Construction Loans Defined – Winston Rowe and Associates

WINSTON ROWE AND ASSOCIATES COMMERCIAL LOANS ONLINE

The most common form of borrowing for commercial real estate transactions is the first-lien commercial mortgage loan. With principal running anywhere from $300,000 to many hundreds of millions, the financing of most (but nowhere near all) industrial, office, retail and multifamily property tends toward this form of debt, which is commonly priced somewhere between 75 and 150 basis points above 10 year US Treasuries.

Naturally, it’s often a combination of debt and equity that finances a commercial property transaction. And equity isn’t always the simple “down payment” residential brokers are familiar with. Far from it: commercial property financing options abound to add to the first-lien loan, including mezzanine loans to bring the loan to value (LTV) up even as high as 100%.   Other strategies include A-note an B-note division of debt, or even “preferred equity” where a third party secures a loan with equity in the property that has an edge on other lenders in the competition for cash flow off the property in the event of default.

But commercial real estate is a complex beast, not limited to a market in tangibles. The role of CRE in economic development is critical, which means future propositions – new construction – needs financing just as much if not more than ownership transactions do. What do properties that sport no cash flow (because they don’t exist yet) have to bring to the table to get the financing they need?

The most common forms of financing for these are the construction loan. Secured by properties that are under construction, with no cash flow, these loans are considered higher risk that first lien, which makes sense when you consider the construction lender’s prospects include a lien on nothing more than a hole in the ground and a pile of unassembled building elements . More often than not, the borrower(s) set up a reserve account at the origination time of the loan in order to pay the interest on the principal. Loans tend to mature in 12 to 36 months and principal reflects the construction’s budget plus a modest contingency. The loan’s repayment is contingent on completion of construction, that magic time when the intangible becomes tangible and permanent financing can be established.

The distinct and unique risks of construction finance also call for the provision of the principal in stages associated with construction progress. As with so many subsections of commercial real estate, expertise is earned with focus and professional development that comes with experience. Examining the shapes and sizes of construction finance is instructive from both the lender and borrower sides.

Hard Money Commercial Real Estate Property Financing Lending California

Hard Money Commercial Real Estate Property Financing

Winston Rowe and Associates provides their clients in California with access to the most advanced hard money loan products in the commercial real estate industry.

Winston Rowe and Associates is a unique type of commercial real estate finance firm, they do not charge any upfront fees like their competitors to review or perform due diligence for your transaction.

Advantages of No Upfront Fee Private Capital Loans from Winston Rowe and Associates:

All commercial property types considered, however no raw land please

No advance fees

Nationwide

Fast, reliable capital for time sensitive and opportunistic transactions

Capital for transitional or non-stabilized assets; can accommodate holdbacks for real estate that requires tenant improvements and leasing commissions or construction completion

Discounted Payoff Financing, no new cash required

Capital to owners repurchasing their existing debt

Capital to owners cashing out of one property to purchase another property

Capital for the acquisition of individual or pools of notes

Winston Rowe and Associates has some of the most aggressive rates and terms available, while managing every step of the financing through their advisory and due diligence processes from document collection to commitment negotiation and closing.

Winston Rowe and Associates always welcomes the opportunity to speak with clients directly. The can be contacted at 248-246-2243 or visit them on line at  http://www.winstonrowe.com

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory services in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

STRIP MALL LOANS

STRIP MALL LOANS ON LINE

The need for alternative sources of capital in the commercial real estate industry has never been greater. Winston Rowe & Associates is a funding source that provides flexible, reliable and timely solutions for shopping center owners.

With low fixed interest rates starting at 3.50% and flexible financing options, Winston Rowe and Associates is able to structure shopping center financing solutions, in days not weeks or months.

Shopping Center Loan Rates & Terms:

Available Nationwide

Loan mounts Stating at $1MM

Hard Money that can Fund in as little as 10 Days.

CMBS, SBA, Conventional

Purchase, Refinance and Cash-out

Joint Venture

Discount Note Payoff

Chapter 11 DIP Financing

The goal at Winston Rowe and Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Things To Consider When Applying For A Commercial Loan

GET A COMMERCIAL LOAN ONLINE TODAY

A commercial loan has a more in-depth application process and its specifications are much more thorough when compared to personal loans, as commercial loans need details and financial data from not only the borrower but the business too, though personal loans only call for information from the individual borrower.

When applying for a commercial loan, there are many significant elements to consider for example credit ranking, financial history, and other factors, and each commercial lender focuses on different factors when making a loan decision.

There are two main general commercial loan collateral types, the secured and unsecured loan. For people with a powerful company an outstanding credit rating, unsecured loans can be a great option as the borrower will not have to present any collateral to secure the loan.

The only problem with unsecured loans is that the interest levels are normally higher because of the increased risk to the commercial lender, and they’re usually harder to get.

A secured commercial loan is where the loan is backed by the pledging of collateral like a residence, commercial property, or business asset(s). The risk of a secured loan is that the asset(s) pledged are at risk need a default happens. But because commercial lenders prefer to do secured loans, the interest rates and terms are usually much better along with secured loans.

The type of commercial real estate and loans the amount of paper work of which the commercial lender will need you to complete and this could even more increase the processing time. But you don’t have to go through the lengthy process of doing your commercial loan application on your own.

You need to work with a professional firm, such as Winston Rowe & Associates that understands the processes and underwriting guidelines that the various lenders use.

A firm like Winston Rowe & Associates will submit a summary to potential commercial lenders and investors to get the process started and to gauge their interest level.

The summary will include details such as the loan quantity requested, purpose, and your ability to repay the loan, requested interest rates, fees, and terms. Commercial loans really have their positive aspects, however there will also be disadvantages based on the nature of the loan that must not be ignored.

Why use a firm like Winston Rowe & Associates, because many traditional banks and lenders only offer one or two loan programs with limited options.

Borrowers often do not get the best financing solution or are constrained with terms that are inadequate because the lender is inflexible. Getting the “right” loan requires a lender with multiple program options and the willingness to be creative in its approach. With multiple alternatives available,

Winston Rowe & Associates customizes each loan to meet the specific needs of the Borrower.

 

How To Invest In Apartment Buildings

APARTMENT INVESTING LOANS NATIONWIDE ONLINE

Winston Rowe & Associates has prepared this article to provide prospective clients with a strategic overview of the mechanics of investing in multifamily and apartment buildings. Winston Rowe & Associates is a national commercial real estate finance firm specializing in no advance fee loans.

For more information about apartment building investing you can go to http://www.winstonrowe.com or contact Winston Rowe & Associates directly at 248-246-2243.

Overview:

Rental property that has more than one family unit is considered multifamily property. From a duplex (two units), the smallest multifamily property, up from there to larger rental complexes easily consisting of hundreds of apartments.

The advantage of purchasing multifamily properties, not unlike all income property, is that it provides real estate investors with the ability to support debt from the income the property produces.

Understood in real estate investing circles as “using other people’s money”, this idea is crucial to buying multifamily properties profitably and therefore must always be kept in mind because the success or failure of the investment depends on the income the property generates to meet debt service and other obligations required to keep the property.

Enough said. Let’s look at three elements that contribute to this principal, and discuss why they are crucial to buying multifamily units profitably.

Obtaining Financing:

The key to buying any investment property is for you to establish a sound financing package. You want to obtain a loan that doesn’t place excessive burdens on the property, or yourself. Also, given that lenders evaluate multifamily real estate based on income stream and generally structure a loan based on the property’s financial strength as well as the investor’s, bear in mind the significant role the principal of using other people’s money plays in financing the investment.

