SMALL BUSINESS LOANS WILL HELP YOUR BUSINESS

March 1, 2015 on 12:25 am | In Bravo, Fascinating Information, Funny...Money, Government, Investment Opportunities, Office Fodder, Solutions, Uncategorized | 3 Comments

How the Small Business Administration can Help You Improve or Start a Small Business

Courtesy of Ella MossSBA seal

People have great ideas for small business all the time, but most never get past the idea stage, and it’s often due to a lack of funding for major expenses like retail or industrial space. And many don’t realize that they might be able to access funding from the Small Business Administration (SBA), a federal agency that provides all kinds of useful information—as well as loans—for small business and start-ups.

What Help can the SBA Provide for Small Business Owners?

The SBA offers a range of different types of programs for helping small business owners get loans or access venture capital, and can also guarantee bonds for contractors.

SBA guaranteed loan programs are designed to help small business owners get third party sba-loan applicationloans from participating lenders. The money that a small business owner borrows doesn’t come from the SBA itself, it comes from a conventional lender such as a bank, or sometimes from micro-lender organizations or other community organizations. Many banks participate in the SBA loan program, including The Bank of America, Chase, US Banks, and Wells Fargo, as well as lending institutions like Fundera. The SBA’s role in the loan process is to provide a guarantee that the loan will be repaid; this reduces the risk for the lender, and allows them to offer loans with more favorable terms, and more relaxed qualifying criteria. Note, however, that the SBA won’t guarantee a loan for a borrower who can access conventional financing at a reasonable rate—the loans are intended more for people who would not otherwise be able to access affordable funding.

SBA loan structureIn a similar fashion, the SBA surety bond program helps contractors by acting as a third party, or surety, to a contract between the contractor and a project owner (the person the contractor is doing work for). Under the terms of an agreement between the contractor and project owner, the contractor is legally bound to provide the work they’re contracted for, but if they are unable to do so, the surety—in this case, the SBA—becomes responsible for getting the work done.handshake

The also known as the Small Business Investment Company (SBIC) is a combination private and public investment partnership designed to help small businesses locate growth capital. The funds are licensed by—but not provided by—the SBA, but the SBA supplements capital raised by investors with its guaranteed loan program. Access to venture capital funds is more limited than access to loan funds, however, and there are more stringent qualifying criteria for businesses that want to access venture capital.

What can You Use SBA Loans For?

The SBA offers several different loan programs; the amount a small business owner can borrow depends on the bank they work with as well as SBA regulations. For example, Chase bank offers loans of up to $5 million, while Bank of America offers loans of up to 3.5 million. In most cases, the SBA logobusiness must have been in operation for two or three years, and the owner or owners must have some of their own equity in the business (these are requirements of the lenders, rather than the SBA itself). The SBA has requirements of its own: for example, the business must be a for-profit organization, be an SBA-defined small business, and have a sound business purpose in mind for the funds. However, there are few restrictions on what the business can do with the money: it can be used for both long term and short term purposes, including use as working capital for paying expenses of operation, to buy equipment, fittings and furnishings, or supplies, to buy real estate such as building or land, to home_loan_entryrenovate a building, or to construct a new one. Purchasing land and buildings can be an especially advantageous way to use SBA loan funds, since it allows a small business owner to access retail or industrial space without having to qualify for a commercial loan, which is typically a more expensive prospect than a residential one. Restrictions on what can be done with the money include using it to pay or refinance other debts, to pay delinquent taxes, or for any purpose not considered a “sound business purpose” according to SBA regulations.

How to Apply for SBA Funding

The SBA offers plenty of guidance for small business owners interested in applying for loans or accessing venture capital, including help with finding local lenders, application checklists and guidelines, and further services at local offices.

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THE BENEFITS OF REAL ESTATE PARTNERSHIPS

February 15, 2015 on 12:08 am | In Fascinating Information, Investment Opportunities, Solutions, Uncategorized | 2 Comments

by Naomi Shaw

A real estate partnership can be a lucrative venture for many individuals with a limited amount of money to invest. Forming a partnership will increase your working capital, and you’ll be able to buy properties you couldn’t afford on your own.

However, there are some significant risks that can come with forming a partnership. If you choose the wrong person or company to do business with, you could find that your investment quickly becomes a loss.

Before entering into any sort of real estate business partnership, make sure you do your homework on who you’ll be working with.

Knowing Your Partner

Entering into a real estate partnership with another person or company is something you should do only after you understand who you’re working with. While helpful to work with people you know and trust, there are some questions you should ask any person or company before considering a partnership.

● How much money do you have to invest? How is your credit score?

● How many properties do you currently own?

● When do you expect to make a profit from your properties? Do you plan on holding properties for years or do you want a quick turnaround to leverage into other ventures?

● Have you had other real estate partnerships in the past? Do you currently have other real estate partners? Do you have references to any past or current partners?

