buying a houseBuying a house for yourself and your family is a task that’s not only vital but also close to heart. We all have our versions of a dream home and it’s not surprising if we all strive to get it in every detail. But the real estate market isn’t an easy giant to tackle. There’s a lot to remember and do. Sometimes, we could get lost in overwhelm and find ourselves trapped in an impending nightmare. To avoid that, we’ve asked the lead experts at Alternative Bridging to help us starting with this list of do’s and don’ts.

Do finish your homework. Most often than not, we tend to get too excited. There’s the urge to jump at pretty much anything and everything. That’s a risky move. Before even buying or deciding to look at options, make sure to do adequate research. Educate yourself about the market and the tasks that you’ll be facing.

Don’t hesitate to ask for help. This can be a friend, a family member, a colleague or even a hired professional. Because buying a home is a crucial task and not everyone has the energy, time and skill to tackle everything on their own, it is pretty beneficial to ask the services or advice of someone who does.

Do establish needs and preferences. Take out a sheet of paper and make a list. Having a firm grasp of what you need as well as any preferences both negotiable and non-negotiable would help make the search more directed thus cutting on time and avoiding slack that translates to costs eventually.

Don’t aim for more than what you can afford. As they say, live within your means and do so you must. Find out how much you can and are willing to spend on a house. This way, you can also translate your needs and preferences into a monetary value. Never buy or mortgage something that you cannot afford otherwise you might just face a foreclosure in the future. That’s not what we want.

Do check and assess the property. Before even closing in on any asset, see to it that you’ve done your fair share of checking. For one, there’s the survey to be had that involves meticulous inspection of the house that leads to the determination of its remaining useful life, market value, ongoing costs, safety and security, depreciation, appreciation potential and more. Alternative Bridging notes that once you’ve signed into the sales contract, there’s no turning back so better be sure.

business loanGetting a business loan, whether it’s for the short or long term, is serious business. One has to prepare for it to ensure an approval from the various financing institutions and lenders that offer them. It may not be easy but it sure isn’t impossible. It’s very doable and is here to dish out some tips for all of us.

  • Do your homework. – In other words, make sure that you research ahead of time. There are a number of things for you to look into namely needs, options, limits and providers.
    • Needs – What are yours? This will be your biggest driving factor when choosing a type of loan, the amount and a provider. This then brings us to our next item.
    • Options – Varying types of business loans are offered in the market, each one bearing a particular use and answering certain needs. For instance we have short and long term loans, bank borrowings, bridges and mortgages to name some. It is likewise important to understand each one.
    • Limits – Know what they are and borrow within such numbers. This is to ensure that you only take on what you can. Never apply for a loan that you cannot afford. You have slim chances of getting an approval and/or you’ll end up in debt.
    • Providers – Check out the institutions that offer the type of borrowings that offer the types of loan that fit your needs and budget. Research about them too. Read reviews and feedback as well.
  • Take a good look at your books. – If you were a lender, will you let yourself borrow given the current state of your financials? When applying, it is crucial to set your expectations at a realistic level. This includes having to look into your credit score. Is it high enough? Have you been paying past and present liabilities well and on time? Keep in mind that providers will look into these things and more so it would be better if you do so yourself ahead of time.
  • Show your sincerity. – highly advice anyone who wishes to apply for a loan to express not only their sincerity to borrow but also their earnestness to pay. Financial firms and providers will want to get paid and you’ll have better chances of garnering a yes if you discuss the means by which you plan to close the loan, how well your current and future cash flows are and where you’ll be getting the funds. Tryst us. They’ll want to know.

real-estate-misconceptionsThe real estate world is full of roadblocks and detours but given the right map and a good head for navigation, it’s quite a lucrative avenue that brings in a good deal of returns. But if it’s such a good investment then why are only a few people in it to win it? That’s because misconceptions and myths surround the industry and we are here to help us debunk them.

  1. A property’s value is equivalent to its asking price.

Not all the time. Just as the experts say, always take real estate ads and seller information with a grain of salt. The current market value will be set at a price where buyers are willing to purchase and sellers are willing to sell. It can fluctuate and it’s not set on stone. You’re going to have to ask an appraiser or chartered surveyor for an estimate.

  1. You don’t necessarily have to visit the property before buying.

You have the option not to but as a rule of thumb, you must. That is if you want to ensure that you are getting a good return of your investment. Open houses are a great way to see the asset for yourself. Photos and description alone should never cut it, not even if you’re buying from an online listing or auction.

