While commercial hard money loans might sound as if they come out of a Mafia movie, there is nothing dangerous or especially risky about being granted one of the many commercial loans that are on offer by the different independent financial institutions.

What are Commercial Hard Money Loans?

The word ‘hard’ can be misleading for many people who are applying for this sort of financing. All that it means is that the loan is guaranteed by an asset or a piece of immovable property. The loan will be granted on the strength of the value of the asset in question. Many developers use these type of loans when they are attempting to develop a piece of land into a commercial property that has investment potential as well as the potential of future earnings that will more than cover the loan amount.

The value of these loans is that they are usually funded by private investors. It is worthwhile finding a company who is able to match up potential investors to loan applicants. They will ensure that the loan is completely legal as well as being secured by the property itself and not the personal assets of the owner. Most of the private investors in America today are likely to be private firms who consider that issuing commercial hard money loans is a way of doing business that guarantees them a substantial return on investment. These loans are not usually granted over an extended loan term.

This type of loan is not like a conventional mortgage that is repaid over 30 years. The term is usually between 1 and 5 years and the interest rates are much higher than a conventional loan. While the top end of the scale of interest rates can reach up to 15 % it is still a way of obtaining finance for an investment without having to wait for months or go through an extensive process of paperwork and credit checks.

It is always wise to remember that commercial hard money loans will not cover the full value of the property and it is unusual to find any commercial hard money lender that will over about 60% of the value of the property. If you are buying property then you will have to fund the difference from another source or be prepared to fund it yourself. Commercial hard money loans are granted based on a logical and achievable plan to pay the money back on time and most commercial hard money lenders will need to see a considerable amount of property related experience.

They will not be inclined to lend money to first time investors, unless the risk is very low. Commercial hard money loans are a solution to investment opportunities that many banks have refused due to the economy.

To know more information about Commercial Hard Money Loans and Commercial Financing Services visit ICPFinancial.com

Author: Claire Geonzon
Article Source: EzineArticles.com
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LLC is short for Limited Liability Company. It is a business structure widely adapted by the many landlords. This is because of the benefits it offers. As the name suggest, it provide limited liability. This is a very important feature for the business owners. This simply means that the personal assets of the owners will not be used as payment for the debts incurred by their business. The payment for the liability of the business is limited to the assets of the business. This is because under the LLC, the rental business is a separate entity. Its debts are not the debts of its owners.

This is a good thing for the landlords as it protects their personal assets. In most cases, when landlords encounter a problem, the settlements they need to deal with is more than what their insurance cover. If the business is not an LLC, the complainants can tap into their personal belongings.

Aside from the protection it provides, it also makes the management of the business easier. All the transactions are done using the identity of the business. This means that owners do not have to use their names during the operation, similar to what a corporation is. However, in terms of tax payments, there are different arrangements that can be adapted. If there is only one owner of the rental properties, then the sole proprietorship arrangement shall be followed. If there are more owners, then the tax payment for partnership or corporation may be followed. Although there are differences on how these payments are filed, they are somehow similar. The business can enjoy the same deductible items. These include the costs incurred for the operation.

The business can incur operating expenses. It is essential that these are recorded because they are deductible from the taxable amount. Some of the said expenses relates to finding tenants and posting ads. There are also those intended for the maintenance of the property and repairs. This can be overwhelming for first time tax payers. To make sure that all the deductible amounts are considered, refer to a LLC lawyer.

There are also fewer things to worry about when it comes to organizing the business under such structure. Any landlord can adapt this. It does not matter if only one person owns the rental properties or if there are multiple owners. What is important is that all the needed requirements are submitted. This includes the Articles of Organization. Aside from that, the permit needed should be completed and all the fees should be paid.

The LLC can definitely help the owners of the rental properties. It can protect their personal assets. Additionally, it will also make the management of the business easier.

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Article Source:http://www.articlesbase.com/real-estate-articles/financial-advantages-of-llc-for-landlords-1557440.html