Tag Archives: texas commercial mortgage

Tips for Purchasing Overseas Real Estate and the use of National and Texas Commercial Mortgages

November 7, 2017Uncategorizedtexas commercial mortgage, texas commercial mortgagesbigdaddydennis

Purchasing overseas real estate investments can provide a well-rounded portfolio. Consider these tips before making your first foreign investment including the ability to obtain a national or Texas commercial mortgage.

Live and Invest Overseas prepared their top foreign real estate investments for 2017. These unique locations were recommended due to their bargain value and rental yields. A few of their top choices were the coastal town of Algarve, Portugal; the undervalued and expanding tourist market of Cali, Colombia; and Playa del Carmen in Mexico due to its growing rental demand and strong yields; and Cape Verde, a beautiful archipelago in the Atlantic Ocean off the western coast of Africa, is continuing to make its mark in the tourist industry. 2016 saw visiting tourist numbers rise by over 13 percent.

Before you buy real estate overseas, understand that it can be a complex process. Because of this, it’s essential that you obtain a local attorney as well as an international buyer’s agent. In addition to these professionals, learn the nuances of the particular area you’re considering. For instance, in some locales, the “square footage” is considered both the indoor and outdoor space as compared to America where this measurement usually defines the actual building. Also, foreigners are not allowed to own property in some countries. Don’t let yourself be hoodwinked by a fast talking realtor that forgets to share this important fact with you, only after taking your down payment. Make sure your CPA is knowledgeable in foreign investments and understands the Foreign Account Tax Compliance Act.

Foreign investing can offer several benefits including more property for your money, depending on the exchange rate, lower cost of ownership and tax havens. On the other hand, local real estate laws can be complex and some countries can be mired in political or economic instability. Just as in America, be sure you know the market before you sign on the dotted line. Even if you are highly knowledgeable in investing in real estate in America, understand that there can be a remarkable difference in the laws, requirements and regulations of just about every other country. Work with respected professionals in the area of your choice.

Funding

Finding professionals in the area of lending is another important consideration. You can often obtain the funding by working with an institution that has a presence in the country where the property is located as well as the United States. Even so, many national and Texas commercial mortgages are hard to obtain for oversees’ projects.

Finding the right financing for oversees’ projects can be particularly challenging.

One solution is to obtain a Texas commercial mortgage on your current residence or business in America. A cash-out refinanced Texas commercial mortgage may just give you the money you need to develop your oversees’ portfolio. At Level 4 Funding, we provide private hard money bridge loans that can help you obtain the funding you seek. These collateral-based loans provide a bridge from one asset to another.

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

Tips for Investing in the Industrial Segment of Real Estate and Obtaining Texas Commercial Mortgages

November 7, 2017Uncategorizedtexas commercial mortgagebigdaddydennis

While investing in industrial properties doesn’t quite stir the soul in quite the same way that renovating a historical Victorian mansion might, it is a strong segment in real estate investment strategies. The sale of industrial properties is on the rise as well as attractive rent growth making this a strong consideration for real estate investors, builders, developers, and Texas commercial mortgage lenders.

According to Real Capital Analytics, sales of these types of properties grew by 3 percent during the first quarter of 2017 compared to the same time frame in 2016. An increase in demand as well as the need for specific property features such as wide loading areas appears to be at the forefront of this increase. Tenants are willing to pay more for the features that allow them to conduct business with ease and efficiency. In addition, as compared to the trial that retail is currently experiencing, distribution centers catering to online shoppers are continuing to grow.

Sales in the industrial sector topped $440 billion in 2016 with Los Angeles, New York, Chicago, Atlanta and Dallas leading the way. Many of the industrial sites that are under construction are already pre-leased and built with a specific company’s needs in mind. A few of these companies with building occurring in the Texas industrial segment include Amazon, FedEx, Ravao and Vinmar International. In Fort Worth, Campbell Soup Company and DHL Supply Chain recently opened a 578,000 sq. ft. distribution facility. This one facility will bring at least 120 jobs to the area and will serve as the hub for southern distribution. Due to demand, these types of projects are appealing to Texas commercial mortgage lenders.

