Q3 2016
Thank you for the opportunity to share general information relating to the commercial real estate industry and what's new at The Loan Company of San Diego.

The Loan Company is a private direct lender, making commercial and residential real estate investment loans fast and easy. WE ARE COMPETITIVELY PRICED WITH RATES STARTING IN THE HIGH 7% RANGE. We specialize in real estate investment loans on all income property types, and we also consider renovation and construction loans on certain property types.
 
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Our Annual Borrower/Broker relationship event was September 22, 2016. We had a great time networking and relationship building.

We discussed the importance of relationships in generating business and the value of relationships as they tie to opportunities. For example, investors with strong broker relationships are getting the referrals first. They're getting the pocket listings and the first to see the off market deals. It's these relationships that make the difference.

Status of the market. My forecast on the market is more of the same outside an act of God or an act of terror. We are going to have to continue to be creative and more proactive in making deals happen. Stronger employment and higher wages are contributing to a healthy local economy. The housing supply and projected units coming on line are still not close to providing the housing needed to meet the demand. This will continue to push housing prices higher in the near future. Where are interest rates going?

I believe long-term interest rates will continue to remain low for the following five reasons:

Global economy is in turmoil with negative rates in Europe and Japan. Too much money is flowing into the US market inflating the stock market and putting downward pressure on Treasuries.
US Debt is over $20 trillion any increase in interest rates will compound the problem.
The value of the US dollar, in comparison to other countries currency, is higher than it has been in decades effecting corporate profits.
US GDP (Gross Domestic Product) has been anemic the last 5 years hobbling along on average at about 3% and it doesn't look any better this year.
Inflation has been less than 2% the last two years and is expected to be even lower this year.

The Fed will continue to nominally increase short term rates over the next few years, but I don't believe it will significantly impact long term rates in the near term. Things would have to change drastically, as it relates to the 5 reasons above, for there to be a huge increase in long term rates. The Fed can control the front end of the curve with the short term rates, but not the back end of the curve, the market controls the long term rates. Are we in bubble?

I believe there is a correlation between long term interest rates and real estate values. When we start to see a significant rise in long term interest rates on a more permanent basis that's when we most likely will see a correction in the real estate market. I believe we are in somewhat of a real estate bubble with these extremely low cap rates, but I don't see the real estate bubble bursting anytime soon.

Call us at 619-293-7770 ext. 20 today to see how we can help you.


 

 

With The Loan Company's help this borrower was able to purchase an under-performing mixed-use commercial property and close in a matter of days.
 
 
 
 
$750,000 Purchase
5-Unit Apartment
San Diego, CA

 

$200,000 Purchase
Single Family Investment
Chula Vista, CA

 

$1,000,000 Purchase
 6 Unit Apartment
San Diego, CA
Click on the images above to learn more.
 
 
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6 Habits of Successful Real Estate Investors
By by Theresa Bradley-Banta





1. Make Money “On the Buy” When you invest in a rental property that you can immediately sell for a profit, you’ve made money the day you close. On paper anyway—of course you actually have to sell it to make real money. The idea is to negotiate a decent deal. Don’t overpay for the property. Don’t buy the first property you see—there are plenty of good investment properties available. This strategy helps you rely less on forces outside of your control such as market appreciation or the economy. A good solid real estate investment is one where you buy at a negotiated price and then create added value through smart management appropriate upgrades and renovations a good team and a solid operations plan.

2. Have Solid Investment Exit Strategies What are your plans for your property once you own it? Will you hold it until retirement? Fix it up and sell it? Refinance the property, take some cash out and invest the proceeds into more real estate? Convert the property to another use? These are your exit strategies. When you have solid investment exit strategies you have a better idea of how you will operate the property today. Let’s say you want to keep the property as rental for now and convert it to a condominium when the condo market improves. Do you see how this decision will inform your renovation decisions? You might do very little renovating today (enough to attract good renters) and then do a high-end renovation (meeting the expectations of a condo buyer) at a later date.
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3. Work On Your Business Not In It This is where having a great team is critical. Look at real estate investing as a business. Your job is to manage your business assets and to carry out strategies that grow your investment portfolio. That’s hard to do when you’re micro managing your property or doing small maintenance jobs every day. You don’t want to lose sight of your long-range plans or compromise your ability to consistently carry out your plans. What tasks or jobs will you farm out? Does it make sense to hire a small jobs contractor to handle the maintenance while you get out in the market looking for your next investment property? The answer is “Yes!” It’s easy to fall into the “I’ll just do it myself” trap–especially if you have the know-how.

4. Start Networking Networking is the best way to expand your horizons especially if you’re building a real estate investing business. Through networking you will: Meet and learn from other successful real estate investors (mentors) Discover new markets Find new contractors and service providers through referrals Continue your education Find investing deals that the public has no access to Who do your friends and acquaintances know? I’ll bet you can get warm referrals to successful investors by making a few phones calls. Don’t underestimate the value of building your network.

5. Keep Happy Partners This almost seems like a no brainer, doesn’t it? If you have partners in your deals you know that you want to keep them happy. Right? Well . . . there’s a fine line between happy, content investors and those investors who want to run your business for you. It’s not unusual to have investment partners who have zero experience in real estate investing. Do you really want your partners micro managing your business? Make your partnership structure clear from day one. For example, at the early stages of the investment process: Answer any and all questions about the property and the financials. Offer a tour of the investment property. Offer to let your team (such as your property managers) meet your partners in a short introductory telephone call. Promise (and keep your promise) to send quarterly updates on everything that’s happened with the investment over the past quarter. Hold an annual in-person meeting (a requirement of some partnership agreements). Outline the role of all participants in your partnership agreement. 

6. Buy on Facts, Not Emotion Intuition and feelings have no place in real estate investing. Unless the property you’re buying will be your personal, primary residence don’t fall in love with the property. At least wait until you’ve owned it for a while and it’s earned your love. Think about your first crush. Were you looking for faults and flaws at the time? No! You were head over heels, blindly, madly in love. Have you heard the expression, “Love is blind?” You must kick the tires and look under the hood of any investment property you’re thinking about buying. Run the numbers. Bring in the property inspectors. Know your rental market. You’re already showing your investing smarts by reading this article. Keep it up. Read everything you can get your hands on. Pick up the phone and start networking.

 

 
 
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John Lloyd Call us for more information about obtaining a commercial real estate loan.
John P. Lloyd
President
T: 619.293.7770 ext. 20
E: Jlloyd@theloancompany.com


CA DRE Broker License # 01376920
NMLS ID #345838

 

 
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The Loan Company - 2356 Moore St. Suite 201 - San Diego, CA 92110