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Identity Theft Recovery: The Road Back
Not too long ago, a friend of mine mentioned that one of his coworkers recently recovered his stolen identity. I asked how long the process took. "Only two years" he replied. Compared to my business partner's six year nightmare "only" maybe ...
Secure Locks for the Restoration of Period Houses
Having problems finding suitable, secure lock for your period property or log cottage? A ready made lock block, could be the answer. These are blocks of oak or pine with 5 lever mortice, very secure lock inside, all ready for screwing on to the inside of ...
Why You Should Consider Staining Your Concrete Floor
Acid staining can make a common concrete floor into look like expensive natural stone flooring. Not only is it a fraction of the price, but for people allergic to carpeting materials it's a godsend. Another great application is in houses with radiant ...
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Before you visit the local bank or other lending institution, it may be wise to ask yourself how long you plan to own the apartment building or complex. Are you investing for the long-term? Answering this question will significantly influence the type apartment loan you should get.
If you are planning to own the property for two years or less, most experts agree that an apartment loan with an adjustable rate mortgage (ARM) will be your best bet. Like the name suggests, an ARM is a loan will an interest rate that may change with time in accordance with various factors. ARM apartment loans usually offer a better initial interest rate than other loans to offset the risk of future interest rate changes. An interest rate ceiling that may be reset annually also protects the mortgage holder.
If you plan to stay in the property management business for the long-term, you may want to look at getting a fixed rate apartment loan. A fixed rate loan guarantees the same interest rate over the life of the mortgage.
Supposing interest rates are historically low at the time you secure the apartment loan, this type of loan will lock you in at the best rate possible. On the other hand however, if interest rates are historically high at the time of the loan, you might be stuck paying interest at a higher rate than you would have with another type of apartment loan.
Another important question to answer before seeking an apartment loan source is the approximate cost of the property. This may seem like a no-brainer when looking for an apartment loan, but too many first-time investors just take the interest rates they’re
given without question. If the apartment building you’re interested in is selling for over $500,000, a direct lending source or investment company can usually give you a better interest rate than most banks or credit unions. However, if you’re looking at a smaller apartment building selling for less than $500,000, you may want to check interest rates at the local bank.
With banks and other lending institutions anxious to provide you with an apartment loan, new loan options have emerged in recent years. Generally speaking, smaller banks and other lending sources like direct lenders have a greater degree of flexibility in what they can offer borrowers. In order to attract larger numbers of borrowers, many lenders now offer non-recourse.
A traditional recourse loan means that the lender has claim on personal or corporate assets in the event of a default by the borrower. On the other hand, a non-recourse apartment loan means the lender cannot hold you personally liable if you fail to repay the debt as promised. The only recourse for compensation to the lender is to take the property you’ve pledged as security for your loan, but he cannot claim any other assets or money from you if you default.
Whichever apartment loan option you decide on, it’s important to be certain you understand the details. It’s vitally important that you choose a lender that has both the experience and inclination to take the time to sit down with you and answer your questions clearly. Getting your apartment loan from a source you can trust will go a long way in helping you find success and enjoyment in the exciting world of property investing and management.
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Alan Simpson is more wrong than ever on Social SecurityLos Angeles Timeswho has long been the go-to guy for obnoxiously know-nothing takes on Social Security, this week uncorked yet another spectacularly misinformed "factoid" about the program's history. In a letter to Max Richtman, a former Senate staffer who now heads ...and more » |
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