The real estate market in the United States has been soaring since the beginning. Following the trend, the US real estate market is expected to rise by 3.3 percent between 2021 and 2024, according to statistics. This hot market necessitates real estate investors to make quick decisions and close deals.

Many real estate investors use hard money loans to fund their transactions. Blanket loans, meanwhile, are a common loan alternative among real estate investors.

Let’s look at why real estate investors might think about taking out blanket loans to fund their projects.

1. They Can Help You Get Better Loan Terms 

Consider someone who has ten typical mortgages totaling $300,000 in debt. They are borrowers with a $300,000 loan to each lender. There’s nothing too extra about it.

However, if you have a blanket mortgage of $3,000,000 and owe this much, you might be given exceptional and luxurious treatment.

You can use your high-roller status to get better loan conditions and customize the terms as per your needs. You can demand lower interest rates helping you increase your monthly cash flow.

2. They’re A Great Way to Broaden Your Investment Portfolio

Real estate investors can benefit from having multiple properties throughout town because diverse locations can yield higher earnings. As a result, holding properties in various locations can help them secure revenue and extend their portfolio, and blanket loans can help!

3. They Boost Your Cash Flows

Taking out multiple loans for different houses involves different loan repayments. It can be tough to repay the loans. Regular monthly payments can also impact your financial situation and result in losses.

On the other hand, blanket loans allow you to refinance several homes with a single loan. As a result, real estate investors can save money on various repayments while also improving their cash flow.

4. They Are Simple To Obtain

The ability to acquire many properties with blanket loans makes blanket loans an attractive option for real estate investors. It can be challenging to obtain multiple loans for a new property.

Fortunately, blanket loans make it easier for real estate investors to acquire many homes. Most investors can avoid wasting time and effort filling out numerous loan applications and waiting for approvals.

Most significantly, submitting multiple loan applications increases your chances of making mistakes, costing you a lot of money in the long run.

If you’re an aspiring real estate investor looking to build your portfolio, Commercial Private Equity is the best lender in town.

We offer blanket loans, which allow you to buy multiple properties with one loan, along with commercial hard money, workout, raw land, bridge, and construction loans.

We also offer a three-tiered lending program with varying loan requirements making loan acquisition simple for our customers.

Contact us to learn more about our commercial loans.

Credit scores are a numerical representation of your credibility and economic stability. As your credit score is a significant part of your financial reputation, boosting it will make getting loans easier.

A good credit score gives you an advantage over your counterparts when borrowing money. On the other hand, a low credit score can raise the cost of your financial transactions.

Here are a few lesser-known advantages of having a good credit rating.

Lower Interest Rates

One of the primary benefits of having good credit is lower loan interest rates. When you apply for a loan or simply a credit card, your credit score significantly impacts your interest rate. Candidates with strong credit get the best prices, while those with weak credit often pay higher rates.

Increases the Likelihood of Getting a Credit Loan

Have you been turned down for a credit card or a loan before? You know how frustrating it may be if you’ve experienced this before.

If you’re denied funding for something you want, like a hot property to set up your new office or expand your business, because of poor credit, you might find it difficult to fund your transactions.

A good credit score increases the chances of your loan being approved. Your credit score isn’t the sole consideration for lenders, but it is one of the most important.

Will Give You Priority for A Few Positions

A personal credit check is essential for some jobs, such as those dealing with money or requiring a security clearance.

This credit check ensures that you are financially secure and will not accept bribes and promote corruption due to financial difficulties.

You may be unable to obtain some jobs if you have a poor credit score because employers are concerned that you would resort to illegal means to get out of the financial problem.

Better Loan and Credit Card Limits and Benefits

You might be able to get a credit card with a higher limit if you have a higher credit rating.

A higher credit score also allows you to get a wider variety of credit cards with exceptional perks since many of the best rewards cards require excellent credit.

This applies to cash-back and travel rewards cards, giving you an advantage over individuals who don’t have access to these benefits.

Do you have a bad credit rating? Commercial Private Equity may be able to assist you.

We’re reputable commercial hard money lenders who provide a wide range of loans for commercial properties, including bridge, construction, asset-based, raw land, blanket, and other specialist loans.

Reach out to us today for further information.

The Debt-Service Coverage Ratio (DSCR) measures a company’s or an individual’s ability to repay loans. It’s the ratio of your operating income to your total debt obligations, including the principal and interest.

