All Forum Posts by: Karen Schimpf

And the winner....gray.

@Jason V.  Today the 5 year treasury is around 1.35. The 5 year treasury highest rate in the last 10 years was in 2006 at 5.10.  So if the rate is 5.10 and the spread is 3.5 the rate would be 8.6%, still not 15%.  There are no guarantees but at least that should put your mind at rest.

I recommend  not wasting  any more of your time trying to get a better rate than 4.75% on a 5 year with 20 year amortization. The rate is competitive for this small deal. There is a lot that goes into issuing a rate on a commercial deal.  Like population, the class of the property, if the property cash flows, if the property is 90% occupied, the crime rate, your credit, your reserves etc.   Your time is ticking down and you shouldn't be wasting it over negotiating  .125 of point.   You will need every day of the 60 to 90 days to get your deal closed since the volume is very high right now.  Get your documents in ASAP.

Lastly about the comment about getting a FHA Commercial HUD. The program makes sense on loan amounts around $3MM+. The programs is awesome! The rates are in the 3's with a 35 year term and a 35 year amortization for a purchase. The loan to value is 83.3%. Once again, you will not be able to go this route since your loan amount would not be enough.

Wishing You the Best.

@Daniella Ndzi  Today, Bloomberg posted two articles that were contradicting.  One article was about how values are going up more than they thought...http://www.bloomberg.com/news/articles/2016-03-30/u-k-homeowners-property-prices-have-gone-up-faster-than-you-thought

Per Bloomberg the home values in UK are dropping due to Brexit.  Check out the article here http://www.bloomberg.com/news/articles/2016-03-30/london-prime-home-values-fall-on-brexit-fears-stamp-duty-hike

@Tony Sessa you will not be able to get conventional financing when you buy because a commercial lender will not allow to 100%+ financing. To purchase you are talking about is private money. Private money will allow rehab cost rolled into the loan. The private money lender will still want to see your own money in the down payment, ie skin in the game. The loan to value on a refinance can be 75% to 80% LTV on the ARV on apartments. If you are looking for cash out the, loan to value will drop and the rates will be higher. As far as how soon you can refinance, the typical lender would like 24 months on commercial properties. There are some commercial lenders that will allow 12 months but the rates will be higher. Commercial properties are 5+ units on apartments, office, industrial, retail etc.

FAST CASH WITH PRIVATE/BRIDGE MONEY

We just closed a $1,035,000 private money loan to get a client some quick cash for an acquisition opportunity that had tremendous upside. One of the beautiful things about our fund is that you can use the cash out however you want-no strings. While bridge money can be used for everything from buying vacant buildings and getting the rehab cash to fix it up and make big profits or paying off my good friends at the IRS, the focus of this tip is on the loan size, $1.035 million.

Give me a CALL TODAY to get your deals closed fast at 512-650-8630

Until recently, we kept all our loans between $100,000 and $1,000,000 but an infusion of cash and the opening of a second fund, is now allowing us to entertain deals ALL the way up to $2 Million. Most private money funds, flush with cash, still do not focus on deals under $2 million seeing them as too small and not worth the hassle. To us, a small fund, we treat these deals as critical loans-just as important to us as they are to the clients who need them. And having a team and a lender that actually WANTS to do your loan can make all the difference between approval and denial. We close loans...that's what we do.

Give me a CALL TODAY at 512-650-8630

So whether you need to close quick to capture a foreclosed property, quick cash to get your business back on track or whatever the reason, our fund was created for you. The response time is quick and the results are closings! We closed two loans last week and are actively seeking to fund more.

Give me a CALL TODAY at 512-650-8630

If you need money to bridge a gap, if you need certainty of closing, give me a call today at 512-650-8630. I will personally take the call, crunch the numbers and let you know what can be done. The call is free, our pre-liminary screening is free. Don't delay, call me today 512-650-8630 and consider your loan...closed!

