Understanding Prepayment Penalties

Mortgage loans are expensive to originate.  It is not uncommon for consumer mortgages to cost upwards of $9,000.  Lenders typically recoup those costs through a combination of upfront fees and interest revenue over the life of the loan. 

If a borrower pays off a loan shortly after origination, the lender is at risk of losing money on the loan. Enter prepayment penalties.  A prepayment penalty is a contractual clause that states the borrower is going to pay the lender an additional fee if the borrower pays the loan off early.  This really isn’t a penalty at all.  It is a way for the lender to make sure they don’t lose money on a loan.

For example a standard prepayment penalties with a 5 year structure of 5/4/3/2/1 structure. This means that if the borrower pays off the loan in year one, they have a 5% prepayment penalty, in year two, a 4% prepayment penalty, in year three, a 3% prepayment penalty, and so forth. So, you might be wondering how this affects the borrower, and the answer is, it depends on your investment strategy. Let’s dive in.

The rental investors looking to grow a legacy of rental properties and hold on to them long term (we call these properties “permanent rentals”) are not really affected by the prepayment penalty.  Since their investment strategy focuses on the lifetime of the loan, paying off the loan in the first five years is a moot point.

On the other hand, investors looking to purchase rental properties with flexibility to sell in the foreseeable future (we call these properties “transitional rentals”) are very concerned about the prepayment penalty. These investors are interested in market conditions and want to be able to sell the property at the right time without worrying about paying a penalty fee.

Free Business And Real Estate Investing eBooks

Contact Winston Rowe and Associates

Welcome to Winston Rowe and Associates knowledge blog, scroll down to the right for posts about commercial real estate.

This is a list of free books about real estate investing, commercial real estate financing and business strategy.

We’re always on the lookout for great free books so bookmark this blog and check back for monthly updates.

These links are not affiliate marketing links, just publications that we feel may add value to people and businesses.

Commercial Real Estate Finance

The eBook Commercial Real Estate Finance, by Winston Rowe & Associates discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

Real Estate Investing Articles

This is a link to 1226 real estate investing articles written by industry veteran’s.

25 Productivity Tips for Successful Business Owners

Productivity is critical to your success at work. Business owners, managers and executives all want to get the most from their employees. If you’re not performing as efficiently or effectively as others, your long-term job prospects could be in trouble.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers

“Real Estate Investing: How to Find Cash Buyers and Motivated Sellers” teaches real estate investors and those interested in learning to invest in real estate how to define and target ideal cash buyers and motivated sellers. The book covers absentee owners, rehab investors, Section 8 landlords, and other buyer types. Some of the marketing topics include mailing lists, postcards, both online and offline marketing strategies along with examples. Anyone who wants to wholesale a house or is curious about flipping houses should pick this book to get educated on cash buyers and motivated sellers for their real estate investing.

Real Estate – Breaking Bad How to Flip Decaying Real Estate Properties for Profit

Tired of working 9 to 5? You should think of making money with real estate! Yes, the effort is well worth it! You just have to ditch the misconceptions and embark with all the passion you have in store for this amazing trip of rehabbing old houses and giving them a new look and a new owner.  Your reward? A nice profit!

Real Estate Forms Portfolio

A FREE and ready-for-download eBook consisting of a comprehensive collection of real estate-related forms for real estate investors.

Real Estate Secrets Exposed

This FREE e-Book sheds some light on the often mysterious and sometimes daunting world of real estate.

Use 1031 Real Estate Exchanges to Create Multiple Streams of Income

Discover how to use 1031 tax-free exchanges, tenants in common interests, and zero cash flow properties to create new sources of income. Learn how to offer bundled services and attract new clients. This FREE, ready for download eBook is perfect for anyone involved in real estate, taxes, mortgages, insurance, or law.  Download it now!

Make Money Through Real Estate Renovations

Download this FREE eBook and learn how a successful investor makes thousands of dollars from real estate renovations. Download it now!

Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders

Download this FREE e-Book, and discover the new secrets of funding real estate deals in the post-bubble real estate market, where traditional lending sources are getting very difficult to obtain. Download it today!

Real Estate Investing Strategy for Rehabs

This eBook is about residential rehabbing and the multiple strategies that can be used to maximize profits in this current economic climate. My goal has always been to share knowledge with folks that are truly interested in rehabbing and view it as not only for monetary gain but also see is as an “art and science” like I do. Happy Rehabbing!!

How to Be A Super Property Investor

A FREE, step-by-step guide that will help you become a super real estate property investor. Learn all the basic and some advanced investing techniques that have generated millions for property investors. Ready for download now!

Financial Terms Dictionary – 100 Most Popular Financial Terms Explained

This practical financial dictionary helps you understand and comprehend more than 100 common financial terms. It was written with an emphasis to quickly grasp the context without using jargon. Every terms is explained in detail with 600 words or more and includes also examples. It is based on common usage as practiced by financial professionals.

The Prince by Niccolò Machiavelli

Niccolò di Bernardo dei Machiavelli was an Italian diplomat, politician, historian, philosopher, writer, playwright and poet of the Renaissance period. He has often been called the father of modern political philosophy and political science.

The Science of Getting Rich by W. D. Wattles

This book is pragmatical, not philosophical; a practical manual, not a treatise upon theories. It is intended for the men and women whose most pressing need is for money; who wish to get rich first, and philosophize afterward. It is for those who have, so far, found neither the time, the means, nor the opportunity to go deeply into the study of metaphysics, but who want results and who are willing to take the conclusions of science as a basis for action, without going into all the processes by which those conclusions were reached.

Sun Tzu Art of War

Written in the fifth century B.C., Suntzu and Wutzu still remain the most celebrated works on war in the literature of China. While the chariot has gone, and weapons have changed, these ancient masters have held their own, since they deal chiefly with the fundamental principles of war, with the influence of politics and human nature on military operations; and they show in a most striking way how unchanging these principles are.

Make Extra Money Flipping Houses While On Vacation by Jason Medley

Reveals his simple and proven systems to automate, delegate and outsource nearly every function of his business except cashing his checks. He shows the exact steps that has allowed him to go on multiple vacations with his family throughout the year while having his system continue to flip houses for him.

Achieving Wealth Through Real Estate: A Definitive Guide To Controlling Your Own Financial Destiny Through a Successful Real Estate Business

Have you ever thought about making money with real estate? In Achieving Wealth Through Real Estate: A Definitive Guide to Controlling Your Own Financial Destiny Through a Successful Real Estate Business, author and entrepreneur Kirill Bensonoff takes you through the process of starting your own real estate business step-by-step, featuring his expert tips and tricks.

Business Loans Uncovered

Knowing if you qualify is one of the most important things to know when applying  for a loan of any type. Blindly applying for a loan and being declined increases the chances of you being declined again and again because you not only lower your credit score each time you apply, multiple inquires also serves a red flag to other lenders and as a result lenders put you in a high risk category and charge higher interest rates in the event of an approval Includes: ​Traditional Lenders, Government Sources, The 7(a) loan guarantee program, SBA Low Doc loan program, SBA Express loan program, Factoring, Venture Capitalists, Angel Investors.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Real Estate Finance and Investment

This course is an introduction to the most fundamental concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. As the first of a two-course sequence, this course will focus on the basic building blocks and the “micro” level, which pertains to individual properties and deals.

Introduction to the Law of Property, Estate Planning and Insurance

Introduction to the Law of Property, Estate Planning and Insurance is an up-to-date textbook that covers legal issues that students must understand relating to real estate (an especially important business asset), as well as estate planning and insurance.

The text is organized to permit instructors to tailor the materials to their particular approach. The authors take special care to engage students by relating law to everyday events with their clear, concise and readable style.