When applying for a loan on a multifamily apartment, present lenders with clear and concise cash flow reports because you are more apt to obtain a favorable financing package when the property is represented fairly to the lender and the income and operating expenses are shown to be accurate.

Research & Market Analysis:

What tenants are willing to pay to occupy a unit in the apartment is the cornerstone of the investment. Therefore, it’s incumbent upon real estate investors to understand local rental market trends for vacancies and rental rates when buying multifamily real estate property. Rental market trends are easy for investors to recognize, just watch the newspaper or drive around the community noting all rental properties that have vacancies. If you see few for rent ads or signs, or surmise that rents are increasing, it probably signals a shortage of rental units, and a favorable opportunity for you. On the other hand, when lots of rental signs start appearing and rents drop, it could spell trouble for multifamily real estate.

If you’re looking for real estate properties for commercial investing or need background information on an asset? The following link will take you directly to Winston Rowe & Associates Free commercial real estate and investing resources:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

The best time to own multifamily property, naturally, is when vacancy rates decrease and tenants are standing in line to rent an apartment. Apartment property owners can be more selective about the type of tenant they rent to and establish a positive direction for the complex, perhaps even increasing rents.

On the other hand, when tenants become scarce, owners might have to become less selective about tenants and perhaps lower the rents just to fill the units.Be sure not to neglect a rental market survey whenever you purchase multifamily property. It’s always crucial to gauge the rents and vacancy rates.

Economic Conversion:

There might be money to be made in cases where the former property owners have let the property run down and rents had to be decreased to keep the units filled.

If these rental properties are in a good area of town or in an area that is returning to a former higher quality, then the remodeling of a rundown apartment complex can be a profitable venture. Just make sure that you ascertain the cost for remodeling and understand what impact it will have on your income stream.

Pure window dressing for the sake of appearances only, unless it has a positive influence on occupancy levels or rents, is typically avoided by prudent real estate investors. So get a qualified contractor to give you a bid on remodeling. Otherwise, what you surmised as surface issues when you were buying the multifamily units could in fact be a costly can of worms.

In other words, look for an opportunity to upgrade the building and raise rents because it can contribute to a profit, just be sure that you know exactly what you’re getting into.

Pros & Cons of Buying Multifamily Property:

The most obvious advantage of buying any income property is real estate investors can grow wealthy in the long run. Holding on to investment property and simply letting other people’s money payoff the debt, even if there is no immediate cash flow, is what drives people into real estate investing.

Moreover, because multifamily properties serve a basic need in that they provide shelters to those who cannot afford or who do not choose to buy real estate, the downside risk to multifamily investing is limited.

The downside to owning rental property mostly concerns the management problems associated in dealing with tenants. Multifamily properties can be management intensive, and often the reason why investors who purchase rental property hire the services of a professional property management company to deal with the day-to-day issues of running the property. So you can choose to minimize this disadvantage if you care to.

The bottom line is straightforward. Multifamily property provides investors the opportunity to build wealth. Nonetheless, it’s similar to investing in any other type of investment property, whether it’s land or commercial real estate or apartments, it simply requires you to do it correctly, and with a careful eye on the elements discussed here. Here’s to you and your real estate investing success

Winston Rowe & Associates success is measured by their clients’ success, and their mission is to be your source for the most appropriate – and advantageous – apartment building financing solution that helps client achieve their goals.

Winston Rowe & Associates has no upfront free apartment building loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Cash Out Commercial Mortgage Loan Refinancing – No Upfront Fees

CASH OUT COMMERCIAL MORTGAGES NATIONWIDE ONLINE

Winston Rowe & Associates is a leading commercial real estate finance firm; they are dedicated to securing the best possible cash out loan terms for their clients. Simply put clients won’t find lower rates or better service.

Feel free to contact Winston Rowe & Associates to discuss your commercial real estate cash out financing needs at 248-246-2243 or visit them on line at http://www.winstonrowe.com

They have an experienced and enthusiastic professional team with the expertise needed to make the commercial lending process as easy as possible for their borrowers and without upfront fees or time delays.

The following is a list of commercial financing products and services that they offer:

• No Upfront or Advance Fees
• National Lending Platform
• Loan Amounts Starting at $750,000. With no Limit
• All Commercial Property Types Considered
• Acquisition & Refinance Loans
• SBA 504 & SBA 7a
• Underlying Coop Building Loans
• Commercial Real Estate Lines of Credit
• Capital Improvement Loans
• Asset Backed Lines of Credit
• Bridge Loans & Hard Money
• Development, Rehab & Construction Loans

The following link will take you directly to Winston Rowe & Associates free commercial real estate and investing resources:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has an experienced and enthusiastic professional team with the expertise needed to make the cash out lending process as easy as possible for their borrowers and without upfront fees.

Winston Rowe & Associates has no upfront free cash out commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

No Upfront Fee Private Real Estate Hard Money Loans

No Application Fee Commercial Loans

Winston Rowe & Associates is a no upfront fee private and hard money commercial real estate finance firm specializing in immediate and creative financing solutions.

They understand that in this business very few funding requests will fit neatly in a box and therefore they look forward to working with client to identify a unique deal structure that can benefit from their private and hard money loan programs.

If you have any questions concerning private or hard money financing, you can contact
Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates is dedicated to professionalism and quality customer service, focusing on each borrower’s individual circumstances in order to provide flexible and innovative solutions for time sensitive situations.

What can Winston Rowe & Associates do for clients:

• No Upfront Fees
• Close Quickly
• Purchase, Refinance & Cash Out
• Private Commercial Real Estate Loans
• Hard Money Loans
• Foreclosure Bailout
• Short Term Bridge Loans
• Construction Financing
• Bankruptcy Workouts
• Portfolio Repositioning
• NPN Financing

 

 

 

Aggressive National Apartment Building Financing

APARTMENT BUILDING LENDERS WITH NO ADVANCE FEES NATIONWIDE

Apartment Loan programs from Winston Rowe & Associates encompasses all aspects of multifamily apartment financing.  Whether you are refinancing a stabilized apartment building or acquiring & developing a new apartment complex, their aggressive apartment loans have helped investors across the country achieve their apartment financing goals with larger apartment loans, lower DCRs and faster closings.

Prospective clients with questions concerning their apartment building transactional funding programs can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates structures apartment and multifamily financing solutions utilizing a broad spectrum of traditional and non-traditional capital sources.

They are not tied down by whatever the flavor of the moment is on Wall Street, and can get deals financed which the CMBS world can’t or won’t do, especially in the current structured finance market.

Their primary goal is to be your source for the financing of apartment loans, without up front or advance fees. Winston Rowe & Associates has creative solutions for commercial real estate investors across the nation.

Prospective clients that need to refinance an existing property or you need purchase money – they can help structure the terms that most suitably meets your needs.

Apartment Building Financing Features Available:

No Upfront or Advance Fees
Loan Amount From $2,000,000.
Transaction Funded In 30 Days With Complete Submission
As low as 1.10 DSCR available in some cases
No Lockout & No Prepayment Options Available
Interest Only Option
ARM Programs Available
Non-Recourse Loans Available
Low Fixed Rates ranging on 5-10 Year loans with 30 Year amortized terms.
Conduit Fixed-Rate and Floating-Rate Loans
Fannie Mae and Freddie Mac Loans
Market Rents as NOI

Winston Rowe & Associates understands that in this business very few funding requests will fit neatly in a box and therefore they always look forward to working with clients to identify a unique deal structure that can benefit from their apartment building transactional financing programs.

