Mercantile Commercial Capital “The 504 Experts” Blog 
What do The Celebrity Apprentice and MCC have in common?
If you watched the final episode of The Celebrity Apprentice, you saw Piers Morgan crowned as the winner. You also may have noticed that his charity was the Intrepid Fallen Heroes Fund – the same organization we made a significant contribution to during one of our Holiday Giving campaigns a couple years ago.
For the past few years our staff has decided that it’s better to give than receive, so we’re pooled our personal and corporate gift money and chosen a worthy charity — one giving a “hand-up” rather than a “hand-out.” The Intrepid Fallen Heroes Fund provides help to U.S. military personnel who have been wounded in the line of duty and also for their families.
It turns …
NOW is the Best Time to buy commercial real estate.
Why would I stand up against the downpour of economic negativity all around us from pundits, talking-heads, and even many bankers? (Yes, we’ve even heard about life-long employee-bankers tell businesspeople not to buy property right now — maybe they’re too inwardly-focused on their poor residential loan decisions.) Well for starters, there are commercial property deals out there that didn’t exist 12 and 18 months ago, as many prices per-square-foot have come down (and cap rates have risen) in the past several months. Commercial rent rates (the variable expense that business owners CAN convert to a fixed cost) rose more in 2007 than in any other time since 2001 and must continue to rise (perhaps after a brief plateauing currently) in order to produce …
Daughter and Daddy Holiday Weekend in New York City (Part 1)
So after meeting Heisman winner, Tim Tebow, the day before he won the award in the JFK baggage claim area, we proceeded to our hotel near Rockefeller Center for an early check-in. We then walked down 49th Street to see the sights at Rockefeller Center and get some Two Boots Pizza in the basement of the building. After a few pictures outside, the cold air was just too much for us… so we wandered over to the American Girl place. We had planned to spend quite some time there as I’d booked reservations for Afternoon Tea and the American Girl musical as well.
The Tea was an exercise in “experience choreography.” By that, I mean they did …
A Boost of Optimism for the New Year
I’m a big believer in creating your own reality. Don’t like something? Only YOU have the power to change it for better. When you dig a little deeper, some would call it a belief in self-fulfilling prophecies, though that usually has a negative connotation to it. I have a feeling you share this belief with me . . . most entrepreneurs, as well as their advisors, share this life philosophy. We’ve taken nothing and made it into something. We’ve learned, many times through trial and error, how to make something become reality and how to switch course when needed. (Note: I didn’t say simply think it and it will come true — knowledge and beliefs without action is fairly worthless — as the title of …
This is my favorite time of year because I’m reminded more than usual to be grateful for all the blessed bounty we have, to give more of myself to my loved ones, and to know with certainty of even better things to come in the future. This is a joyous season in so many ways, and I hope the Spirit of the Season lasts much longer for you than just a few days at the end of every calendar year.
I’ve been feeling creative lately, so I thought I’d share a poem with you to brighten your Holidays . . .
A Christmas Poem with a TWIST…
Twas the night before Closing,
When all through the office –
Not a structure was creaking,
Not even the soffits;
The …
Miscellaneous…or as Alex might say on Jeopardy, “Potpourri”
By the way, I miss the old Saturday Night Live parodies with Daryl Hammond as Sean Connery making fun of Will Ferrell’s Alex Trebek and with such classic Celebrity Jeopardy categories as: Words that Rhyme with “Dog”; The Vowels; Movies that Start with the Word “Jaws”; Hot or Cold; Foods that End in “amburger”; and my favorite, Colors that End in “urple.”
Here are some miscellaneous updates on what we’ve been up to:
–Our updated website is nearly complete. Hallelujah!!! We’ve been covertly working on this project for the past few months. Slowly, but surely, changing the layout and the content, while adding audio content, video content, more testimonials, Google Maps, and much, much more. You could go there now …
Our Year-in-Review “Fun Facts”
I’ve made it a habit to take some time at the end of every year to reflect on what we’ve accomplished — both as a company and personally. Here’s an accounting of what we’ve been up to this year:
** Number of Speaking Engagements (in-person or via teleconference): 33
** Approximate number of total people in audiences: 9,475
** National publications we appeared in: 19
(Inc. Magazine, Forbes, Commercial Property News, Sacramento Bee, Origination News, MortgagePro News, Franchising World, Scotsman Guide, Franchise Times, Lending Success, Restaurant Finance Monitor, Orlando Business Journal, Charlotte Business Journal, Minneapolis Business Journal, Florida Real Estate Journal, South Florida Real Estate Journal, Franchise Handbook, Hotel Business …
How to Tell Better Stories (and Win Friends and Influence People)
If you’re like me, you’ll be around friends and family a lot over the next several weeks. I’m big on telling stories — I like to entertain the people around me and (I’ll admit) I like to be the center of attention.
I learned a trick a little while back that makes stories and jokes much more effective, and I’ll share it with you. I discovered it watching The Tonight Show, with Jay Leno.
