Monthly Archives: November 2017

Commercial Mortgage

November 20, 2017Uncategorizedcommercial mortgage, commercial mortgagesbigdaddydennis

Understanding how a commercial mortgage operates in the commercial real estate development is essential for knowing how to use one for the most effectiveness. Even though they might seem similar, they are distinctly different from residential mortgages in important ways.

While there are a number of similarities between a residential and a commercial mortgage, there are also a number of differences. Perhaps the most obvious is with whom the loan is made. For a residential mortgage, the principal party is an individual (or in some cases a married couple). The rates and terms, or even their eligibility, is determined based on credit worthiness. For many individuals this can be a cause of great deals of stress.

A commercial mortgage is granted to a business, rather than an individual. This is slightly different because many business entities cannot really be assessed based on their credit worthiness. There are two different ways to determine whether a borrower is eligible for such a loan. The first is by the business entity putting up assets to secure the mortgage. This guarantees to the lender that if something goes wrong, that they will be able to recuperate some, if not all, of their investment. The other method that is used for an individual within the business entity to be the principal for guaranteeing the loan. This then provides the lender with a specific person to help determine credit worthiness.

Another distinct difference between a residential and a commercial mortgage is the terms of repayment. For a residential loan, a term, say of 30 years is set. The loan is then amortized over that time period so that each payment includes both principal and interest. While it is possible, in many cases, to pay the mortgage off early, it is not expected. However, the terms of a commercial real estate loan are quite different. They can range anywhere up to 20 years (usually not longer), but the amortization is figured differently. For many mortgages, the amortization period extends past the expected end date of the loan. The reason for this is simple. The lender expects the borrower to pay off the remainder of the loan in a single, large payment after the term is up. For most commercial investors, this is not a problem, because they will have easily made back the amount of the loan through sales or through rentals.

Will I be able to pay off my commercial mortgage early?

It is entirely possible that you will be able to do this. However, it is not always an option with certain lenders, and if it is, there are often penalties and fees associated with prepayment. One such method is an interest guarantee, where the lender is contractually obligated to receive a certain amount of interest, no matter how early the borrower pays off the loan. Another stipulation that might be placed on a borrower is a lockout period, during which the borrower is not allowed to pay off the balance of the loan. If you plan on trying to pay your commercial mortgage off early, make sure you know what your lender will be expecting.

Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Important Things to Consider When Working with Commercial Real Estate Lenders

November 17, 2017Uncategorizedcommercial real estate lender, commercial real estate lendersbigdaddydennis

There are many commercial real estate lenders to choose from, but not all of them are going to be the right fit for you and your needs. If you are looking for a successful process when applying for a real estate loan, then try to focus on some of these factors that are going to play a role.

Applying for a commercial real estate loan can be a stressful process which is why it is important to find the right person to work with. The relationship with commercial real estate lenders can make the whole loan process much easier. It really comes down to trust and communication. You want and really need to work with someone that you can trust and that will communicate with you fully throughout the entire loan process, from the beginning of the application to closing.

Remember, you always have options so don’t just settle for anyone that is going to approve your loan. It could take some time to research and find the right fit for you, but in the end, it will be well worth the extra efforts. Some commercial real estate lenders specialize in certain types of loans and properties, so work with one that offers the light loan for you and is experienced in that specific area for the best results.

Another factor to consider is the interest rate. Of course, don’t make a decision based on interest rate alone, but do take the interest rate, along with other fess and agreements terms into consideration. These factors are going to play a large role in finding the right loan and person to work with regarding your financial needs.

Referrals are a helpful way to find the right commercial real estate lenders

It is a big step to decide to work with commercial real estate lenders. Just like when banks are reviewing your small business for loan approval, you are actually reviewing these lenders back, but before even starting the process. Character is going to be a big factor, so listen to others that you trust who have gone through this process. Working with the right fit can make all the difference in the world and recommendations can make the search easier and can be a good idea.

