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...Read More
Category Small Business
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...Read More
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...Read More
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...Read More
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...Read More
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 ...Read More
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...Read More