Property Bridging

[propertybridging]

Real Estate Fun Facts  

Many people find real estate as something that’s both lucrative and a lot of work. By any means we don’t wish to correct them because it is indeed true. But instead of going technical with the jargons today, Advice2credit is here to add some fun into the mix. Here are some real estate facts and trivia that’ll surely blow your mind and perhaps add a pinch of excitement to your day.

1.    A home in Suwon, South Korea was modeled and designed after a bathroom necessity. From the outside, it completely looks like a toilet seat! The architecture was in conjunction to the start of the global toilet association started by Korean sanitation activists back in 2007.

2.    Brass knobs sanitize themselves. The metal possesses the oligodynamic property which makes it toxic to fungi, viruses, spores and many common household germs.

3.    Charles Floyd was a hero for the masses. Sort of. Known as “Pretty Boy”, this Robin Hood-like gangster during the Great Depression was infamous for robbing banks and at the same time destroying as much mortgage documents he could find. Because of this, many citizens were freed from their debts.

4.    Housewarming parties were derived from an old tradition where neighbors, friends and family bring in firewood to light and warm up all the fireplaces of the newly bought house, thus the term. It is also believed that doing so drives evil spirits away.

5.    Red doors mean different things. In old Scotland, it means that the house has been fully paid and is free of mortgage. Americans paint theirs red to symbolize hospitality and that they welcome guests while the Chinese see it as an invitation to luck.

6.    Spiders can create a real estate legal battle. After purchasing their new home, a Missouri family sued its previous owners for lack of full disclosure. They found out that after Brown Recluse Spiders bled off the walls. As part of the case, a pest expert was hired to take a look and estimated that the house was indeed infected with an estimate of 5,000 of the said creepy-crawlies.

7.    Trouble, a dog, has been bequeathed $12 million. Leona Helmsley, real estate investor and hotelier labeled as sobriquet “Queen of the Mean”, left a whopping $12 million to her pet when she passed away in 2007. This is evidenced by her will.

8.    Warren Buffet has not moved houses. Despite being one of the world’s most successful investors and business magnates, the man has been living in the same house he bought back in 1958 which was valued for $31,500.

So, which among these fun facts from Advice2credit shocked you the most?

[propertybridging]

Property Bridging Finance and How Not to Mess It Up

People have a knack for misusing money. Either they completely gave up trying or didn’t know any better. Where do you fall? But that shouldn’t be the case. There’s a workaround things. There always is and today we’re teaching you about property bridging finance and how not to mess it up.

The cash from a bridge loan is used to provide for short term liquidity needs or even emergency expenditures. It’s taken out while a permanent funding is being processed or has already been approved but won’t be available at the time of need. Regardless of its nature and design, using the resources from it must be done in as efficient as possible.

So to answer the question earlier, how does one not mess up? The answer is simple. A budget and below are some fool-proof ways to make an effective one.

1.    Go for a challenging budget. – If you create one that is so easy to attain and is not strictly implemented then you lose every bit of sense and purpose to it. It creates slack and an opportunity for wastage that further leads to shortages.

2.    Make sure it remains realistic. – At the same time, it has to be possible and realistically set. There has to be otherwise you will lead to frustration. Budgets have to be tough enough to encourage improvement and avoid slack but also realistic in all sense.

3.    Keep a tab on all expenditures. – What are your needs? What expenses will you spend it on? List them down and allocate. Make sure to prioritize as well. Add in the factor of urgency and time too. This way, you get to see which costs should be provided for and which ones go first before the other.

4.    Ask for advice. – Most often than not, an opinion can make a lot of difference. Why? It allows you to see at a different point of view. You’re not the only smart ass in the room. Plus, we have to admit that not all of us are skilled and trained in terms of finances and accounting. Asking for help or opinion never hurt. Welcome it.

5.    Stay prudent. – In accounting, prudence or conservatism states that in the event of doubt it is best to underestimate income/resources (gain) and overestimate expenses (loss). This applies even in the making of a budget for your property bridging finance.

[propertybridging]

Repayments of Property Bridging Finance: Are They Legit?

The repayments of Property Bridging Finance are perhaps some of its greatest assets. Borrowers would come to agree that we all want options and the liberty to choose when it comes to our transactions and finances. This does exactly that. But is this actually legit? Yes it is and we’re here to tell you more about them.

But first things first, let’s expound a little more on property bridging finance. By definition, it is a type of interim financing method which is arranged in order to connect and fill in the gap between an asset acquisition and its main financial source.

When it comes to buying real estate assets, we all know how much of a challenge it takes to come up and pool enough cash to go with the transaction seeing that this type of purchase involves something that is quite significantly valued. Plus add this to the fact that majority of main funding options available take so much time. Bank loans and mortgages have long application and approval processes. Income is something that needs a really long time to get pooled up. And as for the proceeds of selling a currently owned asset, no one knows for sure when a buyer shows up.

