Commercial Mortgages: Lenders of some commercial real estate loans look for better times in 2021 | Business News

Like Led Zeppelin’s classic hit “Good Times Bad Times,” lenders and real estate owners experienced the ups and downs of 2020 in a variety of ways.

Along with owners of hotels and mall owners, conduit lenders were clearly on the bad times side of that riff.

Conduits make a business of originating loans, packaging them together and selling them as commercial mortgage-backed securities.

Like many industries, that business came to a screeching halt in March, but, unlike other real estate lenders, conduits never really rebounded for much of the year. In fact, volume for commercial mortgage-backed securities in 2020 was down some 43{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} from 2019.

The primary reason is commercial real estate didn’t change hands as rapidly in 2020 as in 2019. Investment sales of commercial real estate in the U.S. dropped 32{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} when compared to 2019, according to Real Capital Analytics, a New York-based commercial real estate data firm.

The other reason is hotel and retail properties are a tough sell for any lender. Loans backed by hotels make up 10.24{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} of all CMBS loans outstanding, while retail properties currently make up 14.46{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c}, according to analytics firm Trepp LLC.

Even though 2020 was a bad year for loan volume

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Real Estate Investors: How Many Mortgages Can You Have?

Many new real estate investors often wonder, “How many mortgages can you have at once?” While it’s possible to traditionally finance up to 10 properties at a time, there are methods of alternative financing that can help you grow your portfolio even further.

Here’s a guide on how to qualify for multiple mortgages at a time, as well as the pros and cons of following this type of financing strategy. Armed with this knowledge, you should have a much better idea of whether it’s an appropriate strategy for you to take.

How many mortgages can you have?

If you’re starting to think about expanding your portfolio, you may wonder how many mortgages you can have at one time. The short answer is that you can have up to 10 conventional mortgages in your name at once. However, in practice, experienced real estate investors know it’s possible to use alternative financing methods to take on even more mortgage debt.

However, before we get into alternatives, it’s important to understand the history behind the limit on the number of traditionally financed properties an investor can have at one time. Up until about a decade ago, it was only possible to finance up

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Mortgages, Not Assets: How the REM ETF Invests in Real Estate

Covid-19 has changed the real estate investment trust (REIT) landscape, particularly commercial property and office buildings. One REIT to consider focuses on mortgages rather than physical property: the iShares Mortgage Real Estate Capped ETF (REM), which is up 25{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} the last three months.

“Mortgage real estate investment trusts (REITs) may sound intimidating, but their operating model is actually pretty simple,” a Motley Fool article noted. “These businesses borrow money at short-term lending rates and acquire assets that have a higher long-term yield. For mortgage REITs, we’re usually talking about mortgage-backed securities (MBSs). The difference between the yield from MBSs and the short-term borrowing rate is known as the net interest margin (NIM). The wider the NIM, the more money mortgage REITs make.”

At a 0.48{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} expense ratio, REM seeks to track the investment results of the FTSE NAREIT All Mortgage Capped Index, which is composed of U.S. REITs that hold U.S. residential and commercial mortgages. The fund generally will invest at least 90{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} of its assets in the component securities of the underlying index and may invest up to 10{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} of its assets in certain futures, options and swap contracts, cash, and cash equivalents.

The underlying index measures

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