Developers

Tenants’ Improvements and Betterments (TIBs)

Tenants’ improvements and betterments (or TIBs) are when a renter makes changes to a property or building that will increase its value. As a commercial landlord, your lease should include a clause about these upgrades and how they become your property at the time of the update. These improvements could include anything from installing new carpet, adding fixtures, or even building an addition. Basically, this means that anything your tenant attaches to your building permanently becomes yours.
Who Covers the Expenses of Insurance?
How you go about insuring these items depends on your lease. If your tenant is responsible for maintaining the improvements, they should be insuring these areas. However, the fact that your tenant is using the areas doesn’t mean you’re necessarily off the hook for coverage. Your commercial policy should safeguard anything added to your property, but you’ll need to increase the value of your building as a whole on your policy, since your tenant just did you a favor. It would be a good idea to have your attorney review any changes made to your insurance policy.

Many potential tenants look for the TIB portion of a lease right away. If you allow your tenants to make changes that will improve their business, you can develop a long-term, mutually satisfying relationship. Increasing the value of your property and having happy tenants is a real estate investor’s dream. As with any lease section, you need to cover all of your bases, and make sure the language is clear and easy for both parties to read. Having specific details laid out up front could save you a lot of grief later on.
Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan in Atlanta, we […]

3 Tips for Valuing a Commercial Property

 

Many real estate investors understand the value of walking around a residential neighborhood to gauge the potential investment value of a property. However, fewer REIs place the same importance on walking a commercial property. However, if you know what to look for, you can glean some valuable insight into value of commercial real estate.
Valuing Commercial Property: Typical Vehicles and People in the Area
As you walk through the area, make note of what you see.

Do you feel safe as you walk?
What kinds of cars and trucks do you see?
Is the neighborhood demographic appropriate for the type of business you’re considering buying?

Check the alleys for signs of rodents, homeless camps and other factors that may make a property less than desirable. You can renovate a building but you can’t change its surroundings.
Ease of Ingress and Egress Has an Impact on a Commercial Property’s Value
Speaking of things you can’t change, how easy is it to access the commercial property you’re considering? Look at the traffic flow in and out of the parking lot, entryway and loading area. Would it be easy to access in a car? What about a local delivery truck or a semi with a trailer? Depending on the type of business, tight spaces and a lack of pull-through options might be a deal breaker.
Use of Neighboring Properties in Valuing a Commercial Property
Do the local businesses compliment the intended usage of the property you’re considering? For retail, it’s ideal to have complimentary, but not competing, stores nearby. For any business, you should consider whether neighboring sounds, smells or activities will impact the potential value of your property.
Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan […]

Investors and Developers: Could You Use Hard Money?

In some cases, investors and developers are better off taking out a hard money loan than using a traditional loan.

So when is a hard money loan better for developers and investors?

Typically, hard money is a better choice when an investor or developer:

Needs to close quickly and following traditional funding routes would take too long. Often, banks and other traditional lenders take several weeks – if not longer – to process the paperwork on a loan.
Has several good opportunities but not enough cash to accept them all. Banks won’t extend credit if it appears you’ll become over-extended.
Wants to take advantage of an opportunity without the financial strength banks require. While your credit scores and financial history are important with a hard money loan, they carry far more weight with a conventional loan – and that can make it difficult to obtain financing in many cases.
Has credit through a lender, but the credit isn’t sufficient for the investment.

Credit and Hard Money
Although credit is important when you’re interested in borrowing hard money, usually the collateral is more important than a borrower’s credit history. Because these types of loans, which can be for up to 65 percent of the collateral’s after-repair value, or ARV, are typically short-term and designed for investment purposes, they’re often the way to success for investors and developers.
Are You Looking for a Hard Money Loan in Atlanta?
If you’re interested in obtaining a hard money loan in Atlanta or its suburbs, we can help.

Call us at 404-814-1644 or get in touch with us online. We’ll be happy to answer your questions and walk you through the application process. You can also apply online today.