Michael Linton

Florida Commercial Real Estate Investment – Basics

Florida Commercial Real Estate Investment – Basics

Get a List of of Top Ten Commercial Investments (312)612-1031

Mirabella Plaza

Mirabella Plaza (312)612-1031

Would You Rather Have 15 Million in Single Family Homes or 15 Million in Commercial Property?

That will be a lot of homes and tenants to take care of.On the other hand $15 million will buy only a very small number of commercial properties that will be comparatively easy to manage with much lesser overheads.Commercial properties include offices, industrial sheds, free standing retail shop, bulk retail, block of shops, medical centers, service stations, motels, hotels, back packers, health clubs, churches, funeral parlors, child care centers, car yards, convenience stores, shopping malls, to name just a few.

The income is also more stable because of the long leases.It is typical to have returns of around 10% net for a commercial real estate investment and any where from 7% to 9% net return for a prime property.

The value is also determined by the quality of the tenant and length of the lease.The value of a commercial property can drop substantially if it becomes vacant.

It is common to charge penalty interest on the out standing rent or lock the premises on continued default of rent.By far the biggest risk in commercial real estate investment is finding a new tenant in case of a vacancy.

In commercial real estate the requirement of each tenant in terms of size, location, use and rent payment capacity is so different that it is very difficult to get the right tenant for the right property. For the reasons mentioned above it is also difficult to sell a commercial property investment.
Michael Linton
Linton Global Real Estate Team
Chief Investment Officer
Get the Top 10 Commercial Investment Properties in the State of Florida
2422 S. Atlantic Real Estate
Daytona Beach Shores,FL
32118
US
Phone: (312)612-1031

 

How To Build A Cash Flow Model For Your Real Estate Investment Property

How To Build A Cash Flow Model For Your Real Estate Investment Property

Need Help With Your Model? Call (312)612-1031

How To Build A Cash Flow Model For Your Real Estate Investment Property

Financial Model For Real Estate Investment

Financial Model For Real Estate Investment

Here is an overview of the factors you need to take a look at in order to project your potential return on an investment.

Even if you expect to manage the property yourself, it’s best to budget in an allowance for professional property management.

Second, it ensures that you are covered if for some unanticipated reason you need to turn the management over to a pro at some point in the future.

For example, if you can earn 5% by keeping your money in the bank, you’re going to want a lot more than 5% for taking on the risk and time investments required by a rental property!

To determine this, you’ll need to estimate the building’s assessed value as a percent of the total purchase price.

Bank fees – how many points do you expect to pay, and what closing fees do you expect to incur if you will putting a mortgage on the property?

Now that you’ve got all the numbers laid out in front of you, you ‘just’ need to build a financial model which will allow you to project cash flow throughout your ownership term, and then use time value of money calculations to create a present value of those flows.

If the result is negative, it’s a red flag– you need to take another look, because this may not be a good deal for you.

Call Us To Help You Build A Cash Flow Model For Your Property – (312)612-1031

 

Michael Linton
Linton Global Real Estate Investments
Real Estate Professional
South Atlantic Real Estate Group
Florida Real Estate Financial Modeling Expert with over 30 Years Experience
2422 South Atlantic Real Estate Group
Daytona Beach Shores,Florida
32118
US
Phone: (386)312-1031

Mezzanine Financing – What Is a Mezzanine Loan?

 

Mezzanine Financing – What Is a Mezzanine Loan?

Here is the text book definition:

Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate

Mezzanine financing is similar to a second mortgage; the main difference is that mezzanine loans are secured by a fraction of ownership of the project, as opposed to the real estate.

They are similar to second mortgages, but make it far easier for the owner to maintain ownership of the property without actually losing holistic ownership of it to the lender in the case of default.

Since the property that was financed produces income, it is incredibly simple to use a portion of this cash flow to repay the mezzanine lender.

