by Kenbry Capital | Nov 1, 2024 | Blog
Commercial real estate (CRE) is a popular investment choice that comes with potential high returns and diversification of your investment portfolio. However, entering the CRE market can seem intimidating at first, with its jargon, large capital requirements, and complex transactions. Here’s a simple guide to help you get started on your CRE investment journey.
Understand the Market
Understanding the market is the first step in CRE investing. This requires a grasp of basic terms like capitalization rate, net operating income, and occupancy rate. It also involves understanding the different types of commercial properties (like retail, office, industrial, multi-family, and special purpose) and their risk and return profiles.
Do Your Homework
Research is vital before you dive into commercial real estate. Consider factors like location, local market conditions, property condition, and potential for rental income. Use tools like online property portals, real estate market reports and analyses, and professional real estate networks to gather information.
Secure Financing
Commercial real estate often requires significant capital. Multiple financing options exist, from traditional bank loans to crowdfunding platforms. Assess your financial health, understand the costs and benefits of each option, and choose the one that suits your financial standing and risk tolerance.
Build a Network
Building relationships with professionals in the industry can help you identify potential deals, understand market trends, and navigate complex transactions. This network can include real estate brokers, attorneys, accountants, fellow investors, and property managers.
Consider Partnering with Professionals
Commercial real estate transactions can be complex, involving detailed contracts and significant regulatory oversight. It might be beneficial to partner with professionals like real estate attorneys or experienced CRE brokers to navigate these complexities.
Diversify
Finally, diversify your commercial real estate investments. Owning different types of properties in different regions can protect you from localized market downturns.
Investing in commercial real estate can be a worthwhile endeavor that reaps significant financial benefits. The key is to do thorough research, understand the market and your financial capacity, build a strong network, and diversify your investments. If you need financing for your first commercial real estate investment, contact the team at Kenbry today.
by Kenbry Capital | Oct 4, 2024 | Blog
Owning rental property can be a lucrative investment, but it also comes with its share of headaches and concerns. That’s where a property management company comes into play. Engaging the services of a professional property management company can bring a wealth of benefits to landlords, especially those who own multiple properties.
Professional Handling of Property Matters
A property management company takes over the hassle of dealing with property-related matters, from tenant screening to maintenance and rent collection. They have the experience and resources to handle issues efficiently, which can save you time, effort, and unnecessary stress.
High-Quality Tenants
Through rigorous screening processes, a property management company can secure high-quality tenants for your property — those who pay on time, rent longer, put less wear and tear on the unit, and cause fewer problems. Having such tenants can make your investment more profitable and less problematic in the long run.
Lower Maintenance and Repair Costs
Good maintenance and timely repairs keep tenants happy and preserve the value of your investment. Property management companies, often having in-house maintenance staff and bulk discounts from their network of contractors, can ensure that the job gets done right at a lower cost.
Effective Marketing and Rent Setting
Your property won’t generate income if it’s vacant. Property management companies can help minimize vacancies by effectively marketing your rental property to attract tenants. Additionally, they have an in-depth understanding of the local market and can set competitive rental prices to attract tenants and maximize your income.
Compliance with Property Laws and Regulations
With knowledge and understanding of the latest property laws and regulations, property managers can help you avoid lawsuits by keeping your property compliant. They can handle everything from federal to state and local regulations, ensuring you meet all necessary legal requirements.
Conclusion
While hiring a property management company does come with a cost, the benefits — from saving time and reducing stress, to ensuring compliance with laws and getting the best tenants — can significantly outweigh these costs. By entrusting your property to a competent property management company, you can sit back and enjoy the advantages of being a property owner without the headache of direct hands-on management.
by Kenbry Capital | Sep 6, 2024 | Blog
Investing in multifamily properties has long been recognized as a savvy real estate strategy. It offers the potential for consistent cash flow, risk spread over multiple units, and ample opportunities to increase value. However, maximizing returns requires more than just buying and renting out units. Here are five strategies you can implement.
1. Property Management
Effective property management is key to maximizing returns. A well-managed property attracts and retains quality tenants, reducing vacancy rates and turnover costs. Consider hiring a professional property management company that has the expertise and resources to handle everything from tenant screening to maintenance, legal issues, and customer service.
2. Regular Maintenance and Upgrades
Staying on top of regular maintenance not only keeps your property in good condition but can also prevent costly repairs in the future. Furthermore, strategic upgrades can significantly increase your property’s value and allow you to charge higher rents. Think energy-efficient appliances, modern fixtures, or improved landscaping.
3. Tenant Retention
High tenant turnover can lead to vacant units, lost rental income, and additional costs for advertising, screening, and preparing units for new tenants. Implement strategies to retain good tenants such as prompt responses to repair requests, regular property updates, and fostering a sense of community.
