PropertyMagic » Commercial property

What Is Defeasance?

property — Mon, 05 Jul 2010 09:22:09 +0000

Defeasance is a process of commercial real estate finance by which borrower substitutes other income-generating collateral for a piece of real property to facilitate the removal of an existing lien without pre-paying the existing note. The original note remains in place after the defeasance though it is collateralized and serviced by the substitute securities to make the monthly debt service payments on the mortgage being defeased.

The premium the borrower uses to defease is the total cost of purchasing the securities less the outstanding balance on the loan. Secured loans cannot be defeased until two years after the day of the securitization. The lockout date is the first date the securized loan can be defeased. The borrower may have the option of prepaying the loan anytime from one to six months before maturity of a loan penalty or the premium. Borrowers can be allowed to purchase defeasance collateral to provide for payments through the start of the open period by eiminating the final interest payments.

How to sell commercial real estate?

property — Sat, 10 Jan 2009 08:00:55 +0000

If you are dealing in stocks as an investor, you need to have a basic knowledge of when to buy and when to sell the commercial real estate. If you intend to serve as a real estate agent, you need intensive practice of practically selling and purchasing property. Only if you are aware of the latest schemes and the laws pertaining to the real estate, you will be able to help others buy or sell their property easily. There are some schools that teach the techniques, but as with computers, your real talents begin to show once you are in the field.

If you are a novice, not even your best friends will tell you the best secrets of trading in the properties. The reason: they don’t want to create more competitors in the field. But then, there is help at hand, or rather your mouse click. The internet is the best source of information on buying, renting, and selling properties. You can also get abstracts of the laws of protecting your properties against your own tenants as well as others. You get to know different tips and tricks to save your property even when you are on the verge of bankruptcy. As said earlier, this information will give you theoretical knowledge only. As and when you practice the process, you get more experience in the field.

Why invest in commercial real estate?

property — Sun, 04 Jan 2009 05:40:12 +0000

People invest in different things for different purposes: to fund their children’s’ education, to buy a house, to buy a car, to deal with emergencies, and, as cover for medical and related expenses. This list is not exhaustive nor is the methods which they use for investing. Some invest in stocks while others invest in the traditional bank schemes. Others invest in Gold and other valuable items. There are a number of options. Then why should one invest in the commercial real estate?

The reason is simple. The rate at which the price of the land and associated property appreciates is pretty much higher than other methods of investing. Apart from the traditional banks’ scheme and this property investment, you do not have any chance to lose even a single cent of your money invested. The prices of gold, shares and stocks may appreciate or depreciate. But the value of property will not depreciate in any case, just as a human being cannot become shorter after reaching a certain height.

The rates at which the returns are available are much faster than any other mode of investment. There are regular fluctuations in gold, stock and other valuables but they are short lived and may reduce even before you go to encash them. In case of property, you have a steady raise in the value which is faster than the banks too. A bank may double your money in 3 years, while investing in property may bring in several times more than what you invested in the property!