  1. Real estate investments can sell themselves.

If you’re planning to sell rather than to buy then you must know that a lot of hard work is needed in this type of endeavor. Prime properties may have buyers on the line up but that’s not going to be true for all. Plus, it doesn’t guarantee that you’ve got the best set of buyers in waiting. A combination of marketing and strategy will be needed and that’s only for starters.

  1. You’re going to have to be rich to afford it.

It’s true that properties can cost quite a sum. They are after all big ticket items. But not all of them are crazy hefty. Investors who are looking at it for business or for personal use can still acquire even if they don’t have a six digit paycheck.

  1. Once you’ve got a portfolio going on then you’re good to go.

Real estate is quite tricky and sensitive which is why many people shy in treading its waters. But with the right preparation you can win in it. That includes having not only a god portfolio of property investments but also a good head when it comes to managing them. Proof? Check back on item number 3.

alternative-property-financeAlternative property finance has become a powerhouse when it comes to solving the short term liquidity needs in the real estate market. It is after all one of those financing mediums that has provided adequate and reasonable service without having to cut people’s fingers off in the process.

Everyone can take out and apply for a bridging loan but for the sake of discussion, we give you the following list of alternative property finance users. Take a look. You could be one of them.

  • Individuals

You can be a yuppie, a budding entrepreneur or a regular person aiming to buy a place of your own. Bridging finance becomes your best friend when you want to acquire a specific unit, land or home but your mortgage is still on its way. It provides for the upfront costs and in this case the security deposit and down payment.

  • Families

For the same reasons as mentioned above, families may also want to secure a place of their own or even a new one, perhaps even the house of their dreams. Selling your old place takes time and will also push you to spend for rent as you’ll need to move out while waiting for an interested buyer. To cut the chase and to save up on rental costs, bridge loans shall enable you to provide for aforementioned upfront costs so you can move into your new home immediately while your old place or main source of fund is still being processed.

  • Investors

Every investor who seeks to acquire the best properties for their portfolio will find this financing medium very useful. It’s fast, convenient and hassle free. It falls on the short term category too so it’s temporary and not burdensome. Add in to the fact that it helps avoid all those opportunities lost and the costs that come with it. With a very competitive market, investors need to be fast and smart at the same time.

  • Organizations

Businesses and organizations will also find property bridging finance very useful. Acquiring assets is part of the entrepreneurial venture. Land for one is part of the equation because operations do not happen in thin air. This is true even if the company provides digital needs and services. There has to be a physical space to house things like an office, a plant, a factory, a storage unit, a store and more.

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landlordsThere is more to asset investments and acquisitions than meets the eye. To some it may sound plain and simple. You find an asset you wish to get. You pay for it then it’s yours. But expert real estate investors would know that there are things that one has to do in order to benefit best and to make more out of one’s investments and one of them is acquiring now and not later. Why? Here, take a look at the benefits that landlords and investors get from it.

  • Buy now and save money. Buy later and you might need to pay more.

A dollar today is more than a dollar tomorrow. The same is somewhat true when it comes to properties. Many of them tend to appreciate over time so they become more expensive as days go by. This can be financially burdensome for obvious reasons.

  • Buy now and get the best. Buy later and be left with little option.

The world of real estate is a competition and a tough one at that. One cannot expect a prime property to stay in the market for long. Many buyers will want the best for themselves so it’s no surprise why the good ones get snatched up first. If you procrastinate, you’ll lose out.

  • Buy now and remove the risks. Buy later and suffer said risks.

There are risks associated to buying today than tomorrow. For instance, there could be opportunity costs and rising prices as mentioned earlier. Also, one should grab opportunities as they display themselves. Blink and they’re gone so don’t hesitate to reach them when you can.

  • Buy now and start operations. Buy later and delay sales.

For business purposes, time is of huge importance. The delay in the purchasing process could put a hamper on one’s operations causing delays, missed deadlines, output shortages and other hiccups all of which will affect sales and profits and in some cases trust among customers.

  • Buy now and earn immediately. Buy later and earn later too.

Another benefit that landlords and investors get from buying now rather than later is the opportunity to start earning immediately. Any postponement or suspension will only push back the start of leasing and selling which will also delay the income. Why wait when you can do it now? Again, with competition down the line one has to play their cards well. Tardiness is not a playing card that’ll make you win of course.

