Get Rates that Insurance Agents Get on Life Insurance

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Jun 282024
 

A very rewarding profession is the one of selling life insurance policies, but in order to make it in this line of business one has to know the tricks of the trade. A good statement is that the number of people who need insurance of any sort will never decrease drastically. One of the most difficult tasks of the insurance agent is generating and transforming life insurance sales leads into actual closed deals.

Some time ago, life insurance sales leads were generated by agents through cold calls and by going door to door and trying to sell policies. These methods were not very efficient and resulted in low rates of sale and chances were to end up with a bogus lead or the lead becoming uninterested because of the inclination towards quantity rather than quality. This task had become very difficult because of the reluctance people treated uninvited salesmen with, salesmen that gave cold calls and showing up in their doorstep, therefore barging into their private lives digging for their time and money.

In recent years there have been many developments of other more friendly techniques designed to generate life insurance sales leads and to work on them. Online and offline vendors offer qualified life insurance sales leads through newer technological approaches and research methods. Such approaches are really making the job of an insurance salesman a lot easier now than it was before.

Even though these methods also tend to intrude in people’s lives, they are less aggressive than the old methods of cold calls and door-to-door selling. The online and offline vendors are able to generate authentic life insurance sales leads due to their networking with search engines like Yahoo!, Google and AOL, marketing and advertising the benefits of insurance that people can enjoy, and other similar methods. The Internet provides many solutions for independent agents and insurance companies to advertise their offers through emails, pop-ups and free newsletters. It is easy to obtain any type of insurance leads over the Internet because the people who are interested in buying insurance have to fill out forms with personal details like bio-data, age, name, number of dependents, the kind of insurance they desire, what period they want to buy the insurance for and more. Leads and specific information about potential customers can be then bought by independent agents and companies with the hope of closing a deal. Obtaining leads is easy, but the actual sales however are depending entirely on the agent’s marketing and sale capabilities.

There are many types of insurance available on the market. If somebody needs to go into a nursing or assisted living home for a long period of time long term care insurance is the type of insurance that suits them best. Given the fact that most people seek life and auto insurance, long term care insurance leads are a bit scarce. However, if one chooses this field to progress as an insurance agent, the money they can earn is definitely not an insignificant aspect.

Even though the field is challenging, the team from quotesauction.com has the highest closing ratio for long term care insurance leads than any other internet insurance lead provider, due to their exceptional quality control. Working with other organizations helps the generation of a steady flow of long term care insurance leads from seniors, who are also interested in life, disability and annuity leads. As an agent you should seek out people who are interested in long term care insurance online and offline. The key is to expand the number resources for long term care insurance leads and therefore gaining a higher conversion rate. All in all, there are a lot of possibilities in finding long term care insurance leads.

Personal loan – An all purpose loan

 Flowers  No Responses »
Jun 182024
 

The lending business is growing rapidity. More and more people are taking loans for all sorts of purposes. Of all the available types, personal loan remains the all time favourite of all. It is the most saleable and hence the most profitable loan type in the whole world.
A personal loan provides significant solutions and diverse choices under the following categories:

Secured personal loan – is the best choice when the requirement is long-term and when one needs a large amount of money. In order to avail it, one needs to pledge something valuable as collateral
Unsecured personal loan – is the best option when the requirement is short-term or urgent and when one is unable or unwilling to pledge something valuable as collateral. In order to avail it, one simply needs to have the proof of a good credit history and sound repayment capacity
Bad credit or high-risk personal loan – is the only alternative when one is having major financial difficulties or crises