Commercial real estate lenders are there when you need a helping hand

Applying for a real estate loan can be a mixture of emotions, excitement, fear and stress. The entire process from starting the application to getting approved to the actual close can take a lot of time and is dreaded by many. But when you find the right commercial real estate lenders to work with, that will be there the answer all of your questions and concerns, then the process won’t be that bad. Find someone that you trust, communicates effectively and will help you with all of your financial needs.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Asking What is Hard Money Can Be Beneficial to You and Your Small Business

November 17, 2017Uncategorizedwhat is hard moneybigdaddydennis

It is a common question among many in the real estate market, what is hard money? Before diving into your next big real estate and financial decision, you should know all of the expectations along with the benefits when dealing with hard money.

There are some people, especially those in the real estate market that could answer the question, what is hard money, easily. But most probably do not have a clue or good understanding of what it is. In most cases, private individuals or small groups are the main lenders of hard money. One of the big differences with this is that the lenders really focus on the value of the property and not credit score or financial history.

One of the biggest things to keep in mind is that because hard money loans are not based on credit score or financial history, but are instead based on the actual value of the property that is being purchased, they are going to come with a much higher percentage rate compared to other mortgages. On top of higher interest rates, it isn’t uncommon to have also higher additional fees and to have a mortgage that could be twice as high as traditional mortgage prices.

The common question, what is hard money, isn’t the only question that lenders often hear. Many people also ask the question, who needs it? Since you can usually get approved to borrow up to 100% of the price of the property being purchased, then people who flip houses along with developers can really benefit from this. But, be prepared because you will usually have to prove real and valuable assets of the property as credit score doesn’t play a role in approval.

When asking, what is hard money, many developers are pleased with the answer and see many benefits from it

It is often the case that sometimes you can’t easily get approved for a standard loan. So, if you plan on buying a property that you know you will be able to turn into a big profit and quickly, then hard money might be the most beneficial option for you and your small business. It can also be used to fund projects to help raise the property value for the future and this is a smart way to go as well.

If you are struggling to find financial help, asking what is hard money might be able to help you finance your desired project

Of course, it can also come down to who you know and that can be very helpful during this process. If you know of a local lender that you can trust to ask the question what is hard money, then go for it. Speaking with someone you trust and know will give you a direct answer that you will understand will come in handy in the long run. Plus, having a trusting relationship along with great communication with anyone helping with your finances is always important!

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How Commercial Loans can help Your Business Prepare for the Holidays

November 16, 2017Uncategorizedcommercial loan, commercial loansbigdaddydennis

The holidays are quickly approaching up, but is your small business ready for the hectic season? If you aren’t quite prepared for the chaos that the holidays bring, don’t stress! Commercial loans can lend your business a helping hand.

Not only are the holidays a stressful time, but it is also the 4^th quarter and the end of the year, which can always put pressure on any business. Consider looking for financial assistance during this season. Commercial loans are offered by a number of lenders including the Small Business Administration so you will be able to choose from plenty of options to find the right one for your business needs.

Inventory if often a good reason to need extra financial help. Many businesses who sell goods usually see a spike in purchases during the holidays. So, you want to make sure that you have plenty of inventory for your customers to get through the busy season. Especially if you have seen a spike in business during this time of year in the past. Ordering more inventory ahead of time can cause you cut into your cash flow and take a pretty good chunk out of it. That can hurt your business so taking out a loan can help avoid this.

On top of extra inventory, you might need to get additional employees and help as well. Many businesses hire seasonal workers, but that also means adding more people to your payroll. You can have peace of mind hiring these new employees and not stress about finances by looking into commercial loans that can help with the extra costs on the payroll.

Commercial loans can also help pay for extra holiday efforts

Your business can spend a lot of money and time on marketing and this can increase during the holidays. Not only do you need to pay for extra and most likely more extravagant marketing campaigns, but you also need to pay for the extra work that it is going to cause. Since you won’t see the benefits right away from your marketing efforts, it is best to get the fund up front to help establish a marketing plan for the season. Your extra marketing will draw n more customers and create more revenue down the line, so the extra expense at first will pay off in the end.

