Latest Economic Indices Not Painting a Rosy
Picture

Here's the most recent data according to R. Keith Schwer of the The Center for Business and Economic Research regarding the Southern Nevada Index of Leading Economic Indicators:

The Index rose a modest 0.6 percent for June, essentially standing still on a month-to-month basis. The sharp decline of the past year or so has at least hit a pause, however. Visitor volume, down a modest 2.89 percent for the same month a year ago, contributed the most to the strength of the index. All in all, we may be starting to get around the corner. We remain cautiously optimistic that a turn up in the index is forming -- giving us some hope that a recovery may start in the next six months or so.

CBER Clark County Business-Activity Index:

The Business-Activity Index continues its downward trajectory, reversing last month?s one-time rise -- a one-month change that was only a desert mirage. The index offers a perspective of the stage of the business cycle we are in. In short, a recession is from peak to trough and a recovery from trough to peak. Taken as a whole, we have strong evidence that the recession we are in continues.

CBER Clark County Tourism Index:

The Tourism Index improved for the third month in a row, though up a modest 0.79 percent over last month. The rise in visitor volume explains this strength. Aggressive advertising of value opportunities seems to be working. To be sure, this improvement is modest and has yet to gain enough momentum to curtail the recession, but clearly this is a glimmer of hope for better things to come.

CBER Clark County Construction Index:

The roller-coaster decline in construction that started from 2006 has pushed the
index below the values when the index starts in 1995. The index shows a one-month rise of 2.17 percent. Still, the index is near and all-time low. Moreover, the prospects for improvement remain weak. We lost about 15,000 construction jobs over the past year. With excess residential, commercial, and industrial space, further contraction seems inevitable at this time.

Read The Full Article:
http://highrises.blogspot.com/2009/07/latest-economic-indices-not-painting.html

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Google Search Trends in Commercial Real Estate

Google Trends is a tool that tracks how much people are searching for certain terms on Google.  Here are a few  interesting graphs created with Google trends related to commercial real estate search.  The first graph is the average search volume in the USA for the term ?Office Space? since 2004.Analysis: The graph [...]

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http://blog.rofo.com/2009/07/02/google-search-trends-in-commercial-real-estate/

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BofA Sees Residential Investments Feeding Greener
Shoots

Economic growth in the second half of the year is expected to come in “substantially” above previous consensus, according to economic commentary this week from Bank of America/Merril Lynch analysts.Lori Helwing, an economist at BofA/Merrill Lynch, says the analysts there now expect a 2.1% slip in real gross domestic product (GDP) in 2009, 30 bps [...]

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http://feedproxy.google.com/~r/HousingWire/~3/-mSwf4j3lAo/

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REITs Move Off Bottom, Can Commercial Real Estate
Be Far Behind

REITs Move Off Bottom, Can Commercial Real Estate Be Far Behind?

By Mark Heschmeyer

Data from the National Association of Real Estate Investment Trusts (NAREIT) clearly show that investors have smiled on REITs so far this year. There were 45 secondary equity offerings in the REIT industry in 2009 through May 31, which raised $14.2 billion. In May alone, 18 secondary equity offerings raised $5.3 billion. By comparison, there were 76 secondary offerings in all of 2008 raising about the same amount. This was greeted as very good news indeed by commercial real...  
» Click here for full storycommercial appraiser

Read The Full Article:
http://harriscompanyrec.com/blog/2009/07/reits_move_off_bottom_can_comm.html

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TRAINING SERIES ON UNDERWRITING COMMERCIAL
FINANCE, PART 2

TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE, PART 2

Charles Pixley
RAMA ENTERPRISES, Inc.
Real asset management associates
515 Madison Ave., 5W, New York, NY 10022
charlespixley@rocketmail.com
Skype: toanangel
585 217 2191


Volume 6 Issue 2
TRAINING SERIES ON UNDERWRITING
COMMERCIAL FINANCE, PART 2

THE COMPONENTS OF AN EXECUTIVE SUMMARY

William Shakespeare wrote: “Brevity is the soul of wit.” If you want someone immersed in this industry to pay attention it most likely will not happen if you submit a series of files that take up allot of disc space and would take hours to read and still not convey the basics of the project.

To spare everyone’s time, get you the fastest answer and have the greatest chance of garnering interest, the most effective means of getting your loan or finance request read understood, and approved by an underwriter for in depth review is the Executive Summary. The following is a sample; obviously you have to tailor the summary to the subject type:

TYPE OF FINANCE REQUESTED
1. Date:
2. BORROWER’S NAME whether personal Corporate or LLC:
3. SUBJECT ADDRESS:
4. PURPOSE OF THE LOAN:
5. TYPE OF PROJECT, OR BUSINESS:
6. DESCRIPTION OF THE PROPERTY OR BUSINESS
7. PURCHASE PRICE:
8. DATE OF PURCHASE:
9. BORROWER CASH INVESTED TO DATE:
10. EQUITY IN DEAL:
11. BREAKDOWN OF ALL IN COSTS:
12. USE OF FUNDS:
13. AS IS VALUE:
14. QUICK SALE VALUE:
15. AS COMPLETE VALUE BASED ON INCOME:
16. ACUTAL OR PROJECTED GROSS INCOME:
17. NET OPERATIONG INCOME Projected or Actual:
18. CLIENT NET WORTH:
19. CLIENT FICO:
20. EXIT STRATEGY:
21. Brief summary of salient facts:

