Hot Property Types in Texas Commercial Real Estate Investing

If you’re just delving into Texas Commercial Real Estate investing and you haven’t developed your niche just yet, consider these types of properties that are in high demand. Both multifamily and fix-and-flip properties are showing solid investment returns.

Yes, investing in Texas Commercial Real Estate can make you a millionaire. It can also cause incredible stress and, similar to boats being known as money pits, investments can soon turn into negative cash flows. There are varying ways that investing in real estate produces income. Consider these avenues before jumping into your next or first property in order to make sure this investment will leave you in the black.

Texas Commercial Real Estate investments produce a positive cash flow when more money is coming in than going out. But these numbers have a tendency to fluctuate, making it difficult to count on. One month you’re in the black and the next month the stove breaks down. You can be sure, however, that your tenants are paying your loan down and once that loan is paid off you will be seeing a definite positive cash flow. And don’t forget about the appreciation that is occurring, hopefully, every month.

So what properties are real estate investors putting their money on and into? Multifamily rentals are definitely on the upswing. In many markets, apartments are in high demand leading to low turnover rates, high occupancy and increasing rents. This steady stream of income may cost quite a bit more than your single family home; however, an apartment with multiple units represents multiple streams of income coming from one investment. If one unit is unoccupied, there may be 20 others that are producing a steady cash flow. Other types of properties that seasoned investors are drawn to include fix and flip homes. If you find the right home, these types of investments can be very lucrative. With the current shortage of homes on the market, finding one in a high-demand neighborhood can leave you feeling fairly certain that it will not sit empty once your renovation is complete.

Hard Money Financing

If you’ve found the perfect apartment complex in a great location that just needs a little TCL to really make it shine, consider a private hard money loan. These types of loans are funded quickly, usually in a matter of days, and they do not have the stringent qualifications that many traditional lenders are bound by. These short-term loans give you the capital you need to make an acceptable offer and to fix it up and make repairs. Once it is rented out, you can pay the principal or obtain a traditional loan using the after-repair value.

A private hard money lender is a great source of capital for those in the fix-and-flip business model.

At Level 4 Funding, we provide Texas Commercial Real Estate loans for multifamily units, warehouses, industrial spaces and offices. Our short-term loans can often be extended for up to five years and we offer interest-only payments. We provide funding with limited documentation and credit scores are not our main concern. Call us to find out if we have the right loan for your next hot property.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Things to Consider for your First Buy-and-Hold Texas Commercial Real Estate Investment

Location, location, location holds true for Texas Commercial Real Estate investments just as it does for many businesses. Whether your first investment will be a buy and hold or a fix and flip, you’ll need to consider the following in order to make your first project a solid one that you can build on.

Know the market and what it will sustain as far as rent for your potential property. When scouting out the numbers, include the property taxes and insurance. A note on property taxes: remember that this is considered Texas Commercial Real Estate and will have higher taxes than an owner-occupied property. If the house or apartment is located in a flood plain or in an area where earthquakes are common occurrences or smack dab in tornado alley, you will likely need additional insurance coverage that will, again, bite into your profit.

Check into the neighborhood schools. Choosing a neighborhood with a good school district is likely to attract families as compared to properties that are near universities and will likely be filled with students who may not be year-round residents. Check out crime statistics and know the local perks that will attract renters such as dining, movie theaters, gyms and public transportation. Many in the millennial generation are looking for “walkable” neighborhoods with gathering spots such as restaurants, pubs or cafes. You’ll want to be aware of who your target renter is so you can renovate and place ads accordingly.

To use or not to use a property management company, that is the question. This consideration is important for a number of reasons. If you do not use a company, your properties will have to be in driving distance from your present location, or you will need to have maintenance personnel in place for those plumbing and repair issues that can occur at any time of day. The benefits: they will also assist with screening tenants, decreasing turnover and collecting rent, enforcing late fees and issuing an eviction, if need be. The negatives: cutting into the profit margins. Typical fees for single family homes are around 10 percent of the monthly rental value of the property or anywhere from 4 to 7 percent for multifamily units. Some charge flat monthly fees.

Funding for your First Real Estate Investment

Bob Hope said it well: “A bank is a place that will lend you money if you can prove that you don’t need it.” Texas Commercial Real Estate loans for first time investors can prove difficult to obtain. If you do find funding via the conventional route, most require a minimum of 20 percent down. Finding a for-sale-by-owner property is another approach that works well for some investors.