Also, consider the idea of needing extra equipment during the holidays and get the financial help from commercial loans

With your business needing more inventory, more workers and drawing in more customers, you may need additional equipment during this time of year as well. Commercial loans can help pay for any extra equipment or supplies that are needed. This can be a big expense and it can help to spread the payments out over time instead of dipping into your cash flow to pay all at once.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Evaluate Commercial Loans from the Small Business Administration

November 16, 2017Uncategorizedcommercial loan, commercial loansbigdaddydennis

The Small Business Administration is there to lend a helping a hand when you and your small business need them. But there are still things to consider when applying for commercial loans from the Small Business Administration.

If you are looking to financial a small business, the Small Business Administration is there to help you with loans. These commercial loans are often times offered with lower interest rates along with flexible terms since they are guaranteed by the federal agency. Because of this, you are able to start your business or make large financial changes to it without having to worry about falling into debt. Also, the Small Business Administration is there to help in the wake of any damages or losses from natural disasters.

With a loan from the Small Business Administration, you have the opportunity to find the lowest financing options for your small business. Remember, not everyone is going to qualify, but if you do, research and look for the best option for you. There are different types of options out there and some will be better for you to get on your feet than others.

Mostly banks are going to be the ones issuing commercial loans from the Small Business Administration. It is reported that with help from the Small Business Administration, they are able to guarantee up to 85 percent of loans that are $150,000 dollars or less. And guarantee up to 75 percent of loans that are over $150,000 dollars. In 2016, the Small Business Administration’s average loan amount was reported to be around $375,000 dollars. This can be a great option if you are looking to borrow to refinance your small business, open a new location or even remodel.

One of the many benefits of obtaining commercial loans through the Small Business Administration is the luxury of lower interest rates

Loan rates can vary, but the Small Business Administration are highly competitive when it comes to interest rates. Obviously, it will depend on the size of the loan, but most will see interest rates as low as 6.5 percent and usually always under 9 percent. These are great rates for any small business, whether you are just starting out or looking to refinance.

Be prepared to have documents ready that are prepared for the Small Business Administration to approve commercial loans

The Small Business Administration is going to require some documents to review from your small business before approval of commercial loans. To make the application process go smoother, have the following documents ready for review: a borrower information form, personal history statement, personal financial statement, 3 years of personal income tax returns, 3 years of business tax returns, a business license or certificate, business lease and your loan application history. The process can be quite intense, so the more prepared you are, the less stressful the entire process will be, from the start of the application, to the very end of closing.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How a Successful Business Can Benefit from a Business Loan

November 16, 2017Uncategorizedbusiness loan, business loansbigdaddydennis

Even a successful business sometimes need to find extra financial assistance. There are many good reasons for a business to consider a business loan when in a time of need.

Building your credit score isn’t always easy, but that is where a business loan can help. Everything business strives for a good credit score for many different reasons. If you are in a good place with your finances and business, you want to keep up the momentum by building your credit score. That is because making your payments on time or even early and paying the loan back in full will really boost your credit score.

When your business needs to make a large purchase, it is a wise idea to look into a business loan. Sometimes it is difficult to take a big chunk of money from your cash flow to buy the equipment or other necessities for your business. This way, your cash flow isn’t affected and you will still have the funds to purchase what your business needs. Plus, making payments over time instead of having to make a purchase all at once helps your business manage your finances.

Speaking of cash flow, sometimes your business will boom during certain seasons. It can be difficult to spread that seasonal revenue across the entire year. When your business hits a seasonal slump, you can have peace of mind knowing that you can get extra financial help when you need it, no matter what time of year.

A business loan is also helpful when a successful business decides to expand

Expanding your business is exciting and a good thing, but it can also add up and be an expensive thing. There are lots of things that are needed when expanding your business like more staff and personal, a new space and maybe even more equipment and inventory. All of this could get really expensive and your business may need help upfront to get the new operation going. This is another way a business loan can lend a helping hand to your business. If you are thinking of expanding your business, then take this option into consideration.

