Archive for June, 2011
Jun
30
Commercial Mortgage Rates
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Commercial mortgage rates are essentially the combination an index and the margin that the bank charges. Borrowers should be careful on how the term sheets are written, in regards to quoted rates. Below are a few suggestions on how you can protect yourself against bait and switch moves that some lenders still use regarding commercila mortgage rates.
First of all, an indexes commonly used in the commercial mortgage industry includes Prime and the 10 Year Treasury. Less well known indexes such as the 5 Year Swap or the FHLB indexes are becoming more popular.
The margin is where the bank makes its spread. It is a very complicated process for banks to figure out what to charge as they basically have to predict the future and take into account the probability of default, adequately cover their costs, and of course try to make a profit. At the same time the industry is highly competitive and they have to price out their loans “skinny” enough to be able to bring in new borrowers.
The combination of the margin and index is commonly referred to as the Effective Rate. It’s what the borrower will use to calculate their payments and what they normally think of when they ask for rate quotes. For example if a bank quoted you Prime plus 1% your Effective Rate would be 6% as prime right now is at 5%.
The main suggestion regarding not having your rate bumped up on you while your loan is in process is to have both the margin and index clearly written on the term sheet. The opposite is to just have the effective rate quoted with no mention as to either the margin or the index. If either or both go down for example, you would not know, and would not know that your rate should be lower. The lender could simply keep your rate the same and you would have no recourse or really any way of knowing.
A worse scenario would be to have your rate increase during process. Rate locks are rare in the commercial mortgage industry so it is possible for the funding bank to call you with the bad news that your rate will be higher. In fact, as of this writing 5/8/8, it’s not that uncommon at all, as banks are constantly rethinking what they can and what they want to lend on – due to the credit crisis. And many will have the attitude of, take it or leave it. More to the point though if the margin and index are not clearly known the lender could mention any margin or index when challenge to “cover” his story.
Get it in writing or assume they will try the bait and switch on your commercial loan rate.
Sell and Rent Back
Jun
29
commercial property – new shop lease help – urgent?
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Hi all, I’m looking into leasing a commercial property and i’m a new business. I want to try and get the best deal possible and wondered what the industry standard is for negotiating? I’ve been informed that I should ask for a rent free period, and also as i’m a new business i should also ask for either a rolling 6 month contract or a get out clause after 12 months with a min 1 month notice. – Any help or advice you can give me will really help, I’ve viewed the properties but want to know how to procede on making an offer as i know they should be grateful of someone taking the shop on at the moment! cheers
Quick House Sale
Jun
28
Uk insurers with commercial mortgages?
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Which UK insurer has the larges book of commercial mortgages, and how much is it in £?
Sell and Rent Back
Jun
27
UK Property Sale
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1. Take advantage of a buyers’ market. With the UK property market slowing down, the current climate brings good news for those looking for investment property for sale. According to Hometrack, agents are seeing the return of a buyers’ market with sales being achieved at 94.3% of the asking price.
2. Buy off-plan. Buying investment property for sale off plan can be a great way of getting quick returns on your investment. There are many developers who will offer significant savings on units in new developments purchased before the build is complete. Current examples include The Cube and The Mews developments in Manchester, both marketed through BuyProperty4Less.com. The apartments for sale range in price from £116,450 to £152,150 and are available with a 15% discount for off-plan purchasers.
3. Look for areas of economic growth and regeneration. In 2008, property forecasters are expecting Scotland to experience the UK’s greatest property price rises due to economic prosperity from high oil prices. The good news for investors is that Scotland is currently one of the most affordable places in the UK with investment property for sale at prices almost one-third less than the national average. With its great transport links and history, Aberdeen is full of potential for investors. Gavin Bain & Co currently holds a wide range of properties in the area from £68,500 to £450,000, including a two-bedroom apartment in Candlemakers Lane for £165,000. Some forecasters also highlight Northern Ireland as a good prospect for property investors. Northern Ireland has been enjoying a period of considerable investment and regeneration and there is a wide range of investment property for sale. Ireland’s property finder, PropertyNews.com, is currently marketing over 800 properties with something to suit all budgets. Among these are several 5-bedroom character properties in the university area of Belfast for around £350,000 each.
