Category Archives: Arizona mortgage broker Blog 15: What’s so great about trust deed investing Arizona?

Why potential commercial loan rate increases are making investors nervous

Inflation fears are stoking fears in the minds of investors about potential commercial loan rate increases in the immediate future.

Yields on short-term Treasuries have recently reached new heights, creating new fears that long-term borrowing costs could rise as well. As of February 2nd, short-term yields on US treasuries sat 2.825 percent, the highest since 2014.

So why are these rising bond yields causing so much panic among investors? Their primary concern is related to inflation and the potential for steep rate increases by the Fed.

Steady job growth may be a sign of rising inflation. The rising rate of employment indicated in the recent January jobs report has many concerned that the Fed will raise interest rates to reduce the risk of inflation.

The Fed usually raises interest rates when the economy overheats, increasing borrowing costs to keep up with inflation. The Fed also raises interest rates when it expects inflation in the near future, which has many investors worried.

Investors are wary the danger of steep increase in commercial loan rates

A fundamental question is why investors are so concerned about inflation? The perception that inflation will soon rise rapidly could entail immediate interest rate increases by the Fed. Drastic rate increases in response to potential inflation would obviously hamper any recent economic growth due to higher borrowing costs.

The historically low bond yields of recent years have made risky investments like stocks more attractive. Bond yields impact the cost of borrowing throughout the economy. If bond yields rise too sharply, companies will have the added burden of higher borrowing costs. Should the Fed rapidly raise interest rates, these riskier investments will become considerably more volatile, which could explain the recent stock sell-off.The anticipated steep rate increases by the Fed would have a clear negative impact on corporate performance. A mismatch between the “real” cost of borrowing and long-term bond yields is also raising concerns among investors.

Investors note the danger that attempts by the Fed to raise commercial loan rates and control inflation may not be enough

The fact that long-term borrowing costs have remained low has spawned the greater fear that perhaps is the Fed may not be able to raise rates sufficiently to control inflation. Some are noting the disparity between Fed rates and real long-term borrowing costs. In the past year yields on short-term Treasuries have risen in line with Fed interest rate increases. However, the yields on long-term Treasuries have remained low or unchanged.

Some fear that in the face of rising inflation the Fed could overreact and dramatically raise rates to regain control of the situation.

Still investors panic about the risk of inflation may be premature. The relationship between employment growth and inflation, known as the Phillips Curve, has not matched economic data. Inflation has been relatively moderate of late in spite of recent robust job growth. The Fed could still hold off on the rate increases many investors expect.

These concerns remain speculative the time being and rarely is sound investment strategy founded on speculation.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Benefits of Non-Recourse Commercial Loans


There are many options to explore when seeking commercial loans. One of the factors which can reduce personal liability and risk of assets is a non-recourse loan.

As you begin to explore the options for commercial loans you will quickly find that there are two main categories for these loans, recourse and non-recourse. The more common of the two is the recourse loan which requires the borrower or borrowers to personally sign as the guarantor of the loan. This simply means that in the event of business failure or inability of the business to make the loan payments for any reason, then the guarantor is personally responsible to make the payments. Obviously, this presents a significant personal financial risk to the guarantor.

Non-recourse commercial loans do not require the borrowers to become personal guarantors of the loan. Therefore, these loans do not require the risk of the personal assets of the borrowers. This is one of the biggest advantages for any borrower. Knowing that a business failure means the loss of income is bad enough but to also be faced with the responsibility of personal liability on a commercial loan can be devastating. No business owner ever chooses to take out a loan which they believe the business will default on but there is always that rare possibility, and the added stress of personal liability. But a non-recourse loan eliminates that stress and potential issue.

An additional benefit is that non-recourse loans are assumable. This can be a huge advantage if you plan to sell the property in a few years or if a situation changes and you need to sell the property quickly. Currently, commercial lending rates are very favorable, but they are expected to increase. So the current loan rate is likely to be much lower than a rate which will be offered on a loan in a few years. So when you do decide to sell the property, you have the ability to offer to have the buyer assume your loan. This will be a great incentive for the buyers as the interest rate could be significantly lower than the current rate.

The Perfect Non-Recourse Loan Candidate

Non-recourse loans are most often used to purchase properties which provide a strong cash flow as the property is the only collateral. This means that even if the property is not the more visually appealing or if it needs a face lift, it could still be a candidate for a non-recourse loan. The critical factor is the cash flow. As long as the property is generating 1.25 times the proposed payment of the loan then lenders will be eager to offer this financing solution.

Great Benefits if the Fit is Right

Non-recourse commercial loans can offer a huge benefit for the right borrower and the right commercial property. Knowing that the property does generate a strong and steady cash flow allows the borrower to get a great loan and rate without having to personally guarantee the loan in the event of a business failure. It also provides added benefits to the borrower when it is time to sell the building by allowing the buyer to take advantage of a lower interest rate on the assumed loan.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Is a trust deed investment Arizona right for my portfolio?

Is a trust deed investment right for my portfolio?

With regards to your portfolio, it is smart to be over protecting and ceaselessly in the hunt for the right investment. However look no additional as a result of trust deed investments Arizona is right right here ready for you. Trust deed investment Arizona has low threat and excessive returns and that makes individuals very blissful. Learn on to seek out out extra.

We talked about there is not a lot of a threat with regards to deed of trust investment Arizona.

You may surprise how that may very well be so we are going to clarify it to you. The wonderful thing about taking your portfolio to the following step with trust deed investment Arizona, is that you’ll at all times have an asset in your title that’s simply yours. When you make your investment you don’t have to fret that it will likely be gone with out making you any money. You by no means lose and that’s known as a win with deed of trust investments Arizona. With deed of trust investments Arizona you’re at all times making the right investment.
The favourite sort of trust deed investments Arizona are sometimes the non performing notes Arizona. It’s because performing notes may be costly. Non performing notes Arizona value little or no and at all times ends in some sort of return for the investor. That is nice information for you as a result of it means you by no means should take a single threat. You might be mainly investing in money assured –or at the very least some new property.
As you resolve what you wish to do along with your portfolio, don’t overlook about how incredible trust deed investment in Arizona may be for your variety. All the time be certain that to look into non performing notes Arizona and see how one can get a deal at an extremely low worth that will get a nice return. Don’t hesitate immediately. Make the choice now and bask within the glory later.
page-1-img-1Arizona Onerous Cash
Arizona Mortgage Broker
Dennis Dahlberg
Dealer/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.SETABAY.COM
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 12
Phoenix AZ 85027