They also have an excellent knowledge based free investor resource for commercial real estate investing, valuation and analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

 

 

 

An Overlooked Option for Financing Multi-Family Affordable Housing Winston Rowe Associates

Resort Financing No Upfront Fees – Winston Rowe and Associates

APPLY ON LINE NO UPFRONT FEE COMMERCIAL LOANS

There is a company out there, its Winston Rowe & Associates. They are a nationwide no advance fee commercial real estate advisory and finance firm that specializes in private money, conventional and agency commercial mortgages. They can be contacted at 248-246-2243.

Experienced developers, savvy investors, commercial developers, nationwide have been turning to the firm of Winston Rowe and Associates. They are a national no advance fee capital source that provides equity capital or debt financing for acquisition, construction and development hospitality projects.

Winston Rowe and Associates takes pride in building long term relationships with their clients; they appreciate the opportunity to evaluate client’s business plan, and to review the current status of the client’s commercial development. They offer equity, debt, bridge, mezzanine, equity participation, joint ventures and hard money loans.

Their specialty is financing acquisitions, construction and development of raw entitled land, to develop multifamily, office, retail, mixed use properties, resort communities, hotels and golf course projects.

The key components utilized by Winston Rowe and Associates will be based on their evaluation of the borrower or developer’s net worth, their equity in the project, development experience, the geographic location, and the feasibility of the project.

When experience is important and timing is crucial. When you contact them, a principal is always available to speak with prospective clients.

They can be contacted at 248-246-2243 or visit them on line at http://winstonrowe.com

Winston Rowe and Associates provides professional services in the ensuing states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Resort Financing No Upfront Fees – Winston Rowe and Associates

APPLY ON LINE NO UPFRONT FEE COMMERCIAL LOANS

There is a company out there, its Winston Rowe & Associates. They are a nationwide no advance fee commercial real estate advisory and finance firm that specializes in private money, conventional and agency commercial mortgages. They can be contacted at 248-246-2243.

Experienced developers, savvy investors, commercial developers, nationwide have been turning to the firm of Winston Rowe and Associates. They are a national no advance fee capital source that provides equity capital or debt financing for acquisition, construction and development hospitality projects.

Winston Rowe and Associates takes pride in building long term relationships with their clients; they appreciate the opportunity to evaluate client’s business plan, and to review the current status of the client’s commercial development. They offer equity, debt, bridge, mezzanine, equity participation, joint ventures and hard money loans.

Their specialty is financing acquisitions, construction and development of raw entitled land, to develop multifamily, office, retail, mixed use properties, resort communities, hotels and golf course projects.

The key components utilized by Winston Rowe and Associates will be based on their evaluation of the borrower or developer’s net worth, their equity in the project, development experience, the geographic location, and the feasibility of the project.

When experience is important and timing is crucial. When you contact them, a principal is always available to speak with prospective clients.

They can be contacted at 248-246-2243 or visit them on line at http://winstonrowe.com

Winston Rowe and Associates provides professional services in the ensuing states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

OFFICE BUILDING MORTGAGES AND FINANCING – NO UPFRONT FEES

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Commercial Office Building Financing

With a commitment to quality Winston Rowe & Associates is becoming a recognized leader as an office building financier.

In these times of tightening credit, it is more important than ever to have a specialist working to secure the office building financing you need. Winston Rowe & Associates specializes in difficult to place loans, providing private funding solutions when needed, and securing institutional financing.

Winston Rowe and Associates success is measured by their clients’ success, and their mission is to be your source for the most appropriate and advantageous office financing solution that helps you achieve your goals.

Office Building Financing Terms:

No Upfront or Advance Fees
Capital Deployment Nationwide
Loan Amounts Starting at $1 MM
Purchase, Refinance & Cash Out
No Recourse Available
Joint Venture
Interest Only Option
Hard Money that can close in 10 Days

Winston Rowe and Associates can assist in financing for new acquisitions or refinancing for both single tenant and multi tenant office buildings whether the borrower is seeking the lowest rate, highest leverage, no prepayment penalty, or a long-term fixed rate.

Office building mortgages, due diligence and advisory services are provided in all 50 states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

NO UPFRONT FEES SHOPPING MALL LOANS

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

In today’s financing environment, to fund the purchase of shopping malls is difficult and refinance to solve these issues can be a financial hurdle – many banks will not or cannot fund such transactions, and renovation or expansion is difficult to execute within the confines of CMBS without refinance.

The need for alternative sources of capital in the commercial real estate industry has never been greater. Winston Rowe & Associates is a funding source that provides flexible, reliable and timely solutions for shopping center owners.

With low fixed interest rates starting at 3.50% and flexible financing options, Winston Rowe & Associates is able to structure shopping center financing solutions, in days not weeks or months.

Shopping Center Loan Rates & Terms:

Available Nationwide
Loan mounts Stating at $1MM
Hard Money that can Fund in as little as 10 Days.
CMBS, SBA, Conventional
Purchase, Refinance and Cash-out
Joint Venture
Discount Note Payoff
Chapter 11 DIP Financing

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective clients. They can be contacted at 248-246-2243 or visit them on-line at  http://www.winstonrowe.com

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory services in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Investing In Apartment Complexes Financing Options – Winston Rowe & Associates

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Investing In Apartment Complexes Financing Options
Apartment building are a great way to build wealth because they always increase in value or are a great hedge on inflation. Winston Rowe and associates is a nationwide no upfront fee commercial finance firm. You can contact them at 248-246-2243

Financing for Apartment Complexes

Winston Rowe and Associates, a no upfront fee commercial real estate financier. They‘ve developed a comprehensive mix of highly customized multifamily and apartment building loan programs.

When it comes to investing in multifamily housing properties, often times the difference between a good investment and a great investment is financing.

For more information about Winston Rowe and Associates you can contact them at 248-246-2243 or check them out on line at HTTP://WWW.WINSTONROWE.COM

Apartment Financing Options:

Joint Venture Purchase and Construction

Capital deployment starting at $10 mm
Liquidity requirement at 10%, in addition to a 10% reserve

Conventional Purchase, Refinance and Cash Out

Nationwide
75% LTV purchase
60% LTV Refinance
Minimum capital deployment $1 MM

Hard Money and Private Capital Purchase, Refinance and Cash Out

65% maximum loan to value
Minimum capital deployment $500,000

Chapter 11 Debtor in Possession Financing

50% maximum Loan to Value
Minimum capital deployment $1 mm

Discount Note Financing

Maximum Loan to Value 60%
NO new cash required
Minimum capital deployment $1 mm

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Winston Rowe & Associates provides no upfront or advance fee commercial Apartment Building financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Structuring Commercial Bridge Loans

APPLY ON LINE NO UPFRONT FEE COMMERCIAL LOAN

Winston Rowe & Associates, a leading no upfront fee financial advisory and consulting firm focuses on borrowers with immediate financing alternatives to traditional commercial real estate programs.

They are expects at gap (bridge) financing, discounted mortgage buybacks, unpaid tax remittances, foreclosure workouts, bankruptcy resolutions (DIP) and short fuse opportunity financing are all examples of transactions that can be closed with immediately.

Prospective clients can always speak to a principle directly at 248-246-2243 or visit them online at http://www.winstonrowe.com (http://www.winstonrowe.com/) .

They always have straight forward answers to client’s questions and have some of the best service in the business.

When you need to move quickly, Winston Rowe & Associates is prepared to move at the same quick pace as their clients – in weeks not months.

Why CRE Investors Are Turning To Winston Rowe & Associates:

Never an upfront or advance fee

National coverage

Fast funding in less than 30days (with complete submission)

Bridge loans starting at 7%

Loan to value up to 70%

Some of the best service in the business

Streamlined submission process

All real estate types considered

Loan amounts starting at $1,000,000 with no upper limit

Winston Rowe & Associates of their highly skilled team of due diligence and underwriting professionals that can get out of the box transactions funded.