4. Areas of high rental accommodation need. Manchester, Liverpool and Leeds are all enjoying a period of regeneration with many new property developments and business investment. All three cities have good transport links and thriving business and university populations with a great need for rental accommodation. In the fashionable Ancoats area of Manchester, the Ellesmere Property Group is offering 17% discounts to off-plan purchasers of apartments in the cutting-edge Ingenta development. Within the development there are 30 properties for sale with gross prices starting at £181,260. In Liverpool, investment property for sale includes a number of trendy one-bedroom warehouse flats in Cornwallis Street L1, marketed from £120,000 to £140,000 on the NorthwoodUK.com website. In Leeds, Your Move is currently listing a five-bedroom terrace for £149,995 in the Holbeck area, which is the latest area of focus for reinvigoration. Prices in this area are expected to see dramatic price increases over the next five years.
5. Go to auction. According to the Sunday Times, “90% of cheap property is sold at auctions”. In the current UK property market, houses that are in need of modernisation are being snapped up quicker than those in pristine condition. Due to the growing popularity of auctions there are now companies that will keep you up to date with the latest auctions for a small subscription fee. These include IPDS whose website, auctionpropertyforsale.co.uk, also has handy step-by-step guides to buying investment property for sale through auctions. Several other websites that list auctions can be found on LandlordZone.co.uk.
This summary shows you just a taste of investment property for sale in the UK right now. Using careful research and good timing, there are still some great investments to be found.
Sell and Rent Back
Jun
26
Credit crunch commercial property successes
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The UK recession isn’t easing. Unemployment has officially overshot the two million mark, redundancies have reached a record high and the value of the pound is plummeting fast.
Despite these gloomy statistics some industries are literally thriving as a direct result of the adverse economic conditions. The budget sector in particular is enjoying record growth with companies such as Travelodge planning massive commercial property expansion. The budget hotel chain has exchanged on twelve new hotels recently and is expanding into prime locations that pre recession would have been unavailable to them.
Poundland, Aldi, Lidl and Cost Cutter are also amongst the credit crunch winners. Consumers are naturally looking for ways to make their lowering disposable income go further and are turning to budget providers. Aldi in particular are experiencing record growth and have extensive commercial property plans in place, with the aim to open hundreds of new stores throughout the UK over the next five years.
The recession has led many people to make lifestyle changes. Consumers are still looking for the same end result for example, a night off the cooking, but are now going for a cheaper alternative such as a takeaway pizza rather than a fancy meal out. Fast food takeaway providers are thriving as people opt to have a cosy night in with a takeaway over a night on the town. McDonalds alone have plans to open ten new stores in the UK in a big commercial property deal and DVD rental providers and board game suppliers are seeing unprecedented sales increases. At a time when fifty seven pubs are closing every month businesses such as DVD rental company The Movie Booth are looking to cash in on the new staying in culture. Introducing options such as the “great night in” package to their DVD rental range.
In another behavioural change consumers are helping to boost the sales of cheese and other sandwich fillings as they look to save up to £5 a day by preparing their own packed lunches, rather than buying prepared shop brought sandwiches.
Businesses that are in the commercial property industry are looking to cash in on these credit crunch success stories.
Repossession
Jun
25
Sell And Rent Back: An Alternative To Repossession
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One scenario today is a great worry for every home owner; regardless of how healthy that home owner was, personally and financially, when buying their home. That worry is this: “Over the next thirty years, will I be able to keep my home if I become sick? What if I have an accident, or lose my job? What if my mortgage goes into arrears? Will my home be subject to repossession?”
Unfortunately, for too many people, that worry becomes a reality, and the end result is that a family loses a home they love. The good news is that there is an alternative, and it is an alternative which allows the family to stay put.
Circumstances like these can happen to anyone, and when a home has no income coming in, it’s easy to fall behind on mortgage. Once one falls behind in mortgage payments, it can become difficult or even impossible to catch up. At that point repossession is a strong possibility, and the home can be lost forever.