Bridging loansProperty Bridging Finance (PBF) is considered a very powerful tool in the real estate ‘buy and sell’ market. Considered as an arm under interim financing, PBF is utilized not just my individuals but organizations as well. Today we shall cover the basics of the said method to introduce it to those who have not yet learned of its value and capabilities.

Now, property bridging finance is defined as a short term borrowing taken out to cover short term liquidity needs (e.g. property taxes, research costs, survey fees, security deposits, down payments, etc). It is an arrangement that covers a short period of time often from a few weeks to at most of two years.

Since its use is mostly unrestricted, it can be allocated and spent based on the user’s preferences; however, it is majorly employed to cover initial costs to the investment. This is due to the fact that bridging finance can be acquired relatively fast.

Now, the cash received shall not be used for the purchase price on the asset being bought. Remember that it is a ‘a short term borrowing taken out to cover short term liquidity needs’. It is not meant to replace the permanent long term financing. Confused? Allow us to expound a little more.

You see, buying a property be it residential, commercial or industrial will require significant financial resources. Real estate investments can be costly which is why they are mostly funded by a bank loan, a mortgage or the proceeds from a sale.

The issue with the aforementioned funding sources is the fact that they will take time before they become available. Bank loans and mortgages have a scrupulous application process and cash release is not immediate. It can take weeks or months. As for the proceeds from a sale, say for example one wishes to buy a new house and plans to fund it by selling the current house one settles in, the presence of a buyer is not certain. One cannot tell the exact date and time that a buyer shows up.

In all these cases, time is the essential factor. When buying properties, investors need cash for pre-acquisition expenses. Plus, a deposit and down payment must be rendered. What happens when permanent funding is not yet ready? One simply cannot lie and wait as other buyers will surely flock and the first one to pay gets the asset. To avoid the opportunity being lost, investors can take out a property bridging finance.

home-buyer-coupleMany homebuyers find the benefits from bridging loans very rewarding earning it a spot in one of property financing’s most popular and often utilized short term loan options. Now you might be curious as to what these perks are and so to save you from all the trouble, we took it upon ourselves to list them down for you. Scroll through.

  1. They connect two points to a transaction. – A bridge serves as a form of interim finance whereby it connects the gap between the purchase price on a residential property and a mortgage, bank loan or proceeds of the sale of an old property. It is able to provide for the cash needs of a homebuyer in the event that the aforementioned permanent funding sources are not yet accessible at the time of the acquisition.
  2. They are short term in nature. – Because of this, the loan is much less burdensome as compared to permanent or long term finance. This makes them easier to close and payout. With the lesser span of time covered, they also do not accumulate as much interests.
  3. They help avoid lost opportunities. – Before the sale is awarded to a buyer, certain requirements must first be accomplished for example, the security deposit and down payment. These must be paid upfront and immediately. The bridge, being immediate in nature, provides for such needs thus allowing buyers to grab an acquisition opportunity better. We all know that great deals do not last long so failure to act timely can push an investor out of the queue and the asset will then be awarded to the next buyer in line.
  4. They reduce costs. – Many homebuyers finance their purchase by selling the current property that they are residing in. Doing so will require them to move out and rent as they wait for a buyer to come forward. By using a bridge, they can be able to raise enough resources to cover the initial costs and allow them to move immediately into the new home thus cutting the costs of rental.
  5. They have flexible payment methods. – One of the more applauded benefits from bridging loans would have to be its flexible payment schemes. Borrowers can repay and close it out in two ways, either before maturity or at maturity. If one has mustered enough resources to close the bridge, it can be done. At the same time, there is also the option to wait until maturity which is the date wherein permanent finance becomes accessible.

savingsSaving is a good thing albeit many people will agree that it does not come easy for the majority. But have you ever wondered what would be better than saving up? If you ask experts, that would be through property investments. Saving cash is great but oftentimes it will only have your money on hibernation. We all know that the interests you earn are very little and this would be a good alternative that can help you get better returns. Don’t believe us? Well then see what benefit landlords and investors get from property investments below.

You get rid of dormant cash. – Simply put, your money does not sleep away for years until retirement or until you wish to makes use of it. Instead, it grows as time goes by. That in itself is a huge advantage to begin with.

