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.

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.

Ocean Pacific Capital

Ocean Pacific Capital is 30 year old real estate finance corporation specializing in all types of residential and commercial mortgage loans. With a core focus on apartment loans, ranging from loan amounts of $500,000 to $800 million plus, we can create a custom financing solution for you.

We have a variety of the best apartment loan products, allowing us to offer the most competitive rates to our clients, whether they need an apartment loan for construction or refinance..

Our access to over 130 different lenders allows us to offer flexible apartment financing with fixed, low rates amortized over 30 years with higher loan-to-values. Acquiring an apartment loan doesn’t have to be a slow, inefficient process. We have assisted countless real estate developers and investors through this process to quickly and efficiently close their loan.

With over 31 years of experience, we have the knowledge and experience in selecting and fine-tuning the best apartment loans to suit your needs. We will work hard to help you through the application process and assist in acquiring the necessary documents to secure the best apartment loan

What is a Cap Rate? Why it is important in commercial real estate….

Often times we will get a buyer of an investment property….lots of questions, and mostly good ones. One good question that keeps coming up, especially with newer investors…What is the Cap Rate? What cap rates are on the recent sales? So, here is a definition of a Cap Rate…one of the best that I have read….and I think it is from one of the real estate investment text books…

The Capitalization Rate or Cap Rate is a ratio used to estimate the value of income producing properties.The cap rate is the net operating income divided by the sales price or value of a property expressed as a percentage. Investors, lenders, and appraisers use the cap rate to estimate the purchase price for different types of income producing properties, which is a guideline for a new investor. A market cap rate is determined by evaluating the financial data of similar properties which have recently sold in a specific market. It provides a more reliable estimate of value than a market Gross Rent Multiplier since the cap rate calculation utilizes more of a property’s financial detail. The GRM calculation only considers a property’s selling price and gross rents. The Cap Rate calculation incorporates a property’s selling price, gross rents, non rental income, vacancy amount and operating expenses thus providing a more reliable estimate of value. These are all key factors that a buyer should consider in the decision making process.

If you are looking for CREATIVE COMMERCIAL FINANCING for an investment property, give me a call. We have products for almost every possible property…and possibly one for you.

http://www.largentfinancial.com

Foothill HS Gets Rivals.com’s attention in State Football

The following appeared on Tuesday in Rivals.com  Sectionsports.com  section…on Northern California high school football:

Forget everything you know about Northern Section football.

Didn’t take long, did it?

Teams from way up north in California like

//

	Zach Ray is the brother former 49er Ricky Ray.

Palo Cedro’s Foothill don’t get the attention from colleges and fans that they sometimes deserve due to relative location, but Cougars’ coach Bryon Hamilton is trying to change that perception.

“Part of the problem with recruiters is they can come up here and see four or five kids, or they can spend the same amount of time in the Bay Area and look at 40 or 50 kids,” Hamilton said. “People forget we’re here sometimes. We’re trying to change that mindset.”

After being snubbed for a state bowl game invitation after a perfect 12-0 season in 2007, Hamilton started scheduling tougher games outside of the Northern Section, and California for that matter. In 2008, the Cougars defeated Oregon’s South Medford, ranked No. 1 in the state of Oregon in some polls. A year later, Foothill beat Washington’s Union High School, a team that was ranked as high as No. 2 in Washington in 2009. Both victories came on the road in hostile environments.

“We tried to upgrade our schedule as much as possible, and we’re doing a better job of going out there and competing with other teams outside of our section,” Hamilton said

One team the Cougars were able to impress was Sacramento’s Grant High School, a perennial powerhouse that won the 2008 open division California state title. The Pacers travelled with Foothill up to Washington in 2009 to play Bellevue.

“The coaches (at Grant) couldn’t believe the level of football we were playing,” Hamilton said. “They really hadn’t seen us play, and there’s the misconception that Northern Section football isn’t very good football.”

Aaron Rodgers, current quarterback of the Green Bay Packers, played at Pleasant Valley in Chico and started to change that mindset. This season, a host of Cougars are trying to continue the notion that quality talent does indeed come out of some of California’s more remote locations.

Ray on the Rise
One current Foothill player who has NFL bloodlines is senior quarterback Zack Ray, whose brother Ricky played for the San Francisco 49ers and New York Jets before starring in the Canadian Football League. Through three games this season, Ray has passed for 538 yards and seven touchdowns in Hamilton’s shotgun zone-fly offense.

“He reminds me a lot of Kellen Moore,” Hamilton said, comparing his senior signal-caller to Boise State’s star quarterback. “He’s got that great poise in the pocket, and I think he’s going to grow to 6-foot-4, so he’s only going to get better.”

Two-headed Monster
The Cougars have a punishing running game,

//

	Slaton is averaging close to 10 yards per carry for Foothill.

which can be a quarterback’s best friend. Junior tailbacks Tevin Slaton and Addison Gillam form a powerful rushing attack. Slaton, a 170-pound speedster, gashes defenses after the 210-pound Gillam softens them up.

“I think Gillam is a (Division I) prospect,” Hamilton said. “He’s a 6-foot-3, 210-pound kid with legitimate 4.7 speed. He’s got great redirection skills that you don’t see from a lot of 6-foot-3 football players.”

Slaton has been the more productive of the two thus far, having rushed for 467 yards and five touchdowns, including a huge Week Two performance against Stockton’s Edison, where the junior ran for 233 yards and two touchdowns on 22 carries.

Perfecting the 3-3-5
Part of the reason Slaton has been slightly more productive has been Gillam’s commitment to playing defense. The Cougars have one of the best linebacker units in California, with Gillam leading a group that also includes seniors Mitchell McCarthy, Garrett Miller, Josh Latham and Rocco Taylor.

“We’re blessed with those five guys. We feel really, really good there [at the linebacker position],” Hamilton said.
All five players get significant minutes in

//

	Gillam stars at both running back and linebacker for the Cougars.

Hamilton’s 3-5-3 defensive scheme, and each full-time defensive player is averaging over six tackles per game for Foothill. Hamilton continues to be impressed with McCarthy, who earned the top linebacker award at the Boise State camp this summer and is fast approaching the Foothill school record for career tackles.

“He’s our strong safety/linebacker this year, and he’s the kid that gets the most attention,” Hamilton said of McCarthy. “He’s got a chance to be a D1 player, and he can definitely play a lot of places with his (3.6) GPA. Between him and Latham we’ve got two legit linebacker prospects.”

Led by the strong group of linebackers, Foothill’s defense got off to a strong start to the season, holding Dixon and Edison to six points each. The Cougars’ defense, a question mark coming into the season, answered all doubts by picking off six passes against the Vikings, as Trent Knight, Tucker Wilson and Ryan Smith each intercepted a pair of passes in the victory.

“At least they weren’t being selfish,” Hamilton joked.

Hamilton: “I want to get my kids signed”
But the head coach knows that his remote position in the state is no laughing matter, and that the team needs to continue to work to change the perception on Northern Section football. Hamilton isn’t just doing it for the sake of the program, however.

“Slowly but surely we’re changing people’s attitudes for the state games, because that’s obviously what’s on everybody’s mind,” Hamilton said. “But I want to get my kids signed. I’ve legitimately had 10 or 12 Division I players (in my eight years here), and I’ve only signed one.”

“This year I’ve got at least two or three of those type of kids, and if they don’t get looked at or signed it’s going to be a shame.”

Apartment Complexes for Sale in Redding, CA

This slideshow requires JavaScript.

This slideshow requires JavaScript.

 

Right now is a very good time to buy investment property. Financing is very much available to qualified buyers at a low interest rates, and lenders are looking very favorably at properties that show stability, good cash flow, and a good future. The nice thing about buying the larger apartment complexes is economy of scale. A good manager can manage a 24 unit complex, as well as a 60 unit. Common utilities are not increased to a great degree when you double the number of units, especially if all of the units are individually metered. To this end, there are a number of good buys right here in the Redding area, and if you travel a little south, even better deals can be made in some parts of Sacramento and even Stockton. Look at this one that we just listed here in Redding:

Great Income property. 34 units consists of two four-plex’s, one 5 plex, one 6

This slideshow requires JavaScript.

& one duplex. Completely rebuilt in 1995. Rents range from $465.00- $700.00 per month. Near new city hall, library & new single family subdivision. Great buy at this price.

 

Need we say more….so if you are looking, give us a call at  530-248-5601 or  e-mail   ronlargent@kw.com     or see my site at   www.ronlargent.com