Research

An assumable loan is a type of loan that the new purchaser of the property can take over. Assumable loans are designed to allow the buyer of the commercial property to take over the loan held by the existing property owner when the property is sold.

There are numerous situations where it is essential to know if a loan is assumable and whether or not … Read More

Earnest money isn’t absolutely required in commercial property deals, but it’s a common feature of most agreements. Here’s a look at earnest money: what it is, how to negotiate it, and whether it’s refundable.

What is Earnest Money?

Earnest money is a deposit that the buyer of a commercial real estate property gives (indirectly) to the seller. The purpose of the deposit is to demonstrate … Read More

Many multifamily investors and developers must follow specific rules when it comes to utilizing the land they or projects they build when they are using Low Income Housing Tax Credits (LIHTCs) to pay for the cost of these projects. One of the specific rules that apply to LIHTCs is the requirement to meet rent limits for a period of time. Other restrictions also apply.

All … Read More

Owning commercial real estate comes with tax, financial and other benefits. Many businesses across industries choose to purchase owner-occupied commercial real estate, so they can realize these diverse benefits. Here’s a look at what owner-occupied commercial real estate is.

What Does Owner-Occupied Commercial Real Estate Mean?

Owner-occupied commercial real estate is property that’s both owned and used by the same business. The business usually needs … Read More

Rent is obviously the amount tenants pay for their leased spaces, but it can be calculated in a couple of different ways. Net effective rent calculates the amount that leases generate on an average monthly basis. Landlords may strategically use net effective rent in their listings and marketing, and they should know it even if they don’t advertise rent this way.

What Does Net Effective … Read More

Vacancy rates are a big factor when it comes to selecting an investment property. It provides information on how many properties are vacant and for how long, but it can also shed light on how well the property is being managed.

If purchasing investment property, understanding the property’s vacancy rate may provide insight into the desirability of the property, especially when compared to other area … Read More

Commercial cash-out refinances grant property investors access to the equity that would likely otherwise be illiquid. Selling and cash-out refinancing are two main ways to realize equity and reallocate capital, and refinancing has several advantages.

What Exactly is a Commercial Cash-Out Refinance?

A commercial cash-out refinance is a process in which property is refinanced, and equity is withdrawn; hence the term “cash-out refinance.”

The property … Read More

A commercial real estate property’s potential income isn’t just the monthly rents times twelve. Such a simple approach misses additional revenue sources and potential costs, and thus doesn’t fully and accurately reflect the income that the property should generate. Instead, calculating effective gross income provides a much more accurate estimate of potential income.

What is Effective Gross Income (EGI)?

Effective gross income (EGI) projects the … Read More

Tenancy in common (TIC) is a real estate transaction in which there are more than one owner of a specific property. It is not an uncommon situation, but it is one that can have both good and bad factors related to it. Understanding tenancy in common in a commercial real estate transaction is a critical step if this type of structure will be used.

What … Read More

Commercial mortgages have numerous stipulations that help to protect the lender’s investment. One of those is a prepayment penalty called yield maintenance. Commercial lenders may use this type of penalty as a way to ensure they receive a profit from lending to the borrower.

What Is Yield Maintenance?

In commercial mortgages, yield maintenance is a type of fee paid by the borrower to the lender … Read More