What Is A Hard Money Commercial Loan & How It Works

Hard Money Commercial Loan & How It Works

What is so-called “hard money” mortgage lending? Are these loans hard to get? What’s the downside if you get one? How did the financial crisis affect this segment of the lending business?

Hard money loans are short term, and generally not “consumer related”; that is, they’re for business purposes; the rates are high, and they’re designed for entrepreneurs who need a bridge from, say, property acquisition to profit on the other side.

These loans serve those borrowers and properties that the Bank’s can’t handle, since the HM lenders can do what banks can’t. For example these non institutional capital sources still welcome asset based lending: loans based on the collateral property’s value rather than the borrower’s cash flow or liquidity. Once, banks could engage in this kind of lending, at least to a degree, but since the financial crisis, it’s a regulatory no-no.

A bank, thrift or credit union must base their loan to value ratio (LTV) on the lesser of acquisition cost or the current appraised value. HML’s can, and often do, base it on just the appraised value. This could mean that, if the lender says that 60 percent of appraisal is the maximum LTV, then a borrower could, on a $3,000,000 sales price, with a $4,000,000 appraisal, get at $2,400,000 loan, 80 percent of the price.

Surprisingly, this does occasionally happen, as banks and other lenders are unloading foreclosed commercial properties.

If private lenders are waiving the rules that banks are compelled to follow, then you can bet that price will rule the waves of capital coming out of the HML coffers. Rates run from 9.5 to 16 percent, origination fees (points) from 3 to 6 percent. Since the loans are short, generally two to three years, they’re interest only.

The income that a property can generate is a key element in its valuation, and that income from the property can have more relevance to a hard money lender than the borrower’s cash flow outside of the property.

Just like the banks, the hard money people got hit hard during the great meltdown. Since their loans were based on the inflated value of the real estate, they took a bath when the bubble burst. Commercial property values dropped even more precipitously than residential prices.

Now the wheel has turned, values are down, bargains abound for potential developers and landlords, while bank lending is constrained by restrictive regulation. HML’s are enjoying a bit of a boom as people long on experience and vision — but short on cash — snap up bargains in land and buildings being peddled by a previous cycle of lenders.

Should you look for a hard money loan when your bank turns you down? Well, one of the tried and true ploys of real estate investing is to buy cheap, develop, remodel or finish a project, and parcel it out to retail purchasers, either businesses or homeowners. Thirteen percent for a couple of years looks pretty good if you stand to make a cash on cash return of 50 percent or better.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Chapter 11 Bankruptcy Financing

APPLY FOR DIP FINANCING

 

Debtor-in-Possession (DIP) Financing is essentially financing provided to companies who have filed for bankruptcy protection and reorganization under Chapter 11 of the United States Code.

DIP Financing is provided on a post-petition basis — after the filing date of the company’s bankruptcy.

There are many benefits to using Winston Rowe and Associates for Debtor-in-Possession financing:

Experience and Expertise:

Winston Rowe & Associates has a long track record and lengthy history of success in providing DIP Financing.  In conjunction with your attorney, they will help navigate you through the process rapidly and efficiently.

Flexibility:

DIP Financing structures are extremely flexible and can accommodate financing amount starting at $1,000,000.

When speed and experience are important and crucial to your commercial real estate investing success, a principal at Winston Rowe & Associates is always available to speak with prospective clients.

They can be contacted at 248-246-2243 or check them out on line at http://www.winstonrowe.com

Winston Rowe and Associates has Debtor in Possession (DIP) financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Zillow Launches New App

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Zillow, the leading real estate and home-related marketplace, just launched the Postlets® App for iPhone® and iPad®.

Postlets is a free listings creation and distribution tool, and is owned by Zillow®.

With the new Postlets App, users can distribute their rental listings to more than 20 of the top real estate and rental sites on the Web and mobile and easily share them on social media sites, all with the touch of a finger.

The app, specifically for rentals, allows landlords, property managers and real estate agents to quickly create, distribute and manage their rental listings on the go, and eliminates the cumbersome trudge back to the office desktop.

Postlets is the path for posting rental listings to the Zillow Rental Network, which includes Zillow.com® (the largest rental site on the Webi), Zillow Mobile, HotPads„¢, Yahoo!® Homes, AOL Real Estate, and HGTV®’s FrontDoor®. Postlets also makes it easy to publish and manage rental listings to other top rental sites on the Web.

With the Postlets App for iPhone and iPad, landlords and property managers can:
Upload an unlimited number of photos.
Specify available amenities and write descriptions on the spot.
Instantly publish rental listings to the most popular rental sites on the Web.
Instantly share rental listings on Facebook and Twitter.
The Postlets App is available for free from the App Store on iPhone and iPad or at http://postlets.com/iOS.

Chapter 11 Bankruptcy Commercial Loan Modification

Debtor-in-Possession Financing

Debtor-in-Possession (DIP) Financing is essentially financing provided to companies who have filed for bankruptcy protection and reorganization under Chapter 11 of the United States Code.

DIP Financing is provided on a post-petition basis — after the filing date of the company’s bankruptcy.

 

 

Selecting “Debt Investing” Vs “Equity Investing” Financing for Commercial Property

WINSTON ROWE AND ASSOCIATES WEB SITE

This is a great explanation of the difference between Equity Investing vs. Debt Investing and how it works from Winston Rowe and Associates.

Winston Rowe & Associates is an equity based private and hard money funding source for commercial properties nationwide without the usual upfront or advance fees. They can be contacted at 248-246-2243.

Equity Investors vs. Debt Investors Differences

The subject of private money is a broad one and one that is vitally important to the success of any real estate investor.

First, when you are raising private money you are generally seeking private lenders. However, not all private lenders are created equal.

Private Money

There are two types of private lenders that you should target when raising private money for your deals: 1) debt investors and 2) equity investors. Your private lenders are investors in your deals so this word can be used interchangeably with lender and in fact, investor is my preferred vernacular.

Debt Investors

Debt investors are people that invest money in your deal for a fixed rate of return. They make an actual loan on the underlying property and you agree to pay them a certain interest rate and make monthly payments over a certain amount of time until the loan is paid in full.

Debt investors do not get equity in the deal or “participate” in additional profits.

Debt investors are the least expensive investor but they take a long time to find. They typically pay debt investors 6-8% interest only and most prefer to be in first lien position on the property so they usually only use debt investors if they can raise 100% of the funds needed to close the deal.

Equity Investors

Equity investors are people that invest money in your deal for a percentage of the profits. They “participate” in your deal and as a result most of these arrangements are referred to as participation deals. Typically these are the investors that get a percentage of the monthly cash flow plus a percentage of the equity.

Equity investors are the most expensive investors you can have in your deal but they take the least amount of time to find. Everybody wants a bigger piece of the pie.

Most new real estate investors think that if an equity investor puts up 25% of the deal then s/he is entitled to 25% of the profit (cash flow + equity). This isn’t necessarily the case. You can structure your equity investor’s participation any way you want.

Commercial real estate investors can view Winston Rowe & Associates products and solutions

They can be contacted at 248 246 2243. A principal is always available to take calls.

Winston Rowe & Associates has hard money financing solutions in the following states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

 

Document Requirements of Hard Money

Take photos of the exterior and interior of the property. Take extensive photos of the property areas that will be repaired , replaced or removed. Digital copies and a walk through video will suffice.