Both your short-term and long-term debts are included in this calculation. In different formulations, you can define the numerator differently. Some may use net operating income as the numerator, while others use EDBT.

The DSCR is a tool that helps investors assess a company’s creditworthiness. It also helps determine the current net worth of the company.

How Is It Calculated?

The most commonly used debt-service coverage ratio formula has net operating income as the numerator and total debt as the denominator.

Method 1

Some estimations do not include the company’s or individual’s operating costs. The formula in this example is as follows:

DSCR = EBITDA ÷ Total Debt Service

Or

DSCR = Revenue ÷ Total Debt Service

Where,

• DSCR = Debt-Service Coverage Ratio
• EBITDA = Earnings before Interest, Tax, Depreciation, and Amortization
• Total Debt Service = Principal + Interest (short-term and long-term)

Method 2

By subtracting operational expenses from revenue, this method generates net operating income. The revenue used in this calculation does not include taxes, interest payments, amortization, or depreciation. EBITDA is the acronym for earnings before interest, taxes, depreciation, and amortization.

DSCR = Net Operating Income ÷ Total Debt Service

Where,

• DSCR = Debt-Service Coverage Ratio
• Net Operating Income = Revenue – Operating Expenditure
• Revenue = total earnings before the deduction of tax interest, depreciation, or amortization
• Total Debt Service = Principal + Interest (short-term and long-term)

What Is The Role Of DSCR In Lending?

The debt-service coverage ratio demonstrates an entity’s ability to service its current debts entirely based on its net revenue for personal, commercial, or government finance.

The DSCR figure illustrates how many times net income exceeds current debt obligations. For example, a DSCR of three shows that net operating income exceeds existing debt commitments by three times.

Lenders compute the DSCR using the borrower’s financial data before making a loan offer to determine whether the borrower will be able to repay the debt.

A debt-service coverage ratio of less than one implies negative net cash flow, indicating that the borrower’s current debt cannot be serviced entirely from net operating income. They’ll have to rely on other resources, such as a second loan or cost-cutting measures.

You can easily apply for a loan based on your DSCR. At Commercial Private Equity, we accept business loan applications with DSCR scores that most traditional lenders reject.

Contact us today for various hard money loans, including raw land, asset-based, and other types of commercial and industrial lending that is simple, quick, and cost-effective.

Have you been struggling to fulfill your mortgage payments recently? You’re not the only one!

Commercial property owners across America have been struggling to keep their mortgage payment streaks going. There can be many reasons attributed to the general decline in financial security for commercial businesses in the country. Similar to how it is for regular American adults, American business owners are also finding themselves in deep water due to worsening personal and economic conditions. Most property owners who default on their mortgage payments do so because of reasons like income reduction, debt, financial emergencies, and unprecedented personal problems.

As a result of commercial property owners being unable to fulfill their mortgage liabilities, many commercial properties are increasingly at risk of foreclosure. The rate of foreclosures across the country continues to rise every year. The good thing is that foreclosures aren’t the only course of action your lender can take. You can get them to forgo foreclosure by offering a loan workout plan.

What are Loan Workouts?

Loan workouts are exactly what they sound like — agreement plans that “work out” loan terms between a lender and a defaulting borrower.

Foreclosures aren’t ideal for either party involved. They’re harmful to the property owner for obvious reasons, but they’re also an annoyance to the lender. So, when neither party wants to opt for a foreclosure, they attempt to come to an agreement. This agreement often takes the form of a loan workout plan. The two parties discuss how to restructure or modify the loan terms in order to come to a more suitable agreement for the borrower.

Loan Workout Strategies

There are a lot of ways that a lender may agree to restructure the loan terms. You should also remember that every loan workout plan and its process will be unique to each lender. There’s no obligation for your lender to agree to a loan workout plan in the first place, either. So, you’ll have to charm your way into getting your loan terms modified.

Let’s start by looking at the most effective loan workout strategies that you should know about.

Reductions

Your lender can agree to reduce the number of payments you’re obligated to make. They can also lower the interest rate that you’re charged on the payments. These actions will be temporary, i.e., for the short-term, but they can significantly help you get back on track. Your lender will likely only agree to reduce your payments or interest rate if the cause of your default is also temporary.

Forbearance

Forbearance is often the first strategy borrowers try to use since it’s seemingly the most helpful one. Your lender may agree to forbear your owed/missed payments for a fixed period of time. This act is called forbearance since you won’t be required to make any payments during the specified time period. The purpose behind this strategy is to give you a chance to stabilize your income again and bounce back stronger. When you’re able to save up for a while, you’ll have enough money to make good on your missed payments.

