• Hard Money -What You Need to Know Hard Money -What You Need to Know

    0 comments / Posted on by Steven Rivera

    Hard Money -What You Need to Know

    When you hear the words “hard money loan” (or “private money loan”) what’s the first thing that goes through your mind?

    Shady looking lenders who conduct their business in dark alleys and charge sky-high interest rates?

    In prior years, some bad apples tarnished the hard money lending industry when a few predatory lenders were attempting to “loan-to-own”, providing very risky loans to borrowers using real estate as collateral and intending to foreclose on the properties. Luckily, these types of hard money lenders don’t exist in today’s market, although some residual stigma remains for some real estate investors who haven’t recently utilized the services of a reputable hard money lender.

    What is a Hard Money Loan?
    A hard money loan is simply a short-term loan secured by real estate. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 6 - 12 months, but the loan term can be extended to longer terms of 2-5 years. The loan requires monthly payments of only interest or interest and some principal with a balloon payment at the end of the term.

    The amount the hard money lenders are able to lend to the borrower is primarily based on the value of the subject property. The property may be one the borrower already owns and wishes to use as collateral or it may be the property the borrower is acquiring.

    Hard money lenders are primarily concerned with the property’s value...

    When you hear the words “hard money loan” (or “private money loan”) what’s the first thing that goes through your mind?

    Shady looking lenders who conduct their business in dark alleys and charge sky-high interest rates?

    In prior years, some bad apples tarnished the hard money lending industry when a few predatory lenders were attempting to “loan-to-own”, providing very risky loans to borrowers using real estate as collateral and intending to foreclose on the properties. Luckily, these types of hard money lenders don’t exist in today’s market, although some residual stigma remains for some real estate investors who haven’t recently utilized the services of a reputable hard money lender.

    What is a Hard Money Loan?
    A hard money loan is simply a short-term loan secured by real estate. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 6 - 12 months, but the loan term can be extended to longer terms of 2-5 years. The loan requires monthly payments of only interest or interest and some principal with a balloon payment at the end of the term.

    The amount the hard money lenders are able to lend to the borrower is primarily based on the value of the subject property. The property may be one the borrower already owns and wishes to use as collateral or it may be the property the borrower is acquiring.

    Hard money lenders are primarily concerned with the property’s value...

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  • Key Terms Used in Commercial Real Estate Key Terms Used in Commercial Real Estate

    0 comments / Posted on by Steven Rivera

    Key Terms Used in Commercial Real Estate

    Regardless of industry, most professionals use special terminology to communicate with one another. Pilots, engineers, scientists, farmers, accountants and commercial real estate investors all have to understand the language associated with their profession — and it can get confusing.
    If you're new to commercial real estate, these 13 key terms to help you in becoming a pro when it comes to the lingo.

    1. Letter of Intent (LOI)

    A letter of intent is an agreement(s) between two or more parties before an actual agreement, such as a lease, is finalized. It is similar to a term sheet or memorandum of understanding (MOU). While LOIs may not be binding, provisions of them can be, e.g., non-disclosure and exclusivity. The intent is to protect both parties in the transaction until the transaction is executed. This is "The Letter" you will be sending out when you are ready to go full force into the Commercial Real Estate Investment scene.

    2. Build-to-suit
    A building is designed and tailored for a specific tenant, often because the tenant is unable to find suitable space in the speculative market. Sometimes (but not always), a build-to-suit project includes specific design features not commonly found in the speculative market, thus compelling the tenant to have a special facility built. The build-to-suit project is usually contracted with a developer who owns and operates the completed facility occupied
    by the tenant. Generally, a build-to-suit project becomes a single-tenant building upon completion.

    3. Direct Vacancy Rate
    The total amount of physically vacant space divided by the...

    Regardless of industry, most professionals use special terminology to communicate with one another. Pilots, engineers, scientists, farmers, accountants and commercial real estate investors all have to understand the language associated with their profession — and it can get confusing.
    If you're new to commercial real estate, these 13 key terms to help you in becoming a pro when it comes to the lingo.

    1. Letter of Intent (LOI)

    A letter of intent is an agreement(s) between two or more parties before an actual agreement, such as a lease, is finalized. It is similar to a term sheet or memorandum of understanding (MOU). While LOIs may not be binding, provisions of them can be, e.g., non-disclosure and exclusivity. The intent is to protect both parties in the transaction until the transaction is executed. This is "The Letter" you will be sending out when you are ready to go full force into the Commercial Real Estate Investment scene.

    2. Build-to-suit
    A building is designed and tailored for a specific tenant, often because the tenant is unable to find suitable space in the speculative market. Sometimes (but not always), a build-to-suit project includes specific design features not commonly found in the speculative market, thus compelling the tenant to have a special facility built. The build-to-suit project is usually contracted with a developer who owns and operates the completed facility occupied
    by the tenant. Generally, a build-to-suit project becomes a single-tenant building upon completion.

    3. Direct Vacancy Rate
    The total amount of physically vacant space divided by the...

    Read more