Contact a local contractor, handyman or repair specialist and get written estimates. Don’t worry if you plan on painting and doing the make-ready yourself – still get a bid for repairs to give to your potential hard money lender.

This is a given. They will need to see signed copy of the purchase contract. Also include the title company and special escrow funding instructions if any. It’s okay if you don’t have a signed copy as of yet if financing need to be established first. Showing them a copy of the contract you plan to use is still a smart move and will make your “property report” look compete and legit.

Have an insurance agent provide you a quote for liability and hazard insurance for your hard money lender. This will insure that the lender will be repaid in the event of severe act of vandalism or catastrophic lost that occurs.

If you have a “preliminary title report” or confirmation that there is not a clouded title share this information with the potential hard money lender. This document is a tricky one. Some hard money lenders “prefer” to work with certain Title Company. Don’t outright purchase title insurance or a full certified report – would not want you to waste money.

Hard Money Lenders of course have their own internal and unique set of requirements based on their lending area, property purchase price, commercial vs residential, and loan repayment terms.

Things to Consider Before Buying Your First Investment Property

INVESTMENT PROPERTY FINANCING

Everyone seems to know it. It’s on TV, it’s in the newspapers, and it’s on the radio: Real estate investing can do wonders for your financial future! However, just because investing in real estate has a great reputation for delivering stellar returns and building great wealth doesn’t mean that all investments are created equal.

The secret to getting those great returns lies in understanding the fundamentals of what makes a great real estate investment and focusing on buying only the best real estate. This post will help you sort through the clutter by offering ten important considerations to think about before you buy your first investment property.
Are You Ready to Invest?

Investing in real estate can be lucrative, but it takes time and a lot of moneyInvesting in real estate is not for everyone. While you don’t need to be listed on the “Forbes Richest” list to buy a rental property, it’s still important that you have a firm grasp on your personal finances before investing in real estate. Real estate investing is not a “get rich quick” scheme, but an adventure that can span decades.

Only you can know if you are ready to start investing, so take a good inventory of your life, and if real estate can fit into your investment portfolio – great! Take time to get educated. Read real estate books, blogs, websites, and forums to get a firm grip on just what real estate investing is and how the most successful investors use real estate to build wealth.

Do You Have a Plan?

Perhaps the biggest reason many investors lose money – whether in stocks, mutual funds, real estate, or business – is due to lack of planning. You wouldn’t consider driving from Saskatchewan to Peru knowing only that the direction was “somewhere south.” A plan will help you get from where you are right now to the place you want to someday be.

What Kind of Property Should You Start With?

Real estate investing is an exciting field because of the many different niches and strategies you can use to customize your plan to fit your personality and position in life.

Perhaps you enjoy risk and would prefer a “fix and flip” business? Or maybe you are looking at long-term stability and would prefer investing in single-family rentals. Or, maybe you don’t want any involvement at all and would rather just “become the bank” by lending money to other investors and earning a passive return. There are hundreds of ways to invest in real estate, so find the strategy that best fits your lifestyle.

What is the Neighborhood Like?

You’ve surely heard the old cliché: “Location, location, location.” The importance of this phrase is no less vital when choosing a real estate investment. You don’t need to necessarily buy a house in the most expensive area of town, but it’s important that you understand what the location is like.

Pro tip: Drive by your prospective property at different times of the day, on different weekdays, to ensure you are comfortable with the location and that it fits within your plan.

What are the Local Vacancy Rates?

One of the most costly expenses you are likely to face as a real estate investor is vacancy. However, vacancy is a normal part of an investor’s life and should be fully expected and prepared for.

Check with local property management companies to determine the average vacancy rate in the area where you are looking to buy. Set aside money each month for times when the unit is vacant so you won’t be surprised by the lack of income. Also seek to minimize vacancies by understanding what the local average market rent is and attempting to be just a little bit below average.

Do You Know All Your Investment Expenses?

A common mistake by many first-time real estate investors is underestimating their expenses. Sure, most investors know there will be repairs from time to time, but there are numerous other expenses you may need to account for.

A good rule of thumb to use when determining how much you should plan on spending for expenses is known as the “50% rule.” The 50% rule states that, on average over time, expenses on a property will equal 50 percent of the income. So if a property rents for $2,000 per month, you can assume $1000 in expenses per month before paying the mortgage payment.

Here’s another short video on how to use the 50% rule to estimate potential cash flows from a multifamily investment property:

How Will You Finance Your Property?

Real estate investors must decide whether they want to finance their properties with cash or mortgage loansThere are many different ways you can pay for an investment property. If you have the money, you can pay all cash and not deal with banks or loans.

However, if you don’t have all the cash needed or you’d rather utilize greater leverage, you can supply just the down payment and take out a mortgage to cover the remaining cost. If you do use a loan, be aware of the term and interest rate on the loan you are taking, and stay away from adjustable rate mortgages as they may go up, causing your payment to rise dramatically.
8. Should You Self-Manage or Hire a Professional Manager?

Whether or not you should manage your property is a personal decision largely dependent upon your plan, personality, skills, and availability. A typical property manager may cost between 7 and 10 percent of the monthly rent, but a good property manager should also decrease vacancy and have systems in place to make repairs less expensive. If you are undecided, always budget in management; if you decide you don’t like it, you’ve already planned for it.

Can You Be Your Own Bookkeeper?

Of all the great benefits real estate investing has going for it, easy paperwork is not one of them. Are you confident in your abilities to do the bookkeeping, or do you need to budget for a professional to keep track of the numbers?

Do You Have an Exit Strategy?

Finally, always start with the end in mind. This circles back to our discussion on “having a plan.” Know what you are going to do with the property before you buy it. Many investors, during the last housing boom, bought properties with only one plan – to sell soon for a higher price. When the market dropped, however, many of those investors lost their properties.

Always have multiple plans for your investment, and know exactly how you plan on making money with the investment. Will you pay it off slowly over 30 years? Will you rent it out each month for cash flow and sell it when the market peaks? Know what exit strategies are available for you, and plan, from the start, how you will exit.

 

Insurance Considerations for Real Estate Investors

COMMERCIAL REAL ESTATE INVESTOR FINANCING ONLINE

In any kind of investing, making money is only half the battle. You must also expend considerable effort, time and capital on protecting your gains and making sure they aren’t stripped away from you, whether by an act of God, a criminal act on someone else’s part, or just random misfortune. After all, every successful football team has to have at least a competent defensive unit.

If you’re investing in real estate, getting a great deal will only boost your business if you protect the investment with appropriate insurance coverageWith real estate investing, your offense is your ability to sell properties at a decent price on a regular basis, to acquire properties at a below-market price, and to make appropriate and profitable renovations that quickly add value.

Your defense, on the other hand, is just as important. Perhaps even more so, because while a weak offense will simply make it hard for you to earn profits, a weak defense can leave you bankrupt in a flash.

For a real estate investor, your primary defense is your use of entities to separate your liability-generating assets from your personal assets, and, of course, insurance – and you had better understand both, if you plan to be in real estate for a long time. If you own property, a certain class of people will perceive you as wealthy. Attorneys are circling, trying to earn a bite of flesh for themselves and their clients.

We dealt with entities in a prior column. As an investor, it’s not enough to sit on your laurels, expecting a garden-variety homeowners policy to take care of your protection needs. Indeed, as we shall see, a standard homeowners insurance policy may not provide a flipper any protection at all, if no one is living in the home while you renovate it! Let’s take a closer look at the insurance part of the equation – particularly as it applies to short-term real estate investors.
Liability Insurance

Liability insurance provides protection and liquidity against people who claim to be injured as a result of something that occurred on your property, or a property owned by a corporation or LLC controlled by you.

