Conventional loans are typically the hardest to obtain for real estate investors. Some lenders don’t allow income from investment properties to be counted toward total income, which can make global underwriting a problem for certain investors, especially those who already have several existing conventional, conforming real estate loans reporting on their credit. In these cases, the investor must look outside conventional funding for their investments. Two of the more popular choices for alternative financing are portfolio loans and hard money loans.Portfolio Loans These loans are loans made by banks which do not sell the mortgage to other investors or mortgage companies. Portfolio loans are made with the intention of keeping them on the books until the loan is paid off or comes to term. Banks which make these kinds of loans are called portfolio lenders, and are usually smaller, more community focused operations.Advantages of Portfolio LoansBecause these banks do not deal in volume or answer to huge boards like commercial banks, portfolio lenders can do loans that commercial banks wouldn’t touch, like the following:
smaller multifamily properties
properties in dis-repair
properties with an unrealized after-completed value
pre-stabilized commercial buildings
single tenant operations
special use buildings like churches, self-storage, or manufacturing spaces
construction and rehab projects
Another advantage of portfolio lenders is that they get involved with their community. Portfolio lenders like to lend on property they can go out and visit. They rarely lend outside of their region. This too gives the portfolio lender the ability to push guidelines when the numbers of a deal may not be stellar, but the lender can make a visit to the property and clearly see the value in the transaction. Rarely, if ever, will a banker at a commercial bank ever visit your property, or see more of it than what she can gather from the appraisal report.Disadvantages of Portfolio LoansThere are only three downsides to portfolio loans, and in my opinion, they are worth the trade off to receive the services mentioned above:
shorter loan terms
higher interest rates
conventional underwriting
A portfolio loan typically has a shorter loan term than conventional, conforming loans. The loan will feature a standard 30 year amortization, but will have a balloon payment in 10 years or less, at which time you’ll need to payoff the loan in cash or refinance it.Portfolio loans usually carry a slightly higher than market interest rate as well, usually around one half to one full percentage point higher than what you’d see from your large mortgage banker or retail commercial chain.While portfolio lenders will sometimes go outside of guidelines for a great property, chances are you’ll have to qualify using conventional guidelines. That means acceptable income ratios, global underwriting, high debt service coverage ratios, better than average credit, and a good personal financial statement. Failing to meet any one of those criteria will knock your loan out of consideration with most conventional lenders. Two or more will likely knock you out of running for a portfolio loan.If you find yourself in a situation where your qualifying criteria are suffering and can’t be approved for a conventional loan or a portfolio loan you’ll likely need to visit a local hard money lender.Hard Money and Private Money LoansHard money loans are asset based loans, which means they are underwritten by considering primarily the value of the asset being pledged as collateral for the loan.Advantages of Hard Money LoansRarely do hard money lenders consider credit score a factor in underwriting. If these lenders do run your credit report it’s most likely to make sure the borrower is not currently in bankruptcy, and doesn’t have open judgments or foreclosures. Most times, those things may not even knock a hard money loan out of underwriting, but they may force the lender to take a closer look at the documents.If you are purchasing property at a steep discount you may be able to finance 100% of your cost using hard money. For example, if you are purchasing a $100,000 property owned by the bank for only $45,000 you could potentially obtain that entire amount from a hard money lender making a loan at a 50% loan-to-value ratio (LTV). That is something both conventional and portfolio lenders cannot do.While private lenders do check the income producing ability of the property, they are more concerned with the as-is value of the property, defined as the value of the subject property as the property exists at the time of loan origination. Vacant properties with no rental income are rarely approved by conventional lenders but are favorite targets for private lenders.The speed at which a hard money loan transaction can be completed is perhaps its most attractive quality. Speed of the loan is a huge advantage for many real estate investors, especially those buying property at auction, or as short sales or bank foreclosures which have short contract fuses.Hard money loans can close in as few as 24 hours. Most take between two weeks and 30 days, and even the longer hard money time lines are still less than most conventional underwriting periods.Disadvantages of Hard Money and Private Money LoansTypically, a private lender will make a loan of between 50 to 70 percent of the as-is value. Some private lenders use a more conservative as-is value called the “quick sale” value or the “30 day” value, both of which could be considerably less than a standard appraised value. Using a quick sale value is a way for the private lender to make a more conservative loan, or to protect their investment with a lower effective LTV ratio. For instance, you might be in contract on a property comparable to other single family homes that sold recently for $150,000 with an average marketing time of three to four months. Some hard money lenders m lend you 50% of that purchase price, citing it as value, and giving you $75,000 toward the purchase. Other private lenders may do a BPO and ask for a quick sale value with a marketing exposure time of only 30 days. That value might be as low as $80,000 to facilitate a quick sale to an all-cash buyer. Those lenders would therefore make a loan of only $40,000 (50% of $80,000 quick sale value) for an effective LTV of only 26%. This is most often a point of contention on deals that fall out in underwriting with hard money lenders. Since a hard money loan is being made at a much lower percentage of value, there is little room for error in estimating your property’s real worth.The other obvious disadvantage to a hard money loans is the cost. Hard money loans will almost always carry a much higher than market interest rate, origination fees, equity fees, exit fees, and sometimes even higher attorney, insurance, and title fees. While some hard money lenders allow you to finance these fees and include them in the overall loan cost, it still means you net less when the loan closes.Weighing the Good and the BadAs with any loan you have to weigh the good and the bad, including loan terms, interest rate, points, fees, and access to customer support. There is always a trade-off present in alternative lending. If you exhibit poor credit and have no money for down payment you can be sure the lender will charge higher interest rates and reduce terms to make up for the added risk.When dealing with private lenders make sure to inquire about their valuation method.Also, with hard money lenders, you should be careful in your research and background checking. While hard money loans are one of the more popular alternative financing options, they are often targets for unscrupulous third parties. Before signing any loan paperwork make sure to run all documentation by a qualified real estate attorney and/or tax professional. If you suspect fraud or predatory lending contact the state attorney general office.