Industrial inventory for distribution and manufacturing make up a little less than 50 percent of this space while warehouses make up the lion’s share. The low vacancy rate of 5.5 percent makes this type of real estate investment strategy very popular. While industrial buildings tend to offer lower rental rates than other commercial buildings such as offices, they also offer lower overhead costs and long-term tenants. The downside is that because varying tenants require unique needs, restructuring the building for a new tenant can be costly. Most commercial properties, including the industrial segment, are high risk and high reward with those that do their homework making incredible sums of money as their portfolio increases.

Considerations for your First Industrial Property

There are several different types of properties to consider for investment purposes. These include manufacturing, warehouse, office-industrial hybrids and distribution centers. Many of these require easy access to major highways. Another consideration is demand and, as previously stated, with e-commerce building momentum, distribution centers fall into the high-demand category. Cities often compete for these larger centers and will offer tax-rebates and even reduced prices for land acquisition as well as reduced Texas commercial mortgage rates.

At Level 4 Funding, we work with hundreds of private hard money lenders, some of which specialize in the industrial segment of real estate investments.

We provide up to $50,000,000 in capital based on collateral. Investors commonly use our funding option when they are in need of quick capital in order to make a bid on a prime property or require access to a Texas commercial mortgage while a traditional loan goes through its usual cycle to funding which can take up to several months. Call us today for a no-obligation quote and to see if this type of loan is right for your next project.

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Markets that are Ripe for Real Estate Investments and Texas Commercial Mortgages

November 4, 2017Uncategorizedtexas commercial mortgage, texas commercial mortgagesbigdaddydennis

Several markets have not completely recovered following the subprime mortgage crisis, many of which are ripe for commercial investment opportunities. Know what to look for and how to find the right market for your next real estate investment and how to obtain a Texas commercial mortgage.

As a real estate investor, finding markets with potential and knowing what markets are ripe for growth are a few of the main strategies when creating a growing and valuable portfolio. While values have continued to rise following the subprime mortgage crisis, some markets are slower in coming around than others. The question real estate investors then ask themselves: Are these markets going to return to their former glory and is it time to invest in these undervalued markets? In light of the fact that many markets have surpassed their previous values, chances are good. According to Real Capital Analytics, major metro areas have seen the greatest increase and are over 50 percent higher than they were just 10 years ago.

The areas that are slow in making a comeback include Las Vegas, Sarasota, Sacramento and Orlando. These areas offer favorable pricing and possible greater returns on investments, but at some risk. Investors look at the various areas in the following categories in order to determine the risk versus reward: job and population growth, surrounding communities, demand versus supply and demographics. Buying at the right time is a critical part of success as a real estate investor. In order to maximize your ROI in these types of markets consider looking for the following types of properties: bank-foreclosed and absentee-owners that may consider selling once approached.

While due diligence is required, when a property hits the market that’s priced right and is in an up-and-coming neighborhood, multiple investors will most likely have their eye on it. Quick action in these cases and having a readily available Texas commercial mortgage often determines who the lucky investor is as many people will take the first offer especially if they know there is a time constraint to the acceptance or rejection. On the other hand, owners who have properties that have been on the market for some time are often willing to accept a discounted offer just to get out from under the property and real estate taxes.

Cash Flow

Know your market including typical rents and whether they will cover your mortgage and expenses. To find positive cash flow you need to find affordable multiunit properties, motivated sellers that are willing to accept a reduced offer, and affordable areas in terms of pricing and median household incomes. In addition, look for communities that do not rely on just one industry for economic growth. An example of this is the rise and fall of Detroit due to the automobile industry or one of the many towns in Texas that counted on the oil and gas industry before the fall of prices.

At Level 4 Funding we work with many investors helping them find the Texas commercial mortgages they need as they build their portfolio.