A Little Background Goes a Long Way
Jay begins every show with a monologue where he takes shots at people in the news and current events. What makes him so effective is that he provides a frame of reference for each and every joke he tells.
Here’s what I …
Inspiration from the 400 Wealthiest Americans (Part 1 of 2)
While flying back from a television taping in Palm Springs, CA earlier this month, I finished reading one of my favorite magazines. Every year, I devour the contents and usually hold onto the issue for months on end, regularly referring back to it. Now, some people will think that my behavior is a bit odd, but hopefully you’re someone who’ll see the “method to my madness.” Below, I’ve decided to list the inspirational backgrounds of just some of the “self-made” people in this magazine issue (no one below claims inheritance as their reason for being one of the 400 Wealthiest Americans — ALL EARNED IT):
-Twenty-eight (28) different people on the list dropped out of college, law school or business school.
-Seven (7) …
Some people in our culture get so disgusted and hung-up over discussions of “wealth” and “getting rich.” It absolutely amazes me, and it’s really quite a shame. This, in spite of the fact that millions of books, CDs, magazines, newspapers and so on are sold each year portending to hold the “keys” to “getting wealthy.” This despite the billions upon billions of dollars the wealthy of this country give to charitable endeavors, big and small, annually. Ignorance of our economic history and the entrepreneurial capitalists that helped raise this country to greatness must be rampant… or perhaps too many of us just want to be “polite.” It’s as though, in our attempt to seem less crass and commercial, so many …
Marketing: Expense or Investment?
As my friend and a coach to the mortgage industry, Mike Midget, recently expressed in complimenting me about this, “You put more content in your newsmagazine month after month than newsletters I pays hundreds, if not thousands of dollars a year for. I can’t believe you guys just give it away every month.” Thanks for the kind words, Mike . . . but Believe It. We have a surge of dealflow every time our newsmagazine hits mailboxes . . . as we should. It more than pays for itself… and therein lies the important business lesson: do you view your marketing as merely an expense or as an investment? Do you know your return on investment (ROI) or are you …
Fielding 500 Questions (part 2 of 2)
Here are just a few more questions I fielded from the Inc. crew. Again, I didn’t pull any punches in voicing my opinions… so “reader beware.”
If you were in Congress, how would you vote, either for or against, on
each of the following issues? A. Pull troops from Iraq within the next 12
months. B. Increase funding or offer tax breaks for environmental efforts.
C. Decrease tariffs. D. Privatize social security. E. Introduce government
funded universal health care. F. Grant amnesty to illegal immigrants. G.
Repeal federal estate tax.
A. Against pulling the troops out within 12 months — Iraq isn’t ready for us to end it just yet and we still need an “assembling place” away from our shores for all of our enemies to confront us until we …
Fielding 500 Questions (part 1 of 2)
Now, I will tell you that the reporters at Inc. Magazine are some of the most fastidious I’ve ever come across. I had to submit and resubmit our corporate information at least three times, plus three different people contacted me to verify the accuracy of the information — and some of the information I submitted was our audited financials! Plus, I’ve fielded at least 3 phone calls on top of all of that. Maybe they should call it the “Inc. 500 Questions” award? I don’t mean to sound ungrateful, for it is very impressive on one level, but it is very annoying on another. I think they now know who my 4th grade teacher was, the uniform colors of my …
We made the INC. 500 list!!!
We’ll be somewhere on the 2007 Inc. 500 list of fastest-growing private companies in America. We don’t know our ranking just yet, but we’ll find out when the September issue of Inc. Magazine hits the newsstands. This is quite an honor for us. In fact, besides making it on the Fortune 500 or the Forbes 400, this is probably the most well-known business accolade there is. I’d venture to say it’s the most prestigious award for owners of small businesses. Some very notable names have made the list over the past 25 years (in no particular order): Microsoft; Patagonia; the Staubach Co.; Timberland; Jenny Craig Inc.; Gateway; Paychex; Oracle; Domino’s Pizza; Sharper Image; …
Back in March, I had the privilege of participating in an Office Condo Seminar in Miami, Florida. Several other real estate and lending professionals joined me, and we were able to answer questions from folks who are curious about commercial condominiums. Even though they’re becoming more and more common, business owners still have questions about them and wonder if they are worth the investment. Below, I’ve included a portion of the Q&A session, which will be helpful if you or someone you know is considering purchasing a commercial condo . . .
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Q: There has been quite a media backlash recently on some office conversions. Why are some of these projects not succeeding and where will the market end up?
Salsburg: Quite …
This is the second installment of my Top Ten list that was published in the Orlando Business Journal. Read on to get the top 5 things to do when considering wealth-creation through commercial real estate ownership . . .
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5. Consider adding other furniture, fixtures and equipment (FF&E) into your commercial loan — as long the FF&E costs are still a minority of your overall project costs and the FF&E have relatively long useful lives, you will get to amortize these on the much longer real estate terms (which will greatly improve your cash flow) at the same time that you depreciate these over shorter, allowable IRS schedules. This aspect gives you truly the highest cash-on-cash return for your project when you employ …
Another installment of my column in the Orlando Business Journal