Show of hands, how many of you out there are still confused by the APR vs Mortgage Interest Rate? Come on, truthfully? Well here is a refresher in case you forgot.   THE APR: The Annual Percentage Rate is a formula that combines the mortgage loans interest costs with a whole host of other fees associated with the loan over the life of the loan. The total of the interest rates and the fees for [...]

Just the other day I was talking with a friend of mine who has an SBA loan on a commercial building he owns. He was telling me that he has had a lot of trouble getting the SBA to refinance his loan on the building. A quick summary of the particulars for his situation. The building is valued at $1.2 million and he owes $800,000 on the property. He has a 15% equity position in [...]

Sometimes the simplest things will trip up an experienced real estate investor. Call it a brain freeze. I often forget calculations that I use all of the time when trying to calculate my idea of building values based on local market rates or possible income streams. There are some simple facts I need to understand when making these calculations. Here is an example of something I often forget. When calculating the income approach or the [...]

Floor Area Ratios simplify defined is the area of a building divided by the area of its lot (Land area). The formula is Floor area Ratio = Building Area / land area. The floor area ratio is often limited by local zoning codes. Make sure you contact your local planning department to verify local zoning codes and rules that may apply to your final floor area ratio calculation. Also, remember that a correct floor area [...]

Ah those pesky Home Owner Association Fees, also known as Maintenance Fees, these fees will just kill your cash flow if you do not take them into account when do your cash flow analysis. While these fees can vary from $90/month to several hundred dollars, and sometimes thousands of dollars per month, they are often forgotten when you initially find that gem of a investment property that cash flows out so nicely. I once found [...]