Alternative Loan Options for Residential Real Estate Investment
Small Business Servers – A Need For Change
Many small businesses don’t have an IT department or anyone experienced enough to handle even basic IT tasks like backup, system restoration, patching or updates. In most cases, they rely on a local business partner (typically an IT consultant or local IT support company) to handle these tasks.Unfortunately, many small business IT solutions on the market today exacerbate the situation. Their complexity…
requires the need for ever more powerful hardware
results in frequent system crashes and downtime for upgrades
compounds security problems
necessitates frequent system restorations
increases the investment in resource to upgrade systems and fix problemsWhats needed is a new generation of ‘small business servers’ that deliver all of the essential IT & technology services for smaller businesses but without the usual costs or hassle.Challenges in supporting micro and small business customersTo stay in business small businesses need help with basic IT chores, which are becoming more mission critical than ever as they grow more time consuming to deliver.Just look at business continuity and disaster recovery in small businesses. A study by Gartner found that only one third of small businesses surveyed said they were prepared for a disaster within the next 12 months.In other words two thirds of all small businesses are not prepared for a disaster or protected. The reason, in most cases, is that small businesses don’t have the IT skills of solutions to perform common tasks like backing up critical data or developing a way to restore systems that crash or become damaged when a pipe breaks or there is a fire, flood or other disaster.Small businesses also need help just backing up and restoring files when someone accidentally deletes them. Such deletions in small businesses are quite common.Whilst everyone understands the need for data to be backed up, what many don’t realise is how expensive and difficult it actually is with traditional solutions. In fact, the traditional approach to backing up data is a time consuming and resource intensive task. The normal procedure requires tapes to be rotated, in the right order and taken off site for secure storage.Plug In, Switch on & Start WorkingSecurity within smaller businesses is also an issue. Hackers today are after confidential information about businesses and their clients to commit fraud and identify theft. They employ increasingly sophisticated attacks that may use socially engineered phishing email messages. These spam messages are designed to fool even savvy computer users in to thinking they are from legitimate sources. An unsuspecting user might click on malicious executable file or URL link to a poisoned web site and automatically download malicious software.In their pursuits hackers increasingly exploit new vulnerabilities in applications and Windows operating systems as a means of infecting computers. To battle this problem, software vendors issue frequent system updates and security patches that must be installed quickly to minimize exposure to each new threat.In 2008, Microsoft alone issues 43 critical, 24 important and two moderate fixes, according to security experts. The previous year saw a similar amount, including 49 critical, 23 important and five moderate updates. Other application and browser vendors had numerous updates as well.Again, many small businesses don’t have the IT expertise to track all of these patches or the time to install them. Beyond security patches, there are typically many operating system updates that must also be applied. Such installations are often time consuming.Unfortunately many of these fixes incur downtime, which no business likes. For example, in many situations, a business must first test a patch or upgrade to be sure it does not cause problems. If the test goes well, planning must take place to be sure the changes are made at a time that least inconveniences its workers. Again, many businesses are looking for help with these matters from their business partners. The challenge for the business partner is that all of these tasks (testing, planning, applying etc.) are all time and labour intensive.Problems with traditional Small Business Server SolutionsEven the smallest business today requires certain basic capabilities. Workers need to share files and printers. Additionally, their data must be protected and their systems must be secure.The burden on the business partner to provide these services typically requires the use of multiple solutions from different vendors. The mix often includes a server OS and file system from one vendor, backup software from another, and security products including firewall, anti-virus, anti-spyware and anti-spam software etc from even more vendors.Managing such a mix can add to a business partner’s workload. Each product must be managed with its own administrative system, and each must be updated on its own. There might also be conflicts when trying to get different vendors products to work together.Additionally supporting such a mix of applications might introduce security issues. For example, if a firewall and anti-spam solution are not in sync with regard to the level of protection each affords, one might work in detriment of the other.The end result when using multiple solutions is that the time investment per client grows as the complexity increases. It also increases the time investment a business partner must make in learning/training. Their staff must be knowledgeable about many discreet products in order to support their small business client’s workers.Compounding matters, the traditional choices have had their problems. Solutions designed specifically for smaller businesses often could not scale to support a business growth. For this reason, many of the solutions commonly used are not designed specifically for small businesses. But this only adds to the management burden placed on the business partner because they must customize or scale down these solutions to meet the needs of small businesses.Additionally, such solutions are often bloated with features not needed in smaller businesses. For instance, directory services might be overkill for a