Archive for July, 2011
Jul
21
Commercial Mortgage Rates – Get The Best Commercial Mortgage Deal!
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A commercial mortgage is a loan made using real estate as collateral to secure repayment. This is similar to a residential mortgage, except the collateral is a commercial building or other business real estate, not residential property. Moreover, these types of mortgages are usually taken by businesses instead of individual borrowers. The borrower can be a partnership, incorporated business, or limited company. Hence, assessing the creditworthiness of the business can be more complicated than is the case with residential mortgages.
Commercial mortgages and real estate loan types are available for various types of they mortgages. There are numerous types of commercial mortgages available for your business. You can choose from a wide variety of options.
Commercial mortgages can be used for the following:
Shopping centres, industrial buildings, office buildings Golf courses, resorts, hotels, parking garages, car washes Construction loans, ground leases, seconds, wraparounds, etc.
Some of the commercial mortgages are non-recourse. This means that in the event of default in repayment, the creditor can only seize the collateral, but has no further claim against the borrower for any remaining deficiency. Taking out a commercial mortgage is one way of maximising your business finance. Property can be a significant cost for many businesses. Hence, it is important to manage that investment wisely. You can get the best rate of interest on commercial mortgages.
The property pledged can be anything from a home, which can be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. All loans are subject to status. Your permission will be sought to carry out credit check on you and your business. If you cannot afford to repay a certain amount, it is suggested you don’t borrow the amount.
These types of loans are available to businesses who wish to purchase property, whether it is to expand, purchase a building connected to the business or simply to invest. These loans are also available with preferential rates as compared to other types of loans. Various lenders will have different criteria, based on a range of factors from personal credit history to whether the business itself is stable and in profit. You can get the best commercial mortgage rates from various lenders. It is not difficult to avail a commercial mortgage loan. The lenders can also provide guidance on the suitable types of commercial mortgage loan.
Sell and Rent Back
Jul
20
The Pros And Cons Of Private Property Sales
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A small number of people are bypassing estate agents and taking on the job of selling their home themselves.
It is still a small number – some people estimate that nine out of ten homes sold in the UK are still handled by estate agents.
So is putting on a private property sale something you should look at, or should you continue to place your trust in a professional agent?
We examine the pros and cons of doing a private property deal.
The main advantage is obvious: you save on estate agents’ fees. These are normally a percentage of the sale price that is taken by the agent when the house sells.
You can also take full control of the process of selling. You don’t have to wait to see how your house is being marketed or wonder how inquiries are going. It’s all down to you when you’re the one doing the selling.
It’s also possible that by handling the property yourself, you can speed up the process, as there will be fewer people involved.
So those are the advantages, and the main one it seems is saving the commission. But if you examine what an agent does to actually earn that fee, you realize the expertise they bring to your private property sale.
First of all, an estate agent is there to value your property. It’s not unusual for people to get three or four valuations from different agents to assess how much they will get for their home on the open market.
Agents base valuations on how much other houses in the area have sold for, taking into account the differences on your property.
It’s not always sensible just to plump for the highest quote, and an experienced agent will tell you why. If you overprice your house you may find inquiries to be sluggish – the market soon spots when the price is wrong. And many agents know that once you’ve set a price that’s too high, even dropping it won’t attract as many potential buyers as getting the price right in the first place.
Having a good agent with strong local knowledge will stop you making a pricing mistake.
An agent will also know how to market a property efficiently and cost-effectively. It’s something they do day in, day out. Good agents have the ability to get houses onto powerful online property portals with huge levels of traffic. This is good for you as more website traffic should turn into inquiries.
There are plenty of private property websites, but few can rival the main property websites for the number and variety of homes.
Offline, the power of an agent’s High Street shop window has yet to diminish. Displaying properties in the window is a strong source of leads for agents. We all like to browse properties for sale now and again, and a shopping trip is a convenient time to do it.
Plus think about people who are planning to move to an area they don’t know. After looking for houses on the major property portals, they will visit the area and look round the agents’ shops to find property. This is a source of potential buyers you’d struggle to tap into on your own.
Another thing an agent does that no private property site can do is find potential buyers who are ready to move straight away. If an agent has sold a property similar to yours, they may have had 15 inquiries – meaning they already know 14 people who are still looking for a house!
Of course your agent will also handle cold inquiries and qualify people before bringing them to see your house. When you’re doing the sale yourself, you’ll have to sort out the time wasters from the genuine buyers.