Karen Schimpf
Commercial Capital, Ltd.
p: 512-650-8630
www.linkedin.com/in/karenschimpf/
blog: http://bizloansconnections.com/
website: http://https://securecontact.me/[email protected]

P.S. Who do you know needs a commercial loan? I specialize in Small Business Administration Loans (SBA), Private Money Loans and Commercial Loans. I help entrepreneurs attain financing for their business or project. I BRING COMMERCIAL MONEY FROM AROUND THE COUNTRY TO LOCAL MARKETPLACES INSURING THE MOST LIKELIHOOD OF CLOSING. The key is placing the borrower with the lender that most suits that borrower's strengths. I do it better than anyone. Give me a call today at O:512-650-8630 to get your loan closed.

@Kyle Lane I agree with@Michael Wagnera seller carry financing or master lease are your best bet.  I also agree you do need to do the research to find out why this property is struggling.  Is it truly mismanagement or is the property not right for the area?  What I would add is that if you decide to purchase the property with seller financing, get a third party like note servicing company to track your monthly payments to the seller.  

@Ron Mais it will depend on your market.  Flipping commercial property is not like flipping a single family residence.  Commercial is a different animal from residential. The average time to sell a property is anywhere from 12 to 24 months depending on where you are looking to buy. Getting conforming commercial financing usually takes about 90 days. If your buyer is not a cash purchase and they need financing,  than you will need to be able to provide operating statements, rent roll, tax returns etc. showing a history of the property cash flowing. 

I am working on financing a 6 unit retail space right now and 1 of the units is not rented.  The seller has guaranteed that they will pay rent until the space is leased out with a cap of receiving rent ending at 12 months.  You would think that would make a lender feel more comfortable but it doesn't.  The space is 3,300 sq ft out of the 16,000 sq ft which is significant.  The lenders wants the seller to put into an escrow account 12 months of rent and a guarantee that the seller will pay the lease improvement and the lease commissions.  On top of that the seller has so many expenses on the property that it will only debt service at 55% Loan to Value. This is telling you the buyer is paying too much for the property but the market is hot in the area the property is located.   Retail properties are typically 70% loan to value with a debt service requirement of 1.35 which is higher DS requirement than a 6 unit apartment.  Apartments can go up to 80% ltv depending on the loan amount size and if the property and buyer are strong.  The debt service ratio is typically 1.25 on an apartment.

 I am not telling you not to bother with fix and flip commercial properties because personally commercial is really the way to go.  I would recommend seeking out an experienced fix and flippers of commercial properties and learn how they did it so that you will know the nuances.

Good Luck

@James MasottiI see the picture but hard to tell if the cabinets are run down.  The question is,  do the cabinets look run down?  Light color or white cabinets are in, so why spend the money if they are not run down?  As far as counter tops,  I would go with a multi color top so you can't see stains.  I personally like darker top, gray, black and white, with all the light wood to give the space some dimension against your white stove. Get a sample of what you like and take it back to the apartment to see what you like.

@Nick B.From a lending perspective, we do count the Taxes and Insurance.

@DJ CumminsI agree with @Peter MacKercherof the items you should get but one more thing you need to get is current rent roll.  You need to know how many apartments are currently being rented.  I would try to make sure the occupancy rate is 90% or more.   Than I would make sure you will be able to handle making the mortgage payment on the agreed terms and rate of the seller note. 

A way to make sure you can handle the seller payment is find out if the apartment will debt service of 1.25.  If the apartment debt service with the 1.25 than you will be able to buy the property knowing you can handle the mortgage.  The  debt service calculation is the annual NOI divided by the annual PITI payment.  You will need to find out what the gross rents are minus 5% rent, minus the expenses to determine the NOI. Than to calculate the mortgage payment go to Google and look up a mortgage calculator to figure out what your monthly payments will be and times it by 12 months to give you the annual PI payment. Than find out the annual taxes and insurance and add it you your PI payment. Now do the annual NOI divided by the annual PITI payment.  If the number is 1.25 or higher it looks like a good deal.