company with fewer than twenty people. Yet, its administration is as time consuming for twenty as it is for one hundred or more.Similarly, an enterprise solution might be so narrow focused that it lacks key features for small business, thus requiring a patch work of solutions to meet a business’s basic needs. For instance, a firewall might need a third party anti-spam or anti-virus solution to provide more complete protection.In either case, trying to force fit an enterprise solution into a small business environment can add to the management workload.What’s needed: Desirable characteristics?With these concerns in mind, there is obviously a need for an alternative to the enterprise patchwork solutions that are currently being cobbled together and used in small business today.Any solution that addresses these pain points must be designed specifically for small businesses and the business partners who serve them. It must enable customers do email, create and share documents, centrally manage files, store and secure business data, control access to information, connect offices, employees and partners whilst protecting their network and systems from unwanted disruptions and intrusions.It should be less complex so that it requires less IT support than traditional solutions. Additionally the solution should be Linux based. The reason: Linux is stable and reliable. This would simplify management and make solution subject to less downtime than some alternative solutions. Additionally being Linux based reduces many security problems, as far fewer attacks, generally speaking, are aimed at Linux than traditional operating systems.Furthermore, most operating systems are packed with drivers, utilities and services that are seldom used. An ideal solution would only use the parts of the Linux Kernel that are needed to perform the desired functions. This would reduce potential vulnerabilities.To simplify matters further, the solution should be very easy to deploy. For example, it should be offered as a simple plug and play solution in the form of an appliance. And the solution should support remote management to troubleshoot and correct small problems, as well as recover from a system crash.A solution with these characteristics will save a business partner valuable time that would otherwise be needed to administer solutions at every client’s site. This saves time and money. It allows a business provider to provide services in a more economically efficient manner to existing customers. And it frees up time to solicit and support new businesses.Enter: An affordable solution designed specifically for small businessesSmall Business Server Appliances are a new breed of Small Business Server Solution they are delivered delivered as a plug and play hardware appliance, everything is included. Its pricing structure is simple and straight forward. Business partners do not have to deal with multiple and complex licensing agreements as is the case with many alternative offerings where you are required to switch platforms (or upgrade hardware) above 75 and 100 users, or when email and data storage requirements reach a certain limit.Small Business Server Appliances offers file and print sharing; firewall, anti-virus, anti-spam protection; email, calendaring, contacts, tasks; secure remote access; data backup and disaster recovery features; office productivity tools; and automated system updates.Everything is included within the appliance as a single solution. And business partners can use the platform to deploy other applications that a client might need.The high performance appliance hardware allows a powerful solution to be delivered in a small footprint. This also provides the ability to scale solutions as a clients business grows up to 500 users without artificial licensing barriers. Furthermore, the appliance format also makes the solution very easy to deploy, typically it can be up and running in about 20 minutes.Setting the solution apart: Autonomic features and benefitsSmall Business Server Appliances are designed to run on their own at a customer’s site with little intervention from the business partner. To accomplish this we make use of autonomic features that automatically handle many routine tasks and can correct many problems on its own as they arise. These autonomic features ensure that the small business stays up and running and its systems and data are protected, all while off loading time consuming IT tasks from business partners.For example Small Business Server Appliances comes pre built and pre configured and can usually be implemented in around twenty minutes. There is no monitor or keyboard, the admin interface is accessed via an IP address securely through HTTPS which enables you to manage the appliance remotely. In contrast, alternative solutions often require the business partner to load 5 to 15 CD’s to get a system running initially.Small Business Server Appliances also has the ability to self manage automated backups to a disc based storage device (on or off site), to a hosted backup service in addition to traditional tape or USB based storage devices. A few Small Business Server Appliances also provide the option for integrated hot swap backup discs to be used which enable data to be backed up continually throughout the day.SummaryWith Small Business Server Appliances, business partners get an easy to implement and easy to manage solution that has specifically been designed for smaller businesses.Small Business Server Appliances come pre built and ready to be used this solution offers a rapid time to value.All of the attributes of Small Business Server Appliances pay dividends twice over. First, the small business client is happy, because they can do their jobs without computer related interruptions. And second, a business partner can deliver a high level of service while dedicating minimal IT resources and staff to each client.The autonomic features of the solution reduce the time and resources a business partner must invest to begin work with a new client and to support existing small business customers. For example very little training is required to become familiar with the solution, so business partners quickly leverage the solution and immediately become more profitable.
