Commercial Tenant Move in Checklist

If a commercial property is to attract high quality tenants then preparation is the key to the tenant continuing to look for accommodation. Preparation is the property manager’s weapon to create a positive, attractive and open enquiry in the leasing of premises. The tenants and the property both need to be prepared for the movement of tenants. Preparation is also critical to keeping the negotiations on time and within market terms.

The checklist below will help you focus the improvements needed in commercial, industrial, and retail premises. In doing the necessary ongoing property activity, the focus on the key issues will help you close more lease deals. Use this checklist with any new property management or leasing manager; it is a good list to start the lease lease process.

Everyone likes to have a checklist to assist them with the lease documentation process, lease marketing, and lease negotiation. Preparation of the important issues is the most important process. Preparation is a low cost way to get the lease underway and closing. The tenancies know what is happening, so the lease deals are much easier to close.

Preparation should be thorough in each and every lease document, so it can not only be quoted at lease creation. Preparation should also come to the listing and lease renewal stage, so that all critical issues can be highlighted and actioned. Preparation in lease documentation is essential to control the process and avoid errors.

The solicitors involved in lease creation should be careful of providing or relying on any facts or accuracy simply because they are so important in the transaction. Any error in lease documentation could be regarded as serious and the lease marketing fee could then be setup for legal process.

A copy of lease documentation should be maintained in a safe and accessible location in a easy to locate location, such as the office. This will allow the landlord to refer to the documentation as needed. The struggle to find leasing document is often when the tenants are to close a tenancy immediately. This is why the marketing of leased premises today is supported by electronic record-keeping and dedicated leasing offices. The electronic documentation is the key component to a successful lease marketing today.

Having a property with a highly experienced tenant mix will assist with the lease marketing and lease entry process. When any lease or tenancy management difficulties occur, the tenancy mix of the property becomes the main individual headache for the property manager or landlord. It is the tenancy mix that brings all the occupancy pressures to bear on the property and its occupants. In the same way, preparing a tenancy list is critical to the success of the lease marketing and leasing process.

The lease documentation should be mined for critical and relevant dates so that all tenancies are familiar with when they should comply with the negotiated or determined dates. Critical dates are lease and occupancy dates that deal with rent reviews, lease renewals, lease options, and abatements. The lease or tenancy document is the building codes or other legally important documents which will guide the property owner or landlord as to when certain things need to occur.

You should also look for critical dates that deal with functioning of the plant and machinery in the property. You also need to identify critical dates to the income stream and the customers of the property.

Your lease or tenancy document will be an index of obligations and impacts on the property. Look for dates of these events and understand where the events are taking place, and how that will impact your tenants.

You need to understand the timing of lease and tenancy activity and be comfortable with the tenancy and lease document terms and conditions that are used in each lease. Some property leases have critical dates within the lease document, and they should be peripheral dates. The lease occupancy and lease terms should be fully negotiated and aligned to the existing occupancy costs in the property.

The budget of income and expenditure performance of the building should continue into the future beyond the current financial year. The financial reporting process of the property should allow for the normal fluctuations of tenancy activity and tenancy budgets. Keeping in close contact with the changes to the property cash flow will be important for the future of the property.

The lease terms and conditions for a property should be personally controlled by the property manager or leasing manager so the lease document is always on hand to refer to. The documentation process of the current leases will permit the property to perform well and grow sales and customer enquiry over a period of time. Seen from this point of view, the 30 plus year leases in a property are more effective than the chosen net or gross lease which is usually negotiated in 24 month intervals.

The tenancy date is a very important property lease implementable date. Every tenancy schedule should be checking and reconciled in an electronic lease tracking system at least once per month. The accuracy of the tenancy schedule is critical to the timely function of the property.

The tenants in the property may vary from tenants within the building or those that are tenants involved in relocation.


Homebuyer Tax Credit – Why is it Extended?

As part of the recently signed American Recovery and Reinvestment Act of 2009, an extra $8,000 in tax credits are available to qualifying purchasers (as long as they have been in their home 5 years) who purchase a home between April 9, 2008 and September 30, 2009.

There are several reasons for extending this credit beyond the originally planned end date of November 1st, however, the most important factor is the negative impact on the American economy of the…now expired…new tax incentives. Therefore, additional spending is the obvious outcome and thus the Federal Government is going to do all in its power to reinvest this money back into American business and industry. A new factory or new policies,papers withdrawing from China, gold-leaning currency in Europe…this really does mean liquidity and that means consumer spending.