Finally, when an offer is made, the agent will continue to earn their fee by acting as the middleman between you and the buyer. Many agents are trained in negotiating, and as they are not emotionally involved, can help to ensure you get the highest price. When you’re selling it yourself, the temptation is there to take the first offer and run.
Repossession
Jul
18
My business failed, and I do not have the 36K that I am being asked to pay for the remaining 2 years left on the lease. If I file for bankruptcy, will I still be responsible for the remaining lease? Or is there another way for me not to pay the remaining 2 years since I know that the business will not succeed. Any help will be appreciated. By the way, I’m in California. Thanks.
Quick House Sale
Jul
17
Commercial Mortgage Refinancing
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There are many pitfalls that can eliminate or create problems on a commercial mortgage refinance. Whether or not your particular situation will qualify, depends on several factors. Understanding your potential loans strengths and weaknesses will save you time and ensure your best chance of a successful commercial refinance. Below are some basic questions and concepts to keep in mind regarding your commercial mortgage refinance.
Commercial Mortgage Refinancing – Ownership
First, how long have you owned the subject property? Has it been less than 12 months? The lender will use the purchase price plus any documentable improvements you’ve put into the property – not the appraised value. Many borrowers are often surprised by this, and this rule is getting more and more prevalent as the credit crisis continues. It’s often referred to as a seasoning issue.
For example, if you bought the subject property 9 months ago, and put down 20%, you will not have sufficent equity, even if you’re convinced you “stole” the property. The banks will look at your loan request at 80% and most will only consider commercial mortgage refinances at 75% loan to value or less.
Commercial Mortgage Refinance – Value
Related to above, value or more specifically to commercial mortgage refinancing, loan to value is becoming more and more important. Obviously most banks have increased their loan to value standards. For example most banks wouldn’t go beyond 80% -75% on a commercial mortgage refinance a year ago. Now 65% – 75% is the norm. For example if you purchased a property 5 years ago with 85% financing and now you can only get 70% financing on your commercial refinance AND the value has decreased, you’ve got a problem.
In addition, the problem is dynamic in that commercial real estate values are tied to financing. For example the debt coverage ratio (which is a measure of the properties/business cash flow) has a direct impact on the level of debt that can be placed on the property. Most buyers for example (on a purchase) are only interested in putting 20 -25% cash into a property as their down payment. If they have to put more into the deal, just so the property cash flows, many buyers will just come to the conclusion the property is overpriced. So the seller will have to drop the price in order for buyers to be interested and in order to get financing.
If the current owner has a 30 year amortization schedule, and the buyer can only find 20 year financing, there will be a cash flow issue and the only way to overcome this is by 1. The buyer brings in a higher down payment or 2. The seller reduces the price. This sale will be registered with appraisal companies and have an impact on the general commercial real estate values in the properties city.
Commercial Mortgage Refinance, Current terms
What are your current mortgage terms? Are you refinancing because you want a lower rate? Longer amortization and or fixed period? Want to pull cash out? Or do you have a ballooning loan? One of the biggest questions to ask yourself is, “what are my prepayment penalty?” This clause can kill your deal.
Prepayments come in a couple of different forms. Some are fixed or declining but all are tied by a percentage to the existing loan balance for a certain amount of years. For example a 5% flat, 5 year prepayment is common. Another example is a 5% declining. Meaning 5% in the first year, 4% in the second years… down to zero.
Lockouts are another issue. They are a form of prepayment penalties but are normally harsher. For example on a 3 year lock out you would owe the lender 3 years worth of interest if you were to sell/refinance the property. Which often, adds up to hundreds of thousands of dollars or more depending on the loan amount.
Commercial Mortgage Refinancing, Property Charteristic
What type of commercial property are you refinancing? Different building types get of vastly different terms. 75% loan to value on a restaurant refinance will not fund, while a 75% loan top value on an office building will.
If your business occupies some of the space, what percentage? Is it more than 25%? Is it more than 50%? Many lenders will consider it an owner occupied deal if you’re in more than 25%. Virtually all lenders consider it owner occupied if your business occupies more than 51% of the subject building, which will often give you better terms.
Despite the credit crisis commercial mortgage refinancing is still viable. Take your time and work with experienced professional to make sure you get the best terms available.
Sell and Rent Back
Jul
15
Commercial Mortgage. $400,000.00 How much interest today? My banker is yanking my chain?
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Jul
14
Australian Commercial Properties
Posted by: | CommentsAustralia offers profitable opportunities for city investment as well as Australia commercial properties for sale in current property hotspots in coastal resorts such as those in Western Australia and North Queensland.
