Friday, May 4, 2007

Borrow more for better rates

Commercial lenders will either have higher interest rates on smaller loan amounts, lets say under $1,000,000 or they won't lend under that threshold. The lenders who do lend in that arena will charge more for their efforts. Completely opposite from the conforming and jumbo loans for your Sunnyvale ranch house. So my advice is PLAY BIG!!!

Same tenant - different location

Corporate credit is nice - maybe. What is interesting is that a national tenant in Colorado, such as Walgreen's, will sell at a 7.5 cap rate. While the same corporation who has a store in San Diego, will sell at a 6.0 or lower cap rate. The checks come from the same national office. The quality of that ability to pay debts is the same. Then why the difference in value of the investment? Comments?