Learn the Three Ratios That Are Used to Determine Commercial Lending

 Flowers  Comments Off on Learn the Three Ratios That Are Used to Determine Commercial Lending
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.

Top Reasons Why You Should Do Commercial Real Estate

 General  Comments Off on Top Reasons Why You Should Do Commercial Real Estate
Mar 282024
 

Getting involved with commercial real estate could be the best decision you have ever made. Whether you are currently working within the real estate industry, or are new to the business, commercial real estate is one of the best kept secrets of those already succeeding in the business. The rewards reaped within this industry compare to no other, as you will soon learn.

If you feel commercial real estate is something you are not able to accomplish, I would have to say you are greatly mistaken. With a little knowledge and a great amount of motivation, anyone can succeed in this business. The benefits far outweigh the costs, as you can create a life of which many dream, but never actually experience.

The first great benefit is one that allows you to create a schedule that best fits your personal situation. In commercial real estate you can work full or part-time and still create wealth and equity you never knew was possible!

Commercial real estate can easily be a part-time job that brings in incremental cash flow. You can even start out part-time, and hold a job until you have enough cash flow and money so that, eventually, all you do is commercial real estate.

Commercial real estate as a full-time job allows you to have many benefits such as being your own boss and having the ability to work from home. You can create your very own commercial real estate business and quickly build a strong net worth as well as positive cash flow.

Another great benefit is it does not take years of training, or years of moving up the corporate ladder to be successful. You can start right now, today! You can begin your commercial real estate endeavors whenever you so desire because there are very few barriers of entry to this industry.

Probably the most enticing benefit of commercial real estate is profit. Huge profits, in fact, which can be made with a limited amount of effort. You can make the same amount of money quick turning or selling 100 single family residences as you would make with a single commercial real estate deal. The profits can be astonishing!

It takes the same amount of work for every commercial real estate deal, meaning you must go through the same processes each time. Why not maximize your result and go for the larger returning deals, rather than the smaller ones? Synergy is a key word in commercial real estate, as small changes can yield huge results.

In commercial real estate, your financial investment is very low, perhaps even non-existent. You can purchase property with 100% of other people’s money (OPM), and create large profits for yourself. This is the only industry where there are literally hundreds of millions of dollars just waiting to be borrowed! Find the money and get to investing!
As you can see, commercial real estate meets and exceeds the expectations many people wish they could have in their own career and personal lives. You can make commercial real estate whatever it is you want it to be… a supplemental income or primary career. Take some time and imagine that all these great benefits were yours. How would life be?

If you think commercial real estate is more than you can ever dream of, begin your research and start learning all about it. Find people working in the business, and get acquainted with the investment strategies and methods that can return huge profits in a very short amount of time. Once you truly understand and experience firsthand what commercial real estate has to offer, I know you will look no further for other money-making, equity building, life creating businesses.

Credibility One Of The Most Over Looked Items In Real Estate

 Fragrance  Comments Off on Credibility One Of The Most Over Looked Items In Real Estate
Mar 272024
 

There are several different ways I built credibility.

First of all, like it or not, people make value judgements about you before you even open your mouth. Think about it. What preconceived ideas do you have about a bag lady vs. a movie star? You get an image but the reality is you don’t really know anything about them. It is in your best interest to present a well-groomed professional image and make sure your staff members comply as well.

This professional image extends to the meeting location you choose, the marketing items you provide, and your presentation.

This is whether you want to borrow money, buy their house or sell them a home.

The first verbal message should be to gain rapport with the guests. I share that I have lived in the area for 10 years and I have kids in school. I establish credibility as a member of the community. We are in this together. If you lose, I lose – and I’m not gonna lose because I have a lot at stake.

The actual presentation sends one clear, consistent message such as “you loan me money and I’ll give you high interest payments”. That’s it. While I have other facets to my business and other interests, I do not waiver in my message.

Sending a straightforward message in an easy-to-understand way, to convey credibility because there is no “small print.” You let them know this is a simple program. These are the simple forms. This is the way it works. Period.

Current action conveys credibility. I always mention one of my most recent deals which is usually that I bought and/or sold a property yesterday or within the last few days.