4. Rethink Amenities
Amenities can be a major draw for tenants and can justify higher rents. Determine what amenities your target tenants value the most. This could be anything from in-unit laundry and pet-friendly policies to communal spaces like a gym or rooftop terrace.
5. Strategic Financing
Choosing the right financing strategy can greatly influence your returns. Shop around for the best mortgage rates, consider refinancing if market conditions are favorable, and don’t overlook opportunities like 1031 exchanges or opportunity zones for tax benefits.
By adopting these strategies, you can maximize the returns on your multifamily property investment. Always remember, successful real estate investing is about more than just accumulating properties. It’s about managing them strategically and creating value at every opportunity.
If you need financing to acquire, renovate, or build a multifamily property, contact the team at Kenbry today.
by Kenbry Capital | Aug 2, 2024 | Blog
The financial planning of any large construction project is critical to its success. It demands careful consideration of diverse factors including labor costs, material costs, and administrative expenses. In this blog post, we’ll guide you through a systematic approach for creating a realistic and effective budget for large construction projects.
Understand Your Project Scope
The first step in budgeting is to thoroughly understand your project scope. This involves identifying all necessary tasks, required resources, and the timeline for completion. A detailed project scope helps you accurately forecast the costs involved, thereby reducing the risk of overspending.
Estimate Costs
The next step is to estimate the costs associated with each element of the project. This includes direct costs such as materials, labor, and equipment, as well as indirect costs like administrative expenses, permits, and insurance. It’s advisable to add a contingency for unexpected expenses as construction projects often encounter unforeseen challenges.
Track and Control Costs
Once your budget is set, it’s crucial to continually track and control your costs. Use project management tools to monitor your spending and ensure they align with your budget. Regularly review your expenses and make necessary adjustments to keep your project within budget.
Review and Adjust Your Budget
Remember, a budget is not a rigid document but a flexible tool that should adapt to the realities of the project. Conduct regular budget reviews and make adjustments as necessary based on project progress and unforeseen changes.
Remember, budgeting for large construction projects can be a complex process, but with careful planning, diligent tracking, and regular revisions, it is possible to keep your project financially healthy and ensure its success. If you need ongoing to permanent financing for a large construction project, reach out to the team at Kenbry today.
by Kenbry Capital | Jul 5, 2024 | Blog
Real estate investment, particularly multifamily property investments, is a proven strategy to build wealth. So, if you’re considering this route, here’s a comprehensive guide to set you on the right path.
Understanding Multifamily Property Investments
Multifamily properties are primarily residential properties that have more than one unit for tenants, such as duplexes, triplexes, and apartment buildings. These property types offer unique advantages for investors, including multiple streams of income, lower risk of total income loss, and economies of scale that can reduce per-unit costs.
Steps to Building Wealth Through Multifamily Property Investments
- Education and Research
Before diving into multifamily property investing, it’s essential to educate yourself on the subject. Arm yourself with knowledge on real estate investing, market trends, how to evaluate potential property investments, and the legalities involved in owning and operating rental properties.
- Financing
Identify your financing options early on. These options could include traditional bank loans, private lending, or even partnering with other investors. Pre-approval can give you a competitive edge when it comes to negotiating and closing deals.
- Property Selection
When it comes to property selection, consider the location, the condition of the property, potential rental income, and the costs of any necessary renovations. Look for properties in areas with high rental demand and low vacancy rates.
- Acquisition and Renovation
Once you have a potential property in sight, negotiate the purchase price and finalize the deal. If the property requires renovations, hire reliable contractors and manage the project effectively to avoid cost overruns.
- Property Management
Effective property management is key to a successful multifamily property investment. This can involve everything from tenant screening, lease management, maintenance, to rent collection. You can choose to manage the property yourself or hire a professional property management company.
- Growth Strategy
Finally, develop a growth strategy for your investment portfolio. This might involve refinancing properties to free up capital for additional investments or selling properties that have appreciated in value to invest in larger, more lucrative properties.
Building wealth through multifamily property investments can be a challenging yet rewarding journey. By planning well, staying informed, and being diligent in your approach, you can create a robust and profitable real estate portfolio. Remember, every investment comes with risks, so it’s important to assess every opportunity carefully. Contact Kenbry today to get the financing you need for multifamily investments.
by Kenbry Capital | Jun 7, 2024 | Blog
Short sales can be a great way to snap up a property at a bargain price. However, these transactions often need to be completed in a short time frame, which can be challenging if you’re waiting for a traditional loan to be approved. This is where bridge loans come in.
Understanding Bridge Loans
Bridge loans are short-term loans designed to bridge the gap between the purchase of a new property and the sale of an existing one. They offer immediate cash flow, allowing you to secure a property quickly and repay the loan when your existing property sells.