Note that many of these claims could happen to flippers just as easily as to owners of rental properties. But a standard home insurance policy plus umbrella coverage protection – the “plain vanilla” option offered by most rookie insurance agents, may not be appropriate for your needs.

Why? Because most standard home insurance policies contain exclusions for vacant or neglected properties. To fill the gap, you will likely need a special kind of coverage called “vacant property” coverage, or to buy a rider on an existing homeowners policy, say, if you have a tenant moving out.

You may also want coverage for malicious mischief. This protects you against the kinds of things the neighborhood kids or area vandals and vagrants might commit while occupying your vacant property. Most homeowners insurance will cover this, but not if the property’s been vacant for more than two months while it’s being renovated! This is a specialty area of coverage, and you need a separate policy to protect you.

Dwelling vs. Homeowners Insurance

Generally, real estate investors should be covering their investment properties with dwelling policies, and not homeowners policies. The difference: A homeowners policy covers belongings in the home, too. Most investors don’t need that much coverage. A dwelling policy covers the building itself.

This doesn’t mean dwelling insurance comes cheaper. Typically, any policy designed to cover vacant buildings is much more expensive than a standard homeowners insurance policy would be. You can bid premiums down, however, if the dwelling has a functional fire alarm and burglar alarm system, if you have insulation and climate control in place to prevent pipes from freezing, and other basic risk mitigation measures in place.

Vacancy Considerations

Courts have defined a vacant home to mean one in which there is not enough furniture or appliances to reasonably allow someone to live there. So, if you have a standard homeowners insurance policy, and you have an incident of vandalism or arson that causes significant damage to the home, and it comes out that you had stripped the place bare of furniture and appliances, your insurer could well evoke the “vacancy exclusion” to get out of paying the claim. And they should! Standard homeowners insurance policies are not designed to cover the risks of vacant dwellings, which would drive premiums up for everyone.

To protect yourself, keep some furniture in the unoccupied home so it doesn’t meet the court’s definition of “vacant.” It may be worth renting or buying some garage sale furniture to do this in the short term, suggests Jack Hungelmann of Corporate 4 Insurance Agency Inc. in Edina, Minnesota, and author of “Insurance For Dummies.”

Some policies only cover the actual cash value of the structure, after depreciation. This is generally less desirable than a policy that covers replacement cost. With an actual cash value policy, the insurable value of rental buildings gradually diminishes over 27.5 years, using IRS MACRS rules. (There are other ways to calculate cash value as well.) This is a big deal to rental property investors who hold on to properties for many years. It’s not as much of a concern to a flipper, because if you unload the property very quickly, there’s not much time for the property to depreciate!

Because vacant dwelling coverage is a specialty line, there are no real industry standards. Policies aren’t written to conform to anything like a homeowners HO-2 form. So policies can vary widely in terms of coverage definition, exclusions and price.

For this reason, I would recommend going to an independent insurance broker who is experienced in this type of coverage, and who can write policies for several different insurance companies. This will save you time going over the fine print and comparing the contract language of many different policies from many different carriers, which you would have to do yourself if you went direct with a carrier, or with a captive agent representing only a single carrier.

Construction Insurance

If you have a property that’s under construction, you will also want construction insurance in place. Why? Because chances are good that you will have tens of thousands of dollars in construction supplies sitting on the property during the process – an open invitation to thieves. One of my earlier Flippin’ Insider columns deals precisely with this construction coverage.

Top Real Estate Depreciation Tips

COMMERCIAL REAL ESTATE INVESTOR FINANCING

Depreciation is a double-edged sword. It’s a big part of why real estate works so well with leverage as an investment. Taking the depreciation allowance on investment property is a critical part of the attractiveness of real estate investing, from the point of view of the cash-flow investor. But the rules governing depreciation are notoriously baffling, and occasionally trip up even tax professionals.

With tax time on the horizon, here are some tips on depreciation for real estate investors There are lots of articles out there explaining the basics of depreciation and amortization, but the best of them is still the IRS publication on How to Depreciate Property.

There are fewer articles out there that specifically outline some of the traps and landmines that surround depreciation and give the property owner some concrete tips on how to avoid them. So I decided to put some tips together here:

1. The “Use it or Lose It” rule is in effect! You must be on the ball when it comes to claiming allowed depreciation each year. This is because if you neglect to claim depreciation in one year, you cannot “double it up” in the following year to catch up. You may be able to file an extended return, but if you’ve made the same mistake two or more years in a row, and it was because you chose the wrong method, rather than a simple math error, you might have to file for a change in accounting method, using IRS Form 3115.

Furthermore, when you sell a property, the IRS will force you to subtract all allowable depreciation from your basis, and calculate capital gains taxes based on that, even if you did not claim the depreciation!

Think that hurts? Here’s another twist of the knife: If the IRS recaptures depreciation in this way, the amount recaptured is not taxed at capital gains rates, but at ordinary income rates.

2. The Section 179 deduction and accelerated depreciation is nice – but remember that it doesn’t count for real estate. Real property is not eligible for Section 179 deduction. Your real estate transactions have to make sense even if you don’t get much in the way of first-year deductions.

3. Be careful with taking big Section 179 deductions if you are the owner or part-owner of a fiscal year corporation or partnership. Yes, the corporation can deduct up to $500,000 in equipment. But currently, owners can’t take advantage of the full amount in practice. They can only deduct $25,000 of anything that flows through a K-1 report in tax years beginning after 2013.

4. Tax year 2013 is the last year for bonus depreciation under Section 179.

5. Remember that land doesn’t depreciate. Just the building. So you have to separate out the value of the building from the land. Generally, the IRS will accept your local property assessor’s judgment, so you can use that document to back up your own calculations.

6. Land doesn’t depreciate. But landscaping does!

7. Did you plant anything on investment property? That’s depreciable over 15 years, under MACRS rules. Fruit and nut-bearing trees are 10-year property.

8. Spouses are not depreciable. But livestock is!

9. Don’t forget: If you’ve made improvements or renovations to an investment property, you can keep depreciating the cost of those improvements even after you have already fully depreciated the original cost of the home.

10. Try to get your renovations done and property into rentable service, or capital equipment into use prior to the last quarter of the year. This helps you avoid or minimize the negative impact of the mid-quarter convention. This is a special tax rule that applies if the IRS notices you crammed at least 40 percent of your depreciable property into service in the last quarter of the year. This is their way of keeping you honest and preventing you from claiming six months’ worth of depreciation on assets you place in service in the last few days of the year.

11. You can’t claim depreciation on your personal residence. You do get an exemption from capital gains taxes, though, ($250,000 for singles or $500,000 for married couples) if you meet the ownership and use tests.

12. Do you have a home office? It depreciates under a different schedule than ordinary residential property. The portion of your home committed to business use is depreciated like commercial property, not residential property. This means that it uses a 39-year depreciation schedule, rather than a 27.5-year schedule.

Heads-up: If you have been claiming a home office deduction, and then you sell your home, you will probably get smacked with something called the depreciation recapture tax. You can defer that tax by using Section 1031 like-kind exchanges, but it is very difficult to avoid it altogether. Note that even if you never claimed the depreciation, the IRS will still tax you as if you had!

 

 

 

Deducting Repairs: New IRS Rule Eases Burden for Landlords

COMMERCIAL REAL ESTATE FINANCING

 

Here’s a bit of good news for small landlords: The Internal Revenue Service has introduced a “safe harbor” for deducting repairs to investment properties from ordinary income. Normally, the IRS does not allow you to take a full current-year deduction for anything they consider a renovation or improvement.