In my presentation I acknowledge their fears and openly address a big one when I show the slide that says, “What Happens to my Investment if Alan Dies.” They usually chuckle because they thought of that but didn’t want to say it. I let them know that the corporation is structured to sell properties and their principle and interest will be paid as agreed. Talk about credibility. Have I not crossed all the T’s and dotted all the I’s with this presentation?

Also, If you say you are going to do it, DO IT.

Someone might be testing you by loaning a small amount just to see if you are for real. Make sure you send them their interest check at exactly the agreed upon time for the correct amount. I’ve seen this happen time and time again where the lender comes back a couple months later with more money. Then a few months later they come back with even more money. You must prove that you are for real and that you do what you say.

If you break that trust, it’s over.

Finally, I build credibility by being reachable. I have an office that they can stop by. I have an answering service that picks up my calls 24 hours a day, 7 days a week and relays important messages quickly. I have a web site where the lender can see what I’m doing and, they can send me email and I respond promptly.

Credibility is powerful… Learn to use it to your advantage.

Marketing Research: An Overview

 Flowers  Comments Off on Marketing Research: An Overview
Mar 262024
 

Market research refers to the systematic collection & evaluation of information about the market for your business. Unempirical approach will never help you either launch or operate a successful business. A broad range of knowledge needs to be developed on the basis of a number of facts before you start a business.

Good market research will help you find out the following facts:

§ Location and size of market.
§ Market Demographics.
§ Receptiveness for your product in the market.
§ Trends and outlooks in the industry.
§ Industry structure & lines of distribution.

Market research helps companies know more about the past, present & potential customers, including their preferences towards various products and services. It comprises of testing the market for determining the acceptance of a particular product/service, especially among various demographics. It’s used for establishing thing such as which segment of the population does or will purchase a specific product. Such analysis is usually based on a number of variables such as gender, age, location and income level, to name a few.

Market research also allows the companies in developing information about new products and product lines plus what is the scope of a particular product in the market. Businesses can find out the customers’ response to a comparable product existing in market. It’ll help them take decisions such as whether they should produce a specific product or not.

Of course, you can never sell a product or service that’s not required by the customer in the first place. Hence, you need to learn what does your customer want and how to present the product/service attractively?

With the help of a good market research report you can make intelligent decisions about your business. Market research reports provide you with answers to key questions influencing your business. Thus, help you in better decision making about your business.

Marketing research deals with people & their ever-changing needs and behaviors, which are affected by numerous subjective factors. For conducting marketing research you need to gather facts & opinions in a systematic & objective manner.

Such information can only be acquired once you get market research done with some experienced and reliable market research firm. Getting the market research done is more significant for those running large businesses. Market size is larger for such firms as compared to the small businesses where the market size is not so vast.

Though, small business owners do have a sense of what their customers need, this informal information might not be timely or relevant to the current market. However, focused and organized market information is provided by the market research reports. Also, the information is timely & relevant so that business risk can be minimized. It also helps in spotting current & future problems in the market, identifying sales opportunities and developing plans of action.

To be able to run a successful business you must know all about your potential & existing customers as well as the marketplace you operate in. Acquire as much information as you can from various sources to understand the marketplace for your business. Find out the economic & industry trends, latest products, customer requirements and an idea of the plans and strategies adopted by your competitors.

RNCOS is an industry leader in the field of online business research. We specialize in industry research on various business verticals. To read our reports, please visit us at http://www.rncos.com/Report.htm or email us at info@rncos.com

Beds and How to Get the Best Deals and Tips

 Fragrance  Comments Off on Beds and How to Get the Best Deals and Tips
Mar 252024
 

If for some reason you can’t get the bed buying advice you

desire from a bed supplier then probably you are looking in

the inappropriate place, for instance, lets suppose your

area of focus was antique metal bed frames, it would possibly

be good for you to check a certain home furnishing portal.



Be aware that bed tips might be sourced quite quickly, if you

do not rush when carrying out your bed research and you will

not go wrong, if you should require expert info on merchandise

including antique bed platforms then try and discover a few

specialized bed reviews.



