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Commercial Loan Blog

THE SHOCKING TRUTH ABOUT CAP RATE

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

Author: The Encyclopedia of Commercial Real Estate Advice – a WILEY book – OUT NOW!

 

Cap Rate stands for capitalization rate and is used in commercial property valuations. Cap Rate is simply the net operating income (income minus expenses) divided by the purchase price or appraised value.

“There must be some mistake” Rick, my client said to me. “How can my property only be worth $5.25 Million when the exact same property 4 miles away sold for $5.6 million last year.” In fact, he... Read More

DSCR: Debt Service Coverage Ratio

May 28, 2022

DSCR - most important factor for a prospective commercial lender to determine

Why is a DSCR - Debt Service Coverage Ratio needed?

DSCR stands for Debt Service Coverage Ratio and is the most important factor for a commercial lender to analyze the risk level of your business or investment property loan.  It is the DSCR that tells the lender that the net income  is more than adequate to support the loan payments. You... Read More

Cap Rate Calculator

 

 

Use our Cap Rate Calculator to check your property

 

 

 

DON’T FALL INTO THE CAP RATE TRAP

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

“Are you kidding me?” my client asked.  “You’re telling me that the property... Read More

Effective Gross Income - What is it?

February 24, 2018

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

Effective Gross Income is much simpler than it sounds, but also a lot more important than it may sound. It is the actual—and I mean actual—amount of money an investment real estate property has grossed in... Read More

Recourse Loan Definition

February 19, 2018

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

Author: The Encyclopedia of Commercial Real Estate Advice – a WILEY book – OUT NOW!

 

So you're applying for a commercial real estate loan and you are told "this is a recourse loan." What is... Read More

Commercial Loans: How Do They Differ From Residential Loans?

February 15, 2018

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

Commercial real estate loans differ in so many ways from residential loans. It is a different world, or you could say "a different planet.” Here are some differences:

1. On a... Read More

How do you Finance an Apartment/Multifamily Building?

In Short, it takes these 5 components to finance an Apartment Building: 

1. A Great Property – that has 2 or more of these upsides: a good location, under market rents, already cash flows the loan, or rents can be increased with inexpensive value adds.
2. The Property Value and Income Supports the Loan
3. The Property is in Good Condition
4. The Borrower is Qualified – has good credit, enough cash, and enough net-worth
5. The Borrower has the Best Professionals

 

... Read More

Non-Recourse Loan Definition

December 29, 2017

So you're applying for a commercial real estate loan and you are told "this is a Recourse Loan." What is recourse?  Is this good or bad?  Does this matter?  Do you have a choice? Yes, it does matter. Often borrowers do not realize when they apply for an investment property or business loan, that if they default on the loan they can lose more than the real estate or equipment that is collateralizing the financing.... Read More

REIT - What is it?

December 15, 2017

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

At Apartment Loan Store, some of our funds for permanent and bridge loans for financing apartment buildings come from REITS. These loans have great rates and reasonable terms with one to 10 year fixed rates... Read More

Debt Service Ratio - What is it?

December 12, 2017

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

What is debt service ratio (DSR)? Well, let us start out by saying that although Debt Service Ratio is used more than half of the time by bankers, mortgage brokers and realtors, the correct term is Debt Service... Read More

Yield Maintenance - What is it?

December 6, 2017

 

By Terry Painter, Mortgage Banker

Member of the Forbes Real Estate Council

Author: The Encyclopedia of Commercial Real Estate Advice – a WILEY book – OUT NOW!

 

 

What is Yield Maintenance? Why is it so difficult to get a straight answer on this?

... Read More

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