The cons of a secured, unsecured and bad credit personal loan are:
Secured personal loan – if the borrower defaults to pay back as decided then the lender can seize the pledged collateral to recover his money. Also, the entire property evaluation procedure slows down the loan approval process
Unsecured personal loan – the lender imposes high interest rates, flat repayment terms and other loan clauses, as collateral is absent to take care of the risk factors
Bad credit or high-risk personal loan – the interest rates are highest and repayment terms most stringent, as it is the diciest pact
The pros of a secured, unsecured and bad credit personal loan are:
Secured personal loan – the lender facilitates with low interest rates, negotiable repayment terms and other loan clauses, as collateral takes care of the risk factors
Unsecured personal loan – if the borrower defaults to pay back as decided then there is no immediate risk to his priced possessions and a legal action against the defaulter is the only way out. Also, absence of collateral speeds-up the entire loan approval process
Bad credit or high-risk personal loan – the borrower gets the chance to recover and improve his credit record for the future
On the basis of mode of repayment, a personal loan can be categorised as:
Instalment loan – the loan is repaid in the form of monthly instalments, which carries both the principal and the interest elements
Balloon loan – the interest is paid at regular intervals and the principal amount is repaid at the end of the loan period
Single payment loan – the entire principal as well as its interest is paid at the end of the loan period
The above-mentioned mode of payments validates the flexibility aspect of personal loans. Hence, they have always been a favourite for purposes like home improvement, debt consolidation, higher education, car purchase, wedding or vacation planning, etc. So, look and wait no more… Some of the most competitive deals are just a mouse click away.

Best Satellite TV Offers

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Jun 162024
 

There are two main companies offering satellite television in America. The main one is DirecTV and then Dish Network. They have many similarities in channels and options but each has their own exclusive rights to different features and sports league coverage.

They also differ slightly in their monthly subscription costs start up fees, and amount of programming choices. DirecTV is a little bit more expensive than Dish Network starting out at about $40. Dish Network costs about $30 month for standard subscription channels.

Dish Network is offering some competitive promotions such as free satellite for up to four rooms in the house, free installations, free HDTV upgrades, free DVD player, as well as a DVR that can record and store 100 hours of video.

DirecTV competes well and wins when it comes to customer service satisfaction. They were rated number one when it came to J.D. Power and Associates best satellite TV provider customer service. DirecTV always offers free professional installation of their high end equipment with a subscription. They do charge a small fee for shipping if you want to order more than two satellite systems.

The different channels are about the same give or take a few. DirecTV is much more popular for NFL or NHL sports fans. DirecTV offers the NFL Sunday Ticket which provides access to over 14 games a week during the foot ball season.

While DirecTV does offer many channels in HD Dish Network offers a few more channels in HD. You can also purchase additional international channels through satellite providers or select menu options in Chinese or Spanish.

The options for satellite providers are different as well. DirecTV offers packages that include total choice standard, plus, and premier. Dish Network offers the Top 60, 120, 180, and everything. You should get these offers side by side and compare to see which one is best suited for you. This is a way to prevent paying for extra programming that you won’t be able to watch.

I have known of cases where satellite TV scammers have claimed to be able to provide the best satellite TV deals. They may offer a false promise on their deal such as an extremely low monthly fee, next-day installation, as well as other electronic devices. When someone signs up for one of these scams they quickly find hidden activation fees, high shipping costs for free extras, installation dates continuously changed, and insanely expensive cancellation costs.

For this reason it is wise to compare offers online and shop around but actually sign up inside of a reputable retailer. Having online access gives you the ability to search about different offers and programming options so you can choose the best one for yourself.

With either provider of satellite TV you will get better quality picture and sound at a better price then with cable. You also get a more than double the selection of programming options. The only question to ask is why would anyone stick with cable?

Direct TV Offers and Deals

 Flowers  No Responses »
Jun 152024
 

Back in 1994 DirecTV was first introduced to the public by General Motors and Hughes electronics making it the first digital broadcast system in the entire world. Currently DirecTV has over 15 million customers in America and Latin America. Their revenues in 2005 were over 3 billion dollars.

DirecTV is the leading provider of satellite television in America. They remain at the top for customer service satisfaction. Maybe it is because they offer such a huge range of channels in their programming selections or because they provide their high end equipment and professional installation free with every new subscriber.

You can also sell this equipment if you ever want to, not that you will. Since DirecTV provides one hundred percent pure digital picture and sound you will get the best out of your viewing experience at a price that costs less that old analog cable provider.

DirecTV provides their customers with up to 225 standard channels compared to cables average of 100. On top of that DirecTV also offers the exclusive rights to some big name sports channels and packages that include the NHL Center Ice, MLB Extra Innings, NBA League Pass, and the NY Yankee games.