All of that leaves a gap in the acquisition process. When buying a property of any type, investors will need to dish enough cash to provide for pre-acquisition expenses such as research costs, professional fees and of course the necessary security deposit and down payment. Failure to provide for these will make one lose out on the opportunity to get hold of the property they want.

This is where property bridging finance gets to step in and save the day. It is a short term and temporary loan that caters to the pre-acquisition costs. It’s fast to process and relatively easy to apply for. Moreover, users have two options when closing it out.

First, you can pay it out at its maturity. This is the date set for when one’s main fund line is available or is expected to be available. Once the cash from such source is released, it shall then be used to close the bridge.

Second, you can take it out prior to maturity. If you find yourself with enough cash that can pay off the bridge then you can do so.

With the available repayments of property bridging finance, users and investors can definitely get an upper hand. Read more here.

[propertybridging]

Benefit that Landlords and Investors Get from Interim Loans

Interim loans are dubbed to be lifesavers. But what exactly made it worthy of such accolade? Let us all find out by perusing the following list of benefits that landlords and investors get from the said financing method.

But before we get into that, what do we mean by an interim loan? Simply put, it is a type of short term loan that is typically taken out for a period of two weeks to three years pending the arrangement of one’s permanent finance.

It is no secret that property acquisitions require quite an amount of resources to pull off and majority of them take time to apply for and pool considering the amount. Real estate assets are nowhere near cheap. They are hefty investments.

Since permanent financing such as bank loans and mortgages will take a considerable time before an application is approved and before cash is released, a lag occurs wherein immediate costs and needs are not provided for. The same is true for financing the purchase with the proceeds of a sale since one can never predict when a buyer shows up.

The above circumstances can hinder landlords and investors from acquiring a prime property. This is due to the fact that such purchases will require pre-sale costs. Remember that buyers will need cash to pay for expenses like research costs, agent or broker fees, legal expenses, survey costs and not to mention the security deposit and down payment.

Without the resources available, the acquisition process cannot begin. This becomes a huge disadvantage to investors and landlords as it can make them lose out on a great asset. We all know that prime properties do not stay up for sale long in the market. It’s a battle field out there and failure to deliver means defeat.

That is bad for business and even on a personal level. But because interim loans provide for immediate access to short term liquidity needs, it allows for such acquisitions to push through. This eliminates opportunity losses that could have been suffered. Moreover, costs can be reduced. Keep in mind that assets can appreciate in value over time. What may be the price today won’t be the same in the days to come.

Simply put, the benefits that landlords and investors get from interim loans allow them to make better and more worthwhile acquisitions.

[propertybridging]

Bridging Loans and How It Got Its Name

When it comes to interim financing, bridging loans are definitely a rising superstar. With more and more users, both individuals and organizations, it is no doubt one of the more prominent mediums in the financing jungle. But have you ever gotten curious as to how it got its name? If you have then you’re in for some treat because that’s exactly what we are about to discuss today.

Now, bridging loans work to connect two points namely a need or debt coming due and the yet to be accessible permanent fund line. It provides for the immediate needs that would have otherwise been provided for had one’s permanent funding been made available earlier.

To better demonstrate, let’s take an example. Say a real estate investor wishes to buy two condominium units on a prime beach front location to add to his portfolio. Now, he plans to finance the first one using a bank loan and the second with the proceeds of the sale of a currently owned single detached property in the city.

Now his dilemmas are as follows. The bank loan involves quite the meticulous and long application process. As for the proceeds of his sale, inquiries have been made but no sure buyer has stepped forward yet. In both cases, the time for the availability of cash is not definite. This puts the investor short of finances and at a disadvantage.

The thing is since the condominium is at a prime location other interested buyers have been quickly taking in the available units. As is with most real estate transactions, sellers will require at least a security deposit and down payment to seal the deal and failure to provide for them will have the investor losing out on the opportunity. Plus, let’s not forget all the other expenses to be had prior to acquisition.

Will the investor simply quit and move on to another prospect? Not necessarily as long as he makes use of bridging loans. Because they are an interim mode of finance, they are able to produce short term loans that will cover for the initial costs to the acquisition. In this scenario, the security deposit and down payment. It shall then be closed out upon the arrival of the main fund line at a later date.

Essentially, the bridging loan acts as a stop gap measure. Its ability to connect the two points in the otherwise impossible transaction makes it earn its name. It acts just like the architectural structure.

[propertybridging]

Questions to Ask Before You Get Bridging Loans

Bridging loans are short-term finance that is typically used when there is a gap between the sale and completion dates in a chain such as when resources are needed but one’s source isn’t ready or available yet. It is therefore a stop gap measure and a type of interim financing.

The use of bridges is fairly numerous but the real estate industry has to be its most loyal patron. This is because the purchase of an asset often requires significant costs which may not be immediately available as a whole thus requiring investors to work with time. Savings, income, bank loans, mortgages and proceeds from a sale and the like will need some sort of waiting before they are made available for use. Investors will still have to provide for their expenses as well as the initial costs of the acquisition thereby the need for a short term financing.

