Taking care of investment properties requires a lot of work. Finding tenants, tracking down late payments, attending to maintenance and repairs, and evicting tenants if necessary all take time and effort. For many property investors, hiring a property manager is well worth the property management fees charged. It’s efficient to pay someone else who specializes in this work to take care of everything.
What Does … Read More
Multifamily commercial real estate loans give investors capital that can be used for acquiring, repairing, or improving multifamily residential properties.
Loans are available for virtually all types of multifamily housing, and many loan programs have specific features that make them well-suited for certain types of housing.
If you need capital for a property, make sure you choose whichever multifamily loan is best suited for your … Read More
Commercial real estate loans grant property investors access to capital for the acquisition, repair, or improvement of real estate properties. Lenders offer many different types of commercial property loans, and each one has unique features that make it advantageous in certain situations.
Investors need to choose the right loan product for their property and purpose.
What is a Commercial Real Estate Loan?
Commercial real estate … Read More
Understanding loan to cost meaning is quite important to investors. This ratio is a valuable metric used in commercial real estate construction (and other areas) to determine whether a transaction may be profitable or beneficial to that investor. It compares the cost of financing a project (usually as a loan) to the cost of building the project. By utilizing this metric, lenders can better determine … Read More
Loan to value ratio is a standard metric that lenders use to assess default risk and qualify commercial real estate loans. While it’s far from the only data point lenders consider, it’s one of the most basic and often checked early on during the loan application process.
What is a Loan to Value Ratio?
Loan to value (LTV) ratio is a straightforward way to measure … Read More
Business credit scores can have a dramatic impact on the availability and cost of financing, and any impact is only magnified for commercial property financing where investors need to borrow large sums. For investors, developers and managers, understanding the role of a company’s financial score is essential.
What is a Business Credit Score?
The purpose of a business financial score is to help various … Read More
Real estate investors need information. The more information they have, the better the decisions they can make. There are a lot of tools to provide this information, but one of the most important is net operating income (NOI). Understanding what this calculation is and how to use it can help investors make decisions quickly regarding any property an investor is considering.
What Is Net Operating … Read More
The debt service coverage ratio (DSCR) offers a key but often misunderstood tool for all commercial real estate financing parties. For instance, investors may use this formula to adjust offers, track performance, calculate profit margins, and determine when they should obtain financing or seek to refinance. In contrast, lenders employ the figure during underwriting to decide if the property earns enough income to justify the … Read More
Cap Rate for Commercial Real Estate
Capitalization rates calculate the expected annual return on investment that commercial real estate properties will generate. Cap rates can show investors how much they might expect to receive from a particular property, and thereby provide a metric for evaluating the property.
Debt yield hasn’t traditionally been a primary commercial real estate loan underwriting metric, but more lenders are incorporating it into their criteria. In the current real estate market, measuring debt yield ratios provides lenders with a stable assessment regardless of unusual or changing conditions.
What is Debt Yield?