There are many ways to benefit from a business loan, but make sure to pick the right one for your business

When it comes to getting extra financial help for your business, there are many options that you can choose from. You want to always do your research and compare your options to know you are choosing the right one for your business. The Small Business Administration is a popular option among many businesses looking for financial assistance. Every business is different along with their needs so there are various types of options to choose from.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Raise Your Business Credit Score to Apply for a Business Loan

November 15, 2017Uncategorizedbusiness loan, business loansbigdaddydennis

When you apply for a business loan, often times your business credit score plays a role in approval. But do not stress, there are plenty of things that you can do to boost your business credit score to avoid application denial.

Every business, small or old, big or small, strives for a strong business credit profile. That is because your business credit report can say a lot about your business. Also, it will help avoid having to pay higher interest rates and additional fees when applying for any business loan.

One of the easiest ways to boost your credit score is to make payments on time to creditors. But to boost it even more, try to make payments early. It is reported that a perfect credit score is often assigned to borrowers who make their payments not only on time, but early. The sooner you start doing this, the better because the longer you have a good credit history, the better. Don’t be afraid to use your credit cards either! You want to use them to help increase your business credit score. Just make sure to never max them out!

Of course, public records are going to come into play when raising your business credit score and obtaining a business loan. Anything that might be filed like judgements, liens and bankruptcies are public record and going to be a factor when it comes to approval and when it comes to your credit score. These things could potentially have a negative impact on your credit score and application, especially if anything financially wrong with your business is recorded.

There are benefits to obtaining a business loan from certain lenders, so be picky!

You may not be aware of this, but not all lenders report to credit bureaus. And the best way to boost your credit score is to make sure that all of your early payments are being recognized by the credit bureaus. Since you want to build business credit, the right way to do this is by working with lenders who will report everything to the credit bureaus. Before working with any lender, be up front and ask them before going forward with the process.

Remember, for a more successful chance of getting approved for a business loan, have good business credit!

It is true that your business credit score doesn’t always play a part in obtaining a business loan. But sometimes it will make your chances of approval better, plus it can also give you other benefits. When a lender looks at your credit score and is impressed, they could potentially offer you not only approval for extra finances, but also lower interest rates. If you have history of making payments early, then lenders could also offer you better terms. As long as you are using a lender that reports to the credit bureaus, your hard work keeping your credit score high with making payments early and showing consistent financial responsibly, then you are going to help maintain or build your business credit score.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Top Things Commercial Lenders Consider When Approving Loans

November 15, 2017Uncategorizedcommercial lender, commercial lendersbigdaddydennis

Working with commercial lenders can seem like a scary thing at first, but if you know how they evaluate your small business for approval, then it isn’t that bad. In fact, the entire process won’t be as stressful!

Commercial lenders take many pieces of information regarding your small business to find out the two main things they want to know for approval. First, they want to know if you are going to be able to repay the loan back and secondly, if you are not going to be able to make payments, what can be collected in return, which is known as collateral.

To start finding these answers, character is often times one of the biggest factors for loan approval. It really doesn’t matter if you have a great deal of cash. Your past financial history will actually say a lot about your character and ability to pay back the loan. Proving that you are able to manage your finances, like by making payments on time, then these are the things that commercial lenders will take into high consideration.

Credit score doesn’t always play a significant part in getting approved or denied, but it is a good idea to try and maintain a credit score of at least 670 to avoid reason for loan denial. A good credit score is going to help back up the fact that you are responsible for your finances.

Commercial lenders not only take credit score, but also collateral into consideration

If you are unable to make payments on your loan for some reason, then collateral is going to be used to repay the loan. Commercial lenders can get a better idea of the value of your assets by reviewing a balance sheet. This can help your small business show your assets and liabilities at an easy glance. Now keep in mind that it is beneficial to have a lot of assets as this will give more reason and a high chance of loan approval.

Detailed personal financial statements are also something commercial lenders are going to take a look at

Personal financial statements are going to come into play because it will give an idea of what type of personal assets you have. Sometimes collateral isn’t the only thing that is going to be used as repayment for a loan that has had missed payments. When obtaining a loan from the Small Business Administration, a personal guarantee requirement is popular. A personal guarantee requirement means that if your business is unable to make payments, then you are personally liable to repay the loan since your business is unable to.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Avoid Common Commercial Mortgages Issues

November 15, 2017Uncategorizedcommercial mortgage, commercial mortgagesbigdaddydennis

When a borrower is prepared for the worst, there is more of a chance of avoiding commercial mortgages pitfalls. A successful plan for when things could go wrong, can be beneficial to many borrowers.

It is important to know that not all lenders and brokers are fully prepared for all of the different financial issues that you and your business could face. This is why it is crucial for borrowers to be aware and prepared for any potential financial issues that they could be faced with then it comes to commercial mortgages. It is best to rely on yourself than your lender or broker.

Sourcing is one of the most common commercial mortgages mishaps that should be avoided at all costs. This happens when a documentation of the down payment source for the purchase is required by the lender. They can also require the verification of the funds for the payment. This is called seasoning, which could take a long time, up to a whole year.

Recall terms are another problem that borrowers could face with commercial mortgages. These recall terms could allow the lender to collect payment from the borrower before the due date. Usually, these recall terms must be present in the loan agreement for this to happen.

There are some differences to recall terms when it comes to commercial mortgages and business loan agreements

Commercial lenders often times will include recall terms in the business loan agreement. However, if terms are not specifically notes in the agreement, there is a chance that you could be forced to repay the payment sooner than expected and on short notice. This is another reason it is important to work with a trusting lender that communicates with you effectively and outlines the terms clearly.

Keep in mind that not all lenders utilize recall terms when it comes to commercial mortgages

To avoid having to deal with recall terms at all, you can find lenders who do not use them. It is beneficial for both parties to try to come up with a plan and refinance with a borrower before having to mess with recall terms. But since agreeing on refinancing terms is not always a luxury that you may have, try to find a lender that doesn’t deal with recall terms or be prepared so that you do not have to worry about this issue.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

All You Need to Know About Hard Money Commercial Loans

November 14, 2017Uncategorizedhard money commercial loansbigdaddydennis

If you are not able to qualify for a traditional commercial loan then you might be interested in looking into alternative lenders. Hard money commercial loans could be the solution that you are looking for.

Hard money commercial loans are non-traditional loans that are funded by private individuals or private investment groups. Often times these loans are sought out when a business is unable to qualify for a traditional loan due to poor credit or lack of credit. But there can also be other reasons to use a hard money loan such as the number of preexisting loans or the time in business. Investors also use hard money loans when time is critical to making a purchase. Being that the loan is not from a traditional lender, hard money commercial loans process much more quickly.

The factor that many borrowers find most attractive about a hard money loan is that the loan is asset based. This means that the deciding factor for loan approval is not the creditworthiness of the borrower but the value of the collateral for the loan. In most cases that collateral is the property being purchased. One other factor to consider when selecting a hard money loan is the loan to value rate. Because the lender wants to be certain that the collateral is always worth more than the balance on the loan, the loans are normally only granted for about 70% of the value of the property. This means that you are going to need to find the additional 30% of the purchase price in cash or by some other means. This can be a drawback for some buyers.

The Cost of hard Money

Because hard money commercial loans are not coming from a bank, they are not governed by the same rules and guidelines that lending institutions must abide by. That means that a hard money lender is basically free to charge whatever interest rate they feel is fair or will be accepted by borrowers. In most cases the interest rate is a good bit higher than what traditional lenders are charging. In some cases the rates can be as high as 30% but it varies due to the level of risk associated with the loan and the borrower.

The Reasons and Advantages to Use Hard Money

It is very true that hard money can come at a very high price. But it is also true that hard money lenders fill a need in the lending industry. Hard money is a legitimate option for a business which is new or has little credit history. It is also a viable solution for a company which is trying to build or rebuild credit but is still unable to obtain a traditional commercial loan. In addition, hard money loans can be requested, granted and funded much more quickly than a traditional loan. If you need money and need it quickly, then paying the higher cost of a hard money loan could be well worth the increased interest rate. You would always have the option to refinance with a traditional loan once the time constraint is behind you. Hard money loans are a great tool for investors and businesses as long as they are used wisely.

Technorati Tags: commercial loans,commercial lending,commercial mortgage