You get to be your own boss. – Investing gives you that right. You have full control of which type of asset to buy, where to get it from, whom to sell or rent it to, how much you’re going to ask for it and all that. No more stressful Mondays with your Machiavellian boss! You have control now.

Rental income is additional money in your account. – You can still work and keep your 9 to 5 job and have an investment property up your belt. If you decide to rent it out, the lease payments you receive is additional income in your pocket. Plus, part of your rent amortizes a mortgage or loan you took on the property if any.

You can take advantage of capital gain. – If instead, you decide to buy and sell the asset, you can take advantage of capital gains. Properties do not only depreciate in value. They appreciate too especially if you happen to invest in growth areas and promising locations. As its price rises in the market your returns do too. If you do just want to lease it out, such appreciation is a valid means of increasing your rent and therefore your income.

You can take advantage of tax deductions. – Property owners are offered more items in their tax deductions list. These expenses may include repairs and maintenance costs, council rates, insurance, travel expenses, legal costs and managing agent fees among others.

So are you ready to receive the same benefit landlords and investors get from property investments?

bridging financeBridging loans have been rounding up the business financing sector for the past years and for good reason. The said interim financing method that also doubles as a stop gap measure allows individuals or even companies to provide for their short term liquidity requirements should their long term funding be unavailable or is only yet to be made available.

If you are not well familiar with bridging loans then today must be your lucky day for we are going to list and drill down the major characteristics that set it apart from other credit and funding methods in its circle. Let’s begin, shall we?

1st Characteristic: SHORT TERM

Bridging loans are first and foremost short term in nature. In other words they only cater for immediate needs that span for a brief period of time like weeks to months. This is unlike traditional forms of credit such as a mortgage and a bank loan which will cover years, often ten or more, within its time span.

2nd Characteristic: IMMEDIATE

The processing for a bridging loan is relatively fast and you will not have to wait up for weeks or months to get an approval and for the cash to be released. This is why it is the perfect fit and funding method of choice for immediate needs such as a down payment for a property acquisition or legal costs attributable thereto.

3rd Characteristic: EASY

The application process is likewise easier and faster. There won’t be any need to go into all the trouble of providing for every document imaginable. This is a huge relief considering that much of the length of applications tend to be caused by all the requirements required by financial providers of other financing methods.

4th Characteristic: UNRESTRICTIVE

Users are given the liberty to use the funds as they please and as they deem necessary. This is because bridging loans are not restrictive unlike a bank loan for example which will specify the exact expense and the amounts that you should use it for. This is an advantage in such a way that users have more flexibility and freedom in its use; however, discipline must come with it so you don’t end up misusing the funds you just received.

5th Characteristic: FLEXIBLE

The payment method for bridging loans is very flexible. Borrowers have the option to close it even before maturity or at maturity once the long term financing has become available.

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bridging loansProperty bridging finance has long been used by both individuals and entrepreneurs to help fund their short term requirements in the pursuit of an asset acquisition. It has been dubbed as the interim financing method that helps eradicate opportunity losses and helps in the smooth sailing purchase of residential, commercial and industrial properties. But just like any other financial option out there, there are a number of ways to benefit and detriment from them. You want the former of course. So how do you make property bridging finance work to your advantage?

First off all understand what it is. You cannot use it properly and accordingly unless you know exactly how it functions, its terms and conditions, its slew of pros and cons and how it can help you or your business. Think about it this way. If you don’t know how to drive a car, what will be the use owning one?

Second, understand your needs. It is not enough to know what property bridging finance is and then fail to recognize your needs. Both of them have to match not otherwise. To do that you must analyze and understand the gravity and depth of your financial necessities. Is it short term or long term? How much would it be? When will you need it?

Third, only transact with trusted providers. It is your job and responsibility to see to it that you only borrow from trusted quality driven property bridging financiers. You need to canvass, ask around and inquire about their services and the quality of their services. You will read reviews and feedbacks from past and present customers. You will get to know them and you must pick the best among the heap.

Fourth, see to it that you only use it as should be. Property bridging loan is designed to provide for short term needs and must therefore be used as such. You should not in any way use it as replacement for your permanent long term loans and mortgages as they are not made to do that. It will not end well.

Fifth, always have your exit mapped out. Be sure that you have planned and devised a means on how you will go about paying the property bridging finance that you have taken out. Luckily for borrowers, repayment is flexible which can either be done before maturity or upon maturity or when your permanent financing source has come through whichever works best for you.

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