Best of all DirecTV offers the NFL Sunday Ticket that gives you access to 14 professional football games every week during the season. This is a deal breaker for any true NFL fans. This goes for the NBA League pass which grants you access to ever NBA game during the season.

DirecTV also offers international channels and Spanish and Chinese language programming services. DirecTV’s Para Todos service provides more than 45 Spanish language channels. These channels include sports, news, music, movies, and educational networks. Phoenix TV offers Mandarin programming 24 hours a day 7 days a week.

The price for a standard DirecTV package starts at around thirty dollars. DirecTV offers first time customer incentives such as free TV systems for up to four rooms and even free DVD players, home theater systems, digital cameras, or movie channels. These free incentives almost always come with a commitment from you in the form of a contract for 12 to 18 months of service.

Since the satellite TV market has become so competitive the two main companies are offering almost similar packages but each has their own niche. Both companies offer more than 200 channels, integrated digital video recorder (DVR), and HDTV channels. They also both offer great customer service but J.D. Power and Associated rate DirecTV number one.

You are even able to find such introductory offers from DirecTV that start as low as $19.99. You can try looking online for such a deal.

When you compare DirecTV to Dish Network you may go one way or the other based on special programming that one offers but if you compare either company to cable television you will see there is no comparing. When you go with satellite TV you are not only getting better picture and sound quality with more channels, but you are also getting it at a lower price.

GM Augments Weak January Sales With New Deals

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Jun 082024
 

General Motors Corp. is expected to deliver a ramped-up incentive program to amplify its sales in the forthcoming months. January was not a good month for the automaker however; it is working on increasing its sales by delivering new deals that include zero-percent loans and cash.

The incentive program of the largest automaker will revive free financing and at the same time bonus cash. The zero-percent financing will run for as long as 60 months. In addition, the $500 bonus will be available on most 2006 and 2007 GM models. These strategies were considered by GM to augment its January sales, which have declined by about 17 percent.

Bonus cash will be offered by the automaker in the Midwest and Northeast. On the other hand, the zero-percent financing will be available anywhere in the United States. “It’s a new thing that kind of caught us off guard,” said dealer John Rogan of John Rogan Buick-Livonia. “It’s a great deal. And, as dealers, we believe it will drive our market share up.”

GM January sales decline is significantly caused by the intended reduction in rental fleet sales. It is also caused by a slump in consumer demand. After sharp sales decline last month, some critics question whether the automaker pulled back too distant on incentives. “We’re not going to go down the path we went down before, throwing incentive dollar after incentive dollar,” GM senior analyst Paul Ballew said after announcing January sales figures early this month. “But we’ll do what it takes to be competitive.”

John McDonald, GM spokesman, said the new incentives, which will expire on Feb. 20, do not reflect a reversal of GM’s strategy to cut back on deals and discounts, but are a bid to keep customers coming into showrooms during a traditionally slow sales month. “The strategy is the same,” he added. “We had planned to do this prior to the January results.”

Since 2002, the incentives of the automaker in January were at their lowest – at an average of $2,365. The figure is lower than DaimlerChrysler AG’s Chrysler Group at $3,853 and Ford Motor Co. at $3,502.

The new incentives imposed by GM will exclude brands like Cadillac, Hummer and Saab. It will also exclude selected models like the Chevrolet Corvette Z06 and medium-duty trucks. Free financing, consequently, will be available for three or five years depending on the vehicle. It will be available only for Chevrolet Silverado and GMC Sierra pickups. McDonald added, “Advertising will be done on a regional level and by the individual brands.”

“GM was smart to avoid a major national blitz, which would have created the impression that the automaker was going back on its less-is-better strategy on incentives,” said Tom Libby, an analyst with J.D. Power and Associates’ Power Information Network. He added, “Even though GM lost some sales, the company is right to keep its discounts low, since deep discounts erode brand values and drive down resale values. It sounds like a significant program. But it’s not a humungous, pull-out-all-the-stops program. If it is, they would be getting away from their strategy.”