Defensive Real Estate Investing: 10 Principles for Succeeding Whether Your Market is Up or Down

As the real estate market changes after years of aggressive growth, investors everywhere are faced with uncertainty, wanting to know how to prepare for a potential real estate bust and make sure they don’t lose money.   In his authoritative new work, Defensive Real Estate Investing, bestselling author and real estate expert William Bronchick provides guiding principles to safe investments for beginning to intermediate real estate investors.

Private Real Estate Investment: Data Analysis and Decision Making

Fiduciary responsibilities and related court-imposed liabilities have forced investors to assess market conditions beyond gut level, resulting in the development of sophisticated decision-making tools. Roger Brown’s use of historical real estate data enables him to develop tools for gauging the impact of circumstances on relative risk. His application of higher level statistical modeling to various aspects of real estate makes this book an essential partner in real estate research. Offering tools to enhance decision-making for consumers and researchers in market economies of any country interested in land use and real estate investment, his book will improve real estate market efficiency. With property the world’s biggest asset class, timely data on housing prices just got easier to find and use

Construction Funding: The Process of Real Estate Development, Appraisal, and Finance

Construction firms operate on narrow profit margins and the success of construction projects is hinged upon proper financing. Construction Funding is the only single volume, concise text on the financial aspects of building and developing.

The book acquaints the reader with a set of procedures specifically designed to solve the unique financial challenges facing the construction industry. It guides the reader step-by-step through each phase of financing a development project, from simple one-family residences to large multi-unit complexes. Construction Funding also addresses raising capital, selecting markets, rating sites, insurance, joint ventures, loan options, and cash flow management. Separate sections are devoted to the conduct of profitability studies and to finding after-tax rates of return. Construction Funding, Fourth Edition, has been updated to provide current costs and funding methods and additional learning features such as key terms, review questions, and learning objectives.

How to Make Money With Real Estate Options: Low-Cost, Low-Risk, High-Profit Strategies for Controlling Undervalued Property….Without the Burdens of Ownership!

I have dabbled with real estate for years usually making good money and sometimes being hammered (like with the last crash in the RE market). But overall RE has been good to me. Be that as it may, I have lost enough to know that I wanted to minimize my risk while still having plenty of upside potential. Real estate options are a vehicle to accomplish this goal. Thus, I started educating myself on the subject and found this most excellent book. Mr. Lucier is thorough and detailed and relates the reality of what it takes to profit (not like some of these dream weaver real estate gurus who like to sell you on how “easy” it is).

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Marketing Strategies for Real Estate Photography

One of the biggest problems that real estate photographers have once they have set up their business as a legal entity, obtained all the right equipment and perfected their technique is obtaining new clients.

Clients and customers are the lifeblood of any business, but how do you obtain new clients after starting your business?

By developing and executing a strategic marketing plan tailored to your business.

This short guide has been written to help real estate photographers develop their marketing plan and assist with winning new business.

It includes a series of digital and direct marketing strategies along with useful tips and lessons the author has learned from his own experiences that can save you time and money when growing your business.

A marketing action plan template has been included to help photographers execute the strategies learned in this guide book.

Books by Dr William Edward Deming

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.

Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.

In his book The New Economics for Industry, Government, and Education Deming championed the work of Walter Shewhart, including statistical process control, operational definitions, and what Deming called the “Shewhart Cycle, which had evolved into Plan-Do-Study-Act (PDSA). That was in response to the growing popularity of PDCA, which Deming viewed as tampering with the meaning of Shewhart’s original work.

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in July and August 1950, in Tokyo and at the Hakone Convention Center, when Deming delivered speeches on what he called “Statistical Product Quality Administration”.