We provide investment, fix & flip, bridge, commercial, business, construction and cash-out private hard money loans. Loans are preapproved in as little as 24 hours in amounts from $50,000 to $50,000,000. Call us today for a no-obligation quote on your next Texas commercial mortgage.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Texas Commercial Mortgages Promote Going Green as a Real Estate Investment Model

November 3, 2017Uncategorizedtexas commercial mortgage, texas commercial mortgagesbigdaddydennis

As tenants become aware of the effects of the materials used in building on their health and well-being, many are turning to “green buildings” in order to minimize the impact. Multifamily units, single-family homes and office and retail developments are answering the need by becoming certified in WELL and LEED, and Texas commercial mortgages are becoming available for these types of properties.

The International WELL Building Institute has created an alignment with WELL and LEED in order to offer dual certification to those interested in building green projects. This streamlined approach has led to reduced documentation as well as less time and cost when obtaining certification. WELL focuses on creating healthy indoor spaces. There are seven areas that are incompassed and these include: light, air, water, fitness, nourishment, comfort and mind. LEED focuses on not only homes and buildings but communities as well with construction and operation that leads to a healthy environment.

According to EPA, indoor pollutants are two to five times higher than outside levels. This increased level of toxicity can lead to an increase in respiratory disease as well as autoimmune responses. In order to minimize these potential physical challenges, developers and investors are creating buildings and renovating existing sites that are built with green products and materials that are low emitters of indoor air contaminants such as volatile organic compounds. Materials are given time to “outgas” before tenants take residence. HVAC systems are in place that bring the outdoor air in and a ventilation system is created in order to keep moisture to a minimum. Natural lighting is considered when designing windows allowing for uniform daylight throughout rooms.

Developers are finding that these types of construction create a positive financial impact not only by increased demand but also by increasing tenant health. In Brooklyn, Blue Sea Development’s first LEED Platinum building—The Eltona in South Bronx—provides eco-friendly and affordable housing. One interesting side effect was that this building experienced a lower rent delinquency due to medical reasons than their other buildings. According to an article in Apartmentality, “Blue Sea hopes its latest project, Ocean Hill-Brownsville’s Prospect Plaza will provide a model for affordable housing, showing that healthier buildings lead to healthier residents and better financial outcomes for developers.” Lenders are taking notice, making Texas commercial mortgages for these types of properties available.

Green Building Incentives

In order to encourage green building, various incentives such as grants and tax incentives have been created on the regional and national level. Benefits also include programs that offer reduced Texas commercial mortgage rates for environmental purchases and gap financing.

At Level 4 Funding, we work with hundreds of private investors, many of whom are interested in green building projects for both residences and office buildings.

Level 4 Funding offers residential hard money rates from 7.99 percent. We also offer construction loans as well as Texas commercial mortgages, residential, office, multifamily, warehouse, storage complex, student housing and raw land loans. Our bridge loans offer short-term capital that provides a “bridge” for individuals and companies from one asset to the next. Because our loans are asset-based and do not rely on credit scores or credit worthiness to the same degree that traditional lenders are bound by, we can often provide funding in less than a week.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Should I Look For In A Commercial Broker To Help With My Commercial Mortgage In Texas?

November 3, 2017Uncategorizedcommercial mortgage, commercial mortgage broker, commercial mortgage Texas, texas commercial mortgage, texas commercial mortgage brokersbigdaddydennis

You don’t have the time or energy to pursue a commercial mortgage on your own. You know that you need the expertise and assistance of a professional commercial broker, but you don’t know where to start. Here is what you should be looking for in a professional broker.

Finding a commercial broker is easy. Finding a commercial broker that will be a good fit for you is not nearly as easy. In Texas, there are many firms and independent brokers that would happily take your contract and not do nearly as much work as you would like them to do finding an excellent commercial mortgage.

Many mortgage brokers are a part of larger firms. This not only allows them to reach more lenders, but also to give them access to greater resources. Finding the right firm and the right broker within that firm can feel daunting, however, you can make this process easier if you follow some simple steps to ensure that you find the right broker.

First is to examine the qualifications of the broker. This might seem like a no brainer, but many brokers have qualifications in areas that are not in the specific area that you might need. If you need a commercial mortgage for a multifamily housing unit, it really doesn’t matter if a broker is highly qualified in retail space. That is not what you need. So, do not be impressed by a list of qualifications, but instead be selective about a broker who has qualifications that will fit your specific needs.

