So let’s talk about pictures and commercial loans. One of the key items overlooked in most commercial financing requests is pictures.

Tag(s) : Commercial Loans & Real Estate, Commercial Financing, Commercial Lending, Loan Request Tips,

Invest in or keep your commercial real estate, but adjust your lease rates to keep your tenants intact. I’ve written a past article on how even in a declining value market, income-producing real estate protects your capital better than most other investment vehicles.

Tag(s) : Commercial Loans, Real Estate, Commercial Financing, Commercial Lending, Survival Strategies, Craig Higdon,

How is your mental game? Are you using real numbers in your commercial property analysis? Investors also often forget to adjust income for replacement reserves, leasing commissions on expiring leases, and use realistic management expenses.

Tag(s) : Commercial Real Estate, Commercial Lending, Commercial Loan, commercial loan coaching, underwriting tips, Craig Higdon,

Who Controls The Third Party Reports? In light of recent “events” in the mortgage markets, it comes as no surprise that lenders are changing how they handle third party reports. Eventually, most lenders followed suit.

Tag(s) : Commercial Real Estate, appraisal, Commercial Lending, commercial loans, commercial property, due diligence, environmental phase, investment property, real estate investment,

Even in Las Vegas, one of the most overbuilt markets in the country, I found construction activity on several projects. For some commercial real estate investors, this is the end of the line for these projects.

Tag(s) : Commercial Loans & Real Estate, Commercial Loan, commercial loans, commercial rates, commercial real estate education, construction lending, construction loan,

Like most other industries it is clear that Commercial Real Estate is in the midst of an economic downturn the likes of which we have never seen before.

Tag(s) : Commercial Real Estate, Commercial Real Estate Market, Economic Strategies, Net Lease Conference, ,

There are several advantages to being a Specialist in commercial real estate.

Tag(s) : Commercial Loans & Real Estate, investing strategy, investment property, property investment,

Commercial property owners face greater economic challenges because of property size, but can also potentially get significant State and Federal tax deductions.

Tag(s) : commercial property, cut operating expenses, manufacturing facilities, office buildings, retail stores, solar film, tax deductions,

The Green Building Certification Institute (GBCI)–an independent organization– administers LEED certification for all commercial and institutional projects registered under any LEED Rating System.

Tag(s) : Commercial Real Estate, energy savings, environment, investment property, LEED certification, LEEDS Compliance, Property Management,

Commercial REITs and developers are facing serious financing trouble as more than $500 Billion in commercial loans come due this year with very, very few lenders willing or even able to lend.

Tag(s) : Commercial Real Estate, individualist, collectivist, real estate, financing, Craig Higdon,

This surprisingly high reduction in loan volume was also noticeable in the 13% drop in the program’s combined loan value. On the supply side, banks have liquidity issues that have resulted in their reducing their SBA 7(a) loan volume.

Tag(s) : Commercial Real Estate, owner-user property, SBA 7(a), small business administration, small business financing,

Everyone is well aware of the cyclical nature of commercial real estate, as well as the potential for significant profits to be gleaned by purchasing assets before they rise in price.

Tag(s) : Commercial Real Estate, Acquisition Deals, Apartment Properties, investment property, multifamily, Multifamily Properties,

Depository Institutions which include Banks, S&L’s, Credit Unions, and Mutual Savings Banks. They prefer shorter term financing such as construction and bridge loans with adjustable or short term fixed periods and are very borrower oriented in their underwriting.

Tag(s) : Commercial Loans, Commercial Financing, Commercial Lending, commercial property, investment property, lending tip, loan tips, real estate investment,

While costs such as office equipment and furniture are easily recognizable as personal property, construction-related costs that are often included as part of real property may also qualify for a shorter depreciable life.

Tag(s) : Commercial Loans & Real Estate, Cost Segregation Studies, Depreciation Schedules, investment real estate, Million Dollar Properties, Property Construction, Real Estate Investments, Tangible Personal Property, Taxable Profits,

By taking an equity interest in and reducing rent to “fresh” retail models, landlords will drive traffic to shopping centers and improve investment returns on the entire shopping center.

Tag(s) : Commercial Loans & Real Estate, ICSC, investment strategies, property management strategy, Retail Property, shopping center, strategies,

A powerful method for building real estate holdings is the use of 1031 Exchanges, which lets investors defer capital-gains assessment on investment property by reinvesting sale proceeds into the purchase of new property within a set time period.

