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Archive for the ‘Real Estate Investments’ Category

Broker Chains

February 2, 2012 Leave a comment

If you are looking for a business loan, commercial real estate loan, or looking to raise equity for a commercial project, you are likely going to work with a commercial loan broker to raise the capital.  This article addresses the quandary known as the broker chain.  If a broker chain is formed to find a source for funding a project, the process is likely to be impeded by weak links in the chain.

Broker Chain

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And the Answer is…

December 27, 2011 Leave a comment

Have you applied for a commercial loan lately? Most banks are not doing commercial loans and others just wait forever to give you an answer. They don’t want to lose you as a customer and they really don’t want to fund your project.Gameshow

Commercial loan brokers are aware of the painfully long process of closing a loan for commercial real estate. The process will take several months to complete. It can be even longer for construction loans or business loans that are not tied to commercial assets. For example, HUD loans can take 18 months to fund. Recently, a borrower in Honolulu came to me to refinance an operating assisted living facility. He has been working with a local bank to refinance for 6 months and still does not have an answer.

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The Lure of Hard Money

July 29, 2011 Leave a comment

One of my favorite movies is Easy Money with Rodney Dangerfield and Joe Pesci.

The lure of easy money

Rodney’s character made a deal to give up all of his vices to inherit his mother-in-law’s fortune. It turned out to be harder than he imagined.

There is nothing “easy” about obtaining a Hard Money loan from a private lender. It is a proposition based on risk. The lender assumes the risk of repayment of a highly leveraged loan, the borrower assumes risk of paying up-front fees to someone who will not perform, and the brokers assume the risk of getting squeezed out of the deal. Hard money fees can be as high as 10 points with interest rates above 12% and upwards of 20%.

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The Big Taboo in Private Lending for Commercial Real Estate

May 16, 2011 2 comments

Happy Anniversary Andy & Monalisa Sabo

My wife, Monalisa and I just celebrated our 24th anniversary. She is my soul mate and I could never have found a better person to spend my life with. We have truly loved and respected each other all these years and are the perfect match.

The Perfect Match

By now you know that I am an Agent representing Private Lenders for Commercial Real Estate. Those of us in this business specialize in certain types of loans, based on the offerings of our Lending Groups.  One of the problems in this industry is that the lending groups are looking for the perfect match.

This article may seem self-deprecating as I try to give a realistic view of Private Lending Groups for Commercial Real Estate. Many agents contact me with loan requests that were turned down by their lender. Instead of walking away, they try to find someone who can solve their problem. We all do this because we want to help our clients. That should be a good thing, but it is frowned upon by the Lending Groups.

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Investing in Multifamily Real Estate – Where’s The Beef?

March 24, 2011 Leave a comment

Investing Multifamily Real Estate

Where’s The Beef?

I recently went to a networking meeting where a young real estate investor spent about thirty minutes talking about how investing in multifamily real estate is making him wealthier than he ever imagined. He claimed to get into the business with no cash using other people’s money (OPM). So why was he in a networking meeting trying to make connections? There’s a special place for people like that.

Is there money to be made in this area of real estate? Absolutely! To succeed you need what I like to call the 3 C’s and some B’s. Capital, Credibility, and Crystal Ball(s).

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Commercial Real Estate – Best Hedge against Inflation

March 15, 2011 1 comment

Commercial Real Estate – Best Hedge against Inflation

According to the National Real Estate Investor website, the outlook for real estate investments in 2011 is optimistic. “An improving economy combined with a thaw in the capital markets and limited new supply led to a big spike in investor confidence in the fourth quarter” nreionline.com .

Commercial Real estate investment, like investments in commodities such as gold, oil and wheat, has traditionally offered and been regarded as one of the best hedges against inflation. Which is why real estate has traditionally been included in institutional portfolios. When you combine the hedge against inflation, with a favorable risk and return profile, real estate remains an excellent investment.

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