In addition to qualifications, a broker’s area of expertise is important. This does not mean that a broker who has no specialization will not work for you. But it is important to know what type of deals a broker does the most of. This will give you a good indication of where they are the most successful. If you can find a broker that has both qualifications and the experience of success with a commercial mortgage in your real estate emphasis, that is an excellent start.

You will also want to make sure that your broker stays on top of the ever-changing financial world of mortgages and real estate development. A quick way to assess this is to ask what they do themselves, or what their firm provides, for continuing education. A broker that does not continually improve is a broker that is falling behind on current trends in the market.

What is the best way to find a qualified, hardworking commercial mortgage broker in Texas?

Even if you make sure that you are careful in looking for a broker, take your time and ask lots of questions, there is no guarantee. The best way to find a high-quality mortgage broker is through a referral from a friend or business associate who has worked with one before. In fact, this is the way that most decent mortgage brokers grow their business: through referrals. They know that if they work hard, meet the needs of their clients and are able to put together a list of satisfactory commercial mortgage options that they will receive excellent word of mouth. If you encounter a mortgage broker that does not worry about what his clients say, this is most likely a person that you are not going to want to deal with.

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

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 3 – Hard Money Mortgage Application

November 3, 2017Uncategorizedcommercial hard money mortgage, commercial mortgage, commercial mortgages in texas, texas commercial mortgagebigdaddydennis

Perhaps a traditional mortgage is not what you are looking for with your commercial investment, or maybe through the pre-qualification process, your lender has helped you determine that your needs are better served by a hard money loan. In either case, the process for a commercial mortgage in Texas is slightly different with this type of loan.

Typically, a hard money loan is a very short-term loan that will enable to borrower to quickly turn a profit and pay back the loan. If you are developing a property or are looking for a long-term building extension or business development of a commercial area, then this is not the type of loan that you are looking for. Many real estate developers use this type of commercial mortgage to quickly turn around a property and immediately put it back up for sale to turn a quick profit on the improvements made.

This is often referred to as a “fix and flip” loan and has been made famous by shows like “Property Brothers” and “Flip This House.” Often times, from a commercial standpoint, these properties are in depressed areas and often include multi-family housing units. With the recent devastation of Hurricane Harvey, this is actually going to be a growing area of need in Texas markets.

The tricky part of a hard money commercial loan is that it is based on the property appraisal that will be realized after the completion of the project. This is commonly termed as the After Repair Value or ARV.

Because of this unique factor, the application process of a commercial mortgage of this type begins with the assessment of what the property will be worth after the repairs are implemented. This means that the borrower will have to do a good deal of leg work before even knowing if the loan will be approved. Detailed specifications and an excellent business plan are necessary components for a hard money loan, as the entire value of the loan is going to be based on what the borrower intends to do with the property.

Once the plan has been approved and the ARV has been provided to a potential lender, the application process truly begins. Another element that a borrower can expect to encounter in this process is having to provide a detailed budget of how the repairs are going to be completed and their associated costs. This can usually be done by getting quotes from contractors who have worked on such projects before. In any case, this is critical step to help outline exactly how the loan is going to be used and to ensure that it is for the proper amount.

With the recent crisis in Texas, how can I use a commercial mortgage to my advantage?

Multi-family housing units in depressed and affected areas, especially in Houston, are going to be in high demand and investors are going to be needed to quickly turn those properties into buildings that are livable. Having the access to quick funds and experience developing properties with hard money will most certainly help you to make a commercial mortgage work in your favor.

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Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 2 – Traditional Mortgage Application

November 3, 2017Uncategorizedcommercial mortgage, commercial mortgage Texas, commercial mortgages, commercial mortgages in texas, texas commercial mortgagebigdaddydennis

With pre-qualification out of the way and a lender working with you to secure a commercial mortgage for income generating property in Texas, you are well on your way to making your dreams come true. However, the hard work is just beginning.

