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,

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

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	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,

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	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

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	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.”

Foreclosure Investor Services..huge returns.

If you have been thinking about investing in foreclosed homes, here is an opportunity. We have formed Foreclosure Investor Services to assist investors that are interested in buying homes that are being sold at the “Court House Steps”. We assist investors in purchasing homes in Shasta and Tehama counties in Northern California.

We represent a number of investors, but are looking to add additional investors, in that we are buying homes regularly every week. We use our experience and expertise to totally check out the properties being auctioned, and convey this property condition to the investor. Collectively we agree on the price to be paid at auction, and we go from there.

We buy the bank owned property right….due what is necessary to get the acquired property to market condition, and put it “on the market”. Our advice and follow through are bringing from 25-40% return on the initial investment over a period of 90-150 days. …making this one of the best investments in this “down economy”.

For details, please e-mail for a brief description of the program; how it works; what we expect from the investor and what the investor can expect from us; and minimum investor dollar commitment. This is a time-tested program; no gimmicks; and the investor remains in the control position at all times.

Contact us for details: ronlargent@kw.com http://www.ronlargent.com

Shasta County Veterans Affiliated Council Meeting (SCVAC)

Earlier today I attended the quarterly meeting of the SCVAC and it was most interesting. A lot of good things are happening for the veterans in Shasta County and I am proud to be serving in this group as first  VP. My task will be to work on membership, which means helping vets to become involed in the various veterans organizations here in the County that exist to serve vets needs. Members of the Council include the American Legion, the Military Officers Association, and a number of other groups representing both the past conflicts and specific military branches.

The council is concerned with all veteran matters, including the under construction Vets Home on Knighton Road, the Vets Cemetary in Igo, and even the new location of the Veterans Service Office on Shasta Street in Redding.

Reports today were given by Veterans Service Officer for the County, retired Chief Master Sergeant Bob Dunlap; retired Colonel Pete Stiglich; American Legion rep Glen Mayer; and chairperson and President of the Council, Charlee Thompson.

Upcoming events include the Awards Banquet on October 23rd and the Veterans Parade in Shasta Lake City onVeterans Day in November. This traditional parade is sponsored by the Shasta Lake Lions Club and Elmer Ellsworth, the parade chairman announced that this year, again, we would have a flyover by the Airlift Command at Travis Air Force Base.

All interested vets are encouraged to become involved, and can e-mail me for upcoming meetings and functions.

ronlargent@kw.com      www.ronlargent.com

Largest Inventory of Commercial Property for Sale in Redding Area

FrontierHills  Buyers….right now the inventory of commercial properties in the Redding area is at an all-time high….which translates to “this is a good time to buy an income producing property”. We have a very nice choice in multi-family properties from the $200,000 duplex or fourplex…to the larger $3,000,000 100 unit complexes. And, financing is available at a very good and competitive rate. We have a nice selection of mobile home parks, and self storage complexes….which are excellent recession resistant properties. If you are looking for a cash cow service station with convenience store, we have 17 available in the North State, from major brand Shell and Chevron to the unbranded stations.  Simply put, this is an ideal time to buy….especially if you have a little extra cash for investment purposes.

Financing is, once again, becoming much more available than even 6 months ago. Money is flowing from the stock market back into real estate. And, we have a couple of multi-family properties where the seller will carry back some of the financing, and one in particular has an excellent first loan and the seller will carry a second…so little case, relatively speaking, can get one into an income producing property.

Now is the time to act….as an investment property buyer. Give us a call.

ronlargent@kw.com       www.ronlargent.com

Facts are facts…call it what you want.

Earlier today I was challenged by a citizen that is obviously supporting my opponent. I was accused of using “scare tactics” early in my campaign by saying the housing market was going to continue to go down and that the resulting loss of value would reduce the tax revenue to Shasta County. He said I had “lied to the public” to get their attention. This was the “straw”, and I referred back a few weeks to the Record Searchlight article that follows, but he would not hear it. I am the guilty one. Well, here is the article, and you can be the judge. Did the market continue to fall in 2010, or is it static, as is claimed by my opponent, and the critic today?

“Year-over-year home values in the greater Redding area fell for the 13th straight quarter, according to federal figures released Tuesday.

The Federal Housing Finance Agency all-transaction house price index showed that values in the region that includes Redding, Anderson and Shasta Lake dropped 12.82 percent in the first quarter of 2010 compared with the same three-month period a year ago.