You Can Read More About Mezzanine Financing Here

A mezzanine loan is not a real estate loan. Instead, a mezzanine loan is loan that is secured by the membership interests (think of this as shares) of an LLC (think of this as a corporation) that owns a huge real estate project. If you own all of a company and the company owns all of the property, then you own all of the property. Let’s discuss below how a “mezz piece” forecloses. Mezzanine Foreclosure: A “UCC” (Uniform Commercial Code) process – Michael Linton – Chief Investment Officer

REALTORS oppose use of G Fees to Pay for Highway Bill

 

Stop the Housing Tax for Transportation

On Thursday, October 22, 2015, the House of Representatives Transportation and Infrastructure Committee will begin consideration on the surface transportation reauthorization legislation. One proposal would use Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund transportation programs.

Take action now to prevent Congress from placing an unnecessary long-term burden on American homeowners with a new Transportation Tax. NAR strongly believes that a new tax on homeowners would also prevent Fannie Mae and Freddie Mac from effectively managing their risk. Tell Congress to STOP the Housing Tax for Transportation!

REALTORS oppose use of G Fees to Pay for Highway Bill

As a REALTOR and your constituent, I ask you to oppose any attempt by the House Transportation and Infrastructure Committee to use Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund the surface transportation reauthorization legislation scheduled to be marked-up on Thursday, October 22, 2015.

G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans, and should be used only to manage the companies’ credit risks. I am opposed to the use of g-fees for purposes other than risk management.

Additionally, implementing an extension of the g-fee increase that is unrelated to housing needs could also act to hinder the necessary reforms required of the housing finance system for the foreseeable future.

I understand the need to reauthorize the highway programs and help strengthen our country’s infrastructure. However, I also strongly believe that use of an extended g-fee to fund transportation programs saddles future homeowners with an unnecessary long-term burden, and prevent Fannie Mae and Freddie Mac from effectively managing their risk.

Please oppose the use of Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund transportation programs.

What is FHA Mortgage Loan?

What is FHA Mortgage Loan?

Need A Lender? We Can Recommend Many Great Lenders (386)506-8848

Mortgage Loan Application A FHA Mortgage Loan is usually taken by the borrowers who do not meet the requirements for the conventional loan. Mortgage lenders are generally the ones to help you, homebuyers, to apply for FHA loans.

A Fixed rate FHA mortgage loan is the most suitable option for first time homebuyers as it provides up to 97 percent financing on purchase price. Insurance on FHA mortgage loans is also lower than conventional mortgage insurance to make it affordable for lower income groups.

The Truth About FHA Mortgage Loans if you fall into the category of a first time home buyer, an FHA mortgage loan is probably the best type of loan to seek after.

What is FHA Mortgage Loan?

Need A Lender? We Can Recommend Many Great Lenders (386)506-8848

Daytona Beach Florida Homes

Daytona Beach Florida Homes

Call Mike and Peggy Linton for Daytona Beach Florida Homes (386)506-8848

Daytona Beach Florida Homes

Daytona Beach Florida Homes

Whether you are looking for an affordable condo or a luxury villa, Daytona Beach has it. A number of very reasons make Daytona Beach a very attractive option for people looking for a new home.

The wide range of fun activities and destinations in and around the area ensure endless hours of family bonding including golf, deep sea fishing, parasailing, park and recreations sites, and museums.

With a Daytona Beach home, you have definitely arrived.For adults looking for a place to retire, Daytona Beach is a perfect spot, with its numerous entertainment and dining destination such as first class restaurants, boutiques, nightclubs, art galleries among others.

How Do “Hard Lenders” Make Money?

How Do “Hard Lenders” Make Money?

Have a “Hard Lender” Question? Give us a call at (312)612-1031

Hard money lenders are specific asset-based loans based upon the value of a property today such as an 80 unit multifamily apartment or some other type of commercial real estate, and are expensive because of the inherent high risk of the loan.

There is very little income documentation required on a hard money loan although, the more information that is available, the better chances you have of being approved.These hard lenders step in during a time of need and give you a quick answer and get you to the closing table fast.

The shorter the duration of your hard money loan, the better for you and the lender.

Or some other examples might include: The property may not be completely constructed, the retail or office space not leased or you may not have the necessary permits in place and your existing note is coming due.

Florida1031.com: 1031 Exchange Explained

Florida1031.com: 1031 Exchange Explained

Call (312)612-1031 For Your Florida Replacement Property

Florida1031.com: 1031 Exchange Explained

Florida1031.com: 1031 Exchange Explained

Investors can trade up, consolidate, diversify, leverage or relocate their investments and not be penalized by having to pay either capital gains or recapture (the amount deducted while owning the property is taxable if the property is sold) by using a 1031 exchange.

