Archive for May, 2009
May
31
Let’s say I want to buy a commercial property for 200K and don’t want to put do 30% and get into an 8 – 10% interest rate commercial mortgage. I own a very profitable company which grosses 1M per year, Bank are always offering this company large loans or equity lines on the business. What if my company borrow me some money, at a fair interest rate of say 5% simple interest and I use it to buy this property ?
What are the advantages and disadvantages? From what I can see. I will have lots of money on the loan (interest) and not have to make a large down-payment and I’ll own the properly free and clear.
Thanks guys.
Sell and Rent Back
May
30
The Best U.S. Cities For Commercial Property
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Some of the best cities for commercial property truly do belong in states that are dependent upon the shipping industry. Cities like Bellevue and Seattle, Washington are two of the best cities to do business in. This is why companies like Costco and Amazon have maintained their main headquarters in Washington state. Businessmen like Howard Schultz love all the movers and shakers in Seattle as they grab their coffee on the go. People can spend more on coffee and items that they want their because there is no personal income tax in Washington State as well.
Obviously the best places for commercial properties would be cities with a lot of population growth and the majority of that growth is coming from people with plenty of disposable income. Cities like Alexandria, Arlington and Fairfax in northern Virginia continue to expand. A lot of these folks have come down from Maryland to work for a technology, pharmaceutical or government firm around Washington D.C. and have plenty of money to spend. If someone has the resources to galvanize a venture down there, opening a deli or some quick sandwich shop where you can get a lot of these commuters as they go to work could be a very lucrative idea.
Setting up a venture such as a retirement home in a states like Texas or Florida may not be a bad move. You have a wide array of candidates to pick from in the workforces of these two states as well. Another advantage to setting up these types of businesses is that Florida and Texas do not tax retirement income. This obviously already draws a lot of seniors to cities like Boca Raton, Palm Beach or Galveston and Forth Worth respectively.
Cities like Tucson and Phoenix will continue to thrive because of their passionate sports fan base. Plenty of people love to shop or eat before they go to the game to root for their Arizona Wildcats and beloved Phoenix Suns. It all comes down to the fact that commercial property taxes have to remain in a growth minded assessor and mayor’s hands given that commercial property taxes are assessed locally.
One of the best cities in the state of Alabama to do business in is the city of Montgomery. A tax package was recently passed in the city that allowed businesses like Wal-Mart to come in to the city and create plenty of local commerce around it. If you can set up shop near a Wal-Mart and offer a service that they are sub par in, the benefits can be tremendous. The formula is simple if you keep property taxes low in cities businesses will come there and people will have money to purchase items with. Cities like Montgomery are dependent upon the sales tax and tourism like the city zoo for most of their revenue in any event.
Kids love the zoo so it wouldn’t be a bad idea to set up a toy store or some kind of food and beverage stand near by if you can get the permit. That is what is most important when it comes to commercial property. Set up shop as close to people as you can and offer an affordable product; the rest should take care of itself.
Rent Back Fast
May
29
Real estate conveyance fee?
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.Who pays the conveyance fee in a commercial property sale transaction, the buyer or the seller ?
Sell House Quick
May
29
Commercial Mortgage Rates – Now
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With the so called TARP money and low indexes, owners are very curious regarding where the current commercial mortgage rates are. We give specific rates below and some general thoughts surrounding them, broken down by conventional and SBA loans. We will shortly come out with another report on rates for commercial investment properties.
Commercial Mortgage Rates on Conventional
For general purpose properties like office, retail that are either partially owner occupied or rented out, with loan amounts between $500,000 – $3,000,000 we are seeing rates in the low 6%’s and for some strong borrowers in the upper 5%’s. These are based on 25 and sometimes 30 year amortization schedules. Most fixed period offered are 5 years though we are seeing a few 7 and 10 year fixed program, though rare.
Conventional loan are as you may have guessed difficult to get done now. Loan to value are generally capped at 65% and underwriting is getting really concerned with global cash flow. This is where they look very hard at all of the borrower’s income and expenses both business and personal. Though seemingly uncomplicated to calculate and determine, it can get very cumbersome quickly and is a major “lynch men” of many current loan requests as the borrowers business may cash flow yet on the personal side they are underwater.
