Colorado Hard Money recent closings (www.cohardmoney.com)
Fairview is pleased to announce the closings of the following hard money deals in Colorado
1) Red Feather Lakes, Colorado non-owner hard money single family (SFR) cash out refinance
· Borrower lived out of state and owned property free and clear
· Borrower self employed and needed to tap equity in a vacation home for working capital
2) Colorado Springs non-owner hard money single family (SFR) cash out refinance
· Borrower needed cash quick
· Borrower self employed
· Property owned free and clear except some minor tax liens
3) Denver, Colorado commercial hard money cash out refinance
· Borrower unable to show income or tax returns
· Borrower needed quick working capital for his business
· Conventional lenders wanted 5k for an appraisal; Fairview closed the loan with no appraisal
Above are just three of the many recent Colorado hard money fundings. We can fund both non-owner single family homes as well as commercial properties throughout the state of CO. We have funded hundreds of Colorado hard money transactions and look forward to funding your next Colorado hard money transaction. We are experts in the various markets and submarkets throughout the state of Colorado including Denver, Fort Collins, Aurora, Colorado Springs, Front Range towns (Evergreen, Estes Park, Idaho Springs), mountain towns (Breckenridge, Vail, Basalt, Aspen), Grand Junction, roaring fork valley, and everywhere in between.
Call us today at (303) 459-6061 to discuss your Colorado hard money transactions. You will always talk to the decision maker without any red tape. Also please visit: www.cohardmoney.com for more details on our programs.
Colorado Hard Money recent closings (www.cohardmoney.com)
Fairview is pleased to announce the closings of the following hard money deals in Colorado
1) Fort Collins non-owner single family (SFR) cash out refinance
· Borrower lived out of state and owned property free and clear
· Borrower self employed and needed to tap equity in a vacation home for working capital
2) Longmont non-owner single family (SFR) cash out refinance
· Borrower needed cash quick
· Borrower self employed
· Property owned free and clear except some minor tax liens
Above are just two of the many recent Colorado hard money fundings. We can fund both non-owner single family homes as well as commercial properties throughout the state of CO. We have funded hundreds of Colorado hard money transactions and look forward to funding your next Colorado hard money transaction. We are experts in the various markets and submarkets throughout the state of Colorado including Denver, Fort Collins, Colorado Springs, Front Range, mountain towns, Grand Junction, roaring fork valley, and everywhere in between.
Call us today at 303 459 6061 to discuss your Colorado hard money transaction. Also please visit: www.cohardmoney.com for more details on our programs.
Georgia Residential Hard Money
Fairview is pleased to announce the creation of a new entity that will now be able offer residential loans on non owner occupied properties in Georgia. These Georgia hard money residential loans on Non-owner occupied properties will need to meet the parameters below.Georgia Residential Hard Money Parameters:
1) Property must be located in Georgia.
2) Property must be non-owner occupied Georgia Single Family Residence
3) No rehab allowed
4) Max loan to value 50% off the lower of the purchase price or market value; whichever is lower based on Fairview’s analysis
5) $250,000 is the maximum Georgia hard money residential loan
For more information on Fairview’s Georgia Residential Hard Money, please visit: http://www.georgiahardmoney.com/residential_Hard_Money.php
Want to learn more about Fairview? http://www.fairviewlending.com/about.htm
Submit a one page Georgia Residential Hard Money Loan: http://www.fairviewlending.com/loan_app.htm
Colorado Residential Hard Money
Fairview is pleased to announce the creation of a new entity that will now be able offer residential loans on non owner occupied properties in Colorado. These Colorado hard money residential loans on Non-owner occupied properties will need to meet the parameters below.
Colorado Residential Hard Money Parameters:
1) Property must be located in Colorado.
2) Property must be non-owner occupied Colorado Single Family Residence
3) No rehab allowed
4) Max loan to value 50% off the lower of the purchase price or market value; whichever is lower based on Fairview’s analysis
For more information on Fairview’s Colorado Residential Hard Money, please visit: http://www.cohardmoney.com/residential_hard_money.php
Want to learn more about Fairview? http://www.fairviewlending.com/about.htm
Submit a one page Colorado Residential Hard Money Loan: http://www.fairviewlending.com/loan_app.htm
New entity to fund non-owner occupied residential loans in CO and GA
Fairview is pleased to announce the creation of a new entity that will now be able offer residential loans on non owner occupied properties in Georgia and Colorado. These hard money residential loans on Non-owner occupied properties will need to meet the parameters below.
Residential Hard Money Parameters:
1) Property must be located in Georgia and Colorado. We are unable to lend outside these two states.
2) Property must be non-owner occupied
3) No rehab allowed
4) Max loan to value 50% off the lower of the purchase price or market value; whichever is lower based on Fairview’s analysis
Fairview Commercial Lending is pleases to announce the creation of a stand-alone commercial servicing organization (www.fairviewservicing.com) .
Commercial Loan Servicing
Fairview (www.fairviewlending.com) has established a stand-alone commercial loan servicing entity. Fairview Loan Servicing (www.fairviewservicing.com) specializes in servicing non-performing, delinquent and/or distressed commercial real estate loans. Fairview currently services commercial loans throughout the country both for its own portfolio as well as the portfolios of life insurance companies, financial institutions, hard money lenders and other organizations.
Fairview Commercial Loan servicing has the hands on experience that is unrivaled in today’s tumultuous market. Fairview is different from other commercial loan servicing organizations. They not only service loans, but also own and manage properties throughout the country. They are a one stop shop for your commercial real estate servicing needs. Call Fairview Commercial Loan Servicing to see how they can help service your complex commercial portfolios.
Why choose Fairview for your commercial loan servicing needs?
n Much more nimble than large servicing organization. For example, we have the ability to control the cash flow on income properties before most banks would even begin default proceedings.
n More cost effective to outsource than trying to internally build infrastructure to handle defaulted commercial loans
n Proven hands on servicing experience that is unrivaled in the current lending environment
n Have the capability to not only service loans, but also stabilize properties before selling them
n National footprint with established contacts that are effective in handling defaults (attorneys, realtors, contractors, etc…)
n Well established trained servicing organization already in place and ready to hit the ground running on files
Typical Clients:
- Hedge funds that recently acquired a loan pool and need someone to hit the ground running or the hedge fund has seen a spike in their defaults and need assistance handling the increased volume
- Private Investors/Hard Money lenders that need assistance working through issues within their portfolio
- Small banks that have a small number of commercial defaults and find that it is more cost effective and efficient to outsource the servicing of these loans as opposed to hiring employees with the necessary experience
TIC-tenant in common
There have been many articles recently on TICs. First, what is a tenant in common (TIC)? A TIC is a tax structure that allows investors to pool their funds with other investors to purchase real estate. For example if I had 20k that I got from selling a commercial property. I could take these funds to a TIC and purchase a share of a commercial property. For example 35 or 40 investors might purchase a shopping center in Phoenix. By rolling your money into another like property (1031 exchange), the investor can avoid paying capital gains taxes. This all sounds nice and like a great idea except there are major risks that are not fully apparent.
According to a WSJ article (www.wsj.com ) DBSI (http://blog.dbsi.com/ ) recently filed for bankruptcy protection. DBSI was one of the largest TIC providers in the country. My theory for what brought DBSI down is as follows. The theory is true for most TICs that I have evaluated. Most small individual real estate investors are fairly unsophisticated. They have little experience in valuing large commercial properties (cap rates, average vacancy rates, leas-up rates, etc…) and therefore they relied on the expertise of the TICs for valuation and management of their investment. About six months ago we were approached to finance a TIC investment on a shopping center in Georgia. The fundamental assumptions were flawed. The TIC provider sold partial interests to investors all over the country. The property was valued on a 6% cap for a class A/B retail in a nice area of Atlanta. The trouble occurs because the property was purchased on a 6 cap, as opposed to a 7.5 or 8% cap. This cap rate continues rising which means the value of the property is less than what the investors originally paid for it.
As the economy shrinks, tenants begin to renegotiate their leases (or move out like circuit city did of many locations). This further deteriorates the value of the property. At the same time the small TIC investors get restless, the property is managed by a consensus vote of all 35-40 investors in that particular transaction. Imagine trying to get 35+ people who all have different motives, risk tolerance, etc… on the same page to make a unanimous decision. This decision making further deteriorates the value of the property since decisions are very slow and can seem erratic.
It will be interesting to see how other TICs fare in this economy. If I were investing my money in real-estate, I would think twice about utilizing a TIC.
For more information on commercial lending valuation,
please see: http://www.fairviewlending.com/underwriting.htm#4 as well as my recent blog on cap rates:
Hard Money Commercial Lending
I’m commonly asked about hard money commercial lending.Many folks are confused about what it is, how it is different than traditional lending and resources available for borrowers/brokers.Fairview Commercial Lending specializes in hard money commercial loans.The loans are commonly referred to as no-doc, stated or various other names.Fairview underwrites, funds, and services all of its loans as opposed to many other companies in the marketplace that merely broker loans they originate.
What is a Hard Money Commercial Loan?
The definition of “hard money” when referred to in real estate financing, is essentially a non-bankable loan. The name hard money is frequently interchanged with “no-doc” or private loans. For a hard money commercial loan, the underwriting decisions are based on the borrower’s hard assets (real estate).There have been many questions asked regarding how lenders evaluate hard money commercial loans.I have created a FAQ page which outlines the common questions and answers (http://www.fairviewlending.com/underwriting.htm#4 ).Finally hard money loans typically close relatively quickly. Fairview Lending is the leader in hard money lending (NO-DOC / Private lending)
Hard Money verses traditional lending
Traditional loans from banking institutions rely heavily on borrowers income, credit, tax returns, etc.. as opposed to hard money’s primary reliance on the hard real estate asset. Along with requiring substantially more documentation, conventional lenders have minimum credit scores (typically high 600 Fico and above) as opposed to hard money loans that are underwriting on the collateral as opposed to the borrower’s credit (Fairview Lending has closed loans with FICO scores in the low 400s). Along with different underwriting standards, loans on conventional commercial loans can take months to close; hard money commercial loans close much quicker. The final important differentiator between hard money and conventional financing is the interest rate. Since there is more risk in a true collateral based loan, the interest rates are higher than a conventional mortgage.
When is a hard money commercial loan appropriate?
Although hard money commercial loans are not always the appropriate solution for a client, there are numerous circumstances where a hard money loan is the best option for a client.
1. Borrowers with impaired credit (Fairview Lending can lend to borrowers with any credit)
2. Tax Liens/Judgements/unpaid utility bills, etc…:
3. Partner Buyout
4. Owner Occupied properties
5. Time constrained borrowers
6. Foreclosure avoidance
7. Foreign Nationals
8. Complex loans with multiple pieces of collateral
Below is a list of valuable resources relating to hard money commercial lending.
• Key tips prior to utilizing a hard money loan
• What is private/no-doc lending vs. hard money lending?
• How are Hard Money loans underwritten?
• What is Fairview Lending’s loan process?
• Can I broker a loan to Fairview Lending?
• Understanding the total cost of a loan Prepayment verse Interest Guarantee / Lockout / Defeasance
I am frequently asked about capitalization rates (Cap Rates). The questions range from what is a Cap Rate, how is it determined, and which direction the cap rate is moving.
1. What is Cap Rate?
This is the rate of return that a reasonable investor would expect to receive as a result of their investment
.2. What Cap Rate do you utilize when valuing a property?
Each property and market is unique. There is no blanket cap rate used in our underwriting.
3. How is cap rate utilized?
The cap rate is utilized in underwriting to determine the value of the property based on the income approach.
4. What is the formula to calculate value based on the income approach?
One method to determine the value of the property is to take the net operating income/cap rate.
Cap rates are rapidly changing in today’s market. Various factors go into determining the cap rate (vacancy, market conditions, expectations on future inflation and interest rates, property condition, property location, etc…). The value of the property moves in inverse to the cap rate; the higher the cap rate, the lower the value and vice versa. In today’s market, I have been seeing cap rates rising by a couple hundred basis points. For example a small retail center 12 months ago might have been trading on a 7 cap; that same property today is likely trading closer to a 9 cap. As a result the value of the property has declined and lenders will likely lend less on the property today due to its decrease in value. More information on cap rates can be found at http://www.fairviewlending.com/underwriting.htm#4 or on our resources page http://www.fairviewlending.com/resources.htm .Contact us at info(at)fairviewlending.com if you have questions about small balance commercial lending, hard money lending, or private commercial lending. Fairview is the expert in all of these areas.
Impact of Bailout on taxpayers and commercial lendersIt seems that everyone has thoughts on the current proposed bailout.Before drawing an opinion it is critical that the American public understands the true cost of such a proposal.The last bailout of this magnitude was in August of 1989 with the creation of the resolution trust corporation (RTC).The RTC’s mission was to manager and resolve failed thrift institutions.Regulation was supposed to be put in place during this time to prevent future collapses (just today Washington Mutual, the largest failure in banking history http://www.bloomberg.com/apps/news?pid=20601087&sid=ao0E1sRCSORQ&refer=home ).When the RTC was formed they were responsible for resolving 747 thrifts with total assets of approximately 402.6 billion.The final cost to taxpayers for that cleanup activity is estimated to be $87.5 billion. The scope and magnitude of such a cleanup effort was unprecedented, yet essentiallywas completed in just six and one-half years. On December 31, 1995, the RTCwas shut down, and its remaining work was transferred back to the FDIC. (source: http://www.fdic.gov/bank/historical/managing/history1-04.pdf )
If the RTC is an indicator of the government’s success and the proposed bailout of 700 Billion is passed, the cost to taxpayers would be approximately 152 B. Are taxpayers ready to foot a 152 Billion dollar bailout to Wall Street? This loss is a best case scenario. The last proposal floated yesterday would have the treasury purchase the securities at “long term market value” as opposed to today’s market value. Purchasing securities at inflated values would likely add more losses to taxpayers. Along with actual monetary losses, I have yet to hear any commentators talk about the interest cost as a result of this bailout. Since the government would have to borrower this money (deficit spending), the taxpayers would have to pay the folks that purchase the governments debts (the majority are foreign governments/entities). The 10 year treasury was at 3.81 percent today (www.bloomberg.com). Just to finance our debt annually would cost the taxpayer ~ 27 trillion dollars a year. Assume the 700 billion is out for 10 years (the last word from the treasury is that it would take ~ 10 years to recoup the taxpayers money). The real loss to the taxpayer would be ~ 400 Trillion over the life of the program. That is assuming best case. As we are all aware, the government is not known for its efficiency and business acumen so the loss is likely to be much greater.
What does this loss mean for American taxpayers? With higher debt comes higher taxes (to pay the interest carry) and a deflated dollar which in turn leads to higher prices (a weak dollar will purchase less imports; think oil and all the items bought from China). The combination of higher debt and higher prices puts the economy in a precarious situation. Bottom line is why should responsible lenders like Fairview (www.Fairviewlending.com) be forced to pay for the excesses of other companies. During the boom days many lenders like us stuck to their lending principals and did not partake in the craziness of the market. Profits were sacrificed during that time but in the end Fairview like many other conservative commercial lenders is not in the precarious state as most other lenders (think WAMU, Lehman, etc…). With this in mind and a likely 400B loss to taxpayers, myself along with most economists feel the bailout is ill conceived in its present form and should not pass. According to many economists the government program assessment of the economy is ” more hype than real risk,” said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. “A nasty recession is possible, but the bailout will not cure that. So it’s mainly relevant to the financial industry.” (http://www.miamiherald.com/news/politics/AP/story/701956.html )