100% Financing For Private Money Loans: How It Works

June 26, 2009 by  
Filed under Private Money Lending

Private money loans are considered as saviors for many real estate investors in the industry. These loans are usually favoured for their fast processing time and bigger released amounts compared to bank loans. Also called hard money loans, this real estate financing option bases the amount released according to the collateral given by the investor when it is in good condition.

In most cases, most private money lenders release at least sixty five to seventy percent for a property in its ARV or after repair value. However, there are lenders who are willing to finance 100% on a project depending on the deal. The question is: How does a real estate investor get a lender to finance the property 100% of its restored value?

Here are the factors that can affect this financing option:

These are the three main things that every investor should consider when getting private money loans for their properties. Each of these factors definitely has a big effect on how an investor can make it or break it in the real estate industry.

Commercial Mortgage Loans; Private Equity Firms are Actively Lending

June 22, 2009 by  
Filed under commercial mortgage lenders

The credit crisis is realality and has been absolutely devastating to commercial real estate investors. Large, conventional lenders such as national banks, Wall Street investment houses, Connecticut insurance companies and large multinational corporations (i.e. GMAC) have stopped making loans that can’t be sold to the Government or securitized. GSEs (Government Sponsored Enterprises) like Fannie Mae, Freddie Mac, Ginnie Mae, HUD (Housing & Urban Development) and FHA (Federal Housing Administration) are doing their best, providing as much liquidity as they can, but the bond market has stopped functioning as a provider of capital. There is still a massive shortage of money to lend. Hundreds of billions of good loans that should be approved are being turned away.

Desperate commercial real estate professionals are scrambling to find lenders who are actually willing to lend. Borrowers seeking alternative funding sources are increasingly turning to private equity firms to secure the funding they need.

Private equity firms are investment companies set up to invest the wealth of their sponsors and investors. They are similar to hedge funds in some respects but are structured a bit differently and can be more flexible and creative in their investment policy. Many private equity companies are flush with cash and hungry for good deals. Developers and property owners that have developed a relationship with private equity firms enjoy a reliable source of money for their real estate ventures.

Very few private equity companies are set up exclusively to be commercial mortgage lenders. Most are designed to use sophisticated LBO (leveraged-buy-out) strategies to acquire other successful businesses. However, many firms have real estate divisions that are willing to make loans and / or take equity positions in good deals they come across. These firms usually have a degree of expertise in commercial real estate and have a healthy appetite for mortgage paper.

Private equity firms are highly opportunistic and seek high returns. They charge interest rates in the mid-teens and usually tack on several origination points as-well. Private loans are not inexpensive, but at least they are available. Private equity companies lend based on the amount of equity in the collateral real estate; their loans are not driven by credit. Many borrowers with less-than-perfect credit are surprised to learn that they still qualify for an equity based loan from private equity.

Private equity is protective of its investment capital; they demand a significant amount of equity in any deal they fund. It is exceedingly rare for a private equity loan amount to exceed 65%-70% of the value of the target property. Most loans they make are “bridge” type loans that mature in less than 36 months. Before they lend money they must be confident that the borrower has a viable exit strategy.

With the banks and other big lenders out of the picture, private equity has been stepping in to take advantage of the huge commercial real estate mortgage market. For borrowers fortunate enough to know who they are and how to approach them, private equity can provide all the money they need. Borrowers without established relationships with private equity will need to use intermediary, agent or consultant that has Wall Street experience to gain excess.

MasterPlan Capital LLC (http://www.masterplancapital.com) offers private and institutionally funded commercial mortgage loans, equity financing and asset management services to commercial property owners and investors nationwide. CLICK HERE TO APPLY FOR FINANCING – Please visit out our blog.

Glenn Fydenkevez is President of MasterPlan Capital LLC, a dynamic, privately held commercial real estate investment bank, active nationwide in commercial real estate finance and investment.

Mr. Fydenkevez is a 20 year veteran of Wall Street and has served as an officer at one of the worlds largest investment banks.

Commercial Mortgage Online

June 22, 2009 by  
Filed under commercial mortgage lenders

A commercial mortgage loan is a type of business loan availed against a security of a commercial property. Almost anyone who has applied for a traditional form of commercial mortgage will tell you of the harrowing experiences they might have faced in trying to locate commercial mortgage lenders, selection of the right person and finally availing the commercial mortgage loan. All this requires plenty of moving around and unnecessary hassles. But all of our prayers seem to have been answered in the arrival of the commercial mortgage online service. As many others have discovered too, the business mortgage online business services are informative, rapid, well structured and well marketed too. Many of these sites will guide and counsel you on how to go about acquiring commercial loan finance online. Most of the websites follow a comprehensive style of research and analysis before they give you their sound opinion. There are experts who will ask you for your credit proofs as well as the equity of your commercial property and based on your particular requirements give you advise on which mortgage loans will be suitable for you. Most of these companies will also guide you through the entire process so that you do not face any hassles. They would then structure a repayment schedule for you based on your income and the targeted amount of time you would feel comfortable in paying back the loan. Based on the advice of a commercial mortgages online expert, you have to decide the best mortgage rates for yourself. A good commercial mortgage loan online is generally one that will increase your overall ROI. Most private mortgage lenders usually make an advance of 75% of the value of the commercial property against which you are taking the commercial mortgage online loan. Because of the large number of online mortgage companies both big and small offering business loan finance online, it is advisable to conduct a research of your own, whereby you will have an idea of the authenticity of the loans being provided. Online borrowers also have the privilege of conducting a search for low interest rates and easy loan repayment structures. Acquiring a business mortgages online does not consume a lot of time and effort. All you have to do is fill out a requisite form, provide information regarding financial details, your business assets, details of age proof, address, contact numbers, etc. Once the firm verifies these details, your business mortgages refinance online loan will be approved and you will be notified about repayment structure and the arrangement made to credit the loan amount. You are also provided expert advice on the commercial mortgage terms that will suit you and your conditions. Most of these commercial mortgage lending companies are overseen by Financial Services Authority and will adhere to a code of practice accordingly. Expert advice for obtaining a commercial loan refinance online usually includes interest rates and on redemption penalties which are three tiered. You will be informed about extensions on lapses of payments, discharge fees, penalties therein, etc. You will also be advised on the different types of commercial mortgage leads with the various interest rates too. You usually have a choice of

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Self Employed 401k Plans – Savvy Options For Retirement

June 2, 2009 by  
Filed under IRA-401k

It is impossible to overstate the importance of research and planning when it comes to developing a viable business. Too often, though, the same people who boldly enter the realm of self employment are those who also fail to properly plan for retirement.

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