Avatar's Blog

Taking a look at national and local trends in mobility trends in commercial real estate, you'll actually find that fewer such bills are on the floor of local, state and national governement than have been in the past decades. The reason is simple; the country has more presssing issues to attend to. In times of strife and war, budget deficits, poor economic performances,tc., lawmakers are far less inclined to take up their time with issues of accomodation in public or commercial buildings.

This does not mean the issue has disappeared. The costs of retrofitting is sufficiently onorous that lawmakers are unwilling to saddle an already tender economy with additional costs of doing business. However, as soon as the economy improves, look to see a boom in mobility and accessibility regulations being proposed again.

If you are building or investing in commercial, industrial, or residential properties, look for properties that already meet and exceed the needs of the aging US population. At the least, consider properties where accomodation retrofitting will require minimal cost.

Just as the 1970's and 1980's brought a significant improvement to the accessibility in public buildings, look for the coming years to increase that accessibility quotient in both public and private buildings. Investing in commercial real estate requires a keen sense of the current and future needs of a population, just as investing in residential real estate. Look for buildings with accessibility for handicapped and elderly, as well as accessibility for strollers and limited mobility persons. There is a difference between finding a building that will fill an office space need in an area and one that will fill that need while complying with current and anticipated increasingly demanding regulations for accessibility.

When investing, look for buildings that will not require costly retrofitting to meet the needs of the 76 million Baby Boomers who are moving at breakneck speed toward their golden years, complete with the limited mobility that aging can entail. Look for accessibility and accomodations for an inreasingly overweight population as well. Take time to review pending regulation and look to see what might be coming down the pike. Consider retrofitting costs for those regulations you believe might pass while you are the owner of any commercial, industrial or investment residential building. It could make the difference between profitability and lack thereof.

Over the past two decades, the profession of energy conservation has boomed in the commercial sector. Companies such as the Boeing Company employ people to focus on energy costs and savings within their vast real estate holdings. These energy specialists are available for consultation. Before investing in a commercial or industrial real estate property, consider consulting with an energy conservation specialist.

Learn what retrofitting of light fixtures, heating, ventilating, air conditioning, window and other structures will be required to meet current and coming regulations for energy conservation. Additionally, you can learn what you can do to reduce energy costs of operation. If you are operating the facility, depending on the size of the facility, you may save thousands or millions of dollars each year. If you are renting the facility, you will have the edge in the rental market if your building is energy efficient and will save your prospective tenants substantial operating costs.

Investing in US investment residential real estate? For the past decade, the trend in development and investment has been toward the sun belt. Older retiring Americans, people reasoned, would want to move to warm places where they would enjoy golf, group activities, etc. close to or within their planned communities. For awhile, this scenario was playing out. Development has boomed in many sun belt communities. Buyers have begun to populate these new homes.

Recently, however, trends are showing that more active Americans are choosing to retire and stay closer to their previous homes, regardless of the weather. There is a tendency to sell off larger homes with extensive maintenance requirements. Many older people - couples and singles - are moving to condominiums, smaller private homes, and apartments closer to urban areas where services and activities are more readily available. The greatest demand is now found in communities with mid / high rise buildings in dense urban areas.

One of the most important trends lies in development of residences designed for mobility and service for an aging population with increasingly limited mobility, special needs, etc. Step-less entries, cabinetry and more designed to support wheelchair and limited mobility needs are increasing.

Real estate investors look for a reasonable return on their investment. Whether residential, comemrcial or industrial, the real estate investor looks for a reasonable RO, which fluctuates with the effort required to make or keep the property profitable.

If you are looking to purchase real estate property for investment purposes. take time to look at the current ROI as well as future ROI. While a vacant lot in a part of town you expect to improve in the future can be a good deal, a better deal might be a lot in the middle of a busy part of town now. Even if the lot is smaller than the one in the 'future growth' area, you can generate immediate income by turning it into a parking lot or some similar low-entry cost profitable business. Consider the total ROI when looking at the purchase of real estate investments. A small ,currrent and ongoing profit can sometimes outweigh the potential for long term larger profits in the future.