GM, founded in 1908, has global headquarters at the Renaissance Center in Detroit, Michigan, USA. It is famed in the manufacture of remarkable vehicles that served as milestones in the automotive timeline. GM manufactures cars and trucks in 33 countries. These vehicles have established a reputation for quality in the field. This is because GM parts and accessories like rotors, brakes, filters, AEM cold air intake as well as other auto systems used in the vehicles are precision engineered to serve their purpose well.

Miroslav Klabal is a an all encompassing art dealer

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Jun 072024
 

Art is the expression of different events that take place in the world. Each perceives life, world and all events in a different manner. So a thing which for one person may be useless can be the source of inspiration for an artist. Basically, it all depends on the way a person sees life and all the happenings around him. Miroslav Klabal is an art lover, who understands the finer nuances of art and artists. All artists need a platform where they can display their work and creativity to the world. Miroslav Klabal better known in the world of art as Mirek Klabal and his wife Maryann Klabal, love art and want people to know about all these. Artists also want this, after all who does not like to be recognized and become famous.

Miroslav Klabal is one art dealer who is constantly looking out to find ways and means to help any one who is associated with the world of art. So if a person wants to buy art pieces which are not fraud but genuine masterpieces, Miroslav Klabal will surely help them out. Miroslav Klabal has a wonderful collection of art and fine art at his gallery MK Fine Arts in New York. The collection includes most of the work done by renowned artists of the world. Miroslav Klabal takes a personal interest in either buying or selling a genuine piece of art. He is very particular about the genuineness of the art pieces, which he sells and there is absolutely no chance that one will face any problem due to this.

It is not that Miroslav Klabal suddenly developed an interest in art and artists. Every since he was a small child, he had showed his inclination towards art. Any free time he had, was spent in browsing through all the art galleries that were present in his hometown. That is not all; he used to read books related to art and always wanted to make a name for him in the amazing world of art and fine art. It is not that he deals with only established name in this field, Miroslav Klabal is particularly interested in promoting promising new talent in the art world. Miroslav Klabal’s art gallery in New York is the hub where one can find in display the work drawn by both world renowned artists and also new talents who want to provide their mettle in the incredible world of art.

There are numerous people who would love to purchase a good piece of art made by some renowned artists. The only thing, which is holding back many people from doing this, is the presence of fraud art dealers and fake artists in the world of art. Well imagine how frustrating it would be if you buy a beautiful piece of art with your savings and after that come to know that the art piece is fake. It can be a very annoying experience, especially for someone who loves and appreciates art. Miroslav Klabal makes sure that no individual who purchases art pieces from him faces this situation.

Orange Pay As You Go – Now With Latest Samsung Mobile Phone

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Jun 012024
 

Orange lets you enjoy the complete mobile experience with Samsung phones. With its pay as you go deal, Orange has introduced quite a cheap and convenient way to get your favorite Samsung phones.

Orange pay as you go mobile phone mainly is a deal that allows you to talk freely without any worry about credit. When you take an Orange pay as you deal, you pay for what you use rather than entering in to any kind of contract or pay any hidden costs. Thus this deal is quite a safe bet as compared to other ones and most importantly, you get your favorite Samsung mobile with it.

Be it the latest multimedia or feature-packed mobile phones, there is whole lot of Samsung mobile phones available with the deal. Samsung’s D series, C series, E series, P series have introduced some of the feature-packed mobile handsets having features like camera, MP3, Bluetooth, GPRS, and many more latest features. You have the freedom to choose among them your favorite one.

Along with the phone, you will also get to choose among various tariffs plans. As, this is a pre-paid deal, you will not have to pay any rental or other fee. But for your benefit, you can avail beneficial tariff plans that would help you cut down your call rates and other charges. Many of the lenders would even offer the mobile phone free of cost with the connection so as to serve you better and make your mobile expenses in budget.

The most affordable and easy way to get an Orange pay as you go mobile deal is to go online and shop with the retailer available there. There are hundreds of mobile phone retailers online that offer cheap and reasonable mobile phone deals. All you need is to go look for the best among all of them. This can only be achieved through online shopping as it gives you room for comparing and negotiating. So with all these conveniences offered by pay as you go deals, there is hardly any reason to go back. Get your favorite Samsung phone and make the most of it with pay as you go deal.