Values in Redding in the first quarter fell 4.1 percent compared with the previous quarter, and have plunged 16.17 percent over the last five years.

Nationally, home values fell 6.8 percent in the first quarter over the same quarter in 2009, and 1.6 percent compared with the previous quarter, the Federal Housing Finance Agency said.

The index gives estimates for 301 housing markets, tracking data from mortgages used for both home purchases and refinances. Because the source data is different, it provides a similar but distinct picture compared to that offered in the figures from MDA DataQuick.”

So, critics beware. My numbers are nationally published numbers. Every seminar that I have attended in the past two years has been saying this…so nothing is new here. The reality is fact in Shasta County, and home values will continue to go down as the bank owned properties continue to come on the market. Again, my critics are saying I do not know the market, and if the Assessor is to determine assessed values based on market values, as is required by Proposition 8 as a follow on to Proposition 13, then I think I have a sense of the market and where it is going.  If the above is “static market”, as is claimed by the incumbent, then maybe this is why we need a change. Is there such a thing as “reality” in government thinking?  Your call, as the voter on June 8th in Shasta County.  

www.largent2010.com

Ways to Succeed by Cost Cutting Ideas in Shasta County

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Ways to Succeed by Cost Cutting Innovative Ideas in Shasta County

Early in my campaign, I made it known both verbally and in writing that one of the characteristics of my campaign platform was to, in an effort to be a true advocate for the taxpayer, look for ways that the county could save money in cost cutting ideas. From fleet management to inter office cooperation, I would look at the Assessor Recorder office in terms of efficiency and cost effectiveness..from the taxpayer and business owner point of view. I was ridiculed, being told that was not in the job description of the Assessor Recorder. Obviously, I disagreed. Today, the Sheriff made public a concept of joining with Redding Police as a way of cost cutting….exactly what I was saying, in terms of looking “outside the box” in these difficult times. The following is what appeared in the Record Searchlight today…so maybe we should all in county government think of new and innovative ways “to do business”.

Shasta County Sheriff Tom Bosenko has asked top Redding officials to consider the idea of forming a metropolitan police department, multiple sources confirm.

The proposal surfaces less than a week after Redding Police Chief Peter Hansen announced he’ll step down by the end of this year.

The city and county would look for ways to save money through combining elements of law enforcement to eliminate duplication of services, these sources say.

Larry Lees, Shasta County administrator, confirmed Friday afternoon that he’s had brief conversations with Bosenko about proposing the idea of a metropolitan police department to Redding officials.

“(Bosenko) just mentioned it to me in passing, since we’re always looking for opportunities to save money,” Lees said. “He did not say whether he was for it or against it, but just wondering if he should bring it up. I don’t think it’s gone anywhere yet.”

Bosenko has cited the Las Vegas Metropolitan Police Department as a possible money-saving model for Shasta County, Lees and other sources have said.

The Clark County sheriff is the top law enforcement officer in the city of Las Vegas and the unincorporated county under the metropolitan department, created in 1973.

Bosenko, Hansen and City Manager Kurt Starman did not immediately return phone calls Friday seeking comment.

The Redding Police Department and the Shasta County Sheriff’s Office have seen drastic budget cuts and layoffs during the past two years as the worst recession in generations grinds on.

Since early 2008, the police department has eliminated its roster of community service officers and has suspended its DUI enforcement program and its neighborhood policing programs.

Twenty-five people have left the department through layoffs or attrition, and Redding police expect to lose 18 more by the end of the year.

The sheriff’s office has closed a floor of the Shasta County jail, shuttered Crystal Creek Boys Camp and curtailed its work-release program, among other cuts. Sheriff’s deputies – who already earn 20 percent less than Redding police officers on average – this year agreed to pick up 9 percent of their pension costs over time.

Redding police officers and Shasta County sheriff’s deputies often work together. But the differences between the two agencies are fairly deep, starting with jurisdiction.

Redding police enforce the law within the limits of the city and work mainly in an urban or suburban environment. The sheriff’s office patrols the unincorporated county – a mostly rural and rugged area substantially larger than the state of Delaware – along with the city of Shasta Lake, which is every bit as densely built as Redding.

It’s not uncommon for sheriff’s departments to provide police services to cities in California. Yucaipa, a fast-growing Southern California city of 57,000 people, contracts with the San Bernardino County Sheriff’s Office for law enforcement within the city limits.

There is more to this story, which you can read in detail at   www.redding.com …but my point is made. As elected officers representing the taxpayer, we must be creative, and it takes a leader, like Tom Bosenko, and like I will be…to make these kind of recommendations. No more “same ol’ stuff” when I am elected Shasta County Assessor Recorder on June 8th.

www.largent2010.com

 

Posted by Ron Largent on 05/29/2010 11:29 PM

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Ron Largent for Shasta County Assessor Recorder in the ActiveRain Channel

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Housing in Redding, CA

About a month ago, as part of my campaign for Shasta County Assessor Recorder, I met for my Editorial Interview with the Record Searchlight paper. As part of my prepared notes for the interview, I made it very clear that we are still in a downturn, and that County offices are going to find that the property tax revenue to the County was going to continue to go down in the next few years. Those of us in the real estate business are well aware of the fact that bank owned properties are increasing, causing home values to fall…which translates to lower comp appraisals…and lower home values.

This week, my prediction, which was treated very “unlikely” then, is coming true. The following is the essence of what was on the front page of the Record Searchlight this week:

Year-over-year home values in the greater Redding area fell for the 13th straight quarter, according to federal figures released Tuesday.

The Federal Housing Finance Agency all-transaction house price index showed that values in the region that includes Redding, Anderson and Shasta Lake dropped 12.82 percent in the first quarter of 2010 compared with the same three-month period a year ago.

Values in Redding in the first quarter fell 4.1 percent compared with the previous quarter, and have plunged 16.17 percent over the last five years.

Nationally, home values fell 6.8 percent in the first quarter over the same quarter in 2009, and 1.6 percent compared with the previous quarter, the Federal Housing Finance Agency said.

The index gives estimates for 301 housing markets, tracking data from mortgages used for both home purchases and refinances. Because the source data is different, it provides a similar but distinct picture compared to that offered in the figures from MDA DataQuick.

The Kennewick-Pasco-Richland area of eastern Washington, where home values went up 2.08 percent, topped the nation in appreciation in the first quarter of 2010.

Bend, Ore., held the dubious honor as the fastest-depreciating community as values in central Oregon plummeted 23.03 percent in the first quarter. It was the second consecutive quarter Bend topped the federal index in depreciation.

Year-over-year values in Redding started falling in the first quarter of 2007, when they slipped 1.58 percent, and have declined every quarter since, according to the federal index.

The median sales price for a home in Shasta County in April was $165,000, the sixth straight monthly decline, according to MDA DataQuick.

Redding experienced its greatest annual depreciation in the federal index during the fourth quarter of 2008, when values dropped 14.62 percent.

Foreclosures will continue to put downward pressure on real estate values, Redding realtor Curt Largent   said during his weekly radio program last Saturday.

The Federal Housing Finance Agency’s quarterly index cast the national spotlight on Redding seven years ago as the fastest-appreciating housing market in the nation. Prices in Redding during the first quarter of 2003 jumped 16.3 percent.

Year-over-year appreciation in Redding peaked during the third quarter of 2004 when the federal index reported prices jumped 26 percent.

But in a sign of how crazy the U.S. market was in 2004, Redding couldn’t even crack the top 10 with that 26-percent leap. Redding was the 15th fastest-appreciating market that quarter.

Las Vegas (42 percent) ranked first in appreciation in the fall of 2004.

By contrast, values in Las Vegas dived 18.99 percent in the latest index, ranking the gambling capital as the fourth fastest depreciating market in the nation.

So, this said, we are in for a number of years of this market, exactly as I predicted. OVER ASSESSED IS OVER TAXED. Call it what you want, and this is why I am running for office.

www.largent2010.com

 

Sunday, May 23rd, at the Anselmo Vineyards in Inwood, CA

Please join us this Sunday, May 23rd, at the Anselmo Vineyards in Inwood near Shingletown, CA in the foothills of Lassen National Park. Please check out this gorgeous 2200 ranch at  www.bar7h.com  and you will see what I mean.

This is a fund raising activity for my campaign for Shasta County Assessor Recorder, and a per cent of the proceeds for food and drink and the drawing will go to the campaign.

Doors open at 11 AM and we will go until 4 PM…with music and a full schedule….and still plenty of time to eat whether it is brunch or dinner…or wine and cheese.

This is one of the most beautiful destinations in Northern California, as the web page shows…so join us for the day and see why we all love living in Northern California.

See you at Anselmo.

Ron Largent for Shasta County Assessor Recorder on June 8th.

www.largent2010.com