Welcome

1
Welcome

• Real Estate Investors of Central Florida

2
Introduction to Commercial Real Estate
Terminology

• Speaker
• Nathan Jones
• Commercial Financing Specialist
• Integrity Home Funding
• Njones_at_IHFunding.com

3
Introduction Topics

• Terminology to Know
• Tier Systems/Property Classes
• 100 Financing
• Typical Lender Criteria
• Types of Loans
• Locating Property

• Analyzing Your Project
• Contracts LOIs
• Ownership
• Exchanges

4
Terminology to Know

• LTV
• ARV
• LTC
• Cap. Rate
• DSCR
• Operating Expense Ratio
• Proforma

• REO
• Executive Summary
• Small Balance Commercial
• NOI
• Breakeven Occupancy Ratio

5
Locating Property

• Loopnet.com (one of my favorites)
• Property Source Book
• MLS (2 systems in Central FL)
• Commercial brokerages internal databases
• cimls.com
• land.net
• Foreclosure Sources
• and so forth

6
Analyzing Your Project

• I/E Statement
• Proforma
• DSCR
• Cap Rate
• Due Diligence Audit the books, research market
  conditions, etc. Why being sold?
• Banks Due Diligence

7
Typical Lender Criteria

• Good Credit
• Skin in the game (down payment)
• Experience (or hired experience)

8
100 Financing Available?

• Yes, but not common.
• When not available, may utilize
• Down payment assistance
• Seller Concessions
• Seller held 2nds
• Gifts of equity
• 2nd mortgage
• Equity participation
• IRAs/ 401ks
• Imagination (anything of value)

9
Types of Loans

• Conventional
• Hard Money
• Bridge
• Mezzanine

• Rehab
• Acquisition Development
• Unsecured Line of Credit
• Joint Venture

10
Tier Systems (varies per lender)
multifamily, mixed-use, office, retail, self
storage,, bed breakfast, assisted living
facility and mobile home park (75-90)

• I
• II
• III
• IV

rooming house, heavy industrial and funeral home
(65-80 LTV)
restaurant, daycare, gas station, light
industrial, and warehouse (50-75 LTV)
11
Contracts LOIs

• Letters of Intent/Interest
• Contracts should be written in accordance with
  your finance needs
• Not 30 day closing process normally
• Time to audit verify everything!

12
Ownership

• In personal name
• LLC / Corporation / Trusts
• Multiple Entities advantage
• Separation of liability, debts, ownership division

13
1031 Exchanges

• Delays tax due
• Advantage is you keep more of your money to roll
  into the next project
• Must be an investment property
• 45 day 6 month deadlines
• Disadvantage is you dont know what tax law will
  be latereventually you pay the gains tax

14
Next Meeting

• What do you want to cover?
• Goal Everyone personally invite 2 people.
• Sponsor for appetizers?
• Note Make sure you have signed up online so you
  get email notifications.
• www.meetup.com/CFLInvestors