Infinity Commercial Capital

In the dynamic realm of real estate investment, success often relies on strategic methods that enhance returns while mitigating risks. A popular approach among astute investors is the BRRRR strategy: Buy, Rehab, Rent, Refinance, Repeat. This effective framework enables investors to build a strong real estate portfolio, leverage property value appreciation, and utilize financial tools like the Debt Service Coverage Ratio (DSCR) loan. This article delves into how combining the BRRRR strategy, rehabilitation, and DSCR loans can propel investors towards their financial objectives, supported by Infinity Commercial Capital’s tailored financing solutions. The BRRRR strategy outlines a structured approach that comprises several essential steps: Buy : Identify properties with high potential for appreciation and cash flow. Acquire these properties at a favorable price, often through distressed sales, auctions, or off-market deals. Rehab: Increase the property’s value through strategi...

Embarking on a large construction development project, such as a multifamily complex, requires careful planning and substantial financial resources. One of the critical steps in turning this vision into reality is securing construction financing. Navigating the complex landscape of construction financing involves understanding key principles, negotiating favorable terms, and structuring loans that align with the unique demands of the project. Thorough Project Planning and Documentation Before seeking construction financing, it is imperative to have a well-developed business plan and comprehensive documentation for the project. This includes obtaining permits, addressing zoning issues, architectural plans, cost estimates, market analysis, and a detailed construction timeline. Lenders will scrutinize these documents to assess the viability and profitability of the project. A well-prepared package increases your credibility and demonstrates a clear understanding of the undertaking. Select...

Securing financing for ambitious business ventures can be a complex dance, especially when commercial lenders express concerns about borrower qualifications and lending restrictions. While initial setbacks might seem discouraging, they can also serve as opportunities for creativity, strategic thinking, and ultimately, deal success. In this article, we’ll explore strategies to navigate such situations and get your deals done even when lenders initially hesitate. Open Dialogue and Understanding the Lender’s Perspective When a lender expresses doubts about a proposed deal, it’s crucial to initiate an open and respectful dialogue. Understanding their concerns can provide valuable insights into their decision-making process. This also presents an opportunity to address their apprehensions directly and show your willingness to work together to find a solution that suits both parties. Mitigating Risk in Phases In scenarios where a lender recommends starting with a smaller-sca...

Getting a commercial loan can be difficult due to several factors that lenders consider when evaluating loan applications. These factors are aimed at assessing the risk associated with lending money to a business. Here are some reasons why obtaining a commercial loan can be challenging: Risk Assessment Lenders need to assess the risk associated with lending to a business. They evaluate factors such as the business’s financial stability, credit history, business plan, market conditions, and industry trends. If the lender perceives too much risk, they may be hesitant to approve the loan. Business Viability Lenders want to ensure that the business has a solid plan and is likely to generate enough revenue to cover the loan payments. If the business plan is unclear or lacks feasibility, lenders might be hesitant to provide funding. Creditworthiness Just like individuals, businesses have credit histories. If the business has a poor credit history, a history of late payments, or outsta...

Introduction Commercial real estate investment can be a lucrative venture, but it often requires significant capital. When investors need financing for their projects, they typically have two options: approaching their network of known banks or hiring a commercial financing advisor. In this article, we will explore the reasons why a commercial real estate investor might choose the latter option, delving into the various advantages of hiring a commercial financing advisor over relying solely on their local banks. 1. Specialized Expertise Commercial real estate financing is a multifaceted arena. Investors need to understand the numerous capital options available to them, including traditional bank loans, private lenders, commercial mortgage-backed securities (CMBS), and more. Each option has its own unique terms, conditions, and eligibility criteria. A commercial financing advisor is well-versed in this complex landscape, offering invaluable expertise to investors. Commercial financing a...

When borrowers explore loan options, they often encounter lenders’ marketing materials promising loan amounts “up to” a certain loan-to-value (LTV) ratio. However, it is not uncommon for borrowers to receive loan offers that fall below the advertised maximum. Let’s explore the reasons why lenders may offer less than the “up to” amount like debt service coverage ratio, creditworthiness, and property considerations. The Underwriting Process and Loan Limitations The underwriting process is an essential step in lending where lenders assess the borrower’s financial capacity and the risk associated with the loan. During underwriting, lenders evaluate various factors and may determine that offering less than the advertised maximum LTV ratio is prudent. This ensures responsible lending practices and mitigates potential risks. Factors that influence loan offers include: Debt Service Coverage Ratio (DSCR) One primary factor that influences a lender’...

