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Monday, March 30, 2015

Only one point bridge loans & no prepayment penalty!

We charge only one point, and our bridge loans have no prepayment penalty!

A bridge loan is a fast commercial real estate loan used to bridge a short period in time.  Years ago bridge loans were also known as swing loans, although this term has fallen out of common usage.

Typically bridge loans have a term of just 6 months or one year, but many bridge loans also provide for a 6-month or a one-year extension upon the payment of an additional 1/2 point to 2-point extension fee.

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Sunday, March 22, 2015

Submit Your Commercial Mortgage App Today

We continue to seek first mortgages between $100,000 to $3.5 million on standing commercial properties nationwide.

Our hottest product right now is our blanket loan against a portfolio of rental homes.

We will also hypothecate notes and buy commercial loans at a discount.

                                            Apply Now

Wednesday, March 18, 2015

What counts towards the developer's equity?

It is the sum of the following:
  1. The developer's cash down payment on the purchase of the land.
  2. It does NOT include the principal and interest payments on the land loan used to buy the land.  Payments on a land loan don't add value to the project.  In theory, a developer is supposed to pay cash for the land.
  3. But definitely include any appreciation in the value of the land since the buyer purchased it, either because of time (maybe the developer wisely bought the property in 2009 at the bottom of the market) or because of the happening of some external event, such as the completion of a freeway off-ramp on the subject strip or the opening of a nearby Wal-Mart.
  4. Any increase in land value due to a zoning change or use change.
  5. Any increase in value of the land due to assemblage.  Sometimes an assembled parcel is worth far more than the sum of the purchase prices of the various parcels.  Imagine a developer who is able to buy six ugly, old rental houses along a busy strip and combine them into a site large enough for a modern new strip center (called a mini-mall in Southern California).
  6. Any monies already expended for architect's fees.
  7. Any monies already expended for engineering fees.
  8. Any monies already expended for legal fees, especially when used to get the zoning or use changed.
So how much equity is enough?  Generally a developer has to cover 20% of the total cost of a project.

Tuesday, March 17, 2015

Why is it hard to get USA commercial construction loans?

The reason why is because the vast majority of developers don't have enough equity or skin in the game.  They want the bank to take all of the risk. Would you do that?!?

You should also know that construction loans have to be disbursed in stages; otherwise the developer could just skip town with his wife and the bank's $4 million.  The bank will therefore insist on making frequent progress inspections to ensure that building is being constructed according to the plans and specifications.  Of all of the various types of commercial lenders - life companies, conduits, commercial banks, credit unions, and hard money lenders - commercial banks are the ones best equipped to issue a number of smaller disbursement checks.

You can apply for a USA commercial loan right now!