If you happen to believe that bridging loans are the answer to your dilemmas then we urge you to ask yourself the following questions first.

What do I need it for?

You have to define your purpose and then analyze whether the bridge can indeed provide for it. The two should be a match just like puzzle pieces. Otherwise, you may be doing more harm than good.

Do I really understand bridging loans?

Before you dive in, you have to make sure that you completely understand how this type of financing works, what it does, its benefits, its costs and even its disadvantages. Each person, business or organization will have different needs, capabilities and requirements too. You have to also know if a bridge suits you or not.

How will I pay for it?

Luckily, repayment options for bridge loans are flexible. Borrowers have the liberty to close it out before maturity, as early as it is capable of doing so or as early as it wants to. One may likewise pay it out on the maturity date itself, upon the availability of one’s permanent fund line. Whatever the case, it is important that you plan this ahead.

Am I transacting with the right providers?

Only take bridging loans from trusted and qualified providers. You want to make sure that they offer you quality, are transparent and do not have hidden costs or statements in their contracts. It would be best to make your research first, canvass and seek feedback from their clients first.

[propertybridging]

Why Finance With Receivables?

There are many ways to fund a business and receivables are only one of the countless alternatives available to entrepreneurs. But how does it work and what benefits do they bring? Allow Advice2Credit to shed light on the matter.

First of all, receivables financing is a type of asset-funding arrangement in which a company uses its receivables or more specifically customer invoices to garner needed cash. The invoices pertain to unpaid sales on credit owed by customers. The company then receives an initial amount that is equal to a reduced value of the receivables pledged, the lowest at eight percent, with the remainder to be given less the fees at a time agreed upon by both parties or once specific performance has been completed such as payment by customers.

The benefits of receivables financing are pretty diverse and includes but are not limited to the following list below.

Swiftness: This mode of financing in contrast to the others is relatively fast and quick with less and very minimal paperwork required. It can be arranged in a matter of a few days to as fast as twenty four hours. This makes it a great option for companies in need of fast resources or for emergency cases.

Cash Flow: It helps improve cash flow as it brings in resources into the company’s system. It helps companies with a high amount of sales on credit to make a positive cash flow and not fear money shortages.

Working Capital: Receivables finance frees the locked up cash within the customer invoices thereby providing more working capital which can be reinvested into the operations and used for growth and profitability.

No Collateral: There is not property collateral involved and thus no need to fear a foreclosure. Providers of this financing medium bank on customer creditworthiness and not the company’s therefore eliminating the need for collateral.

Bad Debts: With a non-recourse arrangement, any unpaid or uncollected invoices will be shouldered by the financial provider. This eliminates all bad debts expense and losses on the company’s part.

Absence of Debt: Financing with receivables does not involve any debt as it is seen as a sale of one’s assets instead. You do not have to fear the increase of your liabilities. According to Advice2Credit, this transaction is reflected in your financial statement as a decrease in trade receivables accompanied by an increase in cash. Furthermore, it helps hasten receivables turnover and collection.

[propertybridging]

Property Bridging Finance: Yay or Nay?

Property bridging finance has been rounding up the real estate industry for quite some time now. If you are a relative first timer in this business or you are simply aiming to acquire an asset for your own use then you would love to get to know what this is. Such financial method results to lots of nods and resounding hoorays from its users. 

Now, let’s start from the beginning. Fixed assets such as a bare piece of lot or a piece of land with an already erected structure are big ticket items. Admit it or not, these can cost a lot. Some may be more affordable than the others but technically they still require quite an amount. After all, these assets are not like your usual shoes and grocery items. You can’t just pick them off shelves and then bring them home. Also, their use spread out to long periods of time. Moreover, to acquire one you will have to provide for an initial advance or what sellers call a down payment.

Most buyers fund such kind of purchases in various ways and often in combination of two or more sources. Individuals, families, organizations and corporations often make use of savings and future income as well as credit in the form of bank loans, mortgages and the like. The problem with all of these aforementioned sources is that they may not be available on time. Savings may not always suffice. Future income as the name suggests are dependent on a potential or yet to occur transaction should one really happen. Lastly, credit in the form of bank loans and mortgages are effective and can indeed bring up the needed resources. The problem is that the application to approval process takes considerable time. 

What happens then should you as a buyer already need to acquire the asset you are eyeing and provide for the down payment? Plus, failure to do so will make the seller grant the offer to the next buyer in line. You surely don’t want to miss out on a prime property and a great opportunity, do you?

This is where property bridging finance and the use of bridge loans come in. This short term financing method allows real estate acquirers to borrow a certain sum to provide for the necessary initial costs on the property (e.g. down payment and initial installments). It acts as a bridge to connect the fund gap between your purchase and your yet to be available funding of choice. So yes, property bridging finance is a huge “yay” for all of us.