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Pros Cons 1. Getting the Rent on Time 1. In Bed with the Government 2. Lowest Vacancy Rates 2. Annual Inspections Costly 3. Unit Must be Maintained  3. 1st Rent Payment Delayed 4. Higher Rents  4. Damage Payments Delayed 5. Pre-Screened Tenants  5. No Security Deposit 6. Unit Inspected – Declared Safe 6. Tenants Need Mothering By Terry Painter/Mortgage Banker, Author of The Encyclopedia of...
By Terry Painter/ Mortgage Banker Member of Forbes Real Estate Council   Author of "Encyclopedia of Commercial Real Estate Advice" – Released May 2020   What is flex space? Flex space is industrial space that starts with non-air conditioned warehouse space in the back and an office or showroom in the front. You have the flexibility to “flex” with putting small or larger spaces into the building...
By Terry Painter, Mortgage Banker Member of the Forbes Real Estate Council   What is a master lease? What are the benefits and how is it used? A Master Lease as it pertains to commercial real estate is a financial instrument that allows a buyer/lessee to lease the property with an option to purchase it at a later date.  The lessee has equitable title, not legal title which allows the lessee...
By Terry Painter, Mortgage Banker Member of the Forbes Real Estate Council   First, let’s define what a capital stack is. Pertaining to commercial real estate, a capital stack refers to the differing layers of money resources that are involved in buying and improving a project having to do with real estate. The differing layers have to do with the amount of risk in the investment end of the...
By Terry Painter, Mortgage Banker Member of the Forbes Real Estate Council   What is the difference between a non-recourse loan and a recourse loan, and which is best for you?  A Non-Recourse Loan is made to a single asset ownership entity like an LLC. If the property fails, the lenders only recourse is to take the property back.  A Recourse Loan is made to an individual(s) required to sign a...
With a non-recourse loan, no personal guarantees are required. In the case of a default, the lender can only take possession of the subject property. Thus, the borrower’s personal assets are not at risk.   Why You Should Join the Non-Recourse Loan Club? Congratulations! If you are reading this and wanting to learn more about non-recourse financing, then you have the opportunity to join one of the...
A rent concession is a discount in the rent used by property management companies to influence prospective tenants to lease a rental property when rental unit supply is larger than rental unit demand. In your neck of the woods, rent concessions are minimal due less than 5 percent vacancy. To get absorption going quickly, some larger, just built apartment complexes are offering a half month’s...
THE SHOCKING TRUTH ABOUT CAP RATE “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 was right on. He had gotten the blue prints to build his new 36 unit multifamily complex from his brother-in-law who had built and sold the exact same design last year....
Cash on Cash Return is the percentage of annual income your cash investment earns on a real estate investment after debt service. When it comes to investing, the ratio of the cash-on-cash return is defined as the before tax annual cash flow or net operating income divided by the whole amount of money invested, put as a percentage. Don’t Fall Into the Cash on Cash Return Trap You might as well...

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