Be A Rebel: Contrarian Investing

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May 282024
 

Buying stock on a hunch that it may go up when all indicators are that the particular stock of interest is destined for a down turn is known as contrarian trading. While this particular type of trading is incredibly risky it can also provide astonishing payoffs to savvy investors. The truth of the matter is that most people in a position to provide trading advise are the very ones listening to the same advice they are providing to you. They do not, for the most part, formulate their own opinions, theories, or hypothesis but rather follow the very same market trends and prediction models that most of the other advisors and brokers are using as well.

If you wish to be successful when it comes to contrarian investing you must first learn to think well outside the box. By learning where the vast majority of traders (by this I mean 80-90% of investors not a mere 60 or so percent) keep their money and by then keeping an eye on the market for indicators to buy elsewhere you can seriously increase your personal wealth by going against the flow.

One important thing to keep in mind with this particular sort of investment strategy is that it is a high-risk type of investment. Chances are that you will be wrong on occasion when taking the road less traveled. In fact, the chances are that you will be wrong more often than not. With this particular style of trading one must trade quickly and work to keep losses minimal rather than sitting and waiting in order to avoid losses along the way.

With this in mind it is very important that you always have an exit strategy when utilizing contrarian trading. For this particular type of trading you must have a strategy in place to get out quickly if things turn south and protect as much of your investment as possible during the process. It is also a good time to consider buying when most people are bailing, wailing, and gnashing teeth at their brokers.

Another thing to keep in mind is that sometimes the best commodity to hold is cash. There have been times in the past when pulling out of the market for a year or two would have served the average buyer much better than trying to weather the storms that have risen and receded along the way. If you find nothing that is appealing to you for investment consider a money market account until something comes along to strike your fancy. Some of the best deals at any point in history have been made on hunches or simple interest.

The important thing to remember when investing is that if you do what everyone else is doing, you will get the same results that everyone else is getting. If you step outside the box and do something fantastic or different, chances are that you will experience fantastic results for your efforts.

Commercial Real Estate Misconceptions: You Mean Location, Location, Location Was a Lie?

 Flowers  Comments Off on Commercial Real Estate Misconceptions: You Mean Location, Location, Location Was a Lie?
May 062024
 

Commercial real estate is a wonderful, exciting business that can offer a wealth of opportunity for those who look for it! Many people are often hesitant to enter such a market as commercial real estate for many different reasons. In fact, there are some major misconceptions about commercial real estate which I am going to address here.

Many people who hear about commercial real estate, but aren’t necessarily in the business, often use the expression “Location, location, location!” Many people associate this expression as the truth, that the three most important attributes about a property are “Location, location, location!”

I am here to tell you- this is absolutely not the case! Now, I am not going to say location is not important, but what if you have a beautiful location for a mountain resort, complete with snowy hills, a perfect location for a lodge, and beautiful mountain views? What you want to do to the property is improve it for a weekend getaway for romantic couples with a beautiful lodge, resort, luxury type housing, and perhaps some individual cottages overlooking the green forest. Sounds great, right?

The perfect location- you can’t beat it! But, you learn that the zoning for this property is residential, R1, to be exact. The use is only one single family residence per acre, and no commercial property allowed. What happened to your “Location, location, location?” It flew out the window!

The most important aspect of a property is the use. What is it intended for by designation of the city or county? It does not matter where the property is, if you cannot get the zoning that is in the realm of your intended use.

It is possible to get properties rezoned, especially as cities change and grow. Be sure to consult with the city or county to determine if these changes are even possible, because you do not want to buy a property that you cannot rezone, and be left with an unprofitable property on your hands.

Most people believe that commercial real estate is complicated and you need a special education or know how to succeed in the business. Many think that commercial real estate is filled with international finance, heavy and complicated math, complicated tax rules, and forms and applications that are just too complicated to understand correctly.

I am happy to tell you this misconception is the worst, because it puts a road block in front of many people’s aspirations to become a commercial real estate insider. Let me put this misconception to rest. There is math involved, and most of it is not at all complicated: simple ratios, adding, subtracting and multiplying. What is even better is you don’t have to do the math. There are others who can do that for you. The same is true with property management, inspecting the property, and doing the year-end tax report. In fact, commercial real estate is less complicated than residential real estate because you can focus your energies on a single deal that will be worth perhaps 10, 20, even 50 residential deals and more!

Let me put it into perspective for you. If you owned a business (many of you may), would you create strategies, keep the books, manage the many locations, sell on the front floor, and take out the trash after the day was over? I think not! Commercial real estate is made up of many people whom are there to help you with whatever you need. You must position yourself as a real estate insider, which is a leader in the business.

Another misconception is commercial real estate is management intensive, that you must manage every property you own. Let me tell you when you end up owning 10 or more properties, this is almost impossible to do! You do not have to actually manage your properties yourself, so you can concentrate on creating more deals. Hire a company or set a team in place to take care of this “day-to-day” business.

As you can see, what is passed around in dialogue about commercial real estate is not always true. Before you take everything to heart, be sure to get your facts straight. In fact, many people in this profession speak about commercial real estate as a business in which only the savvy and sophisticated can succeed. They often act this way because they want to keep people out of the market by differentiating themselves. If you were in this position, you would too!

How To Become A Commercial Real Estate Expert In Your Own Backyard

 Flowers  Comments Off on How To Become A Commercial Real Estate Expert In Your Own Backyard
May 012024
 

Many people may not realize you can literally become a commercial real estate insider just by working in your own local community. There is a wealth of opportunity for those who are motivated and wanting to make a difference, not only in their own lives, but in the lives of people in the community as well.

You do not have to travel across the United States or around the world to find money making properties that will financially take care of you for the rest of your life. It simply takes two things in order to become a real estate insider: knowledge of your community’s real estate opportunities and a steady increase in your own education.

What makes a real estate insider?

A real estate insider knows the ins and outs of the real estate market in his or her own area of interest. This interest could be in office complexes, strip malls, large apartment complexes, medical buildings, and various other income producing properties The commercial real estate insider recognizes trends, the value of property, changes in values before they happen, all zoning laws and regulations, and infrastructural changes that can drastically affect the values of land on or around the new development.

The commercial real estate insider also knows the city decision makers. He or she knows with whom to speak in order to get information, advice, notice regarding changes in the zoning laws or regulations, and to stay ahead of the real estate market.

How do you become a commercial real estate insider?

To start, you should understand that a large part of commercial real estate is dealing with the officials and decision makers of the city or county because they are the ones who decide zoning and use for every piece of property within the city’s or county’s boundaries. They plan for future growth, and attempt to create a balance among both residential and commercial properties so that the community does not grow too quickly or become unbalanced.

Due to the fact that the city officials are so important to your ability to develop, renovate, and otherwise do what you want to a property, it is crucial that you get to know these people and create a rapport. You also need to know what is occurring in your community regarding real estate at all times. Zoning often changes; there may be new regulations or codes regarding the zoning, or the intended use could be limited to only a few uses that will hinder your intended project. All these things can greatly affect your dealings with a specific property, and how you pick and choose your opportunities.

A good way to meet these important officials, as well as learn about the real estate market in your community, is to attend zoning and planning meetings at your local Chamber of Commerce or courthouse. It is there that you can meet face to face the people who will influence your future as a commercial real estate insider. Introduce yourself as a real estate investor, and give them your card. Ask intelligent questions regarding real estate in your community.

Eventually, after building a rapport with these influential people, ask if you could meet with them to discuss a certain project, or something in which you could use more information or advice. You should always come to these meetings prepared with your questions typed so you stay on task and topic. Show that you appreciate their time, knowledge and expertise.

It is a great idea to ask for a few more introductions to people they know who may be able to help you. Always send a thank-you note that briefly reviews your discussion, what advice you used and how it will or has helped you. When you show appreciation for their advice, they are more likely to help you in the future, or share information of which others may not be privy. You will begin to make excellent contacts and learn key elements regarding your specific market. This is how you become a commercial real estate insider.

Beyond meeting the people who make the big decisions regarding the use of property in your community, you must know the laws and regulations regarding the various types of zoning. Zoning labels may differ from city to city, as do building criteria, the size of lots, building and fire codes, and limitations. You must study these rules and regulations so you know what you can and cannot do to a property. As these rules and regulations often change, it is important that you listen and take solid notes at all zoning and planning meetings, and other important real estate related meetings you might attend.

Your goal is to know your market inside and out so you can make decisions based on the changes in the market before anyone else even knows they are coming. You do this by recognizing certain points, such as an increase in vacancies of commercial property, or an increase in the median home price, or how the new mall planned to be developed in one year is going to greatly affect the land values around it.

In addition to understanding your own market, you should be reading the newspaper, trade journals, commercial real estate books, attending seminars, and speaking with others in your area who are involved with real estate so that you are constantly increasing your knowledge. It is with this constant training that you will learn strategy, finance, information about private lending, how to find deals, how to present offers, what markets are hot, new opportunities in the area others are not aware of, and many other tools and strategies that will keep you ahead of the rest.

To be a real estate insider, you must always be on your game. Make those contacts. Ask pertinent questions. Learn everything you can about your business, and act on this information. You will find yourself finding opportunities that you did not know existed, and you will become a commercial real estate insider sooner than you would think!

Learn the Three Ratios That Are Used to Determine Commercial Lending

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Mar 292024
 

Getting money for your commercial project can be quite a challenge if you do not know how to analyze and present the property properly to a commercial real estate lender. Before presenting your property to a potential lender it is important to determine the most probable ratios that the lender is going to use in making a decision to lend you the money.

There is an increased risk with commercial real estate loans because of the size of the loans. Hundreds of thousands to millions of dollars are loaned on commercial properties and projects. A commercial lender wants to make sure that he or she will get their money back from the generated income of the property.

Most lenders will use the following three ratios to determine if they will loan the money on a project.

The first ratio is the debt coverage ratio or DCR. The DCR applies to the property itself and how much income it is producing compared to the debt service, or how much money is paid out towards the mortgage on a monthly basis. It is expressed by the net operating income divided by the total debt service.

The net operating income is the total income left over from the property after paying all the operating expenses. The debt service is determined by the mortgage terms, such as interest rate, length of the loan, and how often a payment is made. The higher the DCR, the more ability the property will have to cover the debt service. Many lenders require a DCR above 1.2 in order to consider it a relatively safe investment. Anything below that indicates that the property is either barely breaking even, or losing money. A lender does not want to loan money on a project that is not able to cover its debt service.

The second ratio is the loan-to-value ratio. This is expressed by the total loan balances (sum of all mortgages) divided by the market value. When you apply for a commercial loan, as you do for a residential loan, you must determine how much value of the property you are actually borrowing versus what will remain as equity. If you can acquire a loan-to-value ratio of 75%, then that is generally a good number.

If you can get more than 75% of the value loaned to you, then consider that a bonus. Lender’s rules and guidelines may differ greatly depending on how much they are willing to risk on the project.

The third ratio is the debt ratio. For smaller commercial projects commercial lenders may require that you submit personal information to back the loan. This includes your personal income and debt on a monthly basis. The debt ratio is expressed by dividing monthly housing expenses by gross monthly income.

The results show how much debt stands in relation to income. Many commercial lenders will not accept a debt ratio greater than 25%. However, some commercial lenders have been known to go up to 28% or even 36%. A debt ratio greater than 25% stands a good chance of having budget problems.

The lower debt ratio you have, the more likely you will be able to get funding for your smaller commercial project.

Before approaching any lender, it is really important to analyze these ratios on your own. They pertain to your specific deal for which you want to get financing. By performing the ratio analysis on your own, you can better determine if financing will be easy or difficult to obtain, depending on the nature of the project and its level of risk.

It may be a good idea to contact several potential lenders and ask them their basic criteria and guidelines that they follow in evaluating properties. You may find that some lenders are far more conservative than others.

By understanding your property, you can better fit a lender to your specific needs. Also remember that private lenders can be extremely helpful with those risky deals that public lenders will not even consider. Be sure that you are well equipped with the proper information and supporting documentation no matter what lender you approach.

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