They only allow you to take a first-year deduction on repairs, which the IRS defines as projects that do not materially add to the value of a property, nor change its function, but only restore the property to a serviceable and rentable condition. Renovations and improvement costs have to be recovered over the useful life of the property – typically 27.5 years for residential real estate, and longer for commercial real estate.

This limitation on deductions puts a crimp on investor cash flows: Investors would almost rather maximize their current cash flow by maximizing current year deductions (except in a few special situations).
I Have to Account for What!?

In practice, this system led to some onerous record-keeping requirements on the part of landlords.

The new IRS rule, however, essentially presumes that all small landowners naturally have some repairs – and gives them a safe harbor for estimating their repairs without necessarily having to keep a crazy amount of records on hand for very small transactions. The IRS figured out it’s not reasonable for smaller investors/landlords to have a full-time, dedicated accounting staff responsible for depreciating every last widget. If you want the Full Monty version, you’ll find it at Internal Revenue Bulletin 2013-43.
Safe Harbor

The rule: If your tax basis in the property is $1 million or less, and your average annual gross receipts over the past 10 years are $10 million or less, you get a break. You can deduct up to 2 percent of the current market value of the property, or up to $10,000, whichever is less, in any given year, right off of income. You don’t have to depreciate this amount over decades, and you don’t have to hold on to detailed records every time you replace a leaky gasket in your shower or replace some wet-rotted drywall after a heavy rain. Just attach a statement to your income tax return, and make sure you file your return on time.

You can do this with multiple properties, as long as each property has a tax basis of less than $1 million.

Note: If your expenses are greater than $10,000 per property, you don’t get to safe-harbor any of it. Everything has to be capitalized over time.
Take the De Minimis Election

Under the new rule, you can elect to take a special de minimus safe harbor deduction of up to $500 per item of tangible property acquired (or produced), as long as you file your tax return on time (including allowable extensions). To do so, you need to have a written accounting procedure on file stating your intent to take the deduction.

Do you want to take more? You can deduct up to $5,000 per invoice (not per item) if you have an applicable financial statement, defined as:

A 10-K filed with the Securities Exchange Commission,
A certified and audited financial statement prepared by an independent certified public accountant, or
A financial statement required for a federal or state governmental entity.

The statement must be in place at the beginning of the tax year. For the property to qualify for de minimus treatment, it must have an expected useful life of less than one year.

You must be consistent. That is, you must always treat every piece of tangible property acquired or created, below this dollar amount.

Furthermore, don’t try to skate by breaking up items among multiple invoices. The IRS already thought of that, and they’re way ahead of you.
Supplies and Materials

Generally, you can deduct the cost of materials and supplies in the year purchased. You don’t have to keep track of the inventory of a bag of nails and depreciate them over the length of time they’ll be in the wall. Just keep the cost down to $200 or less per item. You can also deduct the cost of acquiring or producing property with an economic useful life of 12 months or less.
Can I Take Advantage of This for 2013?

Unfortunately, no. The IRS stated in their revenue ruling that their intent was to reduce the compliance burden on property owners, and that making the tax benefit retroactive to prior years would be “inconsistent with such a purpose.” That is, they figure the compliance burden for 2013 to be pretty much a sunk cost already. The safe harbor rules only apply for tax years beginning January 1, 2014 and onward.

How To Retire Early Investing In Apartment Buildings

MULTIFAMILY LENDERS WITH NO ADVANCE FEES

We all work hard at our J.O.B., don’t we? We work hard each day and hope to retire when were 65, that’s the American dream, right?

Many of us are looking for something better, maybe a scenario where we can retire earlier or perhaps enter a state of semi-retirement. The answer: investing in apartment buildings.

Imagine working really hard to find a good building at a fair price, putting the financing together, and hiring a property manager to run the whole thing. Was that a lot of work? Of course. But don’t you work hard anyway? Here’s the difference….

Apartment Ownership – What’s It Really Like?

Imagine the day you close on the building and your property manager takes over. Ask most apartment building owners, and they will say they spend anywhere between 2 and 5 hours per week on their building if its managed by a professional management company.

What have you done? You went from a job that took 40-50 hours of your time each week to one that takes a fraction of that. And you replaced part or all of the income of your job with that from the apartment building.

You’re working less while maintaining your income.

What would this mean to you? Maybe you could spend more time with your family. Maybe you want to travel more. Pursue a hobby. Give back. Or maybe do more de”als.

How is something like this possible with apartment buildings? The answer is in how apartment buildings are valued.

How Do you Make Money On Apartment Investments?

The value of an apartment building is driven by its net operating income, the amount of income left after all expenses are paid. The more money the building spits out after all expenses, the more its worth.

In many parts of the country, a building is worth 10 times its net operating income. This 10 times multiplier is referred to as the capitalization or cap rate for short. Don’t worry about this for now – its not important to the point I’m trying to make. Lets just use a cap rate of 10 for our discussion.

Lets say a building has a net operating income of $100,000, which would make it worth $1M. If you could somehow make the building generate $10,000 more each year, maybe by increasing rents or decreasing expenses, you would have generated $100,000 in value (a cap rate of 10 times the additional income of $10,000 is an additional $100,000 in value).

Lets look at a more specific example, so that you can start visualizing how this math could work for you in real life.

Assume you bought a 10-unit building for $540,000, and you had to put 30% down. The building was bought at a 10-cap based on our formula we’ve used so far. Which means its net operating income (or NOI) is $54,000 per year, times our cap rate of 10 is $540,000. The income per unit is $1,000, and the expenses are 55% of the income. The building is in great shape and has been managed by the owner himself.

So far there is nothing special about this deal.

However, suppose you found out that the average market rent in the area is actually a $200 higher per month. Suppose further that you meet a property manager who manages two similar buildings in the area, and he tells you that his expenses are only 45% of income.

Lets say it takes us 3 years to get the building to where it should be, i.e. with each unit bringing in $1,200 per month and lowering our expenses to 45% of income. Here’s how this would impact our financials:

By making small improvements each year, we have added $25,000 to our Net Operating Income. What is our value now?

Our new NOI is $79,000, so our value now is about $790,000 ! That is an increase of $250,000 in three years! Isn’t that incredible?

But that’s not all.

You also had between $2,600 and $4,700 in monthly income from this building over those three years.

 

Led By Multifamily, Improvement Seen in All Commercial Real Estate

NATIONAL APARTMENT LENDERS ONLINE

Despite disappointing economic growth during the first quarter of 2014, the outlook for all of the major commercial real estate sectors is slightly improving, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said the sluggish growth experienced in the first quarter is not indicative of the actual health of the economy. “Gross Domestic Product should expand closer to 3 percent for the remainder of the year. The improved lending for commercial loans and continuing job gains we’ve seen this spring bode well for modest progress in commercial real estate leases and purchases of properties.”

However, Yun cautions that with rising long-term interest rates on the horizon, consistent economic growth is imperative to solid commercial real estate investment in the years ahead.

Multifamily has led the way. “The multifamily sector continues to be the top-performer in commercial real estate with the lowest vacancy rates. However, tight availability – despite new construction – is causing rents to currently rise near 4 percent annually in many markets,” said Yun. “Many renters who are getting squeezed may begin to view homeownership as a more favorable, long-term option.”

NAR reported earlier this month in its annual Commercial Member Profile that despite subpar economic expansion, Realtors® who practice commercial real estate saw an increase in sales transaction volume and medium gross annual income in 2013.

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates edge up from 4.0 percent in the second quarter to 4.1 percent in the second quarter of 2015, with added supply helping to meet growing demand. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.3 percent; Ventura County, Calif., 2.4 percent; and New York City; San Diego; Hartford, Conn.; Oakland-East Bay, Calif., and San Diego, at 2.5 percent each.

