Business Archives | Murk Investments Corp.

Are Massive Bidding Wars for Properties Ending?

Murk Investments Lending Team — Tue, 09 Nov 2021 06:00:00 +0000

For home buyers and real estate investors, bidding wars can be stressful and tiring, especially when you lose out again and again. According to Redfin, bidding wars on homes have declined 5 months in a row. The rate of bidding wars in September 2021 was 58.9% of offers written. The peak of bidding wars was in April 2021 with 74.3% of offers facing competition.

The decrease in bidding wars shows that the market is slowing down, which is normal during the cooler and back-to-school seasons.

At its peak, San Diego was the fourth highest city for bidding wars at 70.3%.

Now is a great time as an investor to scoop up some great properties when there is less competition. Use the market conditions to your advantage. If you are looking for cash to make your offer stand out, give us a call.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

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Lumber Prices and the Real Estate Market

Murk Investments Lending Team — Sun, 07 Nov 2021 18:54:10 +0000

Lumber prices are at an all-time high. Because of this, there is a surge in home prices across the United States. On average, home prices have increased by about $24,000. Lumber prices won’t be lowering anytime soon.

PotlatchDeltic Corp. said lumber prices are climbing in the fourth quarter of 2021 and the housing outlook is positive for demand. “Looking ahead, lumber prices have continued to increase in the fourth quarter and the outlook on housing fundamentals that drive our business remains positive,” said Eric Cremers, president, and chief executive of PotlatchDeltic Corp.

Why has this rise occurred? Well, the obvious reason is the COVID-19 pandemic, along with a labor shortage. With the pandemic, there has been mill closures and a surge for supplies for DIY and other constructions at home. The lumber demand isn’t being met with the shortage in supply.

As a real estate investor, how can you benefit from this rise in lumber? Well, the rise of prices in homes is costly for the average home buyer, but for an investor who knows the market and is willing to invest and find an edge. A hard money loan is designed for situations like this in which you need fast cash to close quickly. During this time of high prices, investors with cash offers and friendly seller terms can stand out from the pack.

At Murk Investments, we can help you navigate the process and make sure a hard money loan is right for your real estate investment. Right now, building and buying homes cost more than it used to, and this is currently the “new normal.”

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What Is Trust Deed Investing?

Murk Investments Lending Team — Mon, 25 Oct 2021 06:11:00 +0000

Trust deed investing is investing in notes that are secured by real estate. Often investors and real estate professionals use a broker like Murk Investments to find capital to fund the purchase of a property. The funds used to purchase the property are provided by other passive investors. This kind of investing is an attractive vehicle for high net-worth individuals seeking to diversify their portfolios.

To fund a loan, Murk Investments sources other passive investor’s capital to create the loan. The passive investor’s interest is declared on a note and dead of trust. Often there is more than one passive investor funding a loan, this is called fractionalizing. The deed of trust is then secured by real property. This type of security gives investors protection in the event the borrower defaults on the loan. In this situation, the investors and broker can foreclose on the property and attempt to sell to recoup their investment.

Once funds are dispersed through an escrow, the borrower of the loan will make scheduled interest payments to the investors. Additionally, the borrower pays points to the broker and investors. Points are charged generally 1% – 4% of the loan amount and are paid immediately by the borrower.

Almost all hard money loans are balloon payments. This means at the end of the term; the borrower must repay the loan amount in full plus any outstanding interest and costs previously agreed upon.

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What Is an ADU?

Murk Investments Lending Team — Sun, 24 Oct 2021 22:10:49 +0000

What is an ADU? An ADU is an accessory dwelling unit and it’s an alternative living space that is commonly referred to as a “mother-in-law” apartment. An ADU is a separate living space located on the same property as a single-family home. Some ACUs are attached and others are not.

The purpose of an ADU is to provide a full living space that is independent from the single-family home. The ADU provides what a single-family home would – a place for tenants to eat, sleep, cook, live, shower, use the bathroom, etc.

An ADU no longer is a space to just house close family members; it can be an income generating asset. ADUs are increasing in popularity and the ways in which an ADU can be financed is expanding, as well.