Using Bridge Loans for Short Sales
- Quick Property Acquisition
One of the primary benefits of bridge loans is the speed at which funds can be acquired. This is crucial in a short sale scenario where the seller may be looking to close quickly. Obtaining a bridge loan can help you meet these time constraints and secure your desired property.
- Flexibility
Bridge loans offer a considerable amount of flexibility. You can use these loans to cover the cost of your new property, any necessary repairs, or even expenses such as staging your existing home for sale.
- Temporary Solution
It’s important to remember that bridge loans are a temporary solution. They are typically designed to be paid back within a year, once your original property has sold.
Risks and Considerations
While bridge loans can be an excellent tool for short sales, they are not without risks. These loans often come with higher interest rates than traditional mortgages. Additionally, if your existing property doesn’t sell as quickly as anticipated, you may end up paying more in interest.
Conclusion
If used wisely, bridge loans can be a powerful tool in short sale transactions, allowing purchasers to act quickly and secure their desired property. It’s essential to understand the nature and terms of the bridge loan, the market conditions, and your financial situation to make the most of this financing option. Seeking advice from a financial advisor or mortgage professional can also be beneficial.
Remember that while bridge loans can provide the funds needed to complete a short sale quickly, they are a short-term solution and should be treated as such. Plan thoroughly, and be prepared for all possible outcomes to ensure a successful property transaction. Reach out to the team at Kenbry if you need customized financing for a short sale.
by Kenbry Capital | May 3, 2024 | Blog
Commercial real estate investing can be highly lucrative, but like any investment, it does not come without its fair share of risks. Lenders understand these risks, and they want to be certain that they’re making a wise decision when they lend money to commercial real estate investors. Here are key aspects that lenders look for before they give the green light to your commercial real estate investment.
Financial Stability
First and foremost, lenders want to see evidence of financial stability. This can come in various forms such as evidence of consistent income, a strong credit score, and a solid balance sheet. Lenders want to see that you have a reliable income source that will allow you to make your loan repayments on time. They also want to know that you have the financial reserves necessary to withstand potential adverse events.
Experience
Experience is another significant factor that lenders consider. If you’re a seasoned investor with a proven track record of successful commercial real estate investments, lenders will be more likely to see you as a safe bet. However, if you’re new to the game, don’t despair. Consider partnering with a more experienced investor or hiring an experienced real estate team to bolster your credibility.
Business Plan
Lenders also want to see a well-thought-out, detailed business plan. This business plan should clearly define your investment strategy, projected income, and expenses, as well as your exit strategy. A well-articulated business plan is a clear indicator that you’ve done your homework and are prepared for the journey ahead.
Property Details
Before making a decision, lenders will want to know every detail about the property in question. They’ll want to know the property’s location, its current condition, and any potential issues that could arise. Your ability to provide this information and your willingness to undertake a professional property appraisal will stand in your favor.
Collateral
In many cases, lenders will require some form of collateral as a safety net. This could be the property itself or other assets you own. The more collateral you can offer, the more reassured lenders will feel about the safety of their loans.
In conclusion, while seeking financing for commercial real estate investments can be a complex process, understanding what lenders are looking for can greatly enhance your chances of securing the necessary funds. By demonstrating financial stability, experience, a well-crafted business plan, detailed property information, and offering suitable collateral, you’ll position yourself for success in the eyes of lenders.
If you need financing for commercial real estate, contact the specialists at Kenbry today.
by Kenbry Capital | Apr 5, 2024 | Blog
Investing in real estate is a proven path to long-term wealth, and rental properties can provide a steady income stream. However, the world of real estate investment poses some critical questions: Should you invest in multifamily rentals, or is a single-family rental (SFR) the better option? Let’s delve into the pros and cons of each to help you make an informed decision.
Single-Family Rentals (SFRs)
SFRs are standalone homes with their own plot of land, offering privacy to the tenant and less maintenance for the landlord. Here are some key advantages:
Lower Acquisition Cost:
SFRs typically have lower purchase prices than multifamily properties, making them more accessible to beginner investors.
Market Liquidity:
SFRs tend to have higher market liquidity. It is generally easier to find buyers for single-family homes than for multifamily properties.
Flexibility:
With SFRs, you can sell off one property at a time, which provides more flexibility and doesn’t require you to liquidate your entire investment.
However, some challenges include:
Vacancy Risk:
If a single-family rental becomes vacant, you lose 100% of the rental income until a new tenant is found.
Scalability:
Growing a portfolio of single-family homes can be time-consuming. Each new property requires a separate transaction.
Multifamily Rentals:
Multifamily rentals are properties that have more than one unit, such as duplexes, triplexes, and apartment complexes. Here are some advantages:
Cash Flow:
Multifamily properties often provide more cash flow because you’re collecting rent from multiple tenants.