The first reaction of many people is to deny there’s any trouble. It’s very tempting to “bury one’s head in the sand.” The problem with this approach is that when one looks up, the problems of mortgage arrears not only haven’t gone away, they’ve gotten worse! At this point the next knock on the door could possibly be bailiffs with an eviction order.
While the homeowner’s options may be limited, there are options, and some of these options will allow the home owner to stay in the home, with a goal of getting ownership back. For example, there are specialist companies which can pay cash for the home, then rent the home back to the homeowner for a monthly payment which is less than the current mortgage.
The best aspect of the sell and buy back option is that when the homeowner’s situation improves, there is the opportunity to buy back the property. The price at which the home owner would be able to buy back the house is set at the time the home owner sells, and that price won’t change regardless as to what happens in the economy. The rent and buy back company will usually be able to offer a verbal quote on a purchase price for the house in as little as 24 hours. If the homeowner is interested at this point the next step would be a valuation of the home and the extension of a written quotation on the purchase price. The rent and buy back company will be able to give the homeowner directions on how to proceed with the sale, as well as how to stop any court proceedings that have already begun.
Mortgage arrears can be devastating, but they can be avoided. It costs nothing to apply for a sell and rent back program, and such a program can make the difference between staying in a home or being forced out, between continuing to work toward owning the home outright or being forced to start over.
Passive Income
Jun
24
I am a real estate broker who wants to open a mortgage division. Any Suggestions?
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I am a fully llicensed commercial real estate broker, who wishes to open up a mortgage brokerage division or new company… How do I begin?
Repossession
Jun
23
serving alchol would the landlord most likly seek an injunctive relief, a condemnation, an eviction or an artistic license?
Quick House Sale
Jun
22
Big City Commercial Development: Houston Triple Net Lease Property For Sale
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Houston has it all, When considering commercial development. Houston is the fourth largest city in the nation. With a sprawling 8,778 miles and added technological advancement in transportation there are no limits. A prime choice for enterprise is commercial development.
Houston suburban growth enhances the already expanded resources. Major growth in these areas contribute to the infrastructure within the city limits as transportation improvements allow commuters to work within the city and live in suburban or rural areas outside the city. Expanded to these suburb areas as Sugar Land, Baytown, Pearland, Kingwood, Woodlands, Clear Lake and Cypress are commercial development.
Houston has the tenth largest port in the world, the Port of Houston opens transport of international trade. Over 5,000 energy related firms benefit from the ports unlimited ability in the import and exporting of goods. Import and export of oil and oil related products keeps Houston globally advanced in the oil industry. Houston is also the Energy Capital of the world.
When considering commercial development, Houston has the largest medical center in the world. It is without question “the best” in the world. Medical advancements and bio medical research open the doors for medical advancements that no other city in the world can offer.
Benefiting from the unending growth within this metropolitan is the top developer. In Texas, the availability of commercial property for sale offers growth for both future sites and established developments.
With its urban sprawl, Houston has an explosion of residential and commercial development properties in triple net leases for sale. The urban sprawl and no zoning have made commercial property available in Houston competitive.
For the shopping center developer, Houston properties are notably attractive within the loop as well as suburban master planned communities. Improved freeway systems, mass transit, metro rail and continued planning are making both commercial and resident areas easily accessible anywhere in the Houston metropolitan area.
Newly constructed commercial development complexes and office warehouses are in no limit. For commercial investors property in Houston can not be overlooked. With population increases, industrial growth and being a center hub for world trade, Houston is a prime consideration for commercial development.
There are few that can compete with the trade and diversity of products both manufactured and imported that come through Houston. Houston is one city that brings it all together, networking and business partnerships and lower risk investment opportunities. Houston is young and energetic with an entrepreneurial, business minded spirit.
Quick Property Sale
Jun
21
Anyone lease space in a commercial kitchen? How much have to pay?
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I want to bake breads and sell them but don’t have a commercial kitchen. I’ve heard some people have leased space in commercial kitchens but haven’t any idea what I should offer to pay or may be expected to pay
Passive Income