The current real estate market and how much money to get the space in proper living condition will determine if an ADU is a good investment. An ADU is usually worth the investment if the owner can get back the initial investment in a reasonable amount of time. Investors need to look at how long it will take to build the ADU and get it rented to determine how quick it will take to become profitable.

An ADU can increase a property’s occupancy rate and with today’s economy, people are looking for this type of space to rent and live in.

An ADU can be a great real estate strategy to diversify a portfolio and they can be funded by hard money loans.

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What is a Fix and Flip Loan?

Murk Investments Lending Team — Sun, 19 Sep 2021 18:46:37 +0000

A fix and flip loan is one type of product offered by Murk Investments. With this type of loan, you can get the funds to secure and rehab your property and have it back on the market for sale in as little as a few months. This type of loan is good to be used for single family homes, multifamily properties, and commercial properties.

A real estate investor/borrower generally uses this type of loan with the intention of re-selling the property after improvements. Sometimes, the borrower may change their mind and hold the property and refinance out the hard money lender.

This type of loan is often underwritten using the ARV (After Repair Value – the estimate of the value of a property after it has been improved). Most importantly, a hard money lender is concerned with the equity in the property or how much money the investor is putting into the project. This helps spread the risk between the lender, investors, and borrower.

Traditional banks will not lend on a distressed property. Hard money lenders are able to take on that risk that banks cannot.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

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What is A Bridge Loan?

Murk Investments Lending Team — Mon, 13 Sep 2021 13:07:34 +0000

A bridge loan is a type of short term financing, commonly used by borrowers, financed by hard money or private lenders. This type of financing solution that gives borrowers the opportunity to quickly secure their investment, make improvements, renovate, or add value.

Once this process is completed, generally under 12 months, the borrower can sell the property or refinance to hold the property with more conventional financing. Bridge loans can be secured by many property types such as, single family homes, multifamily properties, and commercial properties.

This type of loan is generally used to only secure a property. Unlike a fix-and-flip loan, the hard money lender will not have any reserve funds for construction or rehab.
Most traditional banks will not offer bridge loans. If they do, the borrower will most likely go under rigorous and time consuming underwriting. A borrowers tax returns are often the most important document for these kinds of lenders.

As opposed to traditional banks, hard money lenders mostly focus on the asset or subject property when underwriting. The subject property needs to have enough value to cover the cost of the loan. If the borrower were to default or a market correction were to occur, the investors will be able to recoup their investment into the loan.

A good hard money lender is risk averse and treats their investors and borrowers with the utmost care. The loan to cost, or LTC, is generally funded 60-70% of the purchase price of the property. At this valuation, the investors and borrowers can feel comfortable with the risk and equity in the property.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

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Reasons Why Hard Money Lenders are Good for Real Estate Investments

Murk Investments Lending Team — Sun, 12 Sep 2021 18:01:25 +0000

Many hard money lenders are private lenders who offer an alternative way to finance for borrowers who are not qualifying through banks and other lenders.

Hard money lenders focus mostly on the equity a borrower has in a property as opposed to focusing on the borrower’s financial situation. The hard money lender looks at equity as security and if the borrower defaults on their loan, the property will have enough value for the investors to recoup their investment of the loan.

One good reason to use a hard money lender is because they can close quickly and on your timeline. Traditional financing rarely can work on your timeline. The current real estate market is competitive, make your offer stand out with a quick closing and have your hard money lender, like Murk Investments, be ready to close when you need to.

Hard money lenders tend to also offer more flexible terms than conventional lenders. Popular hard money loans offer bridge loans and fix & flip loans.

Hard money lenders are also a desirable choice for those who have poor credit or a lack of consistent income. Many real estate investors are not receiving steady pay checks, this can be a problem for traditional lenders. Hard money lenders can look at your assets and/or what your cash supply is, in determining your eligibility for a loan.

When it comes to real estate investments, hard money lenders are key for making many deals happen. The costs of going with a hard money lender may be higher than a conventional bank, but hard money lenders can offer terms and timelines that a bank cannot.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

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Why is Loan to Value Ratio Important with Hard Money Loans?

