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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-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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“REITs: 10 Commandments That Must Be Known For Financial Survival, Financing, and Sound Investment”

As someone who has participated and underwrote various transactions in the real estate investment trust (REIT) space, both non-traded and traded REITs. I am often asked at certain real estate and business events about mortgage REITs or other components of REITs and what make this sector of the industry appealing. Of course, anyone who is associated with the REIT world knows about many advantages of a publicly traded REIT, which are quite different than non-traded REITS.   Non-traded REIT are not on any exchange, and cannot be bought as a stock like a traded REIT that is listed on an exchange (i.e. New York Stock Exchange NYSE). The main difference is truly about the real estate objective.

I conducted a myriad of in classroom and field projects about many REITs (multifamily, retail, offic...

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The consensus among many non-business savvy investors is to avoid debt like a plague. It is not debt that is horrible. Au contraire, it is the use and cost of debt that must be looked at more profoundly. A good investment often requires capital or there may be a need for expansion, purchasing new equipment, inventory, refinancing, etc; and debt eventually will be part of the equation.  Even when a business is operating at its ultimate peak, which is rare, and making significant profit for managers, and shareholders, there will always be a gap where taking on more debt may be applicable...

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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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