Category Borrowers

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Facts: Some Small Business Owners Should Consider A Line of Credit in Case of a Recession.

Recently Bank of America (BOA) conducted a survey that small business owners should prepare for a recession. The behemoth institution claimed that, “More than 2/3rd of business owners have taken steps for an economic downturn.” Forecasting is extremely important for financial markets and no one can truly predict what Mr. Market is going to do. Of course, finance pundits, companies or banks that have been in existence for more than a quarter of century can be a slight exception – why? Historically, having survived other economic downturn and recessions, these companies that lived thru the darkness of it and survived financially can be a resource for future outcomes. The key word here is “resource” not “certainty...

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Temporarily: 35 Days to Reopen and How the Big Four Agencies Are Coping!

There are sectors and field of endeavors where politics and government play a major role but not as significant as some others. For real estate, on both the residential and commercial side, not only the markets, and overall economy play a huge role, government and the political mainstream have a significant impact on metrics, performance, results and livelihood. This short article will briefly cover some of the short-term impacts and what to look forward to about four government agencies in the real estate sector.

A couple of weeks ago, January the 13th 2019, I alluded in a twitter post, www.twitter.com/refivest, that the government shutdown was poised to lure its tail longer if the major parties involved in making decisions could not come to a solvable compromising agreement...

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Panicking or Relaxing: Volatility in The Markets Lately!

          Source: iExpats Investing

Source: iExpats Investing

While the country was celebrating Halloween in many U.S states, and some other countries, the economy should be center stage for all the major markets, especially with all the political and geopolitical events that have captured the attention of investors, owners, small businesses and borrowers alike since the beginning of 2018. This short piece is not about the desolation of the economy or political sensationalism, it is merely to accentuate on a couple of quick pointers about whether investors should put on their panic or relax hat on.

The post mid-term election on November 6th, 2018 will certainly impact some aspects of real estate, more specifically on the tax front, the lower and middle-class housing sector in tertiary and quaternary markets...

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…Three Conversational Points That Have Banks and Lenders Fighting Over Borrowers…

 Source: Bristol Mortgage It is not 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. Not only rates rose at the end of fiscal year 2017 by 25 basis point than previous year, but the rise also continued to in 2018. In fact, many Fed officials advised that rates will rise to a range of 2.25 to 2.5 percent by the end of fiscal year 2018...

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Part 1: Seven Crucial Steps Use by Lenders for Sound Credit Analysis to Provide Funding

 Source: PaydayLoanCredit

Source: PaydayLoanCredit

There are many moving parts in the process of obtaining a loan from inception, through application until the loan is closed. The focus of underwriting, credit analysis and risks management have become the cornerstone of the process. Banks and lenders are not only in a business of providing loans and other financial services, but also mitigating and managing risks with any associated assets, entity, sponsor or firm they plan to fund. This is why many ratios are used when performing credit analysis to determine if a borrower and the company can be funded and how much loan proceed will be disbursed. This short post is to quickly explain 3 of the 7 crucial steps banks and lenders use for sound credit analysis to fund business deals.

Step 1: Story About the Business a...

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Question: What Are Three Reasons Borrowers Get Turn Down by Lenders and How to Change the Outcome?

 Crowdfund Insider

Crowdfund Insider

Many borrowers have this belief that, “Lenders and Banks don’t like me because there are too may red tapes involve when it comes to financing my property.” That could not be further from the truth. In fact, lenders and banks love to work with borrowers. The expectation for a lender to fund an asset is always high because financing your property means it is a win for the bank, whether the loan is kept on their balance sheet or securitized. In fact, lenders are always salivating about the “right borrower”. When this happens, it is a marriage made in heaven. There is an article I wrote a few months ago about “default” being the kryptonite of lending and how borrowers should be aware – find it in the post categories because it is a great read...

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Questions: Quick Answers About Construction, Risks & Financing…

These two questions were asked by a reputable economist in my circle a year ago? What should we expect from second quarter GDP growth? Is construction helping or hurting? Recently, while underwriting, advising about financing and discussing the current economic market landscape with a small developer about a project, a couple of related questions were asked. The answers are below and may be helpful if you needed fast answers.

Construction that finishes phase 3, and the building goes into operation, producing cash flow – not much of hurting here but plenty of help for local sub-market economy and even small businesses.  However, if the project is stalled, the sponsor walks away or just cannot finish the project, that’s just a hard pill to swallow – plenty of hurting here...

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Multifamily Triple Threats: Acquisition and Lending are Still Economically Strong…

Source: Google Modern Apartment

When analyzing and forecasting growth for the main group of asset classes for commercial real estate: multifamily, office, retail, industrial, self-storage. The multifamily sector offers the most desirable investment opportunities primarily in secondary and tertiary markets in at least 15 metropolitan cities. Many investment management and private equity firms have different risks appetite about these assets and some are completely averse. Some investors prefer office over multifamily properties because of the allure of sophisticated business tenants and longer lease terms. Others prefer retail over multifamily because of different type of leases that are applicable to retail tenants as well as dealing with small businesses or mom and pop shops...

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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-o...

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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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