Setabay Private Hard Money Lender

Monday, September 11, 2017

The Current State of Texas Commercial Real Estate Investments and Commercial Lending

Commercial investment sales are down from the historic highs of last year due, in part, to tightening of conventional commercial lending. Alternative lenders are stepping in to fill the gap.

While all commercial properties are seeing price gains, the investment sales volume is down. July’s volume totaled around $36 billion which is down from the historic highs of 2015 and 2016 when sales came in at approximately $52 billion and $47 billion respectively. Even though deals have gone down, the prices continue to rise. For instance, multifamily properties, though showing a slight decline this month, have prices up 9.6 percent from last year. According to JLL, large transactions over $250 million are down 27.7 percent year-over-year. Their Q2 2017 Investment Outlook showed investment sales growth in all sectors was down except for industrial which showed a 20.7 percent growth. Office, multifamily and retail was all down in the double digits. So why the slowdown?

Several factors seem to be contributing to fewer handshakes between real estate investors and commercial property owners. One of these is an increasing conservative approach in traditional Texas Commercial Lending underwriting and the resulting increase in time to funding and barriers to entry. Other factors include our present political climate. Retail is down due to tenancy risk though outlets with strong anchors are still performing well. Multifamily numbers are affected by the slowdown in high-rise transactions as newer generations are searching for walking-friendly neighborhoods with a strong sense of community. Joint ventures, recaps and entry-level investments are on the rise while conventional single-asset sales are showing a decline.

With banks tightening, alternative lenders are stepping in to fill in the gap. With rising costs and higher labor in the construction industry, traditional lenders are being more selective and contractors are looking to non-traditional options. One of these Texas Commercial Lending options is private hard money lenders. These non-traditional asset-based lenders have fewer requirements than their conventional counterparts. Credit scores are not as important to the lending process as is the collateral. Capital is acquired in days instead of weeks.

Who Uses Private Hard Money Lenders

Real estate investors often use this type of Texas Commercial Lending due to its rapid funding. Immediate capital may be required to obtain a property just hitting the market or to start a build-out project. Others may have experienced some credit issues due to foreclosure and various life-altering events. Typically, these are ideal for fix and flippers as well as those building equity while waiting for a traditional loan to come through.

Private hard money lenders are stepping in to fill the gap that the current conventional lending institutions are creating.

At Level 4 Funding, we work with hundreds of private hard money lenders. If you are experiencing difficulty in this present lending environment, call us to find out if we have the investor to fill your needs. When the banks have said “no,” we often say “yes.” We offer construction loans up to $50,000,000 with terms up to 24 months, quick monthly draws, and APRs starting at 9.5 percent. All we require is a copy of your budget, plans and permits.

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

Real Estate Financing and Texas Commercial Loan Options

Obtaining that first Texas Commercial Loan is one of the major stumbling blocks that keeps want-to-be real estate investors from turning their dream into a reality. There are options and one may be just the right one for your needs.

If lack of funds is holding you back from making your move into real estate investing, don’t let it. Very few investors make all cash offers or have the 20 to 35 percent down and high credit scores that some conventional lenders require. These lenders are often banks or credit unions and, while a good option for those that are approved, they do take time to fund—at least a month in many instances. There are alternatives.

Participating Mortgage or Joint Equity mortgages offer alternatives to traditional lending. In a participating mortgage, the lender is offered a percentage of the resale proceeds if the investment is a fix and flip model, or they are provided with a share of the rental income if the property is a buy and hold. In a joint or shared equity mortgage, both lender and real estate investor agree to share capital, risks and rewards. These individuals or groups come together for one project, which is what makes it different from a partnership. Investors often use this strategy when they are looking for knowledge and experience as well as funds. Like any partnership, it’s important to make sure that the two of you hold the same values and vision.

Crowdfunding has become a growing avenue for obtaining Texas Commercial Loans for real estate projects. Equity investors hold a stake in the property while debt crowdfunding, also known as peer-to-peer, investors are paid back in regular monthly installments with interest over a period of time, usually three to five years. Both are funded by numerous individual investors, some of whom may make an investment with as little as $1,000. This type of lending usually requires strong credit scores and solid business plans.