Economies of Scale:
With multiple units under one roof, you can achieve economies of scale, reducing the cost per unit for maintenance and management.
Lower Vacancy Risk:
If one unit becomes vacant in a multifamily property, you still have income coming in from the other units.
On the downside:
Higher Acquisition Cost:
Multifamily properties tend to have higher purchase prices than single-family homes, which can be a barrier to entry for some investors.
Complex Management:
Managing multifamily properties can be more complicated due to the number of tenants and potential disputes.
So, should you invest in multifamily rentals, or single-family rentals? The answer depends on your investment goals, budget, risk tolerance, and management preference. Consider the pros and cons of each carefully, and perform thorough due diligence before making your investment decision.
Whether you need financing for multifamily rentals or SFRs, contact the team at Kenbry.
by Kenbry Capital | Mar 8, 2024 | Blog
The real estate market has always been a lucrative platform for investors seeking tangible assets that generate both passive income and potential value appreciation. But the traditional approach of buying to let on long-term contracts has been somewhat outdone by a new strategy – short-term rentals.
High Revenue Potential
Short-term rentals, often facilitated by platforms like Airbnb, offer an opportunity for owners to generate significantly higher income. The ability to charge per night often equates to a higher monthly income than a traditional lease, particularly in tourist hotspots or during peak times. By adjusting rates based on demand, owners can maximize their income in a way that just isn’t possible with long-term leases.
Flexibility in Property Usage
Aside from the financial perspective, short-term rentals also provide flexibility. If you want to use the property for personal reasons, you can simply block out the dates you need. This is particularly beneficial for those who own properties in vacation destinations and want to utilize them occasionally.
Better Maintenance and Less Wear and Tear
On the surface, it might seem that short-term rentals would suffer more wear and tear than long-term leases, but that’s not necessarily the case. Because short-term rentals are cleaned and inspected regularly, any issues are likely to be caught and addressed early, preventing minor problems from becoming major repairs.
Diversifying Your Investment
The real estate market fluctuates, and having your investment spread across different types of rentals can help to mitigate risk. If long-term rental demand declines, the short-term market might still be thriving, allowing you to maintain a steady income.
Tax Benefits
Depending on your location, you may also be able to enjoy significant tax benefits from short-term rentals, with the possibility to deduct expenses such as mortgage interest, property taxes, insurance, and maintenance costs.
To wrap up, investing in short-term rentals is a promising avenue offering high potential returns and flexibility. Of course, as with any investment, it is not without its challenges. However, with careful planning, a well-chosen property, and effective management, short-term rentals can be a smart addition to your investment portfolio. Contact Kenbry today to learn more about our financing programs for short-term rentals.
by Kenbry Capital | Feb 2, 2024 | Blog
Navigating the landscape of home loans can be a daunting task for any prospective homeowner. Among the multitude of options available, two of the most commonly discussed types are Stated Income Loans and Traditional Loans. To help clear up some of the confusion, we will delve deep into each of these loan types, contrast their features, and aim to provide you with the information needed to make an informed decision.
Traditional Loans
Traditional loans are the most common types of home loans. They usually come in two forms: Fixed-Rate and Adjustable Rate Mortgages. With these loans, lenders require comprehensive documentation, including W-2 forms, tax returns, and bank statements to verify your income and ability to repay the loan.
The primary benefits of traditional loans lie in their relatively low interest rates and fixed payment schedules, making them a predictable option. However, they require a good credit history, a stable income source, and usually a substantial down payment.
Stated Income Loans
On the other hand, Stated Income Loans, also known as “no-doc” or “low-doc” loans, require less documentation. As the name suggests, borrowers simply state their income without needing to provide extensive evidence. These loans were designed for self-employed borrowers, or those with variable incomes, who may have a harder time gathering traditional income documentation.
Stated income loans offer flexibility that can be attractive to some borrowers, but they often come with higher interest rates to offset the perceived risk by the lender. They also require a higher down payment and a good credit score.
Comparison
When comparing the two, Stated Income Loans offer convenience and less documentation, but they come at a cost. Higher interest rates can significantly increase the amount paid over the life of the loan.
In contrast, traditional loans require more paperwork and have stricter qualification criteria, but they typically offer more favorable terms, including lower interest rates.
Final Thoughts
In summary, the choice between a Stated Income Loan and a Traditional Loan depends largely on your personal circumstances, including your income structure, credit score, and your ability to provide documentation. Before making any decision, it’s always best to consult with a mortgage professional who can guide you based on your unique financial situation.
Remember, the key to successful homeownership is not just getting a loan, but getting the loan that’s right for you. Contact Kenbry today to learn more about our stated income loans for commercial real estate.