Commercial Mortgage Rates on SBA Loans
Due to the relationship between the LIBOR rate and the PRIME rate most SBA lenders have stopped using PRIME as their index on SBA 7a loans and instead now tie their loan to the 30 day LIBOR rate plus 300 basis points. The combination of the two, is not the effective rate for the borrower but just in effect the index (the 30 Day Libor was at 1.45% on 1/1/09). The funding bank still has to add their margin on top of this combination. Most banks are at 200 to 275 basis points over. For the borrower this is the part of the rate that can be negotiated. The actual effective rates we are seeing for borrower are around 6 – 6.5% on SBA 7a’s.
Special use properties like restaurants, motel, etc are having a difficult time getting any bank to fund their loan and borrowers should expect that their rate will be at the higher end i.e. 275 basis points over.
Though the options have been reduced, commercial loans are still closing. Owner occupants should look really hard at the SBA options as they are the most viable in the market, especially on higher leveraged loans. Loan request at or below 60% loan to value, that are doable should qualify for some of the best commercial mortgage rates in the history of the business.
Lastly it has never been more important to take your loan to the right bank/lender, from the beginning. You need to know who is still closing and which source is the right fit for your situation.
Rent Back Fast
May
29
I am looking for info on some commercial property in cleve. oh. 821 E152 44110?
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May
27
commercial real estate people or enviromental inspectors please ~~?
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my family has a commercial property for sale….the enviromental report came back that it has CHROMIUM HYDROCARBONS……….. do you know what this means? AND what the remediation would be and possibly the COSTS and if it is truley a big problem ?? THANK_YOU
Sell and Rent Back
May
18
Commercial Property Epc Deadline Draws Close With Much Confusion Among All Involved
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New government legislation that will require hotels, pubs and restaurants to have an Energy Performance Certificate (EPC) before they can be sold is already causing confusion, property experts have warned.
The law, set to come into force on October 1, will mean any property that is up for sale or letting, or due to be put up for sale or letting, will need to have an EPC certificate.
An EPC provides the energy rating for a building which is based on the energy efficiency of the premises and its services such as heating, air conditioning, ventilation and lighting. The certificates will last for 10 years and are graded from A to G, much like fridges.
The UK’s largest pub operator has teamed up with a consortium of energy and compliance specialists led by Connaught Compliance together with Royal & Sun Alliance and Charterhouse Energy in a deal that will provide EPCs for more than 800 of its leased pubs.
It falls upon the owner, and not the property agent, to make an EPC available to perspective letters or buyers, with those failing to obtain one being liable for a fine of between £500 and £5,000.
The timescale required to obtain a certificate is expected to be between seven and 10 days, depending on the availability of an assessor.
Assessors will collect information about the building including plans, dimensions of the building, its uses, the number of floors, the amount and type of the heating systems and the fuel used.
Darren Bond, head of valuation services at property agent Christie + Co, said the legislation was already causing confusion.
“We still don’t know how many assessors there will be, and it is rumoured that there is a shortage of them,” he told a reporter.
“In terms of us as sales agents, there is definitely a grey area when it comes to selling pubs as to whether or not we will demand the pub seller has an EPC. But we will endeavour to help them.”
Sell and Rent Back
May
18
Where do you look for commercial loans involving the purchase of real estate?
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I’d like to purchase an apartment building. Is this considered a commercial loan and where do you go to find them and what kind of qualifications are necessary? Is it the same as getting a mortgage where you need 20%? Or is it a little different? I don’t have many liquid assets but have found a good building?
Real Estate Professionals
May
17
Finding the Perfect U.S. Commercial Property For Lease
Posted by: | CommentsConsumers in today’s market are looking for properties of all types, for many reasons. Some of the most popular spaces being sought out are Office Spaces for either rent or lease. In our faltering economy many have come to the realization that owning their own business is a must and they are seeking ways to accommodate this all too real “dream”.