Private Hard Money Lending

Private hard money lenders offer asset-based loans that are typically short-term in nature and provide access to quick capital. Terms are anywhere from 3 to 60 months. Credit scores and creditworthiness is typically not as an important factor as it is with other types of Texas Commercial Loans . The loan is based on the property that you are using as collateral, whether the investment property or your current home. As well as a budget and plan, most private hard money lenders require a good exit strategy which will let them know how they will get back their money at the end of the build-out or renovation. An exit strategy for a fix-and-flip property is typically when the home or property resells while, for a buy and hold investor, it may be when they obtain a traditional loan after the property has been repaired and rehabbed.

A private hard money lender provides asset-based Texas Commercial Loans . Credit scores are, typically, not as important to funding as is the collateral.

At Level 4 Funding, we offer quick access to capital. Approval is often determined within 24 hours of applying and capital may be available in as little as two to three days. Call us to see if we are the right private hard money lender for your real estate investment needs.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Qualifying for a Commercial Loan

Traditional lenders have tightened up their lending standards since the subprime mortgage crisis. Find out how to qualify for a Texas Commercial Loan and what options are available.

Texas Commercial Lenders have tightened their lending standards since the Great Recession. While the requirements have loosened up a bit for larger firms, small businesses are still bearing the weight of the subprime mortgage crisis with only 20 percent of those that apply for a bank loan actually getting one. The 80 percent that receive a rejection notice usually fell short in one of three areas: the necessary collateral, the capacity to repay, their credit score and creditworthiness. Banks often prefer credit scores that are in the 700 range or greater.

The debt service coverage ratio is used to determine if the business will or has generated enough income to pay back the loan and interest plus maintain some cushion. For conventional commercial lenders, that ratio is generally set at 1.25 to 1.45 or greater. In essence, this ratio represents the cash a business has available to service its debt which includes the interest and principal payment of the loan. A ratio greater than one shows that the business has enough to pay its obligations. In order to calculate your debt coverage ratio, divide total net annual income by total annual debt.

Gone are the days when lenders offer Texas Commercial Loans of 80 percent loan-to-value. Nowadays, borrowers are lucky to get 60 to 70 percent loan-to-value. Know what your collateral is valued at before hitting the lending circuit. If you require a larger loan than your business or property is worth, you may consider using your home as collateral or any other assets. You’ll need your balance sheets in order to demonstrate a consistent cash flow. In addition, you will often be required to share your monthly financial statements while the loan is being paid back. Other types of loans that may work for an already established business include equipment loans, business lines of credit, and merchant cash advance.

Private Hard Money Lenders

A private hard money Texas Commercial Loan is asset-based. They do not consider your credit score or creditworthiness to the same degree that a conventional lender does. You will need to share your business plan and exit strategy. Payments are typically interest only until the project is complete and has been sold or the borrower has rehabbed a property and is now obtaining a traditional loan based on the after-repair value (ARV). Businesses can also obtain hard money loans as long as they have a form of collateral. These loans are typically 75 percent loan-to-value, though this figure varies. Unless you know someone in the world of private lending, it’s often easier to access the private lender through a broker that works with hundreds and knows what type of business or property each investor is interested in.

A private hard money loan is a short-term loan with terms that are usually in the range of three months to two years. These types of loans provide access to quick capital.

At Level 4 Funding, we pride ourselves in understanding your needs and saying yes when banks have said no. Call us to see if we have the Texas Commercial Loan that you need for your next project.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

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.

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.

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.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Setabay Private Hard Money Lender

Monday, September 11, 2017

The Current State of Texas Commercial Real Estate Investments and Commercial Lending

Commercial investment sales are down from the historic highs of last year due, in part, to tightening of conventional commercial lending. Alternative lenders are stepping in to fill the gap.

Who Uses Private Hard Money Lenders

Private hard money lenders are stepping in to fill the gap that the current conventional lending institutions are creating.

Real Estate Financing and Texas Commercial Loan Options

Obtaining that first Texas Commercial Loan is one of the major stumbling blocks that keeps want-to-be real estate investors from turning their dream into a reality. There are options and one may be just the right one for your needs.

Private Hard Money Lending

A private hard money lender provides asset-based Texas Commercial Loans . Credit scores are, typically, not as important to funding as is the collateral.

Qualifying for a Commercial Loan

Traditional lenders have tightened up their lending standards since the subprime mortgage crisis. Find out how to qualify for a Texas Commercial Loan and what options are available.

Private Hard Money Lenders

A private hard money loan is a short-term loan with terms that are usually in the range of three months to two years. These types of loans provide access to quick capital.

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.

Hard Money Financing

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

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

Funding for your First Real Estate Investment

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

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.

Funding Adaptive Reuse Projects

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

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.

Private Hard Money Lenders

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

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