In the world of real estate investing, one popular strategy is fixing and flipping properties. This involves purchasing a property in need of renovation, improving it, and selling it for a profit. To finance such projects, real estate investors often seek loans. While traditional banks have been the go-to option for many, private Debt Service Coverage Ratio (DSCR) lenders have emerged as a viable alternative. Streamlined Approval Process Private DSCR lenders typically offer a more streamlined and efficient approval process compared to banks. Traditional banks often require extensive documentation and have stringent qualification criteria, resulting in a time-consuming and complex application process. In contrast, private DSCR lenders focus on the property’s potential profitability, allowing investors to secure loans quickly, and enabling them to act swiftly in a competitive real estate market. Flexible Credit Requirements Banks heavily rely on credit scores and credit history to d...

Investing in rental properties is a popular way to generate passive income and build wealth over time. However, securing financing for these types of investments can be challenging. Traditional bank loans are often difficult to obtain, particularly for new investors or those with less-than-perfect credit. Fortunately, there is an alternative financing option that can help investors overcome these obstacles: DSCR loans. Benefits of DSCR Loans DSCR stands for Debt Service Coverage Ratio, and DSCR loans are specifically designed for rental property investors. Here are a few advantages of DSCR loans over traditional bank loans: Longer loan terms: Most bank loans for rental properties come with a 5-year term, which means that the borrower must refinance or pay off the loan after 5 years. In contrast, DSCR loans often have a longer loan term, such as 30 years, giving investors more time to pay off the loan and generate income from the property. Fixed interest rates: Many DSCR loans come with...

W. Karl Baker, CPA When discussing commercial financing needs with prospective clients, one of the first things we get asked all the time is “What’s the rate?”  That depends on a lot of factors, such as property address, the borrower’s credit score, net cash flows from the lease agreement, leverage and a few other factors.   We also remind clients that “rate” is important but is not always the most important factor if cash flow is the goal. It’s certainly not the only factor to evaluate.   We also are asked, “What’s the term of your notes?”  Many people are surprised that it is possible to obtain 30-year commercial money, especially if their only experience is what banks offer.  So there’s usually a follow-up question when we tell them about our 30-year fixed rate commercial mortgages:  “Is it really FIXED for 30 years, and it’s a commercial note?”, said with some astonishment!  Our response is “YES!  You really can get a 30-year fixed-r...

By W. Karl Baker, CPA Industry commercial lending underwriting criteria contain some “norms” that are universally agreed upon but applied differently from lender to lender.  One of those “norms” is the rule of thumb that lenders will loan at 80% of the value of the subject property in a purchase transaction with long-term financing, and then this metric is often scaled back to 75% for a cash-out refinancing, to hedge valuation risk.   Lenders do not set these norms in a vacuum.  Private lenders sell the majority of their long-term loans and some of their bridge loans to the capital markets. These institutional buyers pool loans into packages and convert them to bond funds, called mortgage-backed securities.  Investors buy these funds with the expectation that they will obtain a return on investment commensurate with the risk.  This is a macro-economic way to put capital into the market, allowing property buyers and investors to finance their purchases with low-cost loan terms. Therefor...

By W. Karl Baker, CPA There’s lots of news out there saying “now’s not the time.” “The economy is slowing down.” “We’re headed towards a recession.” “The cost of borrowing is going up.” This is a good one: “Rates will go down eventually and that will be the time.” I heard a podcast recently that gave the quote from a celebrity author, “Don’t wait to buy real estate.  Buy real estate and wait.” That really resonated with me, so I looked it up. The best I can tell it was mis-attributed and is actually a  Will Rogers quote.   As I’m writing this I’ve been thinking about another phrase “‘tis the season”. It’s the Christmas holiday season. It’s a time when people are reflective. It’s a time for love, and there are many other important things to celebrate at Christmas, such as the birth of a savior. However, I’ve also been struck with that phrase as a mantra for rea...

There are going to come times when your business experiences a disruption with its cash flow. When this happens, it can prevent you from taking care of crucial expenses related to keeping your company operational. To avoid a catastrophe, you need to learn what alternative financing solutions are available to your business. A service like equipment financing, for example, can be beneficial to explore when you need to maintain better control over your budget. Look over these details to discover how you can use this form of financing to your advantage. What Is Equipment Financing? Financing your equipment is a straightforward and practical decision to explore. For one, almost all businesses rely on some form of machinery or tech in order to operate. Additionally, this machinery can usually be expensive and it is not always possible for a business owner to pay out of pocket for vital equipment. With this alternative financing option, you can spread payments for equipment out over a period ...

Many people are looking to make and start something that has never been done before. Small businesses are starting to pop everywhere as people realize it’s something almost anyone can start. If you are looking to open one, there are some things you need to take into account. Employees It will take employees to help you run your business. Your business size will help determine how many you need. The larger your company gets, the more help you will most likely need. Pay If your company has competitive pay, it will be a highly sought-after job. Employees who feel they get paid their value, are more likely to work harder for you. If your business is very successful, offering raises and bonuses will also help boost the morale of the employees. Struggles Starting a new business opens the door to a lot of struggles and problems. Throughout these times though, you will need to keep the course. If you have a plan, work through it no matter the ups and downs you face. Expenses No matter the busi...