A hard money loan is typically a short-term asset-based loan that offers quick capital.

At Level 4 Funding, we offer buy-and-hold Texas Commercial Real Estate loans that are ideal for individuals looking to purchase rental properties. We have become the go-to capital source for many investors that work with us for all their financing needs. With hundreds of private hard money lenders in our rolodex, we can often find the funding that you need. Call us for a no obligation quote.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Texas Commercial Lending and your Next Repurposing Project

Turning an old building that has seen better days into a well-loved and useful structure that the community can be proud of comes with great reward as well as frustration. Here, then, are some tips for your next repurposing project and how to find Texas Commercial Lending for this type of venture.

There’s a timeless feeling when you walk into an old building. A sense of history infuses its walls, unique features draw your attention, and careful attention to detail in moldings and form bring an appreciation for carpenters of yesteryear. Enter the repurposer. These individuals and companies see past what buildings were and envision what they can be. Old schoolhouses, carriage houses, barns, churches, banks, train cars, firehouses, warehouses and industrial spaces have been repurposed into homes and apartments. Even grain silos have been turned into luxurious round living quarters. America’s first indoor shopping mall in Rhode Island, a historic building over 200 years old, has been turned into 38 micro apartments that measure anywhere from 225 to 300 square feet. Think tiny house and no, there are no vacancies.

If you’ve got your eye on an old, abandoned structure and can see the beauty beneath the cobwebs, consider the following:

● Zoning. If your structure was once a commercial building, make sure that you can petition to change the zoning to residence.

● Risk. There is an inherent risk with an older building. For this reason, it’s recommended that you obtain an inspection. Pay close attention to electrical and plumbing systems. Maintenance may also be a consideration. Surprises are inevitable, but not all are negative. On the upside, there may be governmental incentives. These include federal rehabilitation tax credits, local incentives, low-interest loans, and grants. Keep in mind that tax credits do come with some restrictions regarding the preservation of the property.

● Location. People enjoy living downtown. Just look at the industrial building turned loft industry. These early lofts were created with artists in mind—an affordable place to live and work with just the right light shining through the large windows. But that was 1970. Lofts have now morphed into demi-lofts or loft-like apartments, new-construction lofts, and even condo lofts. And urban living no longer comes cheap.

● Numbers. Texas Commercial Lenders will want to know that your net operating income (NOI) will support the debt payment.

Some of the most successful repurposing projects have been in the world of entertainment, hospitality and scholastics. Schools have grown from churches, hotels from office buildings and movie theatres from old schools. Cities and communities are often very supportive when it comes to preserving historic buildings and will work with you as best they can, especially if you are considering re-energizing historic downtowns, such as has been occurring in Detroit. Talking with local residents can give you an idea if they are aligned with your vision which can make a tremendous difference.

Funding Adaptive Reuse Projects

In addition to grants and other incentives, funding from alternative Texas Commercial Lenders can be a quick and often painless process for acquiring capital. Traditional lenders often shy away from commercial projects that carry those inevitable surprises. Private hard money lenders, on the other hand, look more to the project itself. Construction financing through these individuals is popular due to their flexibility, reliability and documentation requirements. Interest only payments are often the norm until the project is complete.

Private hard money Texas Commercial Lenders are a perfect solution for those wanting to get into the repurposing craze.

At Level 4 Funding, we offer bridge loans, construction loans and Texas Commercial Loans , one of which may be just right for your project. Call us for a no obligation quote. Approval occurs in as little as 24 hours.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Advantages and Disadvantages of Obtaining your Texas Commercial Mortgage from Traditional and Private Hard Money Lenders

Traditional Texas Commercial Real Estate and private hard money lenders differ in their requirements and funding strategy. Here are just a few of their unique characteristics that may help you determine which Texas Commercial Mortgage is right for your next real estate venture.

When you think of funding for your first or next real estate investment project, your thoughts often turn to traditional lenders such as banks and credit unions. These Texas Commercial Real Estate lenders definitely have their place in the funding scheme of things. They do, however, carry some disadvantages as well. In order to determine just which funding source is best for you, let’s take a look at what they have to offer.

The pros include Texas Commercial Mortgage interest rates, length of term, and loan qualifications. Most traditional lenders have strict qualifying guidelines and long terms. These give them the ability to offer lower interest rates. Because of these high-qualifying guidelines, it also lowers your risk of default. The disadvantages, on the other hand, are actually similar to their benefits.

These same strict qualifying requirements make it difficult for some individuals and businesses to get loans. This may be due to credit scores beneath 700, a high debt-to-income ratio, or self-employment that makes it difficult to verify income. There is also a cap on the number of properties that real estate investors can own at one time, and the approval and funding process can take over a month before capital is obtained. There goes the foreclosed property that just came on the market. In addition, they have high prepayment penalties and regulations regarding the types and conditions of the properties that they can make Texas Commercial Mortgages on. Basically, they are constrained by red tape.

Private Hard Money Lenders

The pros of private hard money lenders are reflective in their less stringent qualifying guidelines. Theirs is an asset-based lending model meaning they will look to the property and your assets more than your credit score and income. They also consider your equity, experience and exit strategy. Approval can occur in as little as 24 hours with Texas Commercial Mortgages typically funded within a week to a few days. This allows investors to act quickly when a prized property hits the market. They also offer interest-only payments until the project is completed. Private hard money lenders will also fund projects that traditional lenders will not consider. For instance, these types of lenders will consider a property with major electrical or plumbing issues as long as all the numbers come out. Their fix-and-flip loans are popular because they offer short-term loans and no prepayment penalties. Because of their short-term nature, the higher risk and the convenience, hard money loans often carry a higher interest rate than bank loans.

Private hard money lenders offer quick funding and interest-only payments.

At Level 4 Funding we pride ourselves on our professional service. Many of our clients are repeat borrowers, coming to us for many of their lending needs time and again. Call us today to see if we have the right loan for your next project.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tips for your First Fix and Flip Property and Texas Commercial Real Estate Loan

House flipping can be a lucrative venture. Learn from others who have come before you—their mistakes as well as their successes—and the types of Texas Commercial Real Estate loans that work for these projects.

This Texas Commercial Real Estate investment strategy is making a comeback after its decline following the subprime mortgage crisis with 2016 seeing 6 percent of home sales falling into this category. But it has definitely changed over the years. At one time, investors simply bought a property, did little to it, and waited for the prices to increase. Nowadays, investors are adding value by making cosmetic changes such as remodeling a bathroom or kitchen.

The first step is, of course, finding a property that will turn a profit. Expand your search by checking out websites such as Auction.com or HudHomeStore.com, foreclosure notices found at the county recorder’s office, and local banks for REO properties. Many regional banks will list these types of properties on their websites. Search for Notice of Default (NOD) and always check for liens.

You’ve found your property. Now, before you get excited, get it inspected. Many first time flippers lament that they did not do due diligence when it came time to inspecting the property. It is always best to get a home inspection as these can throw light on all types of issues including those that are not readily observable such as a cracked foundation. Before you make an offer, you’ll need to determine the After Repair Value (ARV). From this, you’ll deduct the purchase price, renovation costs, and commission costs if you are working with a real estate agent. Include holding costs such as taxes, insurance, interest payments, utilities and the time it will take to fix and flip. After all, you want your first Texas Commercial Real Estate investment to be profitable!

If you’re not use to city ordinances and there is no construction license hanging up in your garage, be sure to check local laws regarding renovations and building. If you’ve decided to do the work yourself and avoid construction fees, don’t forget getting those pesky building permits, particularly if working on the plumbing, electrical or structure of the home. While on the topic of licenses, if you don’t have your real estate license, consider getting a real estate agent on your team. And if you’re not a contractor or you’re construction challenged, consider making your first property one that can be improved with cosmetic changes instead of a major structure over-hall.

Funding the Operation

Texas Commercial Real Estate often requires more of a down payment than an owner-occupied property. Since the subprime mortgage crisis, it is even more difficult to find a low or no-down payment loan. Options include obtaining a home equity line of credit on your owner-occupied home, conventional loans which require a fairly substantial down payment and take some time to fund, or a hard money loan from a private investor.

A bridge loan from a hard money lender is often used by fix-and-flip investors to obtain capital.

At Level 4 Funding, we work with hundreds of private hard money lenders. We offer 3 to 60 month terms with an APR starting at 7.99 percent. Call us for a quick no obligation quote.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Advice for First-Time Texas Commercial Real Estate Investors

Texas Commercial Real Estate investing can be a very lucrative investment strategy. Here are a few tips to help first-time investors succeed.

With the instability in the Asia and the resulting tweets in America, some are wondering if another crisis fueled by instability is at hand. While the politics of the world can be unnerving, those that have been in real estate investing for some time are still betting that the double-digit return that many have seen in the last few years will continue to climb. After all, in an unsteady world, the solid aspect of land can feel a little more secure than the ticker symbols of Wall Street. Here, then, are a few tips for those thinking about entering this investment strategy.