Average apartment rents are projected to rise 4.0 this year and in 2015. Multifamily net absorption is expected to total 221,400 units in 2014 and 173,100 next year.

Apartment Market Has Strongest Quarter Since 2000

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The second quarter of 2014 has emerged as the strongest quarter for the U.S. apartment market in nearly 14 years, according to early release figures from Axiometrics, the leading supplier of apartment data and research.

Effective rent growth was 2.4% on a quarterly basis nationwide in April-June 2014, the highest quarter-to-quarter rate since the 2.9% of July-September 2000. Occupancy in the second quarter of 2014 was 95.0%, the strongest since the first quarter of 2001 (95.6%).

Both rent growth and occupancy exceeded expectations.

“The year started slowly for the apartment market, perhaps due to weather, but it experienced a major reacceleration during the second quarter,” Axiometrics Vice President of Research Jay Denton said, referring to the major winter storms and bitter cold temperatures that gripped much of the nation during the early part of the year. “Effective rent growth was soft in January and February, but the period from March through May was the one of the strongest three-month stretches we’ve seen in the 19 years we’ve been tracking apartments.”

Another reason for the strong apartment performance just may be the falling home-ownership rate, Denton added. U.S. Census Bureau statistics show that the home-ownership rate in the first quarter of 2014 was 64.8%, the lowest in 19 years – since the second quarter of 1995, when the rate was 64.7%.

“Demographics, along with the increasing choice to rent rather than own, continue to play in the favor of apartments,” Denton said.

The second-quarter effective rent growth was a big improvement from the first-quarter quarter’s 0.5%, an increase from the -0.9% recorded in the fourth quarter of 2013, measured on a quarter-over-quarter basis. Occupancy was up 60 basis points from the first quarter’s 94.4%, ending a two-quarter streak of decline.

Annualized effective rent growth was 3.3% in the April-June 2014 time frame, up from 2.9% in the January-March period. That matches the second-quarter 2013 rate and marks the second straight quarter in which the annualized effective rent growth has increased.

These increases are taking place with 180,000 new units having been delivered in the past year.

“There is more supply on the way, but the apartment market is merely returning to a more ‘normal’ level of construction,” Denton said. “It is important to note that total residential construction, including single-family homes, is still well below the historical norm. This prolonged period of lower-than-normal residential construction has allowed apartment occupancy rates to surge to a level not achieved since 2001.”

The second-quarter strength is further confirmation that, as Axiometrics has reported previously, the rental base is changing, Denton added. Most of the new units are geared toward higher-income individuals.

Most of these high-rent submarkets are in the urban core, where many millennials and others like to live to be closer to their work and play. Also, many in this age cohort group like the flexibility of renting versus owning, while others might be falling victim to stringent mortgage-lending requirements.

But, Denton said, the renters outside the core are staying put, and they, too, might not quite make the mortgage-qualification standards because of credit and/or income issues.

How to Fund Fast with a Bridge Loan

Commercial real estate investors have not had an easy time with commercial financing since the real estate meltdown of 2008. And on a new commercial purchase, when everything is riding on the approval of a commercial bank loan, stakes are high.

On some larger commercial mortgage acquisitions for example, inexperienced buyers may lose earnest money deposits after long, drawn out due diligence and bank underwriting. Sophisticated commercial real estate investors may not allow this to happen to them, but with the uncertainty of commercial bank loans, lots of time and money may be lost. Commercial bridge loans are coming more into the mainstream of commercial financing these days, because of the uncertainly of commercial bank loans.

Although interest rates are higher on commercial bridge loans, these loans allow investors to acquire property quickly with less ‘to-do.’ But in order to close a bridge loan quickly, there are certain things to have in hand that are absolutely imperative:

Preliminary Title Report: out of all of the important items needed to close on a loan fast, this is probably the most important.

Financial Information: for both the property and the borrower(s).

Rent Roll and Leases: If the property is leased, an updated, certified rent roll will be required along with copies of all of the leases.

This is just a short list of 3 important things you’ll need, read the rest of the list at our blog, ‘Hard Money 101’ at the link above.

What else would you add to this list? Have you ever had your commercial financing fall through at the last moment and had to use a bridge loan? What items did your lender require to close your loan quickly?

Investors Use Hassle-Free Bridge Loan Instead of Bank Loans

Bridge Loan Instead of Bank Loans

When closing quickly is the primary goal for a real estate investor on a real estate transaction, having a bridge loan in place is crucial. Hard money loans have long given real estate investors a strategic advantage.

The availability of bridge loans has long been a tactic used by real estate investors to snatch up great properties at discounts. Banks simply cannot perform as quickly as bridge lenders when speed is an issue. These loans are hassle-free and are primarily asset based, which makes it easier for real estate investors to make new acquisitions quickly.

Private Money Mortgages Help Borrowers with Bad Credit

There are few options for home loans for borrowers who have had bankruptcies, foreclosures, or short sales in recent years. You can’t get a payday loan on a house, and hard money loans are also not an option. And with the new ‘Qualified Mortgage’ rules that went into effect in January, even the most eligible borrowers can no longer qualify for home loans. For this reason many private money lenders have started offering an alternative for these types of borrowers in the form of a private money mortgage.

Because these loans are not sold on the secondary market but rather are held by real estate lenders, they don’t fall under the same scrutiny that government backed loans do. For those borrowers with bad credit these types of loans allow them to purchase properties that they otherwise would not be able to qualify for. Because private money mortgages are not a standard issue type of loan, most people don’t understand how they work.

National Summer Months Crime Spike Property Protection Tips

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Winston Rowe & Associates, a national no upfront fee apartment building financing firm developed this article to provide security tips for protecting your apartment building and apartments during the summer crime months spike.
With both the high mercury and summer vacations in full swing, incidents of crime increase, too. And it’s no coincidence.

According to FBI data, property crimes such as burglary, property theft and motor vehicle theft have risen as much as 9 percent between May and September over the past five years – the highest percentage in the calendar year.

Inside Your Residence:

Make sure dead-bolt locks are installed on all outside doors. They should not require a key from inside so that they’re easy to unlock if you need to get out quickly in case of a fire or other emergency.

Install peepholes on your outside doors so you don’t have to open them to see who’s on the other side. If your outside door has window panels on the side, cover them with blinds or curtains to keep out unwanted eyes.

Keep your blinds or curtains closed when you’re not home, especially on your main or ground-level floor.

If you have a sliding glass door, consider adding a defense other than the standard lock, such as blocking the track or installing a protective film that prevents the glass door from being smashed in.

Outside Your Residence:

Trim bushes and maintain landscaping to avoid creating unwanted hiding places for would-be intruders.

The exterior of your property should be well lit. Consider installing motion detector lights.
Be on the lookout for graffiti tags and vandalism, and fix it as soon as it happens by replacing signs, painting over it or making repairs as necessary.

Where You Park:

Always lock your vehicle, roll up widows and keep valuables out of sight, no matter where you park. This includes everything from high-dollar items, such as your cell phone or laptop, down to the change in your cup holder.
In any parking lot, park under a light, if possible.

If you have a garage door, always close it. Empty garages are an invitation for thieves to steal tools and other valuables.
Lock the door from your garage to your home, and remove your garage door opener from your car if you need to park outside overnight.

Winston Rowe & Associates, a national advisory firm that structures apartment and multifamily financing solutions nationwide. With no upfront or advance fees, for more information about them, you can give them a call at 248-246-2243

Winston Rowe & Associates has apartment building as well as other commercial real estate financing solutions in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming