by Gagner | Aug 8, 2015 | Commercial Real estate investing, Uncategorized
Financing Commercial Properties In part 4 of our commercial real estate series, we reviewed the basics on how to analyze deals, and now we will discuss how to structure financing. To create a credible offer, you must have a financial plan in place and be ready to articulate that to the seller. In today’s hyper competitive real estate environment, the strongest offer is often the one that has the best financing plan. We recommend you get the financing question figured out before writing any LOI’s. Commercial properties (including multi-family) are typically financed with commercial loans. The exception is multi-family 2-4 unit properties, which can be financed with conventional personal financing (30 year fixed mortgages). Commercial loans are typically shorter terms with balloon payments and pre-payment penalties. A lender that is providing a commercial loan looks to both the performance of the asset itself and the borrower’s credentials (ie net worth, liquidity, and experience). We’ll discuss that in detail below. In most cases, we recommend using a loan broker to obtain the best financing options. A well-positioned broker can help you navigate the many available financing options and overcome the obstacles that are often present in commercial deals. Just like finding other team members, the best way to find a competent broker is to ask other experienced investors for referrals. The next step is to interview these brokers and make a determination which one is the best fit for you and your situation. Once you have selected a broker, they will tell you exactly what is needed to obtain a successful loan. In considering how to structure a deal, the...
by Gagner | Jun 8, 2015 | Finding deals, Uncategorized
Finding Fix and Flip opportunities A few years back, it was pretty easy and profitable to do “cosmetic” fix and flips, but due to rising prices and “seller” markets, this is no longer the case in most areas. That means successful developers must find other strategies for creating value in their real estate business. We think one of the best ways to “add value” is to develop a strong sense of where the right amenities can be added to a property. In this article, we will discuss ideas that have worked well for us. The most common ways to add value are to create spaces that were not previously in the house (at least not on the tax records). We have found ways to create master bedrooms by finding adjacent spaces to a room that we could then use as a master bathroom. An unnecessary alcove in a kitchen allowed us to do just that in one remodel. In our Victorian project, we used a large storage space behind a wall to create an upstairs bathroom. Our Victorian was also a project where we took a downstairs basement and converted it to a bedroom. In another project, we are reconfiguring an unpermitted space to add a master bedroom/bath and a 1/2 bath (we have to move the existing bathroom to do it). The point is that you should get creative when walking properties, so that you can pick up on these value add ideas that others might miss. Sometimes the best way to find these spaces described above is to look for them in houses that have bad layouts. Bad layouts...
by Gagner | Apr 5, 2015 | Real Estate News, Uncategorized
Today, I would like to share a video that was just produced by Brett Jennings, who is both a friend and highly successful real estate broker in the Bay Area. Brett provides an easy to understand explanation about where the Bay Area real estate market has been recently and where it is headed in 2015. There are several dynamics that influence the direction of the market and help predict whether it is becoming “over-valued”. Given the pace of home appreciation over the past several years, it is reasonable to ask whether we are approaching another bubble. Brett provides information that helps us understand the answer to these and many other questions. Hope you enjoy his video!...
by Gagner | Jul 18, 2013 | Uncategorized
As part of our partnership with Habitat for Humanity, Bridge Realty has pledged a fundraising goal of $2,500 to directly benefit the Carter Work Project. These funds will help buy land, labor and supplies that build the homes for families in need. With your donation, you will be helping families break the cycle of poverty and build long-term financial security. Habitat for Humanity and the Carter Project offers affordable, no-profit house payments for families in the Bay Area. Research has shown that decent housing improves health, increases children’s educational achievement and strengthens community ties. Donating through this site is simple, fast and totally secure. It is also the most efficient way to make a contribution to our fundraising efforts. Many thanks for your support — and don’t forget to forward this to anyone who you think might want to donate too! Thanks to your help, Habitat for Humanity and the Carter Project will be transforming the lives of families throughout the Bay...
by Gagner | Jun 22, 2013 | Uncategorized
With so many active real estate agents in San Jose, how do you know which one will provide the best service and net you the maximum offer for your Cambrian home? Generally, it is recommended that you interview at least 3 active agents in your particular area and carefully check their references. If you are willing to do a little extra effort to net a higher value for your home, I suggest working with a realtor that is experienced in creating added home value (more on that shortly). When interviewing a realtor, you first want to learn about their specific knowledge of your neighborhood and community. Do they really understand the home values within your neighborhood? Are they familiar with the schools (including API scores) and nearby amenities? What is their track record for selling homes in your area? What would their pricing strategy be for listing your home (starting at the highest price is not necessarily the best strategy for netting you the best offer). What resources can they offer (repair services, gardening, staging, etc)? Have they done a thorough CMA for your home (competitive market analysis). Does their personality mesh well with yours? These are just a few of the major items. Additionally, you will want to determine what is important to you and what areas you will require the most help. I have another possibility for you to consider. If you have been reading my previous posts, you know that I am both a licensed real estate broker and a developer. If you are really looking to maximize the sale of your home, have the initiative...
by Gagner | Mar 27, 2013 | Before Photos, Sellers, Uncategorized
Here is a story about how one person made a great profit in Cambrian real estate with some extra cash and a small amount of effort. A previous blog of mine spoke to the hot condo market that exists in Cambrian today, and this posting takes it a step further by illustrating how big money can be made. As in all investing, the idea is to buy an asset (in this case a condo) at a low price, add value and then sell at a higher price. Sounds simple, and it is if you follow a proven strategy and avoid any big mistakes. So here goes…. In February 2012, my friend put a $274,000 offer on a condo that the bank was short selling. It required a $10,000 deposit and the bank did not give final approval until the end of October (yes, it required more than 8 months for an answer). Once the bank gave final approval, they gave my friend 10 days to close the transaction. Luckily, he had the cash in a bank account which allowed him to get the transaction done. As a side note, IF he had not had the money, there are hard money lenders who provide experienced real estate investors cash in less than 2 weeks (for a cost). Since February, the market had gone up in value, so instead of keeping the condo as a rental (his original plan), my friend decided to rehab the interior of the unit and resell to a retail buyer. This practice is commonly called “flipping”. Using a contractor I referred him to, he remodeled the...