Tag(s) : Commercial Loans & Real Estate, 1031 Exchange, capital gains, estate planning, family partnership, gain, invest, investment, investment real estate, like kind, properties, property, tax deferral,

Government Agency guaranteed or sponsored transactions, including: SBA 7(a) and 504, HUD construction loans for multifamily projects, Community Reinvestment Act loans, USDA Business and Industry loans, and to a lesser extent, Fannie Mae and Freddie Mac multifamily loans.

Tag(s) : Commercial Lenders, commercial properties, Commercial Real Estate Loans, Community Reinvestment Act, Fannie Mae, Freddie Mac, Life Companies, SBA 504,

Each of the members of the LLC (as individuals) has to sign a Property Management Agreement that employs the Syndicator as the day to day manager of the commercial property investment. 13. The Syndicator then files the Articles of Organization (LLC-1) with the state in which the LLC is formed and any formal registration documents if the property is in a different state.

Tag(s) : Commercial Real Estate, commercial property, real estate, syndications, property management, Craig Higdon,

A property selling for $1,000,000 with $100,000 in annual income has a GRM of 10. The cap rate measures the return on investment for the capital invested in a property. The cap rate assumes that the property is purchased all cash and is calculated by dividing the Net Operating Income (NOI) by the purchase price.

Tag(s) : Commercial Real Estate, commercial property, apartments, income, loans, real estate, Craig Higdon,

My home loan is at 6% and you are telling me that a lender wants over 10% for a land loan? The loan is made to the borrower, not the property. Commercial real estate makes great security for a lender because it produces income that can make the loan payments until the property is sold, in the event the borrower defaults. Not so, land.

Tag(s) : Commercial Real Estate, commercial property, assets, loans, real estate, mortgage, Craig Higdon,

We all understand the basic OPM approach for investment property: Get some investors together, pool their money, buy a property together, and get a piece of the action for selecting and managing the property. This is a time tested method for growing a portfolio of commercial properties and a (nearly) passive income stream.? But this is not the only aspect of OPM in commercial real estate.

Tag(s) : commercial Real Estate, commercial loans, investors, investment, commercial property, Craig Higdon,

I've had real incentive to consider this week's topic: How permits affect commercial loan underwriting. To be clear, "un-permitted" work on a property is work that was done without the local city building and safety department knowing about it. When you ran into that property with un-permitted work, you may have been initially surprised to learn that lender involved disallowed any income or value attributable to those improvements. It's possible that the un-permitted work could be disallowed entirely.

Tag(s) : Commercial Real Estate, commercial loans, underwriting, Craig Higdon,

For loan amounts up to $1.5MM on commercial properties, we can get the Loan-to-Value (LTV) as high as 90% in some cases regardless of the property's cash flow. So even if the borrower made an extra million dollars a year, traditional lenders wouldn't increase a commercial loan amount past their guidelines.

Tag(s) : Commercial Real Estate, commercial loans, commercial properties, Craig Higdon,

The Mezzanine mortgage lender uses the membership interests of the LLC as collateral for their loan instead of the property. Purchase accomplished! Mezzanine lenders also play an important role in large construction loans, too. Unfortunately, these types of commercial loans aren’t available to regular mortals.

Tag(s) : Commercial Real Estate, mezzanine, loans, construction loans, commercial, Craig Higdon,

In order to make a successful commercial real estate investment you need to know the right questions to ask and the right way to ask them. Asking the right questions could help you avoid owning an underperforming asset.

Tag(s) : commercial Real Estate, commercial, real estate, commercial property, investment, Craig Higdon,

There are many “insider” commercial real estate secrets. One of the most important secrets is knowing the right questions to ask when investigating a commercial property investment. Investing in real estate is a complex process. One of the best place to start is to learn about your local commercial real estate market.

Tag(s) : commercial Real Estate, commercial, real estate, commercial property, investment, Craig Higdon,

Commercial real estate lenders are awash in money thanks to Collateralized Debt Obligations. Large funds are taking on more real estate, making it a legitimate “investment class” like stocks and bonds.

Tag(s) : commercial Real Estate, investment, lenders, real estate, commercial property, Craig Higdon,

Those researching the subject of commercial real estate investment are likely to encounter the term “OPM” on a regular basis. OPM is an acronym for “Other People’s Money.” The difficulties facing most investors are finding the other people with the money and proactively structuring the transaction.

Tag(s) : commercial Real Estate, equity, investment, real estate, investors, Craig Higdon,

Property values decline, but local populations remain high. It is easy to see how population movement and population growth impact the housing market, since a higher population density increases the demand for local real estate.

Tag(s) : commercial Real Estate, population, commercial loans, investment, commercial property, Craig Higdon,