Hard money lenders, Avatar included, look for these critical pieces when funding hotels, motels. etc.:

• Does the loan make sense for the borrower?
• How will the borrower make the monthly payments?
• What is the gross income from the property?
• What are the expenses?
• What is the net operating income (NOI)?
• Does the loan make sense for Avatar?
• What is the appraised value of the property?
• How much would the property sell for in a quick sale if the loan goes bad?
• What is the likelihood that the borrower will be able to complete this loan satisfactorily and refi, sell or exit the loan in a timely manner?

Avatar makes loans that make sense for both parties. If you have a loan that makes sense, use our 2-minute loan scenario form to give us the details.

Hard money lenders come in many varieties. Below are just some of the hard money lenders available:

• commercial hard money lenders
• residential hard money lenders
• investment residential hard money lenders
• rehab hard money lenders
• comermcial bridge lenders
• raw land / construction lenders

Hard money lenders tend to specialize in specific fields of real estate, including rehabbing, comemrical, industrial, and/or residential or investment residential lending. Some will finance churches, gas stations, medical facilities, assisted living facilities, etc. Others will focus on hotels, industrial, raw land, or construction deals.

Avatar specializes in comemrcial, industrial and investment residential loans in urband and suburban areas throughout the US. We review all types of improved commercial properties. We do not lend on raw or improved land, rehab, or construction projects.

When seeking hard money loans, you are likely to hear a lot about 'up front' fees. Up front fees are fees charged by some lenders and many brokers to look at a loan package. Avatar believes upfront fees to review a loan package is a little like charging you to make a sales call.

Sorting through a loan package, helping you prepare it, etc. takes a lot of time and effort on Avatar's part. But we believe in good service to our brokers and borrowers. We will not charge for the opportunity to review a loan package. Once we have reviewed the loan package and made a determination on whether Avatar can fund a loan, we will issue a Term Sheet and Letter of Intent. Only then do we ask our borrowers to make a down payment toward the third party costs of due diligence. These funds are credited at closing against those costs. We do not keep the funds. All points, fees, etc. are wrapped into the loan to reduce out of pocket expenses for our borrowers.

If you need to generate working capital for your business, using the collateral in real estate can be one of the fastest ways to generate that capital in a hurry. Hard money commercial bridge lenders can such as Avatar Financial Group can fund a real estate refinancing loan is as little as two weeks from the time you sign a Term Sheet and make a down payment toward the costs of due diligence.

Be prepared to demonstrate your ability to make monthly interest-only payments and show a clear exit strategy. Remember, commercial bridge loans have terms of 1-3 years and require a take-out loan or other exit strategy to be in place. If you are experiencing financial difficulties, but expect to be able to set your affairs in order within 36 months, your exit strategy might be to turn to a conventional lender at the end of the loan term. Selling the real estate property is also an acceptable exit strategy. Work through the financial options before submitting your loan application. Have ready answers to these questions and have photos of the subject property ready as well. A well prepared loan scenario gets funded faster and at better rates.

When submitting a loan scenario for a hard money lender - and Avatar Financial Group is no exception - the numbers are the most important part of the loan package. Make sure you have clean, clear financial statements showing your ability to make monthly payments and pay back the balloon on time.

That said, another important factor in the funding of hard money loans is one that is often overlooked by eager, time-pressed borrowers: the quality of the photos of the subject property. If the photos you send to the lender show a poorly maintained, run-down facility, make sure you explain why it looks this way and what you intend to do to make sure the property is going to be improved instantly. Properties that demonstrate a clear 'pride in ownership' are going to make a much better impression on lenders than those that look like they are all but abandoned by their owners.

Loans with good photos showing well maintained properties get funded if the financials look good. Run down or neglected properties get a lot of questions and carry a lot more concerns, even when the finanicals seem to be in order. Shoot for success: clean up, paint, plant flowers, and mow the lawn or sweep the driveway before taking photos for the refinancing of your commercial or industrial properties.