An example would be an apartment owner wanting to trade into net lease properties that do not require management.

What are the general guidelines for a 1031 Exchange?

The value of the replacement property must be equal to or greater than the value of the relinquished property less any selling expense.*

The equity in the replacement property must be equal to or greater than the equity in the relinquished property.

All of the net proceeds from the sale of the relinquished property must be used to acquire the replacement property. Constructive receipt of sales proceeds is prohibited during the exchange process.

Deadlines for identifying and closing on the replacement property must be followed. From the close date there are 45 days to identify the properties to be purchased and 180 days to complete the purchase (or the due date for your tax return-whichever is earlier). Property is properly identified only if you clearly describe it in a written document signed by you and hand delivered, mailed, faxed to the person obligated to transfer the replacement property to you (typical a Qualified Intermediary (QI) or to any other person “involved in the exchange” other than you or any one disqualified under Treasury Regulation 1.1031 (k)-1(K).

If there is debt on the property being sold that amount needs to be replaced by new debt or cash from the investor’s pocket.

How Many Properties May Be Identified as Replacement Properties?

Three Property Rule: Any three properties of any value.

200% Rule: Any number of properties not to exceed 200% of the sold property.*

95% Rule: Any number of properties of any value. 95% of identified properties must be closed in 180 days or the exchange will be disallowed.

Can Multiple Owners of a Single Property Exchange into Different Properties?

If the intent of varies owners of a single properties is to go their separate way it is important to first review with legal counsel the manner in which the property title is held before selling. Once the property being sold is closed and all exchange investors have entered into one exchange agreement the exchangers lose their options to divide the proceeds and buy separate replacement properties.

Does the Investor have Access to the Sale Proceeds During the Exchange?

Part of doing an exchange is that the investor does not take constructive receipt of the sales proceeds. The taxpayer may not receive the proceeds or take constructive receipt of the funds in any way, without disqualifying the exchange.

Is it too late to start a tax-deferred exchange after signing the sales contract before closing?

No, as long as title has not been transferred. The definition of like-kind for personal property and equipment is much narrower than for real estate.

What is the difference between “realized” gain and “recognized” gain?

Realized gain is the increase in the taxpayer’s economic position as a result of the exchange.

Linton Global Real Estate
Investors can trade up, consolidate, diversify, leverage or relocate their investments and not be penalized by having to pay either capital gains
2422 South Atlantic Ave
Daytona Beach Shores, Florida
32118
Phone: (312)612-1031

Florida1031.com: 1031 Exchange Explained

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Investor Alert: S&P 500 loses $2 trillion in market capitalization

Investor Alert: S&P 500 loses $2 trillion in market capitalization

Florida Investor Homes 590 x 400 copy

Investor Alert: S&P 500 loses $2 trillion in market capitalization

In late August, the S&P 500 lost $2 trillion in market capitalization. When market volatility rises, savvy investors utilize diversification to insulate their portfolios from uncertainty. Bonds, precious metals, cash and other low-yielding vehicles are among the most popular diversification options, while real estate offers much higher returns and a broader range of advantages over other asset classes. In addition to regular dividends or rent, real estate is an inflation hedge, tax shelter, a tangible asset, and has a negative correlation with the stock market.

Tangible real estate is a diversification that should be a part of every investor’s portfolio. Although single-family residences (SFRs) were once considered a specialty asset reserved for wealthy insiders, Linton Global’s business model now offers all investors a reasonable entry point into real estate investing. SFRs have other advantages for investors.

Real estate is among the best-sheltered tax havens available, including the popular 1031 exchange. Section 1031 of the IRS code enables investors to allocate proceeds from a sale into a like-kind investment without paying capital gains taxes. Building a portfolio while delaying tax commitments is an effective path to generate a large portfolio.

If you’re interested in considering investing in rental properties to diversify your investment portfolio, please call Linton Global at (312)612-1031 to learn how our turn key process can make this possible. Investor Alert: S&P 500 loses $2 trillion in market capitalization

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