http://www.northshorefunding.com/articles/blog.htmNorth Shore Funding Bloghttp://www.northshorefunding.com/articles/hard_money_loans_defined.htmHard Money Loans Defined A hard money loan is a non institutional loan made by a private lender or private fund that typically lasts anywhere from 2 to 18 months and carries a higher APR than a traditional loan. Hard money loans carry a heavier burden and interest rate for the borrower for the simple reason that they also pose higher risk for the lender. Hard money loans typically require that the borrower have 25-50% equity or collateral in another piece of real estate (although some lenders will accept other assets such as stocks and bonds as collateral for the loan).http://www.northshorefunding.com/articles/new_york_city_real_estate_terminology.htmBrownstone 1 to 6 floors. No doorman. Constructed during the late 1800's and early 1900's as single family homes. A majority were converted during WW II to create multiple units, from three to ten apartments in each building. Brownstones commonly include high ceilings, detailed architecture, & wood burning fireplaces. Sq. ft. is usually not as much, as in a building that provides a doorman.http://www.northshorefunding.com/articles/small_commercial_lending.htmSmall commercial property owners have a new way to obtain a mortgage. What we call "out of the bank" small commercial lending allows for a mix between the traditional bank and the hard money lender. Such programs allow stated income and stated assets, high loan to values, and easier debt servicing coverage ratios (DSCR). These programs are a perfect fit for cash businesses such as restaurants and laundrymats, as well as non-cash businesses such as apartment complexes, retail strips and hotels/motels. They are also good for the borrower that can not get a loan from the bank for one reason or the other.http://www.northshorefunding.com/articles/fannie_mae_explained.htmFannie Mae and Freddie Mac reduce the costs of borrowers, who meet the underwriting requirements of the agencies, and who need loans no larger than the largest mortgage the agencies are allowed by law to purchase. For 2006 the maximum is $417,000. It is raised every year in line with increases in home prices.http://www.northshorefunding.com/articles/patriot_act.htmThe Patriot Act is a Federal law that was designed to try and stop or detour terrorist activities. This law effects real estate transactions by requiring identification disclosure requirements from banks, lenders, mortgage brokers, and escrow agents regarding transfer of title and deposits of cash. The law also requires new disclosure and signature requirements for buyers and sellers of real estate. http://www.northshorefunding.com/articles/non_warrantable_condos.htmCondominiums that DO NOT FIT into one of these three classes are considered NON-WARRANTABLE CONDO'S: CLASS I 1. Developers control of the homeowner's association has not yet terminated 2. Project may be subject to phasing or add-ons which have not yet been completed 3. All common elements and amenities must be fully installed, completed and in operation 4. 70% of all units in the entire development must have been sold and or legally obligated to close 5. 70% of all units in the entire development must have been sold to owner occupants CLASS II 1. Recent or current condominium conversions (from apartments) 2. Homeowner's association has been controlled by the unit owners (other than the developer) for less than two years 3. Project is not subject to phasing or add-ons which have not yet been completed 4. All common elements and amenities are fully installed, completed and in operation 5. 70% of the units in the entire development must have been sold and/or legally obligated to close 6. 70% of the units in the entire development must have been sold to owner occupants 7. No more than 15% of the current unit owners are more than one month delinquent in payment of homeowner's dues or assessments CLASS III 1. Homeowner's Association has been controlled by unit owners (other than developer) for at least one year 2. Project is not subject to phasing or add-ons 3. All common amenities are fully installed, completed, and in operation 4. 90% of the units have been sold (owner-occupancy of at least 60%) A CONDO QUESTIONNAIRE MUST BE COMPLETED BY THE MANAGEMENT TO DETERMINE PROJECT ELIGIBILITYhttp://www.northshorefunding.com/articles/1031_exchange.htmSo named because it is defined in section 1031 of the IRS Code, 26 U.S.C. § 1031, this refers to a commonly utilized tax break which allows capital gains taxed to be deferred in certain cases in real estate transactions. Considered one of the best ways to preserve wealth, the 1031 exchange, or Like Kind Exchange, generally allows a homeowner or real estate investor to sell one property and defer all capital gains taxes if the proceeds of the sale are reinvested in an asset of like kind, generally in more real estate.http://www.northshorefunding.com/articles/portfolio_loans.htmPortfolio loans are mortgages that are held as an investment by the lender. Usually they hold on to the loan because it doesn't fit the underwriting guidelines for investors on the secondary market.http://www.northshorefunding.com/articles/how_market_conditions_affect_interest_rates.htmWhen the Chairman of the Federal Reserve lowers “rates,” he lowers the “Federal Funds” rate. It's the interest rate at which large banks lend funds to one another and is a “short-term” rate. Mortgage interest rates are long-term, up to 30 years. Longer-term interest rates are sensitive to expectations about inflation. When short-term rates fall, like the ones the Federal Reserve controls, borrowing and spending usually increase, which can actually cause inflation. Longer-term rates, like mortgage interest rates, can rise when concerns about inflation increase.http://www.northshorefunding.com/articles/land_contract.htmAn agreement for the sale of a property in which the buyer takes possession while making payments to the seller, but the seller holds title until full payment is made. This type of financing is usually done for people who have less than perfect credit and are having a hard time getting financed for a home loan. Consult your mortgage professional to explore all options. http://www.northshorefunding.com/articles/commercial_loans.htmCommercial Financing is underwritten on a case by case basis. Every loan application is unique and evaluated on its own merits, but there are a few common criteria lenders look for in commercial loan packages. Financial Analysis A key component in making an underwriting evaluation is the debt coverage ratio (DCR). The DCR is defined as the monthly debt compared to the net monthly income of the investment property in question. Loan to Value Most commercial lenders will require a minimum of 20% of the purchase price to be paid by the buyer. The remaining 80% can be in the form of a mortgage provided by either a bank or mortgage company. Credit Worthiness For businesses less than three years old, personal credit of principals will be evaluated. This may hold true for longer periods of time for tightly held companies. For corporations, business performance and credit ratings will be evaluated with a proven track record. Property Analysis Fair Market Value and Fair Market Rent will be analyzed. Special use property may require additional underwriting. Age, appearance, local market, location, and accessibility are some other factors considered.http://www.northshorefunding.com/articles/capitalization_rate.htmThe Capitalization Rate or Cap Rate is a ratio that is used to estimate the value of income producing properties. In basic terms, the cap rate is the net operating income divided by the sales price as value of a property expressed as a percentage.