Archive for June, 2010

Poor Housing Numbers Demonstrate Futility of Subsidies

June 22, 2010

A subsidy by any other name is still a subsidy, and they don’t work no matter what you call them.

By giving buyers an $8k “tax credit” the hapless Obama administration, enabled by an incompetent congress, simply albeit artificially, propped up home prices to a level they would not have reached had the market been left to its own devices.

Now, when the tax credit goes away, millions of home buyers will instantly and simultaneously lose $8 grand in equity as the existing home market adjusts to the fact that most of the buyers have $8k less to work with.

Thanks for nothing!

Today’s housing numbers show a market that’s anticipating that inevitable evaporation of value.

Not only is this going to be a jobless recovery it’s likely to be a recovery-less recovery.


Stimulus = Colossal Failure – Cool Chart Tells Sad Story – Stimulus Spending Way Up – Unemployment Won’t Go Down

June 21, 2010

Stimulus vs EmploymentThis chart created by the Bureau of Labor Statistics demonstrates the epic failure of massive stimulus spending as prescribed by Keynesian Economics. The numbers speak for themselves and they speak poorly of the current plan (spend, spend, spend) to get us out of our economic malaise.

The Credit Tenant Lease Lending Process Explained by an Expert

June 16, 2010

Credit Tenant Lease (CTL) Lending – An Expert Explains the Process

Credit Tenant Lease (CTL) Lending – An Expert Explains the Process
By Vincent Remealto

Credit tenant lease (CTL) financing is a unique and highly specialized type of lending designed to fund the purchase, refinance or construction of real estate that is triple net leased (NNN) to a single investment grade tenant.

The CTL process is quite different from traditional commercial mortgage lending. The lease rather than the real estate itself is the primary collateral that backs the loan and the lending process is in reality an investment banking transaction.

Qualifying the Tenant

The fist step in the CTL process is to determine whether or not a given tenant will qualify. The company that backs the lease is required to be “investment grade”. This simply means that they need a good credit rating by one of the major rating agencies. For example any company rated BBB+ or higher by Standard & Poors should be eligible. The drug store chain Walgreen’s is an example of a typical credit tenant, Walmart and Home depot also credit worthy firms that are big in the NNN space.

Analyzing the Lease

Next the banker will want to do a comprehensive analysis of the lease. They must understand the exact extent of the landlord’s responsibilities (if any) and calculate the value of the building based on the income it will generate. They will also check to make sure the length of the lease period conforms to their CTL criteria. They will scour the document for any provisions or clauses that might undermine their ability to perfect a security interest in the property.

Executing an Application

Only after the tenant and the lease pass muster will the borrower formally apply for a CTL mortgage. The application details the loan amount, the interest rate, the term of the loan and makes a good faith effort at estimating loan expenses. If everything is in order the borrower signs the application and places a deposit with the bank.

Underwriting the Loan

After the application and deposit are received the banker will begin underwriting the loan. Third party reports such as appraisals, environmental reports and title work are ordered and the numbers are crunched. The borrower’s finances are also scrutinized during underwriting. CTL loans are non-recourse but the bank will verify that the sponsor has the financial wherewithal to get the deal done.

Issuing a Private Placement Mortgage Bond to Fund the Loan

The investment bank will issue a new private placement mortgage backed bond and link it to the target property. They fund the loan by selling the bond to fixed income investors.

Issuing the Loan Commitment

Once the mortgage bond is sold the loan is fully funded and the banker will issue a formal and binding loan commitment. Exact and final terms will be spelled out and locked in. The borrower will be asked to accept or decline the loan.


If the commitment is signed by the borrower, the closing and dispersing of the funds can happen as fast as lawyers can draw up documents and schedule a closing date. All the paperwork is reviewed and signed, the mortgage is recorded and the deal is wrapped up.

CTL loans can be completed from-start-to-finish in as little as 45 days, but 60 days is the typical time frame.

MasterPlan Capital LLCCommercial Mortgage Loans – Private and Institutionally Funded – CTL Loans From $3mm – Equity Financing – Asset Management – Simple, 1 Page Commercial Mortgage Application Online – Prompt, Professional Service – The author, Vincent Remealto, is a commercial real estate valuation and underwriting analyst for MasterPlan Capital.

Article Source:—An-Expert-Explains-the-Process&id=4466680

Cool Chart From CBO; Large Health Care Deficits!

June 11, 2010

CBO Projects Health Care Bill to Cause Large Deficits

Read Comments From the Director of the CBO

Private (Hard Money) Commercial Mortgage Loans

June 4, 2010

Private (Hard Money) Commercial Mortgage Loans

MasterPlan Capital is actively seeking to originate private, often called hard money, commercial mortgage loans against income producing commercial real estate.

CLICK HERE: Commercial Mortgage Loans ; MasterPlan Capital