Anderson Shell Station Just Reduced

We have just reduced the price of the Anderson Shell Station and Convenience Store located in Anderson, CA, which is just south of Redding, CA in beautiful Northern California. We are featuring this station on our web page http://www.gasstationsamerica.com and you can see that this is a very, very profitable gas station and store with a net of over $300k per year. This is an ideal business opportunity as well as being able to own property in one of the fastest growing areas in the north state, and adjacent to the Factory Outlets and a new WalMart Superstore. E-mail or call for details.

World Economic Conditions, etc

So, almost on a regular basis, I am asked about the world economic conditions, in that in the sale of gas stations, http://www.gasstationsamerica.com we are constantly dealing with gas and oil prices, and the international community in general. Thus, I am always looking for articles of insight, etc…and this came to me from a financial advisor, and I found it of interest.

Consumer spending was up 0.4% in December – twice the gain economists polled by Briefing.com had forecast –and by the federal government’s initial estimate, the economy grew 3.2% in the fourth quarter. The last month of the year also witnessed improvements in retail sales (0.2%, 0.7% with auto buying factored out) and industrial
production (0.3%). Thanks in part to a $53.2 billion December surplus, the federal budget deficit was 41% smaller at the end of 2013 than it had been a year before.

This is certainly better news than a year ago….so keep the faith. And, the time may be right to buy a gas station and convenient store. We have a good inventory of listings…and financing is available and readily easy to get. check us out at http://www.gasstationsamerica.com

Gas Station Financing in California and the SBA

One of our associates sent me  the following on SBA loans, and I used it when giving a lecture to agents on gas station financing.  SBA is pretty well known in the industry for financing gas stations, but this is well put and understandable. Part of it is from the government office that deals with SBA…but this is “translated” for all to understand.

Throughout the years, SBA loans have become the only choice of financing for gas station dealers and operators. Since the overall economy has worsened within the last number of years, the gas station retail businesses have become even more difficult. With the constant change in fuel prices and our failing economy, foreclosures on service stations and convenience stores are already at record highs.

Back in 2008 or so, the SBA had made financing for gas stations virtually impossible. The SBA had required all gas stations older than 5 years to get a Phase II environmental and all transactions required a seller indemnification, whether or not there had been an environmental concern or otherwise. To make it more difficult, the SBA also demanded a different business valuation from an impartial and independent evaluation company as well as the appraisal.

What do you think SBA was intending to do with all these requirements? Yes, they didn’t want to do gas station financing and I think they were just not sure how to say it.

There should not be any surprise that the SBA adhered to this position. With some non-bank lenders committing fraud cases in past few years, record default and foreclosures, it’s no surprise they made them difficult at the least to get financing. The truth is, the gas station asset class wasn’t considerably worse than other types of properties.

So with no practical secondary market, many gas station lenders have either discontinued doing SBA loans or any other gas station loans or significantly reduce the volume of SBA gas station financing they’d do. Just the larger banks could lend and portfolio their loans which they choose not to do anyways.

Fortunately with the Government stimulus during 2009, a great deal, but not all, of these conditions have changed. First, the SBA will no longer require indemnification agreements on all transactions except those where environmental conditions exist. And secondly, the SBA won’t demand a Phase II environmental except in situations where environmental conditions exist. It is recommended that buyers check the State’s DEP or DEQ to ensure that there isn’t any environmental issues such as spillage or migration reported so the possibility of decline will be reduced considerably. Of course SBA still has issues with some Oil companies deed restriction and agreements with their dealers so what we recommend and what we usually do for our clients is provide the deeds and dealer agreement to the SBA to check first.

Furthermore, the SBA is currently allowing capital providers to base their loans off of LIBOR as well as Prime, giving financial institutions more options to make loans more profitable.  Of course with the current capital market, almost all gas station lenders would finance gas station properties through SBA 7A loan program which is adjustable rate based on prime.  This way, SBA guarantees 75% of the loan which means less risk for lenders and more profit as well.  There are almost no conventional lender that would do SBA 504 loan for gas station with exceptions of few non-bank lenders.

With the streamlining of SBA operations, SBA financing is still a great source of financing gas stations, car washes and other special purpose business properties. As usual, you should have a good financial package together in order to increase your chances.

Another thing to point out is that the waving of the SBA guarantee fee is over and now borrowers would pay the guarantee fee of 2-3% of the loan amount.  This is a substantial fee to pay for obtaining financing however, as many know, SBA loans are almost the only source of conventional financing with relatively high leverage amount.

Regardless of what type of financing you choose, make sure that when are getting gas station loans, you work with people that specialize in this specific market and know both the lending and gas station business. And, when I get an inquiry on gas stations, I will send them to my associate, as he does a very good job. So, when thinking of buying or selling.,…please contact me at   http://www.gasstationsamerica.com   or call   530-941-0444.

Shell Station for sale in Redding, CA

• Shell Gas Station for Sale in Redding, CA..offered at $2,500,000

  Why buy a Shell Gas Station? Great brand with one of the largest credit card followings in the nation; Consistently quality fuel for excellent repeat business; Opportunity for fleet sales versus unbranded stations and gas; Excellent reputation and branding benefits the local owner; Superb management assistance from company; profitable with good mark up and margins.

  Highlights: Great Location-66,000 gallons/month; Very High Inside Sales-$74,000/month average; Subway Sandwich Shop on Premises; Huge pump access area for RV’s and Boats; Excellent condition both inside and out; Priced to sell based on recent bank appraisal.
  Description: This is one of the most impressive gas stations-convenience stores, with Subway in the building, in the North State. Great location on I5 just north of downtown Redding, and opposite planned Regional Shopping Center. The station has been modernized and is in excellent shape. e-mail for complete listing package.

  Best location on Interstate 5 at the Oasis Road exit just 3 miles north of downtown Redding, CA., which is 165 miles north of Sacramento and is the last major city before Lake Shasta and on over the Cascades into Oregon. Extremely busy location with a great deal of added Lake traffic, including boats, motor homes, and interstate travelers. Subway is a huge draw for business. Additional detail, photos, narrative, and financial info at   http://www.oasisshell.com
  
  http://www.oasisshell.com     Offered at $2,500,000.

More About Hard Money…California and Redding.

Ken Corsine, in his blog on “the Bigger Pockets” blog, which is a an excellent online real estate magazine, made the following observation about Hard Money. I brought this up the other day when talking to a borrower about a hard money-private money loan….and here is the essence of what was said:

For some, the thought of hard money conjures up notions of loan sharks threatening to break your legs if you don’t pay on time. While not all hard money lenders are ideal business resources, most are knowledgeable, professional and can be used to great advantage in your real estate investing.

With the lack of conventional lending products available to real estate investors, many investors turn to hard money financing as a bridge loan between the acquisition of a property and the permanent financing. Of course, hard money is not cheap, but typically is well worth the money for the purpose it serves. In most areas, the more prominent hard money lenders charge around 5 points and up to 15% interest. However, with local networking you may find private lenders willing to charge less.

One of the biggest advantages of hard money is the ability to borrow funds for renovation expenses. Most investment properties have some equity potential, but the average home buyer is often discouraged by the less-than-attractive condition of the property. As investors we create margin by having the ability to find, acquire and renovate these properties. The ability to finance the purchase and repairs is key to this equation, and hard money is one tool that allows us to do just that.

In today’s market, an investor obtaining a conventional loan would expect to pay 20-25% down just to acquire the property, and then come up with out of pocket cash to complete renovations. As an alternative, an investor may be able to use hard money financing for the purchase and repairs, while having to place only 10% down on the total cost.

As a quick example, a $50,000 purchase needing $20,000 in repairs could potentially cost an investor $30,000 out of pocket using a conventional loan ($50,000*20% plus $20,000). However, if that investor uses hard money financing instead, the out of pocket cost may be more like $7,000 ($70,000* 10%). Even if an additional $5,000 is added to the equation to cover loan fees and closing costs for the hard money loan, most investors are perfectly willing to factor in this cost in exchange for the leverage hard money provides.

Once the property is acquired and renovated using hard money, the investor can then employ a conventional lender for the permanent financing. Since the renovations presumably have increased the value of the property, the refinancing lender can use the new appraised value in determining the investor’s maximum allowable loan amount. Typically, a conventional lender will allow financing up to 75% of this appraised value. Best case, the appraisal will be high enough so that the investor can refinance the balance of the hard money loan as well as closing costs without any additional money out of pocket.

