real estate lender. Before presenting your property to a potential lender it is important to determine the most probable ratios that the lender is going to use in making a decision to lend you the money.There is an increased risk with commercial real estate loans because of the size of the loans. Hundreds of thousands to millions of dollars are loaned on commercial properties and projects. A commercial lender wants to make sure that he or she will get their money back from the generated income of the property.
Most lenders will use the following three ratios to determine if they will loan the money on a project.
The first ratio is the debt coverage ratio or DCR. The DCR applies to the property itself and how much income it is producing compared to the debt service, or how much money is paid out towards the mortgage on a monthly basis. It is expressed by the net operating income divided by the total debt service.
The net operating income is the total income left over from the property after paying all the operating expenses. The debt service is determined by the mortgage terms, such as interest rate, length of the loan, and how often a payment is made. The higher the DCR, the more ability the property will have to cover the debt service. Many lenders require a DCR above 1.2 in order to consider it a relatively safe investment. Anything below that indicates that the property is either barely breaking even, or losing money. A lender does not want to loan money on a project that is not able to cover its debt service.
The second ratio is the loan-to-value ratio. This is expressed by the total loan balances (sum of all mortgages) divided by the market value. When you apply for a commercial loan, as you do for a residential loan, you must determine how much value of the property you are actually borrowing versus what will remain as equity. If you can acquire a loan-to-value ratio of 75%, then that is generally a good number.
If you can get more than 75% of the value loaned to you, then consider that a bonus. Lender's rules and guidelines may differ greatly depending on how much they are willing to risk on the project.
The third ratio is the debt ratio. For smaller commercial projects commercial lenders may require that you submit personal information to back the loan. This includes your personal income and debt on a monthly basis. The debt ratio is expressed by dividing monthly housing expenses by gross monthly income.
The results show how much debt stands in relation to income. Many commercial lenders will not accept a debt ratio greater than 25%. However, some commercial lenders have been known to go up to 28% or even 36%. A debt ratio greater than 25% stands a good chance of having budget problems.
The lower debt ratio you have, the more likely you will be able to get funding for your smaller commercial project.
Before approaching any lender, it is really important to analyze these ratios on your own. They pertain to your specific deal for which you want to get financing. By performing the ratio analysis on your own, you can better determine if financing will be easy or difficult to obtain, depending on the nature of the project and its level of risk.
It may be a good idea to contact several potential lenders and ask them their basic criteria and guidelines that they follow in evaluating properties. You may find that some lenders are far more conservative than others.
By understanding your property, you can better fit a lender to your specific needs. Also remember that private lenders can be extremely helpful with those risky deals that public lenders will not even consider. Be sure that you are well equipped with the proper information and supporting documentation no matter what lender you approach.
Saturday, October 6, 2007
ICON Commercial Lending Launches its BLOG!
ICON Commercial Lending Inc is excited to announce the launching of our new blog!
ICON Commercial Lending has over 30+ years experience in commercial lending. We are so confident with our services we offer a 100% No Risk Guarantee.
We will frequently be posting and updating you on the latest commercial real estate news and other updates in the industry. We look forward to helping you in your commercial real estate needs.
ICON Commercial Lending has over 30+ years experience in commercial lending. We are so confident with our services we offer a 100% No Risk Guarantee.
We will frequently be posting and updating you on the latest commercial real estate news and other updates in the industry. We look forward to helping you in your commercial real estate needs.
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