On the other hand, many large businesses are also realizing that they must “downsize” in terms of their employees and locations. Many owners and managers are starting to look for commercial rental properties and office spaces for rent to lower the costs of running their businesses. Office Space is a United State comedy enterprise emerged in 1999, and was written by a notable Business man known as Mike Judge. This practice centers on individuals who are tired with their present jobs. The mission was to sympathized ordinary IT workers including those in professional levels and equally addresses various conversant topics to the working class in particular and Office workers in general.
In the hunt for the optimal office rental space, owners are turning to outside sources to help locate prime pieces of commercial property. In an effort to find the perfect location, they are enlisting help from traditional sources such as Re/Max, Coldwell Banker or traditional banks, who have excellent reputations for finding “any property for any need”. These types of traditional real estate brokerage services and banking systems have mostly unlimited resources online and offline to assist in your office space hunt. These types of services are excellent for busy owners who do not have the time to look for rental properties on their own. They can specify to the agent what type of Office Space they are looking to rent or lease, the agent then finds multiple properties for the busy owner to review and chose from, and then they can visit the property at a time that is convenient for both.
Moreover, being used for locating commercial property for lease and rent is the internet. The World Wide Web has become a massive library of “on the spot” information and has put almost any type of resource at ones fingertips. Go to any search engine and use a few keywords and VIOLA! Many results are listed and depending on what exactly you are looking for you could find office space within a few minutes. Some really useful and more popular sources on the internet are also traditional business, such as Re/Max – you can find an agent or find a rental property on your own. A few other popular sources are Loop Net, Property Line, and Realty.com. You can locate space for lease or rent in any city you wish, view pictures of the property if available, see the stats of the property and locate ways to contact the owner or party leasing the property. Commercial property and Office Space, whether for rent or lease, can be found through many resources that are readily available and highly visible.
Passive Income
May
17
International Property Sales
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The legal framework regulating international property sales is set by the Italian Law together with international treaties. When there is a conflict between Italian and International laws, the latter will prevail.Art.51 of the Italian law n. 218 (31st of May 1995) states that a real estate conveyance will be regulated by the law of the place where the property is located.
The Rome Convention binding the all EU Member States (19th of June 1980) regulates the applicable law to contractual obligations. The signatories to a contract may choose the law applicable to the whole or a part only of the contract and select the court which will have jurisdiction over disputes. By mutual agreement they may change the law applicable to the contract at any time (principle of freedom of choice).
If the parties have not made an explicit choice of applicable law, the contract is governed by the law of the country with which it is most closely connected, according to the principle of the proper law (place of habitual residence or place of central administration of the party performing the contract, principal place of business or place of business responsible for performing the contract). However, specific rules apply in the following case:
• Where the contract concerns immovable property, the law applicable by default is that of the country in which the property is situated.
As a consequence, when the property is located in Italy and the sale involves individual’s resident in Italy or in other States, the transaction will always be submitted to the legal requirements of the Italian law.
EC Regulation 44/2001 lays down rules governing the jurisdiction of the courts in civil and commercial matters. A judgment given in a Member State is to be recognised automatically, no special proceedings being necessary unless recognition is actually contested. According to this Regulation, in case of real estate transactions, the exclusive jurisdiction will belong to the Courts of the country where the property is located. As a natural consequence if the property is located in Italy the exclusive jurisdiction will belong to the Italian Courts.
You should consider yourself and your transaction to be unique. Therefore, by all means listen to, but never rely on, anecdotal or other general advice – however well intentioned it may be – given by friends or other people who already own or are in the process of buying Italian properties. The saying goes that “the devil is in the detail” and here is just one of the countless examples where this is true. Italian town and country planning regulations can vary markedly from municipality to municipality, and this is also true for also other regulations affecting Italian properties. So, what is permitted for one property may not be allowed for an identical property in the same geographical area.
At the risk of sounding self-serving, from our experience we strongly urge that no-one should attempt to buy any Italian property by relying solely on the advice of a notary or an estate agent, without having all documents checked by bilingual specialists.
Quick Property Sale
