Real Estate Financing

5 Tips for Financing Investment Properties

1. Have a sizable down payment
2. Be a 'strong borrower'
3. Shy away from big banks
4. Ask for owner financing
5. Think outside the box

These five tips from bankrate.com give excellent insight on how to present yourself when trying to obtain a real estate investment loan. Depending on what type of property you want to buy, and how much cash you have to put down, you can gather what type of institution you need to approach. You may even decide to explore the option of getting money through owner financing, renovation money through home equity lines of credit, credit cards or even from some life insurance policies.
*Read more: Bankrate.com


Types of Financing from MacKenzie Capital commercial real estate services:

Permanent Mortgage Financing

Acquisition Financing

Residential Development Loans

Construction Loans

Redevelopment Loans

Mezzanine Financing

Bridge Loans

Forward Commitments

Participating Debt

Joint Venture Equity

Equity Placement

Non-Performing Loan Sales

Advisory Services

Funding sources include:

Life Insurance Companies

Wall Street Conduits

Pension Funds

Banking Institutions

Credit Companies

Opportunity Funds

Mortgage REITs

Private Equity

Find out more about how MacKenzie uses these resources to finance real estate by visiting their website at MacKenzieCommercial.com

Overview of Real Estate Finance

There are countless opportunities out there for financial professionals wanting to get involved in the real estate side of business. About a third of the world's assets are tied into real estate. Real estate is powered by the institutions that enable people to obtain financing for their properties. A few finance career areas available in real estate include:

• Residential Mortgage Loan Officer
• Residential and Commercial Development Finance
• Corporate Real Estate Management
• Investment Analyst

For actual financial job listings within real estate visit the website below:
Financial Careers in Real Estate

Housing Market Malaise: How Long Will Real Estate Remain Sick?

This is a quite long video discussing the rise and fall of the housing market. They go into where we stand today, what needs to happen to improve the situation in the market, and how a healthy market may look like realistically in the future.

Overview of a Real Estate Appraisal

Real Estate Appraisal Explination

This explination of the appraisal process from Quicken Loans covers all the bases of the purpose of appraisals and their importance in the morgage industry. Having a correct, up-to-date appraisal value is of utmost importance for every party involved in a real estate transaction.

Appraisers Want your House to Appraise...

This video is very insightful in how each party in a real estate transaction functions, what their goals are, and how they all work together. If one party does not do their job right, it makes it harder for everyone else to close a deal. Transactions in real estate essentialy start from the price the listing agent lists the property for. Even if there is a buyer for the property, the loan may be declined because the appraiser for the loan finds that the property is not worth as much as it is listed for. The best thing for everyone would be to only list properties based on their true value.

Overview of a Real Estate Appraiser

Quick Facts: Appraisers and Assessors of Real Estate
2010 Median Pay	$48,500 per year $23.32 per hour
Entry-Level Education	High school diploma or equivalent
Work Experience in a Related Occupation	None
On-the-job Training	Apprenticeship
Number of Jobs, 2010	77,800
Job Outlook, 2010-20	7% (Slower than average)
Employment Change, 2010-20	5,800

The work of an appraiser is mostly a full time job. They will spend much time writing reports, but the majority of an appraisers work is done outside the office, visiting different sites. To start training to become an appraiser you must have at least a high school diploma. Many hours of classroom work and hours of on-the-job training are required to reach certain levels of certification. Higher cirtification levels require higher degree of training and experience. In order to be able to appraise any type of property at any value, an appraiser must be certified as a General Real Property Appraiser. For more information about the appraisal career, follow the link below.
Occupational Outlook for Real Estate Appraisers

Stand up comedian, David Cash, describes his real life experience as a real estate appraiser. I can not imagine what kind of crazy things these appraisers must run into going into peoples' homes every day.

Public Restrictions to Ownership

Public restrictions on real estate generally come from the government. These restrictions are meant to support the general welfare of a community. The government has the right to assert its police powers, the power of eminent domain, and the power of escheat. The power of eminent domain has been a controversial issue for those affected by it. This power gives the government the right to take your private property without your consent in exchange for "just" compensation(not market value). The government typically uses this power to implement a large building project for the city. It puts a large burden on the homeowner, but the project is typically executed for the general betterment of a community.

Battle for Brooklyn

Battle for Brooklyn is a great example of what happens when the government implements their power of eminent domain. This power is obviously a very unpopular one, but sometimes the government deems it necessary in order to ultimately improve the community.


A pivotal role of government is to use their police powers to promote the health, safety, welfare, and morals of a community. Zoning, building codes, and rent control are examples of how they use this power in real estate.

Private Restrictions on Ownership

The ownership of real estate does not ensure free and complete use of the land. Private restrictions can be placed on property by the Home Owners Association(HOA) of a development. The HOA can increase the value of a development by enforcing certain standards on how its inhabitants should care for and use their property. In most cases these restrictions keep neighborhoods looking clean and uniform. Other times, these rules can be quite a burden. For example, my neighborhood has pine trees growing in the front yards. These trees tend to shed their pines throughout the year, so to keep the yard looking nice we use the needles as mulch for the garden around the tree. Recently we have received our third notice from the HOA insisting that we rid our yard and garden around the tree of the pine needles. In an attempt to comply, we cleaned out the garden as much as we could and planted more flowers. Felling satisfied, we figured this would be the end of the complaints. Low and behold, we receive yet another warning regarding the pine needles. I am quite positive most every house in the neighborhood is having the same problem. I don't know what they expect us to do, or what they will do to enforce this extreme request.

10 Things the HOA Won't Tell You
This articles explains an extreme case of how the HOA can abuse its power. A man was fined monthly by the HOA for planting too many roses in his garden. When the fines piled up, they placed a lien on his house and threatened to forclose. He took the board to court but lost, setting him back $70,000 in legal fees and lost his home to the bank.
You would be surprised just how much power these groups have over homeowners. They can essentially make up their own rules as they see fit, even though they may not be very reasonable. The article advises you pay your monthly dues and comply as best you can.

Home Owners Association Fees
The 81 year old veteran in this case had agreed to a $100 HOA fee, but soon he discovered he was being slapped with automatic late fees and other fines. He was unable to pay these fees, but luckly with the help of his neighbors, he was able to raise enough money to pay off the HOA and avoid foreclosure.

Property Rights and Legal Descriptions

Property Rights
This article about property rights comes from the encyclopedia of economics and is written by Armen A. Alchian. He provides a very technical description of property rights. He rejects the common notion that property rights go against human rights. He believes that property rights are human rights. He gives the definition of property rights to be "the exclusive authority to determine how a resource is used, whether that resource is owned by government or by individuals." The task of defining and allocating property rights within a society is not an easy one. Private property holders can have exclusive rights to the land, or they may have restrictions on how the land can be used. Either way, the rights of the property owner must be explicitly stated.

Real Estate Legal Descriptions

This link conveys in plain English what the legal description of real estate is. They narrow it down into two categories of property; platted, and unplatted. The plat gives very specific location, size, and shape of each plot of land. The direction and distance of property lines are measured by a system of metes and bounds. The picture on the right shows how a developer would use this system to plot out the property lines of a subdivision.