Many in Japan credit Deming as one of the inspirations for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war on the road to becoming the second-largest economy in the world through processes partially influenced by the ideas Deming taught

 

Turned Down For A Hard Money Loan Winston Rowe and Associates Can Help

Hard Money Commercial Mortgage

Winston Rowe & Associates funding sources provide equity based private and hard money loans for commercial properties nationwide for sub-prime money borrowers who do not meet the stringent requirements of conventional bank underwriting guidelines.

Their excellent reputation as a private and hard money funding source has been built on its ability to provide fast financing solutions for borrowers who have come across challenging times and are in need of fast, creative financing solutions without regard to their FICO credit score.

Why Commercial Real Estate Investors Have Been Turning To Winston Rowe & Associates:

Hard Money Financing from $200,000 to $100,000,000

No Upfront or Advance Fees

Purchase, Refinance & Cash Out

No Recourse Available

Interest Only Option

Loan Amortizations Up to 30 Years

If you would like to learn more about hard money financing options for your business from Winston Rowe & Associates they can be reached at 248-246-2243 or you can check them out online at http://winstonrowe.com

Vacant Commercial Property Loans No Upfront Fees

WINSTON ROWE AND ASSOCIATES WEB SITE REVIEW US ON LINE

 

Winston Rowe and Associates is pleased to announce their new short term bridge financing. These commercial real estate financing solutions are some of the most competitive in the industry, without the usual upfront and advance fees.

These bridge loan solutions are available in major markets nationwide, from $1,000,000 to $10,000,000 for all commercial real estate types.

At Winston Rowe and Associates, they appreciate their borrowers and recognize their ability to capitalize on unstabilized commercial investments through the use of short-term financing.

Whether a property is empty, in need of rehab or simply under-performing, Winston Rowe and Associates delivers the bridge financing you need to get the job done and maximize your return-on-investment.

Prospective clients can contact Winston Rowe and Associates at 248 246 2243, a principal is always available to take your call.

You can also find them on line at http://winstonrowe.com

How Winston Rowe and Associates can exceed your expectations:

Lease-ups

Foreclosure purchases

Discounted payoffs

Refinancing maturing loans

Properties that do not cash flow

Tenant improvement

Foreign national borrower

Construction loan take-outs

Reposition of a property

Vacant buildings

Rehabilitation financing

Opportunistic purchases

Non-stabilized properties without historic financial

Leverage up to 75% of cost, 75% of value

Non-recourse available

Minimum stabilized DSCR of 1.20x for multifamily and 1.25x for commercial

2- and 3-year fixed terms; 12-month prepayment options

Winston Rowe & Associates has no upfront free commercial loan programs 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

Shopping Center Finance No Advance Fees Winston Rowe & Associates

SHOPPING CENTER FINANCING

 

Shopping center financing is a Winston Rowe & Associates specialty. They have national no upfront fee creative financing solutions for shopping centers. If you’re going to buy, refinance or rehabilitate a shopping center Winston Rowe & Associates is there to help with some of the best service in the finance business.

For more information about Winston Rowe & Associates shopping center finance programs, they can be contacted at 248-246-2243 or visit them online at

http://www.winstonrowe.com

The Winston Rowe & Associates Advantage:

Never an upfront or advance fee for due diligence
Available in all 50 states
Financing starting at $400,000 through $500,000,000
Purchase, refinance and rehabilitation

At Winston Rowe & Associates, their primary objective is to provide the most reliable and efficient means of sourcing both debt and equity for your commercial real estate loans.

Recognizing that people and relationships drive this business, they are staffed with some of the industry’s most committed professionals.

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

Hard Money Commercial Real Estate Loans

Hard Money Commercial Real Estate Loans

Winston Rowe & Associates, a national no upfront fee non investment advisory and due diligence firm specializes in assisting clients in the structuring of complex commercial real estate financing solutions.

They have direct relationships with a finite number of private capital, private equity, joint venture, hedge funds, agency investors and regional and national commercial banks, each with a highly targeted financing practice.

In many cases they can provide a solution in days, not weeks or months.