If your pre-qualification process was rigorous, then you are well on your way to completing the actual application for your loan. While it might have been frustrating at the time, you will no doubt be grateful for it as the process goes along. However, if you did not have to provide much documentation for your pre-qualification, then you are definitely going to have your work cut out for you. The application process for a commercial mortgage in Texas can be quite long and can confuse even the smartest of business people, so do not hesitate to ask plenty of questions of your loan officer.

If you did not have to provide documentation for your pre-qualification, you will have to gather financial documents to show not only your ability to pay back the mortgage, but also your history of how you have handled debt. This usually includes proof of income, tax documentation, other assets and business information. It also might include balance sheets, income statements and business plans, especially if the property is going to be used to house other businesses as rentals. Lenders are looking for security when they grant commercial mortgages and all of these things become factors not only in their decision to grant the loan, but also in the rate and terms that they are willing to offer.

With a traditional mortgage, there are a couple of things that need to be taken care of before the underwriting of the loan can actually begin. Before any movement can be made toward obtaining a loan, the title of the property and the title company that will be representing it must be chosen. It is up to the borrower to select the company that will be closing the loan (once it is underwritten) and will be providing title insurance. This helps to secure the commercial mortgage against title fraud and is absolutely necessary for lenders to be able to approve a loan. At this time, it is also decided whether the borrower will be covering title and insurance costs separately or as part of the mortgage, all rolled into one. Unless you have a very good reason to divide them, it is most likely in your best interest to lump them together.

What happens with a commercial mortgage in Texas after all of the paperwork has been processed and the underwriting process begins?

Once the underwriting process has begun (this could take up to 2 months), there will be a lot of waiting. But there are still things that will need to be done in order for the transaction to go smoothly. One such thing is for the borrower to get the property appraised by a third-party appraiser. This process is also very time consuming and can take up to 3 weeks to complete so it is best to start this early. In addition to this, you must be prepared to provide additional documentation, as needed, to the lender. It is very possible that they will need nothing else to secure your commercial mortgage, but if they do, it would be best to provide it quickly to not interrupt the process.

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Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 1 – Pre-qualification

November 3, 2017Uncategorizedcommercial mortgage, commercial mortgages in texas, texas commercial mortgage, texas commercial mortgage brokersbigdaddydennis

Venturing into the commercial real estate market is not something to be taken lightly. The process can be long and stressful, especially if you are not properly prepared. When you are seeking a commercial mortgage in Texas, there are a number of steps to take before you are going to be able to secure funds.

Before the official paperwork even begins, most lenders prefer to have potential borrowers go through a pre-qualification process. Not only does this ensure that the borrower is both serious about pursuing a mortgage, but it also helps lending institutions determine the direction that they want to go with the commercial mortgage, especially in competitive markets like Texas.

In many cases, the pre-qualification process consists of some basic questions about your goals and your basic finances. Many lenders actually have this process online, so it can be completed at your convenience. It is important to answer the questions on this pre-qualification application as honestly as possible, even if you do not have to back it up with financial statements right away. Again, this is process is not only to determine whether or not you can handle a loan, but also to justify which type of funding would work best for you and your commercial property.

There is also the instance of a lender reaching out to you, saying that they have already prequalified you. While this is more common with basic commercial loans for small businesses (remember, many lenders make money off of fees and interest rates, so it is in their best interest to have as many customers as possible), it does happen with commercial mortgages, especially if you have already received one or applied for one. If you have already been pre-qualified, you will still have to go through the application process to definitively determine if you qualify for the loan.

For some lenders, just the application and some basic questions are enough to begin the process of a formal application. For others, further documentation will be required. This can be anything from the previous two months bank statements to tax documentation going back two to three years. You might also have to prove additional income by disclosing investment properties or other assets. The larger the commercial loan you are attempting to acquire, the more documentation you should expect to provide up front.

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

Once all of the documentation is gathered and submitted to the lender, you will usually have an answer as to whether or not you are qualified pretty quickly. Often times it is even the same day. If you do this online, you can expect to know the answer, and hear from a representative, within 24 hours. In person, this process might go even more quickly as your documentation will be reviewed by a live person while you are present. After you are pre-qualified, the lending agency will then begin to move you through the formal application process of a commercial mortgage.

