Aneinfo Real Estate

For those who are ready to plan a family vacation, you may want to think about renting a beach home where you would like to go on vacation. You will find that there are a hours of fun to be had when you go and rent a beach house. You will find that there a lot of choices that you will be able to make when it comes to renting a beach front property. However, make sure that you take some time and decide rather or not the beach front property is really what you think it is. You need to read the fine line.

Once you have picked your area or location you can go online and find a beach rental, just be sure that you contact the beach rental business and you ask them for a brochure before you put the deposit down. You will want to make sure that you think about what it takes to invest in such a vacation. You will need to do a lot of planning, but you will find that there are locations that do not correctly represent itself.

Do you wish for a rental property near the beach or do you need this great beach front vacation home? You do know that the closer to the beach, the more expensive it is for you to rent the home. You will find that there are a lot of rental homes that are near the beach, but not on the beach. You will find that there are beach locations that may be out of your price range, but there are beach locations 10-20 minutes from the beach that are. It is all about the way that you prioritize your needs. If you would also like to learn how to save some money, you may want to go on vacation and rent a beach home in the off season. This is a great opportunity if you are looking for a place like in California.

While there are many beach rental properties that will allow you to have some of the things that you would have at home, you may find that there are some things that the home will lack. You may lack a laundry room; you may lack a stove and other things. This is what will keep the prices and liabilities of the home low. You will need to think about the accommodations of the home before you agree to rent the home.

When is the best time to refinance a commercial loan? Factors such as prepayment penalties, goals of the borrower, market rates, and existing loan terms come in play. Of course there’s no exact formula, but below are some thoughts on how you might analyze your commercial loan refinance.

The Discounted Cash Flow method is the traditional system used, which essentially compares the existing loan vs. the proposed loan on a Net Present Value basis. However we have found that most commercial property owners are really interested in:

1. How the refinance will affect their monthly cash flow?

2. What the closing costs will be?

3. How much of the closing costs will have to come out pockets?

4. (If increase in cash flow) How many months will it take for the savings to “pay back” the owners closing costs?

5. What the principal pay down (amortization schedule) will be, compared to existing loan.

Cash Flow

Most borrowers are obviously interested in improving their cash flow situation when refinancing. There’s essentially only 2 ways to do this – reduction of interest rate and or increasing the length of the loans amortization schedule. That’s it. Reducing the interest rates is obvious however most borrowers are surprised to learn that by spreading out a loan from say 20 years to 30 years normally reduces the borrower’s payment by approximately 20%.

Borrowers that are facing a ballooning loan may find out, however that their situation will not improve. Their monthly payment may go up as markets rates change, loan programs change etc. It is often the case as well that the borrowers books are not as strong as there where when they secured their existing loan and they will not be offered the same program/rates that they previously qualified for.

Closing Costs

Borrowers are always very concerned about closing costs, and for good reason. For example with appraisals ranging from $2,000 – $5,000, environmental reports from $1,800, processing at around $1,000, title from $1,000 – $2,000, and the bank 1% fee, it makes a lot of sense for borrowers to be concerned. On a refinance, the borrower can normally roll most of these’s costs into the loan amount. In terms of out of pocket costs, the borrower should be prepared to pay the appraisal, and environmental report fees upfront. In addition, sometimes the funding bank will require the processing fee paid upfront as well.

Pay Back

Assuming there is a reduction in monthly payments, borrowers like to do a cash flow analysis to see how long it will take for the savings to pay back their closing costs. For example, if the new loan monthly payment is $2,000 lower and the total closing costs are $10,000 it will take 5 months for the borrower to “break even”.

Principal Pay Down

Principal pay down is obviously another important component of any commercial loan. However, for most owners, especially those with highly leveraged properties, cash flow is more pressing. High debt payments versus net cash after the expenses have been paid make it difficult for the borrower to look at this in any other way.