Category Real Estate Finance

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Warning: Owner-Occupied Properties aren’t Treated the Same with Typical Commercial Conventional Loan…

Source: Domu Chicago Apartment Site

Source: Domu Chicago Apartment Site

Back in my college years I always pondered about the pizzeria retail store in a small building and the other building right next to it with no retail store, in downtown Amherst, Massachusetts. A few things were always noticeable at the building with the pizzeria such as: high foot traffic, more parked vehicles during weekend, more students around, etc. The ambience was always different. On a raining Friday, while waiting for a bus, I went inside and noticed a tall man who was rarely there. We dialogued for 20 minutes about pizza dough, toppings, and business investing. Surprisingly, he was the owner of the pizzeria and the building, a 5- stories.

This was my first conversation about how owner-occupied properties financing were very different than non-own...

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Inside the Ring: Bridge Lending and Hard Money Lending Take Jabs and Uppercuts – Who Wins?

There is something very interesting about a boxing match when two fighters with similar skill sets are entertaining a vast audience. It is rare to see one opponent win by technical knockout (TKO). The match is typically won in higher round by options and points differential or a draw. Certainly, there are numerous pros and cons, strengths and weaknesses for both boxers, nonetheless there is another crucial thing both fighting entertainers provide the crowd with – Finish Result. Bridge and hard money lending are similar to two boxers in the ring. Now, before I expand on this small cautionary tale, you must understand that this is not a history about any boxing legends or the types of lending that will be discussed either...

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Default: The Kryptonite of Lending & How Underwriting, Credit Analysis, Risks Management are Used to Avoid It – Borrower Be Aware!!!

Every lending institution has a lending process to evaluate a sponsor and its ability to lend. This process can be broken down into four categories: (i) preliminary analysis, (ii) repayment sources, (iii) packaging the loan, and (iv) closing the loan. Under each category there are many other processes that occur from policies, regulatory framework, legal, compliance, examination, asset management, servicing, risks management, etc. Interestingly, with all these critical aspects that are utilized to provide loans to a borrower, the three most vital elements are: underwriting, credit analysis and risk management. The above mentioned are the holy grail of lending institutions, whether it’s a traditional bank or non-banking alternative financing company...

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Indeed: Five Critical Things to Know About Building Business Relationships That Last…

Building strong relationships in business is paramount to future success for the parties involved. In this short piece I will not lecture the reader about real estate business principles or how to build business relationship. Frankly, I am presenting five things many great leaders I have had the opportunity to learn from have used in real estate and business ventures to not only succeed, but also build tremendous relationship that last.

#1 – Let go of Judgements

Being judgmental can be an inescapable plague. The most successful business men and women have set their judgements aside to truly understand the characters of their peers, colleagues, business partners instead – thereby solidifying business relationships that yield profitable outcomes for both sides.

#2 – Let go of Fear

It ...

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Concerning: Five Big Pitfalls Small Business Owners Fall Into and How to Circumvent Them…

 Source: EzyLearn Training Courses

Source: EzyLearn Training Courses

Usually at certain events that particularly catered to real estate and small businesses I often will hear “The entrepreneur bug biting a few.”  By this, I am referring to a select few individuals who wake up one day and decide to start a small business without a business plan or lack thereof any plan whatsoever.  Now being an entrepreneur and small business owner can significantly impact local economies by creating jobs, empowering young adults at learning other crafts, help a community and much more...

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“5 Essential Networking Rules to Utilize at Any Business Event to Be More Successful”

Source: www.StewartHotelnyc.com

MBAofNY, the Mortgage Bankers Association of New York, Inc. hosted their third annual Real Estate Strategic Lending Summit on June 15th 2017 at the Stewart Hotel in Manhattan. Some of the topics covered in no particular order were: alternative lending involving shadow banking, current lending regulatory landscape, market trends, cybersecurity, marketing to millennials, the state of CMBS market, construction lending and risks, and much more. This year the event featured two great keynote speakers (1) Adam Schefter, sports writer, television analyst and NFL insider for ESPN and (2) Clark Gillies, a former professional ice hockey player for the New York Islander with four championships...

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“Overlooked – The Misconception of Capitalization Rate as a Metric When Seeking Financing”

 Source: Google/NCREIF

        Source: Google/NCREIF

In commercial real estate financing there are 3 important metrics that are critical to lenders when they decide to make a decision to fund an asset. In no particular order these metrics are: Debt Service Coverage Ratio (DSCR), Debt Yield (DY) and Loan-to-Value (LTV) – see metrics. Although there are many other metrics when valuating and financing real estate investment, the ones recently mentioned are the holy grail of managing inherent and unknown risks with debt financing. This piece of short article will not be a thesis about these aforementioned terms but rather a short overview to bring more light to  another metric, Capitalization Rate (Cap Rate) that can be sometime overlooked in the decision making process when financing properties.

In real e...

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Incredible: The Giant Retailer That Keeps Marching On, Financing Back Up!!!

Source: Google Images

Source: Google Images

There is a giant in the retail world that continues to be a trailblazer. In fact, this giant is the reason why many other retailers have had to change their business paradigm over the last 8 years. This behemoth is not only on the playing field causing disruption, it also exists to demolish any opponent that dares to combat against its structure and oppose its conquering agenda. As societies become more technologically enthrall in how we acquire goods, products, travel, and shop for every day supplies that are needed, this colossal entity is becoming the people’s choice. If you have not guessed correctly which retailer yet, then let me explain further...

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Borrowers: 3 Crucial Conversational Points That Will Have Lenders Salivating Over You.

It is not a unanimity anymore about what the Federal Funds Rate experts have in store. In 2016 the conversation between many economists and other pundits was mainly about when a hike in rate was going to take place, and in the last quarter it inevitably happened. In an article on my blog titled, “The Most Important Commercial Real Estate Trends in Review 2016 and Expectation for 2017” there is a section about why rates will continue to rise in 2017. For a borrower, the consideration of how moderate rate increase may impact a transaction that is already in the works is essential.  In fact, it is more important for your long term business strategies and real estate assets.

Last week I reiterated on my twitter account at www.twitter.com/refivest   about the 25 basis points that was initi...

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President‘s Day: A Strong Correlation With Real Estate Finance and Investment

Monday February 20th 2017 is the 45th anniversary of President’s day, but it should rather be the 58th. Here is why: The United States finally declared its independence from the Kingdom of Great Britain on July 4th, 1776. However, George Washington did not hold office until April 30th, 1789. Many men who presided over the nation before Washington are lost in history, and one of those men was John Hanson. Hanson was actually the first President of the United States when the country was truly formed on March 1st, 1781 with the adoption of the Articles of Confederation. Due to each state holding too much power a new doctrine of laws needed to replace the Articles of Confederation, hence, the birth of the Constitution.  George Washington became the first U...

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