Commercial Mortgage Loans

Commercial Mortgage Loans available in wide range of financing structures and products

Financial Compound has the knowledge and experience, along with a proven track record of success, to handle many types of commercial mortgage loans.  Our corporate culture is service-oriented, minimizing the client’s involvement in processing and paperwork.  We have the ability to close many transactions that others said could not be done.

 

OUR RELATIONSHIPS

Financial Compound has longstanding relationships with many types of Capital Providers including institutional equity, private equity, life company, bank, CMBS, hard money, hedge funds, venture capital, “friends and family” as well as lenders specializing in non-conventional projects. Financial Compound has successfully financed a variety of product types, from A to Z.

Commercial mortgage loans are utilized in many ways. Often, the loan is sought to enhance the return on equity, or cash-on-cash return. For example, if the property cap rate is 7%, and the interest rate is 5%, then positive financial leverage exists. In Los Angeles commercial mortgage loans can be used to finance apartment buildings, office buildings, retail shopping centers, industrial buildings, hotels, and raw land.

The commercial financing marketplace is made up of many different types of commercial mortgage lenders. The financing, commercial mortgage loans terms that these lenders offer are usually based on their cost of capital as well as yields available to the lender from other asset classes. A good understanding of the capital markets will help best meet the needs of both the lender and the borrower.

Commercial mortgage loans Los Angeles can be helpful to work with a competent commercial mortgage broker. A skilled commercial mortgage broker stays abreast of the most favorable commercial mortgage loans in Los Angeles terms and understands the right type of lender that fits the financing request.

Commercial mortgage loans in Los Angeles

Commercial mortgage loans in Los Angeles are sometimes used to raise cash from commercial real estate property. For example, a shopping center owner may have an existing $10 million loan, and the shopping center has appreciated in value significantly so that the borrower can refinance for $15 million and utilize the $5 million of refinance proceeds for non-property related needs.

While on the one hand, the positive leverage is quite attractive to borrowers, on the other hand, it may be a good idea to be careful and try to keep the leverage as low as possible. Other considerations for commercial mortgage loans in Los Angeles are fixed rate versus floating rate. As a borrower it is important to understand the characteristics of your loan so that their are no surprises, like phantom income, along the way. For example, phantom income can occurs with self amortizing mortgages, such as a 25 year loan with 25 year amortization, where the loan amount and mortgage payments were structured to utilize all of the property cash flow.

Property cash flow

Once amortization exceeds the interest payment, maybe in year 12 of the loan, then taxes would be due but no cashflow from the property to pay the taxes. Therefore it is helpful for borrowers to understand the cashflow characteristics of the property as it relates to their loan, as well as other considerations including income taxes, real estate taxes, and capital expenditures. We serve clients throughout the city of Los Angeles and the surrounding cities including: San Diego, Orange County, San Francisco, Santa Barbara.

 

Commercial Mortgage Loans

Commercial mortgage loans are utilized in many ways. Often, the loan is sought to enhance the return on equity, or cash-on-cash return. For example, if the property cap rate is 7%, and the interest rate is 5%, then positive financial leverage exists. In Los Angeles commercial mortgage loans can be used to finance apartment buildings, office buildings, retail shopping centers, industrial buildings, hotels, and raw land.

The commercial financing marketplace is made up of many different types of commercial mortgage lenders. The financing, and commercial mortgage loan terms that these lenders offer are usually based on their cost of capital as well as yields available to the lender from other asset classes. A good understanding of the capital markets will help best meet the needs of both the lender and the borrower.

Commercial mortgage loans Los Angeles can be helpful to work with a competent commercial mortgage broker. A skilled commercial mortgage broker stays abreast of the most favorable commercial mortgage loans in Los Angeles terms and understands the right type of lender that fits the financing request.

Commercial mortgage loans in Los Angeles are sometimes used to raise cash from a commercial real estate property. For example, a shopping center owner may have an existing $10 million loan, and the shopping center has appreciated in value significantly so that the borrower can refinance for $15 million and utilize the $5 million of refinance proceeds for non-property related needs.

While on the one hand, the positive leverage is quite attractive to borrowers, on the other hand, it may be a good idea to be careful and try to keep the leverage as low as possible. Other considerations for commercial mortgage loans in Los Angeles are fixed rate versus floating rate. As a borrower it is important to understand the characteristics of your loan so that their are no surprises, like phantom income, along the way. For example, phantom income can occurs with self amortizing mortgages, such as a 25 year loan with 25 year amortization, where the loan amount and mortgage payments were structured to utilize all of the property cash flow. Once amortization exceeds the interest payment, maybe in year 12 of the loan, then taxes would be due but no cashflow from the property to pay the taxes. Therefore it is helpful for borrowers to understand the cashflow characteristics of the property as it relates to their loan, as well as other considerations including income taxes, real estate taxes, and capital expenditures.