RATIO USED TO DETERMINE VALUE
BASICS OF DETERMINING THE DSCR

Using a copy of the most recent tax returns for the business, or the specific properties, if there are more than one property incomes reported. Take the Adjusted Gross Income. AGI, and add back: Depreciation, Amortization, Interest Expense and specific non-reoccurring charges used to improve, or maintain the business, or property, (new equipment, new roof, bathroom remodeling, etc.

THIS IS YOUR Net Operating Income, N.O.I.

Probably one of if not the most important valuation ratio is the Debt Service Coverage Ratio, DSCR.

To know if your client, or loan request has a chance of flying, if you know a property or business

NET OPERATING INCOME, N.O.I., an underwriter and you can determine value very accurately without referring to an appraisal.
Debt Service Coverage Ratio

In underwriting a business, or commercial property Cash flow analysis is referred to as the Debt Coverage Ratio and it means everything to an underwriter to determine value. For both owner occupied and investment properties, underwriters normally want to see ratio's above a ratio of a minimum of 1.20 to 1.

In other words, for every $1 of mortgage debt the property or business has to have $1.20 of net income to meet the mortgage payments. Obviously the greater the risk or shorter the seasoning or occupancy rate, or property types such as hotels or car washes will be required to have higher ration preferably a DSCR above 1.4.

As a quick method of qualifying a loan request, assume a Capitalization Rate, CAP RATE OF 10% and multiply the N.O.I. X 10 and you will have a general idea of the actual value. However, if you know the CAP RATE, for the area, is 7% you divide the N.O.I., by 0.07, and it will give you a very accurate idea of what the property will appraise for and whether the Loan To Value, LTV, requirements are within the guidelines to have a chance for approval.

A low DSCR, high vacancy rate, speculative transaction, poor credit history, poor business track record, lack of evidence to repay, high LTV, start-up business and so forth make your loan request “Less than Standard” and then MAY, if at all, only qualify for a Hard Money Loan, with much higher interest rates and points and substantially lower LTV.

commercial appraiser, commercial appraisal

Read The Full Article:
http://harriscompanyrec.com/blog/2009/07/training_series_on_underwritin_1.html

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The Kenneth Village Experience

Kenneth Village is just your average, small town village where everything you need is contained in just a few blocks and everyone you see is someone you know.  Except this one is located in the heart of Glendale.Farmers MarketThis weekend marks the first Farmers Market in Kenneth Village and I am sure this is going [...]

Read The Full Article:
http://www.kendylsopenhouse.com/northwest-glendale/the-kenneth-village-experiance
/

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TRAINING SERIES ON UNDERWRITING COMMERCIAL
FINANCE

TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE
Part 1

’
Charles Pixley
RAMA ENTERPRISES, Inc.
Real Asset Management Associates
515 Madison Ave., 5W, New York, NY 10022
charlespixley@rocketmail.com
Skype: toanangel
585 217 2191


Volume 1 Issue 1
TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE

INTRODUCTION

I am honored to be able to offer you this course which will be emailed to you over the next few weeks. Please feel free to ask questions, as I am sure if you are unclear others may have the same question and together we will have a better learning experience.

Will try to reduce the subject matter to the least amount possible and convey the greatest amount of understanding.

Ideally this information will help you garner a more well qualified base of clients as they learn of your professional ability and ultimately the most important point of all, achieve a win for your client and then a win for you when it the deal closes.

The basic definition of commercial lending is to provide finance to a business, or property, whose ultimate function is the creation of profit.

The purpose of this newsletter is to provide you with specialized information on underwriting commercial loans, which is hard to find and its various types, under the heading of capital finance, so you may address the specific needs of a targeted audience.

This is designed to guide you through the fundamentals of audience as concerns understanding COMMERCIAL LOANS & UNDERWRITING and how “INVESTORS,” a.k.a lenders evaluate scenarios and qualify the proposal and prospect for potential funding.

GETTING STARTED

This business takes guts, drive and intense persistence, and the ability to survive financially, the period of time required to understand, build a book of business and know how to underwrite the various proposals and where to go to find the funds.

In our current market non-traditional sources of funds have become the go-to or lender of first choice, so the opportunity to review a myriad of deals is immense.

Some borrowers are highly sophisticated and know far more than the average loan officer, however, for the most part, simply don’t know what they are doing and don’t understand the process.

These days, almost all business borrowers have been, burned, turned out, or turned down, or simply they are ill qualified. Most unsophisticated clients embellish values, and don’t tell the whole truth and nothing but the truth, and that makes your job as an underwriter more of a Sherlock Holmes.