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How a Texas Commercial Real Estate Loan Differs from a Residential Loan

October 2, 2017Uncategorizedcommercial mortgage, texas commercial mortgage, texas commercial real estate, texas commercial real estate loansbigdaddydennis

Obtaining a Texas commercial real estate loan is a very different process than applying for a residential loan. Consider these tips when searching for funding for your next project.

Texas commercial real estate loans are capital that is obtained for business purposes, whether renovating an existing home to sell or rent, building an apartment or developing office space. These types of loans are typically secured by collateral or liens on the commercial property. How institutions and lenders determine if one is qualified is a much different process than a traditional home mortgage that requires bank statements, recent pay stubs, prior tax returns and your credit report.

When obtaining a loan for commercial use, the lender is first and foremost interested in the property or the project. If it’s an existing property, they will want to see photos of the inside and outside, operating history, cash flow and current schedule of rents. The net operating income (NOI) must be at least 25 to 45 percent over the commercial mortgage payment. Another way that lenders state this is that the debt service coverage ratio must exceed 1.25 to 1.45. The requirements are very different depending on the type of lender of which there are many including traditional banks and credit unions, insurance companies, Small Business Administration, pension funds, government agencies, CMBS lenders and private hard money lenders.

While individuals generally obtain home mortgages—corporations, partnerships and trusts are often formed in order to obtain Texas commercial real estate loans and develop projects. There are both non-recourse and recourse loans. A non-recourse loan means that the only “recourse” the lender has should the borrower default is to take the property. A recourse loan means that the borrower is personally responsible and the lender has the right to try and collect any balance owed even after taking the property back. Another consideration that is often different between these two types of loans is the prepayment penalty which often accompanies a commercial mortgage.

Loan-to-Value and Debt-to-Income Ratios

Recently, Fannie Mae and Freddie Mac increased their debt-to-income ratio limit from 45 to 50 percent of pretax income, making it easier to qualify for these types of loans. While standard requirements for a home mortgage, they also come into play for commercial mortgages if the borrower is considered a secondary source of payment such as in a recourse loan. The loan-to-value is another important underwriting ratio that differs from home and commercial loans. It represents the value of the loan against the value of the property, determining how much equity the borrower requires. It is the amount of the loan divided by the purchase price. Commercial loans generally require an LTV of 65 to 80 percent while home loans will sometimes allow up to 100 percent LTV.

Consider a private hard money lender for your next Texas commercial real estate loan.

At Level 4 Funding, we work with hundreds of investors that offer private hard money loans. These types of loans are based predominantly on collateral and offer quick funding as well as interest-only payments and no prepayment penalties. Call us for a no-obligation quote today.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Financing with Texas Commercial Mortgage-Backed Securities

October 2, 2017Uncategorizedtexas commercial lender, texas commercial loan, texas commercial loans, texas commercial mortgage, texas commercial real estate, texas commercial real estate loansbigdaddydennis

Texas commercial mortgage-backed securities are a choice of funding for real estate developers. Here are the facts concerning this type of commercial real estate loan.

Texas commercial mortgage-backed securities (CMBS) are fixed rate bonds that represent an investment in a portfolio of varying property types and sizes, and that are backed by commercial real estate mortgages. Generally, the loan-to-value is 60 to 70 percent with a 10-year loan term, interest-only payments, and a balloon payment at the time of maturity. When they came on the market in the 1990s, they proved very useful to commercial real estate developers due to the improved loan availability and rates.

As of May 26, 2017, $27 billion in commercial mortgage-backed securities have been issued—down 6.6 percent from the previous year. The reduction is due, in part, to the risk-retention regulations that require the issuer to hold 5 percent of the securities. These regulations favor bigger banks, leaving many of the smaller lenders to observe from the sidelines. Another factor is based on the cyclical nature of things and the growing concern that the market has reached the summit and is heading for a decline.

In 2016, banks made up most of the capital providers—a little over 50 percent of investors. Fannie Mac and Freddie May came in at 18 percent of debt investors while life insurance companies made up 11 percent of the group. The remaining were securitized debt holders such as CMBS. What’s interesting to note is the dramatic drop in CMBS lending, peaking at $229 billion in 2007 and dropping off to $76 billion in 2016. This drop off has been blamed on rising fears of saturation as well as the mounds of loans that were issued in 2005 to 2007 and that are now maturing. The numbers, however, suggest that there is little cause for concern as the $65.6 billion in debt that reached maturity during the first six months of 2017 only showed a 6.4 percent delinquent rate

Obtaining your next Texas Commercial Mortgage

Texas Commercial mortgage-backed securities can be a good choice for longer-term acquisitions; however, the prepayment penalties often associated with these types of loans can serve as a deterrent. In addition, the new requirements have meant that obtaining these types of loans can be more difficult and time to funding longer as underwriting has tightened its belt. Loans are also based on LTP or loan-to-purchase as compared to LTV or loan-to-value which may require additional equity. Modification and additional fees such as insurance review fees can add up. These types of loans have certainly served their purpose and helped many a developer obtain the needed capital. Just be sure to add in all the varying factors when laying out a budget and consider alternative options.

Consider obtaining capital from a private hard money lender.

At Level 4 Funding we work with hundreds of private investors, one who might just be interested in your next project. Our private hard money loans provide quick access to capital, terms up to 60 months and competitive rates. Call us for a complimentary quote.

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Tag Archives: texas commercial mortgage

Tips for Purchasing Overseas Real Estate and the use of National and Texas Commercial Mortgages

Purchasing overseas real estate investments can provide a well-rounded portfolio. Consider these tips before making your first foreign investment including the ability to obtain a national or Texas commercial mortgage.

Funding

Finding the right financing for oversees’ projects can be particularly challenging.

Tips for Investing in the Industrial Segment of Real Estate and Obtaining Texas Commercial Mortgages

Considerations for your First Industrial Property

At Level 4 Funding, we work with hundreds of private hard money lenders, some of which specialize in the industrial segment of real estate investments.

Markets that are Ripe for Real Estate Investments and Texas Commercial Mortgages

Several markets have not completely recovered following the subprime mortgage crisis, many of which are ripe for commercial investment opportunities. Know what to look for and how to find the right market for your next real estate investment and how to obtain a Texas commercial mortgage.

Cash Flow

At Level 4 Funding we work with many investors helping them find the Texas commercial mortgages they need as they build their portfolio.

Texas Commercial Mortgages Promote Going Green as a Real Estate Investment Model

Green Building Incentives

At Level 4 Funding, we work with hundreds of private investors, many of whom are interested in green building projects for both residences and office buildings.

What Should I Look For In A Commercial Broker To Help With My Commercial Mortgage In Texas?

You don’t have the time or energy to pursue a commercial mortgage on your own. You know that you need the expertise and assistance of a professional commercial broker, but you don’t know where to start. Here is what you should be looking for in a professional broker.

What is the best way to find a qualified, hardworking commercial mortgage broker in Texas?

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 3 – Hard Money Mortgage Application

With the recent crisis in Texas, how can I use a commercial mortgage to my advantage?

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 2 – Traditional Mortgage Application

With pre-qualification out of the way and a lender working with you to secure a commercial mortgage for income generating property in Texas, you are well on your way to making your dreams come true. However, the hard work is just beginning.

What happens with a commercial mortgage in Texas after all of the paperwork has been processed and the underwriting process begins?

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 1 – Pre-qualification

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

How a Texas Commercial Real Estate Loan Differs from a Residential Loan

Obtaining a Texas commercial real estate loan is a very different process than applying for a residential loan. Consider these tips when searching for funding for your next project.

Loan-to-Value and Debt-to-Income Ratios

Consider a private hard money lender for your next Texas commercial real estate loan.

Financing with Texas Commercial Mortgage-Backed Securities

Texas commercial mortgage-backed securities are a choice of funding for real estate developers. Here are the facts concerning this type of commercial real estate loan.

Obtaining your next Texas Commercial Mortgage

Consider obtaining capital from a private hard money lender.