Know your strengths. While that goes for many walks of life, it is particularly true in the Texas Commercial Real Estate industry. Though many investors now sit behind polished mahogany desks, there was a time when these same individuals had hammer in hand or a real estate license under their belt. The key is profits. If you can renovate a distressed property or sell it once it is ready to go on the market, you increase the often slim margins. If you’re considering buying and holding in order to build equity and your portfolio and create multiple streams of income, know your numbers—the rent that particular market will sustain and the bills that are coming out of it, and don’t forget the property taxes. Set a goal of 6 percent returns for your first year and don’t forget maintenance costs which are usually calculated at 1 percent of the property value.

Get the down payment. Texas Commercial Real Estate investments are different than owner-occupied properties and often require higher down payments. Depending on the type of loan and your credit score, you will need anywhere from 10 to 30 percent of the property’s value as a down. When you’re ready to get that first property, don’t plop down your money on the first distressed building you find. Take into account the market and community—is it located in a good school district, a fairly decent neighborhood, and is there a growing job market? These factors are important whether you are planning on buying and holding or fixing and flipping. And remember, change is inherent in this industry.

Some Investors use Hard Money Loans

Texas Commercial Real Estate investors use hard money loans for several reasons. Private hard money lenders are not held to the same restrictions that conventional lenders are inundated by. This leads to quick approval and funding. They are also hard asset-based lenders meaning that they pay less attention to your credit score or creditworthiness and more to the value of your asset or collateral.

Private hard money lenders offer asset-based loans that can be funded in less than a week.

There are several unique programs that those in this industry use on a regular basis. At Level 4 Funding we offer bridge loans and construction loans. Both are short-term loans, anywhere from 3 to 24 months that offer interest only payments, quick access to capital, and no minimum credit score requirements.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Making Money on Peer to Peer Lending Platforms

Peer to peer lending offers an exciting investment opportunity. However it is important to be aware of the risks involved and some tools that may help you succeed.

Just how do you make money in Peer to Peer (P2P) lending? The concept is simple. You invest in specific loans and earn interest as the loan is paid back. P2P sites measure the risk of specific borrowers defaulting and assign interest rates to loans depending on the risk involved. As with any investment, the higher the risk, the higher the return (or the higher the interest rate charged to the borrower). Two popular P2P platforms are Lending Club and Prosper. Both of these platforms will charge you a percentage of the interest you earn as the loan is paid back. Usually this fee is one percent of the amount that the borrower repays. Opening an account on P2P sites is easy and requires a minimal investment, often only around 25 dollars. Lending Club claims that the average return for investors during the first three quarters of 2016 was roughly 6 percent. Given these returns, P2P lending can demonstrate yields much higher than an ordinary bank account.

But as with any investment your success depends upon your ability to diversify and to understand the risks involved before you begin the process. Above all manage risk by investing in many different types of loans. Prosper claims that portfolios on its site exceeding 100 notes (i.e. Loans) demonstrate consistently positive returns. The low investment threshold on many of these sites, means you can potentially fund hundreds of loans, each with different grades of risk. However even with diversification, success is not guaranteed. An obvious risk is that the P2P platform could default or even fall prey to hacking, threatening your investment. This method of investing is also relatively new and untested during periods of prolonged recession. Various economic conditions could result in unpredictable defaults among borrowers.

However third party tools can make it easier to diversify and spread risk

Tools like NSRInvest and Lending Robot automate the investment process. This makes it easier to diversify and invest in the best loans. Often attractive loans are full-funded within in minutes on P2P sites. These tools can help you avoid complicated process of analyzing each loan you may want to invest in. They link to your P2P investment account, select loans based on the criteria you set and automatically invest your funds in loans matching those criteria.

However considering the risks involved in this type of investment you may want to limit its impact on your portfolio.

Even with third party tools that help you diversify and spread risk, it is important to remember that this industry is new. It hasn't yet demonstrated consistent returns over a long period time. There is also the more immediate risk that P2P sites could crash, resulting in irreparable loses. Considering these factors it is probably best to avoid putting too much stake in P2P lending as a major investment. Nevertheless peer to peer lending offers a novel way for you to make money, by acting as a commercial lender. If you choose to invest this way, make efforts to diversify, consider the risks and use third party tools to automate the investment process.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage