Should I Change My Independent Motel to A Big Name Chain?
Independent motel is something which is going to give you a perfect freedom of applying some innovative things in it. This you will not get in the big chain name. There are some of the top good things that you are going to find in a big chain, but everything that has good effect always has the bad part too. In this article, you are going to find some of the top things that you are going to find in the big chains and in the individual motels. If you are in dilemma, this will help you a lot, in your decision.
Chain hotels has many things to give you
Big chain name gives some of the big edges like the official tie ups and some of the easy customer generation schemes. While you are having a chain of motels, you will invest in the advertising of any of the business and in return of that, you will get customers for all the hotels. There are some of the other supports too that you will get, when you have a big chain of hotels. Among them, the first one is that you can place a hotel in any of the place, where you think, you will get ample customers. Another supportive element here is the advertising of one other motels, when visitors reach any one of the other motels. When trying to get commercial bridge financing, often times flagged hotels are more appealing to bridge lenders.
Better things in individual motels
You have noted down all the things that you will get when you are having a chain of the motels at different locations. However, there are some of the effects of that, which are not as good as the best effects. One of the effective part of having a single motel, independently held, is that you can make it expensive, irrespective of thinking how the others are. This is not the case, when you are having a series of motels. In the latter case, if you make any alteration in any of the motels the, change must be done in the other motels, in order to keep the standard of support same. This is one of the great disadvantage to have a chain series of motels. You might easily find that there is need of providing something extra in some of the motels, to get more customers, but you cannot apply that when you are having a chain of motels. You can apply that, even when you are having more than one motel, but that must not be in a series.
These are the things that makes discretion among the two different projects. It’s a business proposition. so you must have to think all the effects of the business, otherwise the effect will have to be faced by you alone. You will now say that are all the motels who are going for a chain making loss? You are correct here. Make sure that you can attend all the motels equally and then only go for that. If you are able to do that, your business will be super successful, while making business with the chain motels.
Most of the times, homeowners refinance home mortgages. The lower interest rate drives the entire market of mortgage refinancing for the homeowners. This cannot be said for the commercial real estate. Low interest rate is certainly not the indication for refinancing commercial mortgage. If you think about refinancing your commercial mortgage, you need to consider various factors. You need to think whether you can get the cash out or not. Then, will you be able to lower the rate of interest has to be thought. The limit on the use of the fund and the balloon payment should be equally considered.
Considering the refinancing of commercial mortgage
There are various factors and indications suggesting the time for refinancing of commercial property. If the balloon payment is due and needs to be paid within a year, consider refinancing mortgage loan. Unlike a residential mortgage, commercial property is not actually amortised loans. They have balloon payment which needs to be paid before the end of amortization. Secondly, for residential mortgages, if you are able to reduce the mortgage rate of interest even by 1%, it makes a lot of sense. You should move ahead and consider refinancing. But then, this cannot be said in case of commercial loan. The rate needs to fall even greater than 2-3% to think about refinancing. When it comes to a commercial property, the expenses involved are far greater than what is involved in residential property.
Cash out refinancing
Business owners can go for the refinancing the commercial property to improve their financial outlook. If as the business owner you have accrued significant equity, you can pull out some portion of cash to use for other reasons. You can finance the property improvements and repairs. Even working capital may be provided for day-to-day needs. You can pay the cash-out refinance loan in lump sum as per the requirement.
Switching to a fixed rate of interest
Business owners at times get commercial loan with adjustable interest rates to benefit from the markets’ low rate of interest and to keep the initial cost lower. But then, if the interest rate starts rising, the commercial mortgage will get expensive. You cannot even predict the monthly payments if the rates are adjustable. So, when you need to make ARM loan as fixed rate commercial mortgage, consider refinancing.
To reduce the cost of loan
When you need to reduce the cost of loan, you can think of refinancing the loan. So, when the interest rate in the market drops, as the company you can save on the interests and can even lower the payment simply by refinancing into loan with lower rates.
Lengthening the amortization and extracting cash
Commercial property investors refinance existing commercial property in order to extract cash or even lengthen the amortization on the mortgage to free the cash flow. The most common reason is to re-invent the cash-out proceed to rehab the existing property or to buy a new property. The interest payment on a monthly basis gets reduced with extension of amortization.
A lot many factors need to be considered for refinancing the commercial property. You need to weigh the cost of refinancing and then proceed.
Why Should I Use the help of a realtor To Buy a Commercial Property?
There are several reasons why we should always invest in property and realty. When you are looking towards generating some good growth on investment, then you can always rely on investing in commercial property deals. Commercial properties are quite commonly opted for by many people these days.
But investing in commercial property is a thing which is easier said than done. There are tons of parameters that you have to look out for, and that’s why it is always wise to take the help of the experts. The experts in this particular case are called the realtor. It is actually a norm to opt for realtor’s help when it comes to selecting a commercial property. However, several people use their own prerogative and always hunt for commercial establishments on their own; going along with their own conscience.
It’s the wrong way forward—and today we will discuss why. That’s because realtors can have that cutting edge help and aid that you’d need at the time of selecting your commercial property.
They are always aware of the local market
When you are looking to purchase commercial property, then you must always think about the locality. That’s where the eagle eyes of the realtor can help you out. His or her scouting techniques would certainly help you to pinpoint in the best possible place. You’d always be able to rely on the input and the intelligence the realtor would be able to give.
This would help you not only to select the best possible position for your commercial establishment, but it will also increase your proper investment chances.
Realtors are quite smart. They know what’s in the game, and they always know what has to be done. If you have a specific set of requirements for your new commercial property, then you can always rely on them to give you the tailor made a solution. They know what sorts of properties are available in the market as per your needs.
They can advise you
One of the best things about realtors is that they can guide you all the way. And when you are looking to purchase commercial properties, you’d always require that extra help and guidance. These realtors always show and give the right plans to their clients. They also give suggestions which can turn out to be very vital and important.
They can even suggest you whether you should buy or lease a particular property.
They provide the in detail touch
It does not matter whether you need local government aid or help with financing, these realtors can provide you with all types of support. They can easily provide you help in the sections of space planning, architectural designing, zoning issues, tax assessments, the market trends and closing procedures.
So, what are you waiting for? If you are willing to buy a commercial property, then be sure to take the help of these realtors. They are in the game to provide you with the best opinion and help.
Talking about commercial REOs
Bank owned house or property, or the real estate owned, known as REO property, can be defined as the property or the piece of real estate which was bankrolled and financed via bank at one time. But due to the defaulting or no payment of the borrower, the bank took over the property.
As the banks normally do not do real estate brokering or even property dealing, they turn it around and then put the properties for on the market for sale as soon as possible. On the other side, the buyer of this type of property or land is accountable for the current condition of the real estate, irrespective of the essential changes; maintenance is the sole liability of the person buying the real estate.
Banks, as you know, finance residential real estates, similarly they too finance commercial properties as well and as a result, they periodically have REO commercial properties for sale and auction.
Find and search a bank owned or for sale commercial establishment or property listings. As you know, are a numerous of processes by which one check and go about searching these properties:
- Checking up with a realtor or real estate agent who concentrates in bank possessed properties. It is particularly supportive if you get someone with the knowledge in segments of commercial and REO real estates.
- Contact your nearby bank and converse with someone of the REO sales wing or division. Almost all banks or financial institutes have specific or certain departments or ad hoc manager who is there to work on the branch’s entire bank governed and owned properties.
- Keep track of local newspaper, as they provide news and notices on real estate auctions. Even the banks at all times try to auction off their properties.
Ask the realtor or real estate agent
Before you go for the ROEs, you must gather all information and take the help of the realtor or real estate agent.
- Gather information about the various realtors who are existent in the markets
- Verify of the fact if the bank in question has accepted to any of the damages to the property
- Make sure if there is any “as is” paper or form which needs filling
- The duration it might take for the processing to be done by the bank
- The procedure for delivery.
After all the things are verified, an offer needs to be made about the REO. The offer made should be done very carefully so that the gain is always most and the maximum and your profits and benefits are high.
Gain pre-approval loan.
When you want to take a commercial property or a place, then you can easily opt for the pre-approved loan. These are things that you’d need;
The plan of business. This is not applicable if one is buying a multifamily establishment which one will be residing. In its place, one will require giving a present lease of any occupant or signed tenant leases about to move in.
An appraisal is a form of an evaluation. When a lender is willing to shell out money to you for something, they will want to be sure that they evaluate your position before they give you the amount. When it comes to any form of loan or advance, an appraisal is something that is ordinarily done. When it comes to a commercial loan it is an absolute must. But what if you are not taking loan for the full amount required? Then also an appraisal is generally required by a lender.
Who Orders The Appraisal?
It is the client, in case of a commercial loan a lender, who will be ordering the appraisal. They will be appointing an appraiser to do the process. The appraisal report is also a part of the asset of the client. You as a borrower might not have access to the report. Most lenders go in for an appraisal and you as a borrower cannot say no to it. Denying an appraisal is as good as saying no to the loan.
Importance Of An Appraisal
When you are going in for a commercial loan you will have to attach some personal documents along with your general loan application. Those documents include things like your resume and your asset and liability position. In some cases it has been seen that a particular individual has inflated his net worth in order to get a particular commercial loan. It is very important to note here that the documents attached needs to be completely authentic. But in some cases it has been seen that authentication was a problem.
During an appraisal all these different documents are verified so as to see whether they are cent percent authentic. The official will be looking into all the details that you have mentioned in your loan application and the types of documents that you have submitted regarding that cause. You will be required to show any supporting document that they will be requiring. You might even have to face an interview when you are sitting for an appraisal. So irrespective of the amount of loan you will be requiring, an appraisal is a must.
Thing Not To Do In Appraisal
One of the most important thing to remember while you are having an appraisal is that you cannot misrepresent facts. This is one of the biggest mistakes done by any individual who wants a commercial loan. You might be in dear need of that particular loan but you need to make sure that you do not misrepresent facts as that will cause a certain disapproval. But is withholding facts permissible? This is another big mistake done by individuals. Withholding facts is as bad as misrepresenting facts as that means that you are lying about a certain thing.
So irrespective of the percent of commercial loan you are taking, you might have to do an appraisal if your lender wants it done. It is best to be prepared with all the necessary documents.