Another quick example – Using the scenario above with a purchase price of $50,000 and repairs of $20,000, a good appraisal would be in the neighborhood of $100,000 or higher. If the appraisal comes in at $100,000, the lender may allow the investor to finance up to $75,000, which should be enough to pay off the balance of the hard money loan and cover any closing costs.

Be Prepared Because Guidelines are Changing

Up until now, Freddie Mac guidelines have allowed investors to refinance out of hard money without any seasoning (i.e. owning a property for a certain amount of time), while Fannie Mae has required investors to be on title for a minimum of 90 days. As of May 1st 2011, however, Freddie Mac changed their guidelines to require that an investor own the property for a minimum of 120 days before they can refinance. This may not seem like a big deal, but, in today’s volatile economy, you might be amazed by what can happen in a short three to four month period.

For investors who plan to refinance out of hard money after May 1st, there are a few things to be cautious of:

1.) Just because you are approved for a refinance today does not mean you will be approved four months from now. If your eligibility is currently border line, talk to your lender about any upcoming guideline changes that may affect your approval status.

2.) Take care to not unknowingly do something to lose your approval status. A few tips: Don’t change job or work status. Don’t take out new credit or run up existing credit. Don’t deplete your checking or savings accounts. (I realize that these may seem obvious, but you would be shocked at how many times I’ve seen investors forfeit approval status because they made one of these missteps!)

3.) Stay alert to comparable sales near your property that may erode the value of your investment. Granted, there isn’t much you can do about this, but your due diligence should be as extensive as possible. Just because your property appraised for $100,000 today does not mean it will appraise for that a few months down the road. This is especially true in areas experiencing a high percentage of foreclosures.

4.) Be prepared to pay the hard money interest for this three to four month seasoning period. In the past, it was possible to refinance 30 days after acquiring a property and only pay one month of high interest. If you are locked into a hard money loan for multiple months, be sure to factor this payment into your holding costs.

No matter your investing goals, hard money financing can be a highly effective tool.  Using hard money to leverage your investment can be a great strategy to acquire, renovate and maintain investment property. However, keep in mind that going forward you will need to be a little more cautious in your approach; especially as it relates to refinancing out of hard money.

Reverse Mortgage..what is it?

A reverse mortgage is a loan for senior homeowners that uses a portion of the home’s equity as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage. Eligibility for a reverse mortgage To be eligible for a HECM reverse mortgage, the Federal Housing Administration (FHA) requires that all homeowners be at least age 62. The home must be owned free and clear or all existing liens but be able to be satisfied with the reverse mortgage. If there is a mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at the closing. Generally there are no income or credit score requirements for a reverse mortgage. Outliving the reverse mortgage A reverse mortgage can not be outlived. As long as at least one homeowner lives in the home as their primary residence and maintains the home in accordance with FHA requirements (keeping taxes and insurance current) the loan does will not become due. Estate inheritance In the event of death or in the event that the home ceases to be the primary residence for more than 12 months, the homeowner’s estate can choose to repay the reverse mortgage or put the home up for sale. If the equity in the home is higher than the balance of the loan, the remaining equity belongs to the estate. If the sale of the home is not enough to pay off the reverse mortgage, the lender must take a loss and request reimbursement from the FHA.No other assets are affected by a reverse mortgage. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage. Loan limits The amount that is available generally depends on four factors: age (older is better), current interest rate, appraised value of the home and government imposed lending limits. If you have further questions….. ronlargent@shasta.com and thanks,

Commercial Equipment Leasing Now Available

Although our primary emphasis is on commercial real estate financing, what we have found is that many of our clients, once they purchase their investment or income property, often are in need of commercial operating equipment. Through our affiliates in our national lending programs, our commercial equipment lease programs cover a wide variety of industries. Whether you are looking for aircraft leasing, transportation equipment leasing, medical equipment leasing, or any other equipment and accessories needed for your business, rest assured that with our knowledgeable and professional team by your side you are certain to obtain the financing you need without all the hassle.

For more information regarding equipment leasing in your industry, we have a variety of financing options that include start-up businesses.  Getting approved is quick and easy regardless of your personal or business credit situation, we can help!

• Aircraft and Aircraft Equipment
• Fitness Center Equipment
• Health Center Equipment
• Automotive Equipment
• Agricultural Equipment
• Computers & Networking Equipment
• Construction Equipment
• Dry Cleaning Equipment
• Heavy Equipment
• Industrial Equipment
• Medical Equipment
• Metalworking Equipment
• Office Equipment
• Oil and Gas Equipment
• Printing Equipment
• Restaurant Equipment
• Telecommunications Equipment

We also offer software leasing and have special programs for start-up business leasing.