5 Tips for Buying an Office Chair for the First Time
Since office chairs come in a lot of styles, shapes, and materials, making a choice can be quite overwhelming. For instance, some of them are made for accessional use, while others are more suitable for routine use. Aside from this, there are other factors to consider, such as price, finish, color, and style. Given below are some tips to help you make a better choice.
1. Consider your usage
These units are designed for a variety of purposes. For instance, if you get an executive chair, it will allow you to talk to your senior employees comfortably. On the other, if you are suffering from back issues, it is better that you opt for a chair designed to make your back feel comfortable. Basically, these units are designed in order to provide more support for your back and body. The good thing is that you can adjust these chairs based on your sitting posture.
If you are a heavy computer user and spend a lot of time working on your computer, we suggest that you consider an ergonomic chair.
2. Consider your desired parts
The majority of office chairs have some common major components such as armrests, the seat, and the backrest. For backrest, it all boils down to the lumbar support. Ideally, it should match the natural curve of your back so that you can relax your lower back. It is even better if the chair allows you to recline without any problem.
Another important component is the seat. Make sure that the edge of the seat is rounded and downward-sloping. This will help improve blood circulation to your legs. If you are a heavy, tall person, it is better that you go for a chair that features higher backs and wider seats.
While typing, armrests allow you to place your hands comfortably. Apart from this, an adjustable armrest is another great feature to have in your desired unit.
3. Consider the adjustment features
You should adjust the chair to perform your desired task without suffering an injury. It is easy to adjust the mentioned components using levers and knobs while you are sitting in the chair. For example, the chairs of today feature a lot of mechanisms, such as tilt angle control, adjustable lumbar support, and adjustable height control. Make sure that the unit you are looking for allows these adjustments.
4. Consider the material
If you go for an upholstered unit, you can enjoy a cushioned seat and a lot of color and style options. Apart from this, synthetic fabrics with stain resistance offer a higher level of durability. On the other hand, leather is known for comfort and durability. If you are looking for something easy to clean, faux leather is your best bet.
5. Consider the environment
Based on the type of floors you have in your workspace, you should decide on the dimensions, colors, and styles of the chair. For example, you should get a survival type if you have to move around your workspace to get access to different equipment.
If you have a small office, it is better that you opt for a chair that comes with a lower back. Lastly, you can go for a traditional or modern office chair based on your personal interest.
5 Tips to Choose the Right Conference Table
According to statistics, managers spend a lot of their time in business meetings. If you have a properly designed conference room, you can come up with great ideas and have great meetings and discussions. Apart from this, conference rooms may help create a business environment. Since no conference meeting can be complete without a conference table, make sure you invest in a good table. In this article, we are going to talk about 5 things that will help you make the best choice.
1. Room size
First of all, you may want to consider your room size. There should be plenty of room around the table. The idea is to allow everyone to walk about the room. Besides, make sure that doors and windows are also easily accessible. Similarly, if you have an audio-visual station in your office, make sure the room has enough space for it.
2. Seating
Another thing to consider is the seating capacity of the room. After all, you don’t want to end up with a conference table that won’t leave any space for chairs you need in the office. There should be enough elbow room for all of your clients and employees during a conference.
3. Power outlets
In a conference room, some common items include projectors, laptops, and mobile phones. Therefore, make sure that the power outlets in the room are in the right places. After all, you don’t want to end up with a lot of entangled wires and cords during a conference.
4. Design Aesthetic
You may want to consider the design aesthetic of your conference room before buying a conference table. Don’t forget to consider your current furniture articles as well. You can choose from a variety of table shapes, such as racetrack, boat-shape, rectangle, and circle, just to name a few.
Besides, you can ask yourself if you prefer classic or modern furniture. Color choices also matter. Therefore, you should either go for dark or bright colors.
5. Budget
Last but not least, make sure you stick to your budget limit when it comes to buying a conference table. You can choose from a variety of options based on your price range. Based on the size, material, and design of the table, you should make the right choice. Another way to make a choice is to check out review websites. These sites will allow you to check out a huge collection of furniture articles.
Long story short, if you are going to make a great conference room, we suggest that you follow the 5 things given in this article. This will help you choose something that will serve your needs and look great. Hope this helps.