Intelligent investors are making the most of today’s real estate market in Australia, while opportunities still last, for land, buy-to-let and pure investment options and for >">Australia commercial properties.
There is a strong supply pipeline with a significant element of speculative development, restrained rental growth in 2007, with rents remaining relatively static in the western regions.
According to Australasian Industrial Property Guide Winter 2008, the North and South were the only two regions to experience notable rental growth. In 2007, 776,118m2 of industrial space was leased throughout Sydney industrial markets across 201 reported transactions. The Outer West region dominated leasing activity, accounting for 47% of recorded lease transactions.
Record supply levels were recorded in 2007, with 921,221m2 entering the Sydney industrial market, up 42% from 2006. However, 2008 is set to exceed this record by a substantial 42%, and break the 1 million mark with 1.31 million sqm due for completion. The Outer West will continue to lead the charge, housing 52% of this new stock.
Construction of warehousing and distribution centres continues to rise driven by strong demand for imports, accounting for 64% of new stock to enter the market in 2008 (Australasian Industrial Property Guide Winter 2008).
Australia commercial properties are wide ranging due to the sheer magnitude of the country. Buyers of Australia commercial properties are looking for a buoyant market in which to invest and are looking at various areas where the local economy is growing and the job market is strong, bringing with it a healthy supply of tenants for rentals as well as home purchasers.
Passive Income
Jul
13
Dubai’s Finest Commercial Properties
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Dubai has become an international hub for commercial property and the reason behind this is the fact that Dubai’s real estate laws allow for the freehold ownership of property in Dubai by any foreigner. The presence of a huge number of multinational companies in Dubai has considerably increased the demand for commercial properties and which in turn has increased both the property prices and monthly rentals.
Following is the list of some of the most promising commercial properties in and around Dubai:
Haz Tower:
A spectacular 19-storey office tower, working here is intended for people who seek to be associated with a vibrant community of like-minded individuals. From an incredible architectural style to the breathtaking views outside, Haz Tower provides a fitting ambience for multinationals seeking to establish base in this region.
Haz Tower at Business Bay has offices designed to ensure you stay ahead of competition. A perfect work environment that’s second to none, equipped with the most sophisticated technology and modern amenities like swipe access, high speed internet, 24-hr security & security cameras, indoor/outdoor leisure facilities, swimming pool, covered walkway, café, shopping arcade, underground car parking, landscaped roof garden with outdoor café and much more.
XL Tower:
A master development, Business Bay is the new emerging freehold business, commercial and residential district next to Downtown Dubai (Burj Dubai), extending up to a new creek and all the way to Dubai’s coast. XL Towers is a modern elegance designed for commercial use where professionals can enjoy their own space, in every sense of the world. Airy lobby, spacious elevators, expansively planned workstations etc.
High-profile corporate clients and high net-worth footfalls make this one of the most sought after addresses. The XL Tower offers you a choice of retail units to cash in on this ready business opportunity. The building gives over 13,000 sq.ft of retail space at ground level including shopping arcade, covered walkway, and parking for staff and customers.
XL Tower has it all. The building is equipped with parking on 5 levels- 3 podium & 2 basements with 24-hr security & security cameras, swipe access, Hi-speed internet, multi-purpose meeting room, business lounge plus all the things you’d ever need is really an office to own.
Capital Bay:
Capital Bay comprises of two spectacular 19-storey office towers, right in the heart of bustling Business Bay. Designed to complement each other, Capital Bay is also the ideal location for those who enjoy being in the midst of all the action. It offers a well-designed workplace with comfortable indoor environment as well as innovative state-of-the-art facilities.
Damac Properties are the largest private master developers in the Middle East offering the most luxurious and exclusive residential and commercial Dubai Real Estate, Dubai Freehold Property and Dubai Investment Property for sale.
Sell and Rent Back
Jul
12
is a commercial lease the same as a residential lease?
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does a property owner have to follow the same due process of eviction on a commercial building as the do on a residential one. must they serve you with papers of intent to evict
Quick Property Sale
Jul
11
Getting The Best Commercial Mortgage Rate
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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.
Sell and Rent Back
Jul
10
Commercial vs Residential Mortgages for multi family properties under 5 units?
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How do you differentiate between residential and commercial mortgages. I am looking to purchase a two-family (2 unit) building for investment purposes. I intend to put the deed in an LLC and rent out both apartments.
Since it is a residential property under 5 units, I am unsure whether it is qualifies as a commercial or residential mortgage.
Thanks for any input you can provide.
Real Estate Professionals
