From a financing perspective, the retail sector continues to be challenged, but there are good gems to be acquired too. From a lender’s perspective, there are particular challenges to retail deals getting done: • lease roll overs, • expiring leases with no backfill identified, • downward pressure on retailer credit, • lack of transparency on retail sales figures, and • long term permanent loan take-outs. All of these issues can have significant impact on leverage levels, pricing, and whether or not a deal can even garner interest from a lender. And who’s the culprit threatening retail? Why e-Commerce, of...
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MORTGAGE PLANNING: 30-YEAR FIXED V. 15-YEAR FIXED
The shorter the term of the loan, the less interest you pay, and the sooner you pay it off. So, why not apply for and obtain the shortest-term loan possible? This makes good sense if you are comfortable with the payment. Let’s take a look at the following 3 scenarios, a 30-year fixed, 15-year fixed, and a 30-year fixed paid over 15 years. TYPE OF MORTGAGE INTEREST RATE LOAN AMOUNT MONTHLY PAYMENT INTEREST PAID OVER LIFE OF LOAN 30-year fixed 4.0% $300,000 $1,432.25 $215,607.20 15-year fixed 3.5% $300,000 $2,144.65 $86,036.45 30-year paid over 15 yrs 4.0% $300,000 $2,219.06 $99,431.74 ...
May 25, 2019May 25, 2019
COMMERCIAL REAL ESTATE AS AN INVESTMENT
Wait a minute … shouldn’t this be written by a commercial real estate broker? Good question – read on. Money is mobile. It moves among markets, countries (currencies), and asset classes in order for the investor to optimize his (or her) risk/reward. This is notable and timely today given the recent activity in the stock market. Some of these market participants are going to reconsider their allocation of assets. Commercial real estate may be on the table – maybe your table! Commercial real estate investment doesn’t consider flipping houses, up to 4 units. This is also real estate investing, but...
May 15, 2019May 15, 2019
SO WHAT HAVE YOU DONE LATELY?
This was a refi of 2 existing gas stations with convenience stores in the Phoenix metro market. Underwritten as a portfolio loan, but structured as 2 separate loans. The loan was conventional and refinanced 2 SBA 7(a) loans. The refinancing released about $2.3mm of SBA capacity to be re-used for additional acquisitions. Combined loan amount was approximately $3.2mm, and included about $1mm cash out to the borrower. LTV was about 70% with an interest rate in the low 5’s. This was a strategic refinancing that allowed the borrower to reduce his debt service, liquefy...
April 27, 2019April 27, 2019
LOAN APPROVAL
You received the loan approval from the lender. Does this mean you are done, and that you can now go to closing? Not quite. The loan approval is usually issued by the underwriter after the initial review of the file. It is usually a conditional approval listing conditions that need to be met prior to the loan being final approved and cleared for closing. For example: the underwriter may have found other addresses associated with your name. You will be asked to write a letter explaining whether you currently own those properties. If you don’t own them, then that condition...
April 25, 2019April 25, 2019
THAT’S A WRAP!
Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. No, we’re not talking about the closing of the Mueller investigation of President Trump for collusion, obstruction, etc. This is a wrap of a different kind. We’re talking about a wraparound mortgage. A wraparound mortgage is a type of junior (subordinate) loan which wraps around, or includes, the current note due on the property. The wraparound loan will consist of the balance of the original loan, or more, plus an amount to cover the new purchase price for the property. These mortgages...
March 31, 2019March 31, 2019
CLIENT REVIEW: WHY WORK WITH A COUNSEL MORTGAGE BROKER
John at Counsel Mortgage Group was fantastic to work with in the purchase of my first home. As a veteran, he navigated me flawlessly through the VA loan process which I have heard other vets tell me horror stories about. He went above and beyond, reaching out after hours for information that was needed and willing to work my purchase on weekends. It actually was not painful at all but a very pleasant experience and I will take my business to him when needed in the future. John made the task of purchasing easy to understand and straight...
March 25, 2019March 25, 2019
THE QUALIFYING ACRONYM – ACID® Test
March 8, 2019May 14, 2020
DOWN PAYMENT: WHAT CAN YOU USE?
Many lenders will try to sell you no money down payment loans, or down payment assistance loans, but it is likely that these loans will have higher interest rates and more costs. If you can come up with a down payment, in some instances as little as 1% of the sales price, you may be able to get the lower rates and costs. Here are some ideas of allowable down payment sources: 1. Cash from your own accounts 2. Borrow from your 401k plan 3. Gift from a relative 4. Co-signer on the loan 5. Gift of equity if purchasing...
March 7, 2019March 7, 2019
BANKS ARE EXPECTING A STRONG YEAR (2019) FOR CRE LENDING
Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. The Mortgage Bankers Association (MBA) recently reported another stellar year for commercial/multifamily mortgage originations in 2018. Although the MBA will release final data next month, results from its fourth quarter mortgage originations survey point to volume that could be 3% higher than the record $530 million reached in 2017. Banks are facing more competition. Growth of non-bank lenders has added a whole new dimension to the competitive landscape, particularly in bridge and construction financing, notes Kathleen Farrell, executive vice president, line of business...
March 6, 2019March 6, 2019