What is a Lease? A lease is a contractual arrangement-agreement in which a leasing company, known as the Lessor, gives a customer, known as a Lessee, the right to use equipment for a specified length or time, referred to as the lease term, and a pre-agreed upon payment plan, which is usually monthly. Depending on the equipment, the nature of the lease, and the needs of the customer, the customer may have the opportunity to purchase the equipment, return the equipment, or continue to lease the equipment by executing a new lease or a lease extension.

The overriding positives of leasing include the general application to almost every business that has a need for some form or kind of equipment to conduct its daily business operations, which includes every part of the business from capital equipment to computer hardware and software, and can include both installation and follow on management assistance and consultation. Irregardless of the legal structure of the lessee, including churches and other non-profits, leases make a lot of sense if only for the cash savings realized.

Hard Money-Private Money Loans Now Available

I have just expanded my real estate financing business to include Hard Money and Private Money Loans on both residential and commercial real estate. I am associated with one of the best companies in the nation; a sterling reputation; and one that produces loans…not just a “talker”.  Many have asked me, “what is a hard money loan”…so here is my answer. Please call or e-mail me if you are in need of one of these loans:

A hard money loan is a specific type of real estate based loan through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans because of the shorter loan durations associated with hard money loans. Most hard money loans are used for projects lasting from a few months to a few years. Hard money is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring….which are very present in the current economy.

The qualifying criteria for a hard money loan varies widely by lender and loan purpose. Credit scores, income and other conventional lending criteria may be analyzed. However, most hard money lenders primarily qualify a loan amount based on the value of the real estate being collateralized. This is a key factor in an economy such as we are in now. Typically, the biggest loan one can expect would be between 65% and 70% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000 – $70,000 against it. This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.

This kind of says it all…so let me know if I can be of service…for both residential and commercial real estate loans.

In 2012….is refinancing an option?

As we approach a new year, I get questions on where I see real estate going in the next year. Who knows? The guru’s were wrong 5 years ago when they said, and I was probably among some of these….downturn would be over in a couple of years, and here we are 6 later and still seeing some of the lowest prices of real estate in 25 years. But, one thing is also very evident, namely the unbelievable low rates to borrow money. The next question is “should we refinance our property?”.  This is a very individual option, but if one is an owner-investor in commercial real estate, it might be worth the time to check this out. During the “boom time” some 6-10 years ago, a lot of commercial development was taking place, and money was plentiful but the interest rates were consistently higher than the residential rates. Because of this, the timing might be right for an owner to consider re-financing now, for the commercial rates are almost where the residential rates are, which is a first time occurrence. And, it might be a “slam dunk” process for many.

With a new loan, the lender has to take an in-depth look at all aspects of the transaction, from the value of the property to the credit-worthiness of the buyer. All aspects of the transaction has to “make sense”. With a re-finance, there is a track record of performance for the property. And, there is a history of maintenance and improvements, and all of this is considered by the appraiser, and the lender.  It is easier for the lender to consider the positives and negatives of a property when a pattern of success in the management of the property has occurred.

If re-financing is something that you have been thinking about, let’s talk.  A number of factors has to be considered, from the cost of the new fiance to the savings over a period of time. You may want to involved your CPA for advice. But, contact me and we can start the conversation. And,   www.largentfinancial.com   has info on rates and the various programs that might fit for your particular property.

About Commercial Real Estate Funding ….and Ron

If you are seeking funding for a large commercial project, you have come to the right place.  Ron Largent is a financing consultant with Ocean Pacific Capital. He has the requisite experience and knowledge in real estate and finance to assure your success.

First licensed in 1971, Ron has built on decades of real world experience as an agent or broker in four states. He knows and understands all aspects of residential, commercial, and investment-income properties in the North State.  He has achieved significant sales results in residential sales, Mobile Home Parks and apartment complex sales, along with self mini-storage complex and convenience store sales.

He partnered with his son, Curt, and other associates in the Largent Team, one of the largest real estate teams in the North State, which is now part of Sheldon Largent Realty.  During 2011, Ron gave back to his community, serving as President and Executive Officer of the United Way of Northern California on an interim basis, managing the United Way in the nine northern counties of California.