Because of the web, access to a whole load of bed details can

give you guidance on any number of great many items, say you

need a specific item, lets say a Dark Pine Eastern King Poster

Bed, you may be wiser looking in a bedding or bed portal, these

websites will contain specific categories so locating a

Complete Full Matte White Sycamore Bed, Aero Premier Pillowtop

Twin Airbed or possibly a Monterey White Queen Captains Platform

Storage Bed should not be a problem.



Most bed info with the help of the internet can be sourced

in the United States, Australia and a whole host of countries,

home improvement directories ought to give the details of

globally based bed websites so getting beds from your global

area is quicker and more effortless than in days gone by.



Consider also when you search this area of interior design

that you might be overloaded with a good deal of truly varied

research results, such results as Carlyle Dark Finish King

Panel Beds and metal bed frames may though be very relevant

to your needs.If you can’t obtain the home furnishing help

you require from a bed store then it is very likely you are

looking in the incorrect place, for example, lets imagine

for a moment your subject of research is Complete Full

Provence Earthly Sand Beds, it would probably be best to

check a specific bedding site.



The bed experts will be able to offer you some prime niche

info on issues such as obtaining the lowest price on Charles

Queen Size Headboard CognacFashion Beds and how to get the

right merchandise guarantee while buying a bed, such bed

assistance will surely make sure you order the best products

for your needs.



One of the most important bed purchasing tips that someone

could supply is, you must definitely not buy the first product

you discover, going through a modest variation of bed

retailers will supply anyone with adequate details to

produce a realistic cost review.



This bed search tip is especially valuable, instead of

simply using a research term like “beds “, you should make

use of a more specific search engine phrase such as”new bed

and bedding stores” or “steel framed bed makers”, in doing

this your results are going to be highly targeted to your

particular bed needs.



lets imagine you are hunting for TwinFull Futon Bunk Beds

or Twig Beds, without a doubt these type of merchandise may

very well not actually be freely available on too many portals,

you should really ensure that you employ your PC favorites

button whenever you conduct this type of bed related research,

your important info should be treated with the greatest of care.



The area of beds can often be pretty confusing but the primary

concern is to try to stick with the item you initially meant to

purchase, you should not set out hunting for King Metal Beds but

end up purchasing Yale Iron bed Qween size Headboards, this is

easily done if you get sidetracked.




Article written by Susan Japordue.

How to Identify Distressed Properties

 Computer HW  Comments Off on How to Identify Distressed Properties
Mar 242024
 

Distressed properties can be located in basically every city. They are available to those investors who have a clear vision and an eye for creating value that is currently obsolete. This strategy of investing is available to anyone, and is used by the most astute investors. The result is a solid, well-performing property that generates the most cash it possibly can.

Very often distressed properties need some maintenance, focus, and a new, professional management team to get the property up to speed with the rest of the market. If it is the owner who is distressed, they very often just want the property taken off their hands so they no longer have to deal with it. Commercial properties can often become difficult and expensive to maintain, and some owners simply don’t have the time, money or patience to keep them up.

Distressed properties are identified by some sort of problem. This problem generally resides with two aspects of the property: either the property itself or the owner. The problem can be simple like a high vacancy rate of an apartment complex, or something much larger like the possibility of a property going into foreclosure because the owner cannot make the mortgage payments on time. This can ultimately ruin a person’s credit if a property is to go into foreclosure.

Before we look at a few ways to locate distressed properties, let’s first look at some specific characteristics of distressed properties that you may come across in your search.

A distressed property may have:
• high vacancy rates
• below market rents
• poor management
• old, run-down condition
• poor common areas
• no amenities
• low net operating income (NOI)

A distressed owner may:
• be too old to maintain the property
• have inherited the property and doesn’t want the hassle
• cannot pay the mortgage
• be facing foreclosure
• be in bankruptcy
• be going through a divorce

Distressed properties can have a multitude of characteristics, combination of characteristics, and even odd problems specific to a property or owner.

So how do you identify these distressed properties? One way is to drive around your community looking for buildings that look vacant, run down, not fully leased, and those that display for sale by owner (FSBO) signs. If a property looks like a sore thumb in a nice area, then that is a flag that there might be something wrong. You can go to the county, find out who owns these buildings and send out a letter campaign telling them you wish to purchase the property. Many deals can develop this way, and you can get great prices on properties you didn’t even know would be for sale.

Another way to find distressed properties is to call brokers on listings you find on the internet and simply ask why the owner is selling. You may have to call on quite a few properties, but eventually you will find that gold mine property being offered way below the market rate. With just a few changes that distressed property may be a money generating machine once more! You can even call on brokers to locate and bring you properties with problems that fit your targeted criteria. This strategy of finding distressed properties is a great one, as you can very quickly cut through the many listings that do not fit your criteria.

In order to turn these distressed properties into current market premium properties that retail investors would envy, use the following tools to bring the property up to par. You can renovate the building, change the management team, fill vacancies, add amenities, raise rents to market level, change the leasing agreement, lower overall expenses, and market it properly to a wider audience. With these simple tools, your once run-down, non-performing property will create more cash than anyone would have imagined.

Don’t discount the value of poorly performing properties. Working with distressed properties can be a great way to purchase a property inexpensively and get your foot in the door of the commercial real estate industry. This investing strategy can be far easier than purchasing retail properties at a premium price! A little work and the property can be worth so much more, and supply you either passive income for years to come, or a retail property you can sell at a premium.

Fly on budget

 General  Comments Off on Fly on budget
Mar 232024
 

Looking at the oil prices lately you may decide to skip this year’s vacation because the flight tickets will cost you a fortune. But what about flying for free from London to Barcelona or for just 130$ from US to Germany? This will be perfect deal if you know how to find it.

It took almost a decade after the European Open-Sky Treaty of 1992 enabled airlines to fly anywhere they wished in the EU without government approval to see the business booming. But this phenomenon is observed not only in Europe – low-cost airlines are available all over the world and you can find a comprehensive list and traveler’s tools on www.travelweaver.net.

The low-cost airlines are also known as budget, low-price, discount or no-frills airlines. In order to keep the prices low they provide ticket-less travel, online ticket sales and have no offices internationally; most of them don’t provide free food or beverages as well as in-flight magazines; also they don’t participate in frequent flyer programs and don’t have club lounges. One of the main characteristics of the low-cost airlines is that they have limited coverage and use secondary airports, which are less convenient for commuting.

Although the price looks really attractive there are also some catches and you need to be careful with the low-cost airlines. For example there is no possibility to reschedule the ticket and you will lose all the money if you try to cancel it; the baggage limit can also be lower than on the traditional carriers. In all the cases you need to calculate the price for transportation to the secondary airport and plan for the additional time you will need to get there.

One of the oversea carriers that offer cheap flights is Condor. They offer discount flights from Frankfurt to many destinations around the world. You can fly with them to Las Vegas, Orlando or LA for around 130$ (99 €). There is one more ThomasCook company that offers cheap flights oversee while most of the low-cost airlines like Rynair and Air Berlin offer only intra-continental flights.

The key for cheap travel is to plan you trip early and monitor the prices for some time before you buy. If you go to Rynair’s web site for example you can even find tickets for free depending on when you want to fly. If you have planned your vacation early you may find really good deals with traditional carriers too. Look for flights at least couple of months before your schedule your vacation. Also subscribe for the airlines or travel sites newsletters because then you will receive timely information for deals and offers.

Also keep in mind that the travel search engines do not comprehensively search the Web and retrieve the lowest prices. Some airlines do not permit third parties to book their seats and others are launching a lobbying effort intent on overturning the regulations to advertise the actual price they would charge the customer.

Buying the trip from two different carriers may make sense sometimes if the overall price is lower that the combined price for both of them. Very often for example you can fly very cheap in one direction and need to pay expensive ticket on the way back. Look for prices from other carrier in this case and just combine the whole trip. I personally combined trips from Condor and Continental to fly from Frankfurt/Main to Seattle and the overall fair was less than 300 $ while the traditional carriers like BA, Air France or KLM would have charged me 4 times more.

Also one good source for checking air prices is www.farecast.com which compares the airline tickets and makes projections of the prices. They base their algorithm on a comprehensive analysis of prices from the past. They are pretty new start-up and their coverage is not very comprehensive at the moment but you may consider using them in the future.

Don’t take the conservative approach and rely only on one source of information, Internet allows you to do the research you need to find the best offer and take the most of your vacation.

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