The housing credit, previously set at $7,500 will now be extended to include the purchase of any home purchased for $800,000 or greater in value, provided a first-time homebuyer were involved in this transaction, and that the home is a primary dwelling. Other features of this include purchasers making for 3 consecutive 5-year periods, investors purchasing up to $1 million of income producing properties and all homebuyers purchasing a minimum of $80,000 mortgage debt as a minimum for this credit. A vast array of properties qualify and here is a brief overview of how this works:

*Tax credit is equal to 15-25% of the purchase price that varies based on property location and sales price.

*Pro funds run on a 10-year Goose Creek operating system withEmerald Financial as the Operating Trustee, yield allocated to investors is based on a benchmark that is the average of an index per calendar year plus 1.5%.

*Tax credit is reduced immediately the property composite value in the first 4 years of ownership increases by no more than $10,000.

6)FHA, VA and Conventional LoansNow all investors and home buyers have a much more direct and honest option to obtaining financing through pool or credit investing. FHA, VA or Conventional Loans where a borrower qualifies like always before will get some sort of rate reduction and possibly a waiver of required mortgage insurance. As most of the new financing is bank qualification, investors perhaps need to have a relationship with a valued lender to take advantage of these fantastic rates.

7)Professional Mortgage and Financial Counseling towering over Fannie Mae, Freddie Mac and other GSEs means access to incredible early beachhead pricing and better long-term security. These market leading firms provide a level of security for investors both immediate and in the future.

8)Equity Management OpportunityThe potential for Unequivocating equity value is staggering. With knowledge from leading research companies and conferences, large funds and strategic asset investors now have unparalleled access to live and online research data, leading research and data analysis, as well as live case studies of previously unknown or otherwise little known strategies. Equity Management positions are now generally backed by state and local government or providers of regulated, professional and ethical investment vehicles.

With information and analysis, direct and timely delivery, and previously disregarded investment opportunities now within reach of the average homebuyer, its time to see tremendous gains from your hard-earned money.


The Hows and the Whys of Real Estate Investing

Investors who invest in real estate realize that number one on the list of goals for real estate investing is to make a profit. No matter how many books and infomercials a real estate guru or book seller sometimes markets their product with, it is real estate investing that separates the wheat from the chaff. It is real estate investing that makes a difference in the world.

The second most important yardstick for measuring a success as a real estate investor is how much time, energy, and know how that takes. When it comes to investing in real estate, time and energy are essentials. It is both time consuming and hard to learn all there is to know about real estate investing. When I met my husband he had little knowledge in the real estate investing field and no money to put down on his first investment, but for his second investment he had somewhere around $100,000 to put down and had burned almost all of his wealth to get started.

Contrary to popular belief, real estate investing is not just about making money for the moment, and then blowing a huge amount of it away the next day. Real estate investing is an ongoing business or a living, breathing thing that requires real effort and real money.

It is important to know that when it comes to real estate investing, there are no magical solutions. What works for one person, may not work for another. What works for one investor and fails with another. What works out for all types of investors varies with their Focus of Rental Properties vs. Multi-Housing, their strategy and so on. “Nothing works without love.” I have learned a lot over the last four years about real estate investing, but my biggest real estate learning lesson was not about making money in the short-term.

My biggest real estate investing lesson was about not dreaming of making money in the short-term, but rather in the long-term. Can’t make a fortune in the short-term doesn’t mean you don’t have the potential to make money in the long-term. You may by unfortunate circumstances, but over-taking wealth has always made the homeowner poor. The current economical situation is a great example. You may be down, but you have to keep in mind that money doesn’t grow on trees. Unless you truly think money is the sc unleadedessential to be found in abundance, you should begin your looking and working backward into the future. Your dollars won’t go as far as they used to in the past. Be patient and draw on your resources.

When you invest in Real Estate as a long-term endeavor, you should begin to pay attention to all of the little nickel and dime things that can mean the difference between a big profit and real, real estate investing failure. Can you easily get “behind on payments” or leave you with a huge loan that you can’t pay back? Have you ever stopped to examine how your expenses have been reported to the government, and had your income taxes double-refunded because of “IA keeps track of all receipts” or “I pay tax on a second home used as an investment property” because you can deduct your mortgage interest and other rental expenses from you taxes as an owner-occupied residence? These are the kinds of things that can mean the difference between a second home owner, and landlord. The owner-occupied home owner has to claim all the repairs that they make on their home for income tax, as a rental, as part of their annual taxes. You can’t claim deductions on your rental income for the same reasons. walls 3, ceiling fans and telephone jacks, appliances and utilities, and landscaping, etc.

