In this short article I will discuss the fundamental differences between banks and credit unions without trying to conclude whether one is better than the other. I also won’t quote rates or services they each offer since each individual should decide upon their due diligence which institution would serve his best interest. Both, banks and … Continue reading
Your Mortgage Broker, the Key to your Mortgage Financing Needs
You’re in the market to purchase your first commercial property. You learned all the theory there is to learn about cap rates, cash flow, operating expenses, locating property, working with real estate brokers, finding property managers, and so on. Now, you’re ready to dive in and make it happen but you’re still missing one more … Continue reading
Debt Yield Ratio on Commercial Real Estate Loans
Q: Carmen, your terms look competitive, the only question I have is on the “Debt Yield”. Is this the interest rate? A: The Debt Yield is not the interest rate. The Debt Yield Ratio is defined as the Net Operating Income (NOI) divided by the mortgage loan amount, times 100. It is usually a calculation … Continue reading
Why You Shouldn’t Fear Another Bubble
I recently shared my thoughts on why I believe a new real estate bubble is being formed. Click here to read the article. To be more specific a bubble occurs when the asset – in this case real estate – is experiencing an unusual appreciation during a stage when economic conditions – stagflation – don’t … Continue reading
Is This Growth Sustainable?
In many areas of the country investors are faced with a surge of new investors trying to buy multifamily properties. Such trend is great for sellers but not so enticing for buyers because it puts stress on Cap Rates. Is this trend sustainable? Some are wondering if this is the new norm (Cap Rates continuing … Continue reading
A Brief Economic Review
Just as it occurred during the 1930’s Great Depression, current markets have the tendency to default to a deflationary trend. This trend is being derailed (only temporarily) by the Central Bank’s increase in the money supply. Being determined to fight deflation, the Fed appears to be working at inflating. Such event keeps the markets up … Continue reading
Question: I’m looking at acquiring my first Multifamily property. Is is better to…
Q. I’m looking at acquiring my first Multifamily property. Is is better to go solo, syndicate with a group, or partner with limited deep pocket investors? A. Good question, we get this often but there is no cookie cutter answer. It depends on your goals and preference. Generally, from a lender’s perspective experience and the … Continue reading
Bridge Lending Simplified
Bridge loans have been excellent financing tools during the past several years. Investors use them as short-term financing to complete the task of stabilizing under-performing properties. When properties are renovated and fully leased out bridge loans are paid off and usually replaced with permanent financing. They are used for purchase and refinance projects. Generally a … Continue reading
The Flawed Thinking of a “Wannabe” Investor
I received this email today and thought this would be a good opportunity to discuss the flawed thinking of a newbie borrower. Here it is. “Carmen, I would love for you to do a commercial loan, but you need to match the following criteria. *** commercial building valued at 225,000 *** loan amount: 150,000 *** … Continue reading
Why Real Estate Investors Should Know This
A super smart lady friend of mine sent me a real interesting article written by one of her friends. Its title is “Why Do Banks Keep Going Bankrupt? Moral Hazard, Regulation, and a Century of Systemic Bank Insolvency“. You can read it here. It’s a brief analysis on why banks keep going bankrupt. I thought … Continue reading
Three Reasons Why Real Estate Investors Should Not Fear Deflation
We’ve been told to fear deflation. The government, the Federal Reserve, the mainstream media, and the mainstream economists are all in agreement. They are all alarmed that deflation would ruin our lives. Such myth has been alive since the Great Depression when Keynesian Economics have become the status quo. But buyer beware. Such myth could … Continue reading
The Realtor and Property Manager Partnership
As a member and contributor to several Commercial Real Estate investment sites I often come across newbie questions. These folks generally have some experience in the single family market and are dabbling with the idea of getting their feet wet in the multifamily sector. Here is a more recent one on the subject of real … Continue reading
Commercial Finance 