Murk Investments Lending Team — Mon, 30 Aug 2021 06:00:00 +0000

When applying for a hard money loan, hard money lenders strongly consider the loan to value (LTV) ratio. The LTV ratio is calculated by dividing the loan amount by the total value of the real estate securing the hard money loan.

The LTV ratio is a measurement of risk for the hard money lender to consider. The ratio measures the amount of equity protecting the loan, so the more equity in a property means the less likely the borrower is to default on a loan. Borrowers should also understand this protects the investors who are funding the loan. When both parties feel comfortable it should be a win-win for everyone.

A common mistake when calculating the LTV ratio is overestimating the value of the real estate securing the loan. We generally value a property based on its current use or condition. Some lenders are comfortable basing their calculations on future value.

Lenders should be conservative when underwriting, as it is beneficial to all parties involved. Many lenders may not want to fund a loan that will have too high of an LTV ratio because any change in market conditions could affect the security of the loan. Lenders should NOT want to take back a borrower’s property. A borrower loses a property, lenders and investors end up losing money and no one ends up happy.

Overall, the LTV shows the investors how strong the loan is. At Murk Investments, we generally see our loans around 65% LTV.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

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What You Need to Know About Extending A Hard Money Loan

Murk Investments Lending Team — Tue, 24 Aug 2021 06:00:00 +0000

Do you currently have a hard money loan? Are you considering extending it? Typically, a hard money loan is a short-term loan, less than 12 months. If you currently have a hard money loan that is maturing and your project is not completed, you may be thinking about extending it.

The extension process for a hard money loan with your lender isn’t too difficult. The possibility of an extension would be laid out in the initial term sheet before loan funding.
The term sheet will tell you the cost, often between 0.5% and 2% of the loan amount.
The term sheet will also lay out the length of the extension. This can be for as little as 3 months or up to 9 months.

If your project is close to completion or its just about to the market, extending may be the best option.

Why You May Want to Refinance

Many times, a borrower is fed up with their lender or the borrower would like a new loan because the property may have appreciated. At Murk Investments, we have funded many such loans.

Approval processes with a new lender may be speedier. The property value may have increased due to the equity put into the property along with market appreciation.
You may be able to receive a larger loan amount. If the lender believes there is more value in the property, the loan amount may increase along with it.

At Murk Investments, we have funded loans for borrowers who have left their previous lender. We understand projects may be in a better condition than when the first loan was issued. Not all projects are the same. Please contact us with your loan scenario and we will quickly let you know if we are interested.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

The post What You Need to Know About Extending A Hard Money Loan appeared first on Murk Investments Corp..

Tips To Be In A Good Position for Quick Approval

Murk Investments Lending Team — Mon, 23 Aug 2021 13:59:17 +0000

It doesn’t have to be difficult to get your hard money loan approved by a hard money lender. In fact, it should be easier than going through a traditional bank. At Murk Investments, we wanted to share with you some things you can do to get your hard money loan approved timely.

Hard money lenders will consider the LTV (loan to value) ratio when approving a hard money loan request. This is important because if you, the borrowers, were not to make the payment, the property would need to be sold and the proceeds from the sale would be used to repay the loan. Hard money lenders rely more on collateral (or the asset). The LTV ratio is determined by dividing the loan amount by the value of the property. At Murk Investments, we issue loans around 65% of the property value.

Have your equity financing in place or know exactly how much cash you can put into the deal when applying for the loan. This information is critical for us to be able to let you know if we have interest in the loan.

The type of collateral is also important for hard money lenders when determining if a loan will be approved. The most common property type for a hard money loan is a single-family home or an income producing asset. The property type with the most risk for a hard money lender is land because land does not necessarily produce income, so the value is based on future use. However, our firm has done loans on many different property types as well such as office, retail, industrial, and land.

We also like to know the exit strategy. Will you be doing tenant improvements and leasing out the project? Is this a development or fix and flip? What is your experience finding tenants and selling properties? Having a clear and decisive plan, and a history of doing so can help you.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost.

Disclaimer:
This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by Murk Investments Corp. or any third party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Murk Investments Corp. is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for using the site, you agree not to hold Murk Investments Corp., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the site.

The post Tips To Be In A Good Position for Quick Approval appeared first on Murk Investments Corp..