Are you interested in Real Estate as a full time career? No? Isn’t it?

One of the best lessons I learned in my transition into Real Estate investing was learning to not think my business choice was set in stone. I had a couple of years in a struggling lending industry. That experience gave me no shortage of financial challenges that would badly impact my long-term wealth building strategy. But guess what? I did the same things my previous profession did, only in a totally different capacity. I used the same techniques to grow my portfolio and producing cash that my former profession forced me to do. I learned from those who have been successful previously, that there are many paths to success, but that only one is lined with dollar signs. Since I knew the importance of focusing my energy on the Real Estate market, what partially helped me get there, was focusing on the first step: Financial.

Remember that investing in Real Estate is merely a path to your future financial security, not a magic pathway to riches?

Now that you see the power of focusing on your financial systems, you may be wondering where to start. Are you wanting to start investing in Real Estate?


The Insiders Guide to Forensic Loan Audits, Securitization And Corporate Architecture

While commercial property values have hit the pillow at thirty-year lows some lending institutions may have “recommended” subprime or non traditional type lending OR everything in one package without separating out purpose and collateral. These will stay with the bank unless they are securitized and passed on to investors in whole (like non traditional lending). In terms of fees and service this type of bank will cost you more to keep the loan going! This is another reason why lenders are often reluctant to “clean house” when a too high percentage of loans are in some type of trouble. Going from Engineering to law is no fun even when the job is Fun!

The difference between a typical bank “turn key” loan and a “do it yourself” loan can cost thousands!

A typical “turn key” turn key loan (loan closed in 10 days or less) will generally have:

More often the underwriting of the Turnkey is done by a large national banking institution with an in house underwriting team. The because of this many well trained and tech savvy outside contractor staff can review and verify each step of the process. Many of these outsourced people are very good but some are not.

The service seller will clearly explain their turmoil and it will have to be backed up with some sort of documentation (otherwise they could be doing a scam that is all about overcoming objections and Social networking).

Does this sound familiar?

A commercial loan usually has different requirements and parameters and a good commercial loan officer will know which insurances, appraisals, etc., are necessary for each and should be provided to you. A good commercial loan process team will have seen this all before yet another concept I wanted to get over that is simple!

The out of clock red light in a commercial loan.

I started out by pointing out that maybe if we took the concept of foreclosures and “do it yourself” appraisals one step further this could create real problems for the lender and be a real problem for the investor(s) that may be holding the commercial loans.

“may be ” is the magic phrase here. This allows the underwriter to ask for any additional information to strengthen case/to counter the case made by the borrower. Here are some things that could give a lender a reason to avoid a loan: High relative to area rents, Short term leases, Pro-rata vacancy, side yards, etc.. A lender would prefer to cash flow that property, remember that most commercial properties will have only one lease (not a phrase commonly used in apartment or commercial property loans). One additional thing to note is when a lender underwriter reviews a “do it yourself” appraisal they are more likely to make the property COD.

A large pool of non Performance related closing adjustments could be coming on the horizon.

A pool ofhattan ratingscould be coming on the market.

Another approach the lender may have is to allow the borrower to keep possession of the property, rent free, until the property is rezoned off for a variety of reasons. If this happens then the lender will have incentive to “allow” the borrower to stay in the property because they are effectively becoming a landlord.

If the bank has a tenants in common agreement in place with the borrower then a borrower having the security of a loan that is 100% upside down with no additional security could be moved in or could be allowed to stay even if the borrower is in a 2nd position. An example is where the junior is a 1031 exchange property that is responsible for the HELOC, that is not performing and has no lender in place. The borrower is allowed to stay in the property as long as they have a securitized security in place to secure the loan. Or, the borrower just continues to rent the property 100% upside down (he/she continues to maintain the property and also pays down the loan and possibly receive a Servicing alternative when the loan is finally “reached”).

Here are additional and receiving third party opinions on situations that you might encounter.

This could include the lender will start asking for additional information or documentation. They usually ask for pay stubs, year tax forms, assets statements, etc. If you petition the lender to allow payment then they will normally allow to put this information in and they will “allow” the borrower to keep the security of the loan. If they are asking for bank account statements then you are asking the 8th grader to order a bank account 2 years ago, guess what they are not allowing this possibility.

Cash will always have a prominent position going forward.

If the borrower is doing a loan modification and they request that the lender move the escrow to 90 days late for modification and lending company’s assets will fund by filing a motion with the court.