What do appraisals and sushi have in common?

Good appraisals are like sushi.   You don't want cheap sushi.....

Guest Blog: "What is Value?"

A guest blog post by Dennis Dishaw, President of ACI Capital, Inc.--Los Angeles, California

“What is Value?”

Our firm recently closed an owner user loan for a medical office building.  Our borrower is a physician who has one other office but had moved into the subject a year prior.  It turns out that he had invested over $400,000 in tenant improvements prior to his offer to purchase.  The seller is an active broker and investor in the area.  The buyer was not represented and the transaction was a FSBO. (for sale by owner)

They agreed to a sale price of $3,500,000 and our review of his medical practice income supported his ability to qualify for a loan of $2,800,000 which was 80% LTV.  The loan was approved subject to the appraisal.  Which came in at $2,670,000!!!

Rule 2 in lending is value is defined as: “sale price or appraisal, whichever is lower.”  But buyer and seller had established value in the sale price.  But was that value considered with full knowledge?  Did the broker/seller know the market?  Was the physician given any alternative views?  If this had been an all cash offer the sale would have closed with the $3,500,000 price.

The buyer was cornered due to his investment into the property.  He closed the transaction with a much higher down payment.  The lender continued to offer 80% of their value (the appraisal).  

To find out what Rule 1 in lending is, you will need to ask a Loan Officer at ACI Capital (yours truly is one of them).

Dennis founded ACI Capital in 1994 and has been in the real estate industry for more than 30 years, having weathered the dramatic boom and bust cycles of the commercial real estate market very well.  He has worked at Coast Savings, Gibraltar Savings and Loan, and First Federal Bank during his long tenure in commercial real estate.   He is married for 47 years to Christine and has two daughters and four grandchildren.  He can be reached at ddishaw@acicapital.net or at 818-654-5212.

End of Summer Commercial Loan Specials!!!

One of our most reliable lenders is making it easier for borrowers as interest rates have risen this summer.

If your loan is approved (has a letter of intent) by September 30, 2013, the rate will be reduced by .25% and 3rd party fees (appraisal, etc.) will we waived.

Minimum Loan:  $1,000,000

California, Washington, Oregon only

Sample apartment program:   1.20 debt service coverage requirement, up to 75% LTV on a refinance with a 5 year fixed rate of 4.09% (as of August 19, 2013).

If you don't like this program, we have 80 other lenders we work with across the country through our broker, ACI Capital, Inc. in California.

Email or call for a free cash flow analysis.

After almost 5 years, the North Los Angeles County Real Estate market blog is back

Markets change and so does technology!

After almost 5 years, there have been a lot of changes in northern Los Angeles County.  I will bring you, the reader, news that you won't necessarily get from your traditional sources.

You can follow us on twitter @voltzrealestate and you can follow us on Google+ by clicking the link on the blog.

My firm is now in its 25th year as the leading provider of real estate services in northern Los Angeles County.  NO ONE has appraised more commercial and industrial real estate and land in the Santa Clarita Valley, Antelope Valley, and the Mojave Desert.

We just represented an owner in bankruptcy case on a 40 acre, high profile parcel of land, going against 2 appraisal firms (one of which was a former Appraisal Institute President) and we prevailed!

As a Commercial Loan Originator (DRE 01055958) in California, I have placed millions of dollars of loans for my clients.   Let me help you get the best set of terms possible for your loan.

Finally, if you are interested in being a guest blogger, let me know and we'll work it out!

August 2013: Recent Sale Activity

A 232 unit multifamily complex is currently under contract (asking price of $17,500,000) located at 1650 W. Avenue K-8 in Lancaster, according to Costar.  The capitalization rate based on the asking price is 5.64%.   NAI Capital is the listing broker.

An 85% interest in Canyon Square Plaza, a 96,662 square feet community shopping center in Canyon Country in the Santa Clarita Valley, was sold June 28, 2013.   KIMCO, a national REIT, purchased the remaining 85% interest they did not own from a joint venture partnership.

The Valencia Village shopping center closed June 28, 2013 for $10,687,000 (listed for $11,685,000, representing an approximate 8.00% cap rate.  The property is at the southeast corner of Newhall Ranch Road and Dickason Streets in Valencia.  The sale involved 43% cash at the closing to an assumed loan.

A 105,715 square foot light industrial building sold for $5,000,000 at 46147 7th Street West in Lancaster, and was sold by Rexhall Industries (maker of motor coaches) to BYD Coach and Bus, LLC.  The price per square foot was $47.30

On June 25, 2013, Golden Oaks Pavilion closed escrow, located at 23101-23107 Lyons Avenue in Newhall.   This multi-tenant office/retail building sold for $2,650,000 or $205.55 per square foot.  The buyer will occupy a portion of the building and had put 25% down to a new loan.  The seller was represented by NAI Capital.