My Loan Is Coming Due!

May 24, 2013 at 8:23 am | Posted in Uncategorized | Leave a comment
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Refinance ApplicationWhat do I do now to insure I can get my loan refinanced by my current lender or a different lender? What if my property value is substantially less than when I bought the property? My rents are down, expenses are up, and my Net Operating Income is down. Help, what can I do?

Don’t panic, yet! Here are some things to do to ensure your best opportunity to refinance the loan:

  1. Review the mortgage to assess your current terms and determine if there is a prepayment penalty, when does the note expire and when the balance due? Review the amortization schedule, and get the remaining balance.
  2. This process will take some time; don’t wait until the last month to start conversations with your lender. It could take 90 to 180 days to complete this process.
  3. Determine the strategy: Refinance current debt? Need money for building upgrades or tenant improvements? Know the amount you need to service the debt and complete any necessary repairs or upgrades to the property?
  4. Get the right “teammates” on the bus. Title Company, Mortgage Banker, and Real Estate Attorney. Assembling the right team will be a strong asset in the process.
  5. What documents will you need? Probably a current survey, rent roll with lease expiration, title work to determine any issues with title, updated environmental if applicable. Review expenses and determine if property taxes have been protested and insurance policies updated. Competitively bid insurance to get the lowest possible rates. Every dollar saved in expenses will go straight to the bottom line. The more documents that are ready to go, the quicker the process will move along. Have it all together so when documents are requested, they will be available to deliver to the Lender.

Will all these items be necessary to refinance? Most will and by going through this process you will be up to date with all documents required by the Lender to refinance the loan and you will give yourself the best chance to achieve a successful refinance.

Good Luck!

CRE Report for 07.11.2011 – Office and Retail Recovery

July 12, 2011 at 12:40 am | Posted in Market Reports, Radio Show Reports | Leave a comment
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Bob – Walt, what do you have for us today?

Walt – Good morning Bob, at my house last night we had these wet droplets falling from the sky, I think it’s called rain.

I want to briefly discuss the recovery in the retail and office markets.

The retail recovery will continue to be a slow grind; vacancies are going to be in bouncy territory over at least the next year.

Using a baseball analogy, the retail market is about in the 3rd inning of a 9 inning game and the game appears to be heading for extra innings.

We might a few projects come out of the ground but any new construction will be closely analyzed.

The other point about retail is the significant amount of struggling properties working their way to their loan call which could potentially spell trouble, as those loans coming due will have difficulty in getting refinanced.

Bob, the numbers are staggering for the amount of loans coming due in 2015, 2016 and 2017; even though that is a ways off, it shows the issues retail properties will be dealing with over the next few years.

 Bob – Walt, I know that we haven’t had any good news for the commercial sector since you started talking about this a couple years ago, is there any good news for office properties in today’s market?

Walt – I know it has been a tough market.  As a retired NFL football player I’m praying that my retirement will get a major boost with the new agreement.

The office sector especially in new construction is on hold.

First, there just aren’t enough tenants willing to occupy enough space to trigger construction, second there is very little willingness with lenders to finance any projects, the third reason is the high vacancy rate which in ABQ is over 18%, is just too much risk for developers, and lastly office construction usually coincides with strong Gross Domestic Product or GDP, with a negative 2% GDP in 2009, until GDP improves significantly new office construction will not happen.

Bob – Is there any silver lining in these markets and what are the prospects for commercial real estate investors?

Walt – The saying is, the height of pessimism is the time to invest. There are opportunities in this market, and at Sperry Van Ness we are in this market everyday talking to lenders and property owners that need to dispose of their assets and we work with buyers and investors trying to navigate this difficult environment.

 Bob – How can people contact you to discuss these opportunities?

Walt – Thanks Bob, call Walt Arnold at 256-1255, our website is waltarnold.com. With over 20 years in the commercial real estate business, I know how to help buyers, sellers; landlords and tenants get through this difficult environment.  Thanks for the time today, have a great week.

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