While the banking industry is slowly moving towards recuperation, it is still apparent that there remains some hesitation towards loans from many different banks, both large and small. Bloomberg News is reporting that according to Federal Reserve Governor Elizabeth Duke, "it may take several years for lending to return to pre-crisis levels".
Consumers have become much more conscious of their spending, and coupled with what is reported as "tight credit" consumers are holding back spending even more. Although loan rates have decreased to initiate spending, the type of movement needed to speed up recovery hasn't happened yet.
Small businesses have taken a hit as well, with available credit remaining snug. This can have and has had a detrimental effect on the commercial real estate market, which relies on these small businesses to invest in properties for their business.
Some positive news comes from Hong Kong, where Market Watch reports that the Industrial and Commercial Bank of China (ICBC) will enter to the U.S. Commercial Real Estate market as a lender. Their belief that the market is becoming more stable will impel them to work with steady businesses and developers whom have a positive track record.
Little by little we can look to see the lending market pick up, but forecasts predict that it may take years for U.S. lending to get back to where it previously was.
For those seeking commercial real estate for their business or for investment, RealUp is here to provide free listings, free searching, and free sales comparables to assist you in all of your commercial real estate needs.
As defined by Wikipedia, a real estate appraisal, property valuation or land valuation is the practice of developing an opinion of the value of real property, usually its market value. Market value is the price at which an asset would trade in a competitive Walrasian auction setting.
Appraisals are necessary especially when investing in property because no two properties are exactly alike and therefore there is no market-based pricing mechanism. It is the unique features, locations and conditions of properties that require the need for the appraisal/valuation of real estate property.
There are three basic approaches to the appraisal process. The Cost Approach uses the current cost of the property less the accrued depreciation including deterioration, neglect, etc. The Sales Comparison Approach is based on the value of comparable properties that have recently sold in the area. (You can find free recent sales comparables on RealUp). The Income Capitalization Approach is the market value of the properties earning potential upon capitalizing on income, stability and equity.
RealUp has a significant group of members that are in the commercial appraisal industry. Appraisers find our website very useful specifically because we offer free nationwide recent sales comparables.
If using the Sales Comparison Approach that I mentioned above, this access to free sales data is a tremendous resource for appraisers especially in this slow market. Click here to search our nationwide sales comp database for free.
Do you want to learn more about the appraisal process or find a certified appraiser? Check the Appraisal Institute, the international association for professional real estate appraisers. Formed in 1991, the Appraisal Institute has more than 24,000 members and 91 chapters.
So you've found your perfect property on RealUp and you are looking for financing but you have some questions. What is the cap rate? What is the cash flow and return on equity? What about the gross operating income? Try our financing calculators to get you started.
You can use a Mortgage Summary calculator to find out your monthly and total payments, as well as total interest and taxes paid. Our Amortization Schedule calculator will help you find how much of each payment is going to principal and how much is going to interest.
Have a few lending quotes already? Compare them with our Mortgage Term Comparison calculator. Interest rates and length of loan are demystified with this calculator. If you have a bit of extra cash on hand, you can calculate your Prepayment Penalty.
Want to find out how fast your investment property will pay for itself? Check out our Capitalization Rate calculator and breathe a little easier.
We created all these calculators in-house and we're mighty proud of how they turned out. Always contact a financing professional before you make mortgage decisions as the calculators are for reference purposes only.
Our financing page allows visitors to receive free lending quotes from major partners. We also provide interest rate information, lending calculators and other financial tools. This post will explain an important index: COFI.
The 11th District Monthly Weighted Average Cost of Funds Index (COFI) is one of many indices used by mortgage lenders to adjust the interest rate on adjustable rate mortgages. The COFI is computed from the interest expenses reported for a given month by the Arizona, California, and Nevada savings institution members of the Federal Home Loan Bank of San Francisco.
The COFI is actually not an interest rate. It reflects the interest expenses reported for a given month by the COFI Reporting Members. The interest expenses are incurred from the COFI Reporting Members' various sources of funds. Deposits, including checking and savings accounts, certificates of deposit, money market deposit accounts, transaction accounts, and passbook accounts are the primary source of funds for most savings institutions. Other sources of funds include loans obtained through the credit program of the FHL Bank and from other sources.
The movement of COFI is affected by a number of factors, such as changes in market interest rates, the sources of funds used by the COFI Reporting Members, merger and acquisition activities, and changes in accounting rules or regulatory reporting instructions.
In general, the COFI has not moved up or down as quickly as market interest rates (such as the prime rate, the discount rate, or Treasury bill rates) because some COFI Reporting Members rely on fixed rate deposits with medium- and long-term maturities as a primary source of funds. Because rates on these deposits are not affected by changing market interest rates until the deposit matures, the total interest expense paid by savings institutions in a particular month may reflect interest rates that were prevalent in previous months or years.
Merger and acquisition activity can affect interest expense if the activity results in an unrealized mark-to-market gain or loss on funds acquired by a COFI Reporting Member. The composition of the funds included in the COFI can also be affected by merger and acquisition activity between a COFI Reporting Member and a financial institution that is not included in the COFI.
Because of these and possibly other factors, the movement of COFI cannot be predicted and historical COFI rates should not be relied on to predict future COFI rates. In addition, the movement of COFI may not correspond to the movement of market interest rates.
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While the banking industry is slowly moving towards recuperation, it is still apparent that there remains some hesitation towards loans from many different banks, both large and small. Bloomberg News is reporting that according to Federal Reserve Governor Elizabeth Duke, "it may take several years for lending to return to pre-crisis levels".
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So you've found your perfect property on RealUp and you are looking for financing but you have some questions. What is the cap rate? What is the cash flow and return on equity? What about the gross operating income? Try our financing calculators to get you started. 
Our financing page allows visitors to receive free lending quotes from major partners. We also provide interest rate information, lending calculators and other financial tools. This post will explain an important index: COFI.
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