Asset-Based Lending & The Great Recession Winston Rowe & Associates

HARD MONEY LOANS

 

The last three years of financial crisis and recession have brought a host of new economic-business situations. Not since the Great Depression, many say, has the precipice of a global financial collapse seemed so near.

Asset Based Lenders:

Yet, even as the flow of capital from a broad spectrum of lenders slowed to a trickle during the financial crisis and subsequent global economic pain, asset-based lending (ABL) remained a viable form of corporate finance. While some large financial institutions virtually stopped lending in the face of uncertain earnings and many regional banks labored under the weight of defaulting real estate loans, struggling businesses turned to asset-based lenders to help restructure their costs and stabilize earnings. Other lending vehicles tend to ebb and flow, following economic peaks and valleys, but ABL can be adapted to changes in the marketplace, whether resulting from economic conditions, new legislation, or the emergence of new industries.

In the mid to late 1980s, investors recognized inefficiencies in the market, finding that many corporate balance sheets undervalued their assets and were greatly underleveraged for financing purposes. Such investors initiated a leveraged buyout tsunami by focusing on undervalued corporate balance sheet assets and creating huge investor demand for high-yield bonds to finance large corporate buyouts. Using the same techniques, middle market investors convinced asset-based lenders to provide senior and junior liens to facilitate such acquisitions.

Retail financing was the next new market growth area for asset-based lenders in the 1980s and 1990s. Retailers’ suppliers manufactured consumer goods with the financial support of factors, which typically required a retailer to have unsecured bank debt from a commercial bank. At that time, retailers were experiencing erratic sales and pressure on profits, and many also carried high debt from aggressive lenders supporting past mergers, acquisitions, and internal expansion. Many of these retailers became distressed and went into default with their unsecured lenders, requiring additional funds to survive.

In the 1990s, further expansion in ABL occurred in Canada, where “A banks” were dominant and there were no lenders of last resort, aside from the factoring of accounts receivable. Canadian banks could quickly call a loan and go into straight liquidation since these markets were found to be much more lender-friendly in the courts. Although the concept of ABL to distressed businesses was nonexistent at the time, a few U.S. lenders began to introduce ABL in Canada and made a strong commitment to that market. Later, other lenders followed.

The Great Recession:

ABL emerged as the dominant vehicle for lending during the most recent recession because of the disappearance of other lending vehicles. The cost of funds and credit problems hurt non-bank lenders, such as commercial finance companies, collateralized loan obligations, and hedge funds, and drove many well-known finance companies out of business. To offset the higher cost of funds, a few lenders focused on cash-flow lending to obtain the higher interest rates and fees associated with acquisition financing. Once the cash-flow window dried up, however, ABL became the only viable alternative.

Traditional commercial bank lenders, who thrive on profitable businesses with reasonable leverage, saw their borrowers incur losses that resulted in unacceptably high leverage. Many of these commercial banks also had real estate problems in their portfolios and were forced to curtail other lending activities. Asset-based lenders with strong balance sheets grew during the recession by refinancing these leveraged orphans of commercial banks.

The Recovery:

Many businesses lost a significant percentage of their sales in 2008 and 2009 yet were able to survive by reducing their operating costs, usually achieving their largest savings by reducing labor costs. They also shifted their focus on market replacement and drove down their production levels to more probable levels of demand and revenue.

When sales rebounded in 2010, these businesses immediately experienced increased profitability. Asset-based lenders helped many recovering, highly leveraged businesses to leave their existing disgruntled lenders and provided them with fresh starts. These businesses had good financial outlooks as a result of a few months of positive earnings, stronger sales backlogs, and quantifiable labor and other cost savings. Asset-based lenders booked many loans in 2010 to these recovering businesses.

At the end of 2010, many private-equity firms anticipated capital gains tax increases in 2011. Faced with fewer, if any, exit strategies, investors owning strong private companies with ample excess availability took large distributions financed by asset-based lenders. This benefited lenders by increasing loan utilization by good borrowers, after they had earlier experienced record low levels of utilization as a percentage of the total line of credit.