Many borrowers try to manipulate the money into what they think they want or should get, or they flat out are liars, or worse yet they are frauds. But, as you know money is like water, it seeks its own level and it KNOWS intrinsically what to do and what the rates are.

Unless you have the aforementioned I would not recommend entering this business, full time, at all. Although one never stops learning, nor finding new creative ways to structure deals

Realistically, the learning curve, if you were to do nothing but commercial loans, all day everyday at a modest rate of about 50 calls and interviews per day, can be about one year.

Once you have a working understanding, have been beaten up by borrowers and lenders there is a clarity focus that comes and all the pieces come together, THEN it becomes much easier.

Perhaps, the most important element of all is that, your clients can hear the experience level in your voice. Therefore, as you become more confident, you will inspire confidence in your clients and they will be more receptive to giving you their business.

In the next issue we will cover THREE IMPORTANT RATIOS and how these values are determined and the pitfalls from an commercial underwriters perspective.

commercial appraiser-appraisal

Read The Full Article:
http://harriscompanyrec.com/blog/2009/07/training_series_on_underwritin.html

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Fitch Takes Action on Older Subprime Mortgage
Securitizations

Fitch Ratings took action on thousands of classes of subprime residential mortgage-backed securities (RMBS) issued prior to 2005, including many downgrades of some classes further into triple-C and single-D junk territory and affirmations of other triple-A classes.The actions come as part of Fitch’s ongoing adjustments for deteriorating subprime performance. They indicate RMBS originated before the [...]

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http://feedproxy.google.com/~r/HousingWire/~3/TzkKBAa8XdA/

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Oakville Real Estate News: Battle over
Development Fees Burns Hotter in Oakville

There's a real storm brewing between Oakville's developers and home builders and Oakville's town council and Halton's Regional Council over the proposed increase of development fees levied on home builders.
What's at stake? North Oakville. This large section of land north of Dundas in Oakville yet to be developed has had developers lining up for years waiting to cash in on the desire of home buyers to move to Oakville.
Developers pay fees to the Town of Oakville and the Halton Region for the municipal systems and infrastructure required to service the new homes they plan to sell. Services like roads, water, sewer, etc.
The proposed increase is stated to impact the developer to the tune of about $8,000 per house.
Over the past couple weeks a public opinion battle has been waging between Peter Gilgan, the Billionaire CEO of Mattamy Homes and Gary Carr, Halton's Regional Chair as well as Oakville's Mayor, Rob Burton and our town councillors.
Peter Gilgan and Mattamy launched an email campaign to Mattamy home owners protesting the increases and asking homeowner's to protest the increases and support their position or they may have to reconsider whether they will be building homes in some communities (Oakville, Milton) if the proposed increases carry.
"If there's one message, it's that we're not asking any existing taxpayer to pay one red cent... to support any new development," said Mr. Gilgan. "We're not looking for a bailout - no bailouts here." That's all well intentioned and good, but if developers and builders like Mattamy Homes don't intend to cover the increased costs for the infrastructure - who will?
Who's left?? Customers of municipal services and taxpayers. There's no one left in my view.
Mr. Gilgan has further stated that these increases will further hurt our economy and the Oakville Real Estate market.
Public opinion seems to be hard pressed to support a billionaire developer who has clearly made alot of money off of Oakville residents since the 1970s. I will never fault someone for good business and strategies and whether or not you believe this is the case here, is a whole other story.
"It's our feeling that (developers) made a lot of money during the good times, and they should be using some of that money to pay for the services and stop using the argument that the economu is bad." according to Halton regional chair, Gary Carr.
This debate over North Oakville and South Milton has huge importance. Both now are still almost entirely rural farmland and are due to experience major growth, with more than 75,000 home owners predicted to move in to the area by 2021.
I challenge my fellow residents of Oakville to educate yourself and be heard. Write to your ward councillors, Mayor Burton or Gary Carr. Read the positions and lend your support whether it's to Regional Chair Gary Carr or not. I think you'll agree this issue is one that will impact all of us that live in Oakville.
Here is some further reading on the subject:
There was an interesting article in today's Toronto Star entitled "Battle Over Development Fees Heats Up In Oakville".
Published yesterday in the Oakville Beaver was "Mattamy Lobbies For Lower Development Charges"
Let me know your thoughts on this situation. I would love to hear from you. Contact me through email.
Ryan


Read The Full Article:
http://oakvillecondos.blogspot.com/2009/07/oakville-real-estate-news-battle-over.
html

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Mortgage Fraud Scheme Leads to 83 Count
Indictment

Benjamin Tubbs, 49, Pickerington, Ohio, Kevin Murphy, 50, Blacklick, Ohio, and Karl Mullins, 33, formerly of Columbus, Ohio, and now residing in Florida, are alleged to have acted as the mortgage brokers and orchestrators of a scheme to buy and sell houses at highly-inflated prices and to falsify loan documents in order to skim ten of thousands if not hundreds of thousands of dollars from each sale.

Tubbs, Murphy …

Read More...

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http://feedproxy.google.com/~r/MortgageFraudBlog/~3/IU6qu90tZGA/

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