Understanding Your Partnership Agreement

Before you commit to any type of partnership, it’s essential that you come up with an agreement as to how the partnership is going to work. The most important things you need to discuss when setting up a real estate partnership include:

● How partners will get paid and when. Do partners share profits or are profits tied to resale only?

● What your responsibilities in the partnership are. Usually, one partner will manage properties while another is responsible for finding new properties. Of course, all partnerships differ. Defined roles are important.

● Is the partnership going to be reviewed at certain times? Many partnerships review profits about once per year. After all, not all partnerships are worth maintaining if there’s no growth or profit.

Hire an Attorney

If you form a good partnership, chances are you won’t ever need to consult your attorney. However, you do need to hire a qualified attorney who will help you setup your partnership.

Trying to do it yourself will most likely leave big gaps in your contract, and unless you’re incredibly well versed in business partnerships, those gaps could create potential problems down the road when it becomes time to sell properties, split profits, or dissolve the partnership and its assets.

Hiring an attorney seems costly, but it’s going to cost you a lot less than a business partnership gone wrong.

A real estate partnership is often an excellent way to make more money than you ever could on your own while balancing the work that real estate investing takes. However, partner with the wrong person, and you could end up losing all of the money that you had to invest.

Do your homework and ask questions, and always set up a binding legal agreement that helps both partners understand how they’ll be working together and how they’ll be able to exit the partnership if needed.

Naomi Shaw is a freelance writer in Southern California. Real estate is something she is passionate about and she loves covering the many different facets of it in her writing. She works with Ovlix.com.

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EFFECTIVE OFFICE SPACES

July 15, 2014 on 9:27 pm | In Bravo, Fascinating Information, Green, Office Fodder, Solutions, Trends, Uncategorized, Winning Properties | 3 Comments

by Jodi Summers

Office space has changed drastically in the past decade. Gone are cubicles and forced air. What’s hot are bright and breezy multiuse open spaces which use less square footage than their predecessors. Allow us to share with you some cutting edge concepts in office design.

Google’s stimulating new workspace in Tel Aviv. Google creates environments to allow creative ideas to easily flow.

 

 

 

 

 

 

 

 

92% of young professionals interviewed said they would be more inclined to work for an environmentally-friendly company.

 

 

 

 

 

 

Office space abundant in light with inspiring design.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three complementary design firms have joined together to share a loft office space.

 

 

 

Shared office or executive office suites.

 

 

 

The office barns the workspace is completely open, without partitions and without hierarchy. Desks and local storage are mobile and a system of power distribution drops power and network down to the desks from over head. It’s unlike any corporate office space that came before it and in fact has many of the characteristics of smaller businesses.

 

 

 

 

 

 

 

Open office space circa 1923

 

 

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SOCAL OFFICE REAL ESTATE SNAPSHOT – JUNE 2014 –THE OFFICE PARK OF TODAY IS THE CAMPUS OF TOMORROW

June 1, 2014 on 1:07 pm | In Bravo, Fascinating Information, Investment Opportunities, Market Snapshot, New Developments, Office Fodder, Property Maintenance, Solutions, Trends, Uncategorized, Winning Properties | 1 Comment

by Jodi Summers

Originally built exclusively for business, office parks are evolving into vibrant multipurpose campuses. We all know the office market has been stagnant since the great rise is gas prices and the plummet of the Great Recession. Instead of wallowing in their empty suites, investors and developers from El Segundo to Warner Center are adding value through redevelopment. The result is a re-envisioned business campus where people can dine, shop, and live – all within walking distance of work.

The reinvention of the office complex has had a very positive impact on the lagging office market in 2014. According to Loopnet, office sale prices in metro Los Angeles jumped 12.5% in the first quarter and a total of 17% since 1Q 2013.

The market is finally grabbing how office space needs to be reinvented. Our new generation of young professionals have no interest in working in the same dull McOffice Park that their parents did. So, in addition to reinventing the size and configuration of the workspace, office real estate entrepreneurs are also reconsidering the environment.

To recruit and retain top talent, cutting-edge employers are eager to give millennials a walkable live-work-play-dine environment.

“It’s the new norm,” offers Anjee Solanki, national director of retail services with Colliers International in San Francisco. “People are expecting it.”

The reinvention of the office space is pushing lease rates up. According to Loopnet, average asking rental rate per sq ft/year for Office properties in Los Angeles, CA as of Apr 14 was $25.11. This is an increase of 0.8% compared to the prior 3 months, and an increase of +4.5% year-over-year. County-wide, average rental rates in Los Angeles are +0.9% higher at $24.21 per sq ft/year for Office properties currently for lease, a rise of +3.3% since 1Q 2013.

Want to see fine office retrofit? Check out the 86-acre Times Continental Park in El Segundo. Once and aerospace complex with each building occupied by single large tenants, “we had to rethink what to do with the property,” shares Alex Rose, senior vice president of Continental Development Corp.