Many asset-based financings in 2011 involved businesses like capital goods manufactures that had lagged other companies that had benefited from the improved economy of 2010. During the recession, many businesses had delayed capital expenditures to conserve cash and because they had downsized to much lower capacity levels. But special tax breaks that permitted 100 percent depreciation of capital expenditures made in 2011 spurred demand among many businesses that had delayed such purchases earlier. ABL was used not only to finance purchases of many of those capital goods, but also to finance the companies that manufactured them.

Historically Adaptable:

As demonstrated by its track record during wildly diverse markets over the past 30 years, ABL historically has adapted to changing times and economic conditions. A borrower who is unhappy with its current lender may want to test the market in today’s environment. A business that has a quantifiable story, a strong management team, and improving cash-flow trends should find willing asset-based lenders whose criteria cover a wide spectrum of industry specialties, credit parameters, and levels of risk to provide financing, along with relationship managers/loan officers to offer business advice in good times and bad.

If you would like to learn more about lending options for your business from Winston Rowe & Associates you can check them out online at http://www.winstonrowe.com

They have 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.

HARD MONEY CASH OUT COMMERCIAL LOAN REFIANCE

Winston Rowe & Associate’s

A national no advance fee commercial real estate advisory and financier  provides an attractive mix of commercial loan refinance programs for investors that need lighting fast loan solutions in days, not weeks or months.

• All Commercial Property Types Considered

• Upcoming Balloon Payments

• Discounted Payoff Note (DPO)

• Time Sensitive Situations

• Cash Out

They have national solutions for conforming and non-conforming commercial loan refinance programs, each designed to provide the most competitive financing terms based on a combination of property constraints, borrower investment and personal objectives.

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 email them at processing@winstonrowe.com

They also have many other solutions that meet almost every need. Check them out online at http://www.winstonrowe.com

With their best business practices model ensures that their clients receive lighting fast funding with the most aggressive rates and terms available, while managing every step of the financing process from document collection to commitment negotiation and closing.

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory services for commercial real estate 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

National Commercial Hard Money Loans No Upfront Fees

HARD MONEY BRIDGE LOANS

 

At Winston Rowe & Associates, they offer their clients access to the most aggressive commercial real estate bridge (hard money) loans in the industry.

Whether you are in need of short term financing, such as a bridge loan or hard money loan, or your needs are more long term such as construction or permanent financing, they will work with clients to structure a transaction that will meet or exceed your expectations.

Bridge Loan Transaction Overview:

Nationwide
Never an upfront or advance fee
Loan amounts from $500,000 to $25,000,000
Loan to value range is 50% to 60%
Fast closings in two weeks with a complete loan file
All commercial property types considered

At Winston Rowe & Associates, their primary objective is to provide the most reliable and efficient means of sourcing both debt and equity for your commercial real estate loans. Recognizing that people and relationships drive this business, they are staffed with some of the industry’s most committed professionals.

Winston Rowe & Associates provides no upfront fee commercial bridge financing in the ensuing states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, MaineMaryland, 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

Private Money Commercial Loans Explained Winston Rowe & Associates

Private Money Commercial Loans Explained Winston Rowe & Associates

Winston Rowe & Associates has prepared this article about private money commercial loans to provide prospective clients with a better understanding of private money commercial loans as a financing tool that many businesses overlook when they need financing.

For more information about private money commercial real estate loans, you can contact Winston Rowe & Associates at 248-246-2243

How Private Money Loans Work:

Private money loans are provided by private investors, hence the term. These private money lenders wish to loan out their money at a higher interest rate than they could get from another type of investment. Private money lenders are not licensed to loan.

Applying For A Private Money Loan:

When you apply for a private money loan, the application process is going to be quite a bit different than what you are used to with a bank. You will have to fill out an intake form with basic information about you and your business. However, they use their own criteria when deciding whether or not to invest in your project. They may or may not use all of the financial ratios that typical lenders use. The approval process is usually very quick. You often do not have to go through multiple layers of the business to get approval. The lender decides individually if they want to give you the loan.

Understanding Private Money Criteria:

Often the most important criteria for the loan, is the condition of the property that you are buying. If you are buying a piece of commercial property, the private money lender will want to know everything about it. They will want to look at the property and make sure that they could resell it if they needed to. Because of this fact, they will often offer you a low loan-to-value LTV ratio of between 45% to 60% as compared to other types of traditional lenders, which offer LTV’s of up to 90%. This ensures that they can get their money back out of the loan if you were to default.

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

Winston Rowe & Associates has no upfront free private 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

Office Building Refinancing Guidelines No Upfront Fee Loans

Office Building Refinancing Guidelines No Upfront Fee Loans

Office building investors considering refinancing should look at Winston Rowe & Associates. They are a national office building finance consulting firm specializing in no upfront fee commercial real estate loans.

Winston Rowe & Associates has prepared this article to detail the major points of underwriting office building refinance transactions.

Owners conducting an office mortgage refinance have a broad range of finance options. This is due to several factors, such as loan amount, whether the property is owner occupied or an investment, single unit or multi tenant, strength of owner, etc. In addition there are several different types of office buildings (For example, office condo’s, Class a- c,) which further dictate loan options.

As far as underwriting is concerned, fundamentals are still critical; loan to value, debt coverage ratio, strength of tenant, credit worthiness of borrower, and property analysis come into play. Below is a brief discussion of each underwriting component and how it relates to office building loans.

Debt Service Coverage Ratio restrictions are typically set at 1.2 for both investors and owner occupants of office properties. Meaning that for every $1.20 of net income (income after taxes, insurance etc have been paid) the property/business produces, the mortgage payment will not exceed $1.00. Said in another way, after all expenses and the mortgage has been paid, the owner will need to net $.20 to qualify.

Exceptions can be made with this rule on office refinances. For example, on owner occupied transactions it is not uncommon for the lender to consider other source of income that the borrower has to replace low income that the business lacks. In addition, stated income loans (commercial loans that do not require business or personal tax returns) can be an outstanding option for owners that have low debt coverage ratios due to either overstated expenses, current high levels of vacancy, or understated (or lack of) income.

Loan to value restrictions on office building refinances are normally capped at 80% on a rate and term refinance and 75% loan to value on cash out refinances. Higher LTV’s are available, for example there are a few lenders that will go as high as 90% but this comes at a steep price for the borrower – raising rates by as much as 2-3%. On the flip side, lower loan to values will normally reduce interest rates for the borrower.

Tenant evaluation is not as important within the office property category as others (like single tenant NNN properties) but still important. Relevant information includes time left on leases and renewal options. Further on multiple unit properties lenders prefer the lease expirations to be staggered and most banks/ lenders want to see at least 3 years left on the current leases. Some traditional banks will not allow the fixed period of the loan to exceed the time left on leases.

The personal credit worthiness of the borrower will be scrutinized. 680 credit score is normally the minimum for the best finance options. Exceptions can be made on this as well with some conventional lenders considering scores as low as 600. The overall strength of the property, tenants, DSCR, and LTV can offset concerns on low credit scores. For corporations, business performance and credit rating will be evaluated.

Fundamentals of the building are critical. Market value and market rent is paramount and will be evaluated and compared to the subject property. Any negatives with the condition, appearance, location, accessibility, and local market conditions, as well as other factors will reduce options for the borrower.

Investors seeking office building financing should turn to Winston Rowe & Associates efficient, end-to-end commercial real estate financing solutions provides commercial mortgage capital to owners of all commercial property types. With flexibility and speed of execution, they are able to offer a broad range of financing capabilities. In most cases they can close your loan within 30 days.