Don’t make the mistake of assuming that forbearance equals forgiveness. Your missed payments will not be forgiven if your lender agrees to forbearance; they’ll only be postponed. You’ll still be required to pay the complete overall payments that the original loan agreement established. Forbearance periods don’t typically last for over a year.

Restructuring

In cases where the borrower’s cause of defaulting isn’t temporary, the lender might agree to restructure or modify the loan terms permanently. Any factor that directly influences your mortgage payment amount can be changed by the lender. These factors can include the interest rate, payment amount, or the term itself. This process is also called loan modification, and it is permanent.

One concern with this strategy is that it could incur additional costs for you. The lender might charge you for the structuring since the process impedes the previously agreed-upon loan terms. Make sure to discuss every detail of the agreement with your lender before you sign off on it.

Collateral

Lastly, the lender could refuse to make the aforementioned changes to the terms and opt for additional collateral instead. Collateral refers to any belongings or possessions a borrower has that the lender can hold onto until the mortgage payments are completed in full. The lender could have you provide an additional amount of collateral in exchange for your missed payments. You can use cash, property shares, private company shares, marketable securities, and other assets as collateral for the deal.

Conclusion

Loan workout plans are highly helpful to commercial property owners who are unable to keep up with mortgage payments. You can consult with a commercial hard money lender or real estate lawyer to gauge the legality and applicability of the loan modification strategies you intend to implement. The best course of action for property owners is to prevent foreclosure from occurring in the first place. So, try your best to make timely payments, keep a stable credit score, and reduce any debts you may have. Good luck!

Get Pre-Approved for a Commercial Loan Today!

Would you like to have your commercial loan application pre-approved within a day? Head over to the Commercial Private Equity website!

As trusted commercial hard money lenders, we’re dedicated to making commercial financing safer for clients across the US. We understand how tricky it can be to secure safe and risk-free commercial financing loans. That’s why we help you secure hard money loans, asset-based loans, raw land loans, and other types of commercial loans. Through our experience and expertise, we can come up with tailored financing solutions as per every commercial client’s individual needs.

Feel free to get in touch with us or directly apply for a loan through our website.

It’s no secret that banks are lending less money to US firms than before. In such challenging financial circumstances, completing your commercial projects can be tricky. Luckily, you can reach out to private hard money lenders for financing options.

Private hard money lenders use your firm’s existing property as collateral to offer exceptional asset-based loan deals. And unlike traditional banks, private lenders don’t use your business credit scores to provide loans.

Continue reading this blog to find out all about private hard money financing.

Step1: Select A Reputed Private Lender

If you’re looking for private loans, the first thing you need to do is to select a private lender. Choosing an inexperienced private lender can become a nightmare for you. This is why we recommend you hire reputed private lenders who can help you speed up the loan process.

Popular private lenders have a professional underwriting team to analyze your firm’s financial circumstances and pre-approve your loan application within twenty-four hours. Many private lenders have developed loan programs with different requirements to make loan acquisition favorable for clients.

We recommend selecting a reputed private lender with an excellent underwriting team and multiple loan programs.

Step2: Choose The Right Hard Money Loan

We’ve listed some specialized hard money loans that can be beneficial for your business in 2022:

• Commercial hard money loans
• Bridge loans
• Workout loans
• Raw land loans
• Blanket loans
• Construction loans

Step3: Submit The Relevant Documents

Undoubtedly, submitting insufficient documents can lead to the rejection of your loan application. If you’re applying for a bank loan, you’d be aware of the plethora of documents every applicant must submit and how even a small mistake can give the bank an excuse to reject your application.

Fortunately, with private lenders, you need to fulfill minimal requirements. You should submit your firm’s basic information (contact number, address, registration papers) and the property documents of the collateral to complete the loan application.

Specialized Hard Money Loans Available At Commercial Private Equity

Finding a reliable private hard money lender isn’t as easy as it sounds. We recommend you visit Commercial Private Equity to hire a team of financial experts to help you find the perfect hard money loan deal that suits your needs.

We’ve been providing hard money loans for over seventy-five years and have helped several clients get out of a financial crunch. We offer various asset-based loans, including commercial hard money, bridge, raw land, construction, blanket, and workout loans.

Visit our website to apply for a hard money loan!