Starting a small business can be an exciting process, however, it may not always feel easy. This can be especially true when it comes to figuring out how to finance it properly. That doesn’t mean, though, that there’s nothing you can do to make the situation a little more clear for yourself. By doing some research, and understanding your options, it can be simple to make the right choice for you and your company. What Is a Line of Credit? Lines of credit are a kind of loan that are also a form of revolving credit, as well. With this kind of loan, you are given a credit line, up to a specified limit. You can spend as much or as little as you need to at any given time, up to that limit. You will then be expected to pay the money you have spent back, with some interest. When it comes to credit lines, there are two main types that are offered, a secured line, and an unsecured line. A secured line of credit typically involves some form of collateral, like business equipment for e...

While a strong work ethic is an admirable attribute, if unmanaged, it can get out of control and harm other areas of your life. Finding a healthy work-life balance may not be something you have prioritized, but without it, you can find yourself burnt out with damaged relationships and lacking fulfillment in your life. If you suspect that you may be a workaholic, here are a few symptoms to watch out for. 1.     Your Work Schedule One key indicator is the amount of time that you spend working. If you are typically the first in at the office and the last to leave, you may be unhealthily prioritizing work. For those who may not see the potential problem, overexertion can negatively impact your productivity and creativity. 2.     Unplugging From Work A common symptom of workaholics is the inability to disconnect from work. This has become increasingly hard when many employees are working from home and their offices are steps away from the other aspects...

When starting or running a business, there can be a lot of things to think about, especially when it comes to your business’s finances. When it comes to the finances of your business, one thing you will often need to think about is your working capital and whether or not you’re managing it in a way that will help your business grow. What Is Working Capital? Working capital is the capital that your business has that can be used in day to day operations. It is typically calculated as your current assets, after your debts or liabilities have been subtracted. It is the amount of money that you have free to use as you need to for your businesses. Successful companies tend to have more working capital on a regular basis, and therefore have more financial freedom to make decisions that will help move their business forward. How Is It Important For My Business? Your working capital, the amount of funds you have available at any given time, is important for your business because it c...

If you’re planning to start a company, one of the best things you can do is to break out of the mindset of living paycheck to paycheck. Instead, saving and budgeting is the name of the game. This will be a challenging task at times but it’s necessary to lay a foundation for success as an entrepreneur. It takes a combination of planning, organization, and delaying gratification. These techniques will help you see immediate changes and set positive behaviors in motion that will support you throughout your career. Check Your Credit Know your credit score. An online search will yield a few free options. Once you know it, you can rapidly improve your score by using a few key credit repair techniques. Effective money management requires both understanding your credit score and knowing how to improve it to the best of your ability. New business funding relies heavily on the credit score of the founder — you. Get Organized Keep track of your financial progress by recording all of yo...

Investing in long-term rental properties can be a great way to build income quickly, if you know how to do it. It’s not a guarantee, and it does take diligence and hard work to build a portfolio of residential and commercial rental properties that can support you with its income. The key is finding ways to lower your risk while raising your return on each investment. Most of the time, for those focused on residential investments, this means dedicating a healthy portion of any given portfolio to multifamily real estate. How Multifamily Properties Lower Risk When you finance a single-family dwelling, your entire income for the property goes away whenever you’re in-between clients. That means you’re out of pocket for any loan payments during the months it takes to turn and fill a property, as well as the utilities and any turnover costs for repairs, improvements, and marketing. When you buy duplexes or even larger properties like apartment buildings, the cost doesn’...

The merchant cash advance is one of the most versatile forms of short-term financing for small businesses that have a lot of income generated through electronic transactions. That’s because it uses your income through the merchant account’s deposits as the basis for a short-term advance, tying the payment to a percentage of those transactions each month. As a result, you can get the working capital you need to optimize your approach to high demand seasons and other short-term opportunities. Applying for an Advance Applications for merchant cash advance programs are typically simpler and easier than for long-term loans used to purchase assets. That being said, you’ll still need to disclose income and probably your credit score, as well as information about your merchant account’s monthly business volume. The account’s value is the primary factor in the advance’s approval and size, but the rest of your finances are used for context, so they do matter. T...

Making goods and providing services often means that you are waiting for customers to pay on invoices for the cash you need for supplies, bills and salaries. This can strain your cash flow and prevent you from making seasonal or time-sensitive purchases you need to grow or thrive. When your cash flow is tight because of outstanding invoices for goods or services already delivered to customers, you can turn to factoring or accounts receivables financing to get some needed slack. This process gives you an advance on qualifying invoices, so you have the cash you need for working capital while the customer still has time to pay. What Are the Benefits? Not only does financing your accounts receivables give you cash when you need it, that you are already owed, but it can free your company from the burden of collecting on those invoices. The fees associated are usually lower than the interest rate on a loan and the process has an easier application process. You can even apply online and get t...