Commercial Real Estate Loans

Real Estate rentals usually refer to renting the real estate for a regular income. In this kind of investment the risk is less and the income is regular as compared to other investment options. We should take time to learn the basics so that, we can make good decisions over time. Adding real estate to a portfolio definitely requires an understanding and knowledge of the real estate renting business. There is a lot to learn when it comes to purchasing in real estate to rent. So always plan and prepare well so that you remain protected and don’t make any critical mistakes.

To be successful in real estate business is not easy job and not everyone’s job to be successful. In this luck all matter how good or bad it can be at times. After all, why would you get into an industry that may fail? The few tips are designed to help you to become a successful in the real estate business. It is very easy to just see the money that you can make by buying and selling real estate, but for that also you need a lot of knowledge about real estate business.

Following are certain tips on how you can take an effective decision:

Tips for Investing in Rental Property

1) Before applying for any loan take a clear idea about your financial situation in terms of credit
2) Decide what kind of real estate property you want to purchase like Single-family homes, Apartments and duplexes, commercial buildings and even vacation rentals are all possibilities.
3) Enlist the help of a real estate agent.
4) Hire a rental manager. This is very important if you do not live near the rental area. Continue Reading

As the deepest U.S. recession since the Great Depression grinds on, there are some hopeful signs for a turn around in the much diminished commercial real estate arena.

One factor helping to drive commercial building starts is the aging of America. As the Baby Boomer generation pushes the age demographic ever upward, more senior housing and nursing care facilities are needed. The result is an increase in construction starts for these two areas over last year, according to the Seniors Housing Construction Trends Report 2011.

According to David Schless, president of the American Seniors Housing Association (ASHA), it is an important but modest amount of new construction. “Until the capital markets change and the economy improves, we expect to see relatively muted levels of construction of market-rate seniors housing.”

Senior apartments are responsible for 49 percent of the new units currently under way, of which, only 8 percent fall under the category of market-rate properties. Another 20 percent of the new projects are independent living properties, with assisted living properties accounting for 16 percent and nursing care buildings 15 percent.

Another area of recent activity is commercial building investments in secondary markets across the country. This trend may be led by spiking valuations for office properties in a number of gateway cities. Continue Reading

There are many types of commercial real estate mortgages that are available. Deciding on the type of financing you need or want depends on many factors. One of the most deciding factors is your exit strategy. If you plan to buy and keep a retail center for a long time, you would consider a long term permanent loan with a fixed interest rate. If you want to buy an apartment building and your strategy is to flip it pretty quickly, you want to consider a loan that has a low upfront cost and low interest rate. Here are the most common types of mortgages and how they are best utilized:

Long Term Loans – These loans are up to 10 years in length, are fixed rate loans, usually have a prepayment penalty and are typically amortized over 30 years.

Short Term Loans – These loans are typically up to 3 years in length, have lower interest rates than long term loans and are typically amortized for less than 30 years. These commercial real estate mortgages may suit you if you plan on selling the property within a short period of time and overall would cost you less because it doesn’t have a prepayment penalty.

Conduit Loans – These mortgages usually have low interest rates, with long amortization periods and can be nonrecourse loans. Nonrecourse means that you are not personally liable for the loan. These are good for properties that are stable with credit tenants.

Small Business Administration (SBA) Loans – These loans are insured by the SBA, given through SBA approved lenders and they have some of the most favorable terms such as low down payments, lengthier loan terms, as much as 40 year amortizations and low interest rates. Most of these loans are given to owners who occupy at least 51% of the property and can be used as a construction loan if you occupy at least 60% of the building. Continue Reading