Continental Development steadily began retrofitting the buildings to fit multiple tenants. Then it began adding restaurants, shopping, hotels, fitness centers, and a movie theater—all served by a light rail stop. “Once you get the cycle going, it feeds on itself,” Rose says. With 3 million square feet of mixed-use space and an office vacancy rate below 5%, Continental Park found the right strategy to turn things around. “By taking a mixed-use approach, we think we did a good job of listening to our market,” Rose says. “We’ve been able to keep our rents up, keep occupancy up, and attract tenants that perhaps our competition can’t.”

Continental’s approach was so successful, that others wanted in. Invesco Real Estate and SSV Properties of Ontario, subsequently bought four office buildings in Continental Park totaling 540,000 square feet for an undisclosed amount last year. One building was fully leased, but the new owners chose to spend an estimated $75 million to convert the other three to open floor plans that support workplace collaboration.

Continental Park’s mixed-use environment was a key factor in the decision to buy the buildings as a long-term investment,. “The way officing is going right now, folks want the [mixed-use] environment and amenities,” observes Peter Cassiano, director of acquisitions for Invesco.

Many underperforming office parks can’t afford mixed-use makeovers because the owners don’t have the capital. They don’t have the capital because the property is underperforming. The only escape from this Catch-22 is acquisition by new owners with deeper pockets. Looking to get sell an underperforming office park? We have the buyers.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

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KNOW THE LIFE OF YOUR OFFICE BUILDING SYSTEMS THE BENEFITS OF A RISK MANAGEMENT ASSESSMENT

January 29, 2014 on 9:44 am | In Office Fodder, Property Maintenance, Solutions, Uncategorized | 1 Comment

by Jodi Summers

We meet a lot of inspectors in the day-to-day business of real estate. As we were inspecting a 12,000+ sq.ft. office building with a buyer, it was obvious the property had experienced some significant deferred maintenance. As the inspector was pointing out rust blossoms in the pipes, and homemade electrical upgrades, we got to talking about office building preventative maintenance.

“It’s good for all buildings to have a risk assessment,” the inspector shared. “That way you know what you’re getting, about how long it will last, and it will give you an idea of how much it will cost you.”

A risk assessment usually includes an evaluation the 5 major systems involved in the day-to-day operation of a commercial facility – plumbing, electrical, heating and air conditioning, structure and roofing. Add to that any gear required for business specialization as well as obvious deferred maintenance issues.

A risk assessment examines three aspects of each of the 5 systems:

  1. Expected useful life left in each system.

2. Maintenance/Repairs that are needed immediately for each system.

3. Total costs that are expected over the next five years for each system.

After your inspection, your company will understand your projected expenses for maintenance, and you will be able to fit them into the annual budget…and everything is hunky dory.

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LOS ANGELES IS AN EXAMPLE FOR THE ADAPTIVE REUSE OF OFFICE BUILDINGS

November 15, 2013 on 2:10 pm | In Bravo, Fascinating Information, Green, Historic Properties, Investment Opportunities, New Developments, Property Maintenance, Solutions, Trends, Uncategorized, Winning Properties | 3 Comments

Edited by Jodi Summers

Bravo to the City of Los Angeles. Through innovative public policy and creative private development, L.A.is demonstrating how older buildings can be repurposed and repositioned for the new economy while reducing carbon emissions.

Believe it or not, Downtown Los Angeles contains one of the nation’s finest collections of early 20th century architecture. Most of these buildings sat vacant for decades, until a carefully targeted Adaptive Use Ordinance (ARO) removed regulatory barriers, provided incentives, and helped make it possible to repurpose more than 60 historic buildings over the past 14 years as new apartments, lofts, and hotels.

But many more buildings remain empty or underused in the downtown area and nearby commercial districts.

A recent report from the Urban Land Institute and the National Trust for Historic Preservation’s Green Lab concludes that more than 10 million square feet of space in the city’s urban core is currently vacant. The report, Learning from Los Angeles, was presented to Mayor Eric Garcetti this morning, at an event organized by the ULI Los Angeles District Council. It describes strategies that build on the success of the ARO to unlock the economic and community development potential of underused older buildings. The report documents demolition, building, and vacancy trends throughout the city and recommends strategies for removing regulatory barriers, streamlining approvals, and providing incentives to make building reuse easier to accomplish.

Conversations organized by the Preservation Green and ULI Los Angeles identified key barriers to building reuse and recommend solutions to overcome these obstacles. The Los Angeles Conservancy, a key partner in this effort, served on the project Advisory Committee along with practitioners in real estate development, planning, design, construction, community revitalization, and local government.

Learning from Los Angeles is the first in a new series of research and policy reports being developed by the Preservation Green Lab through the Partnership for Building Reuse, a joint effort of the National Trust and ULI. Launched in Los Angeles in 2012, the Partnership for Building Reuse is designed to foster market-driven building reuse in major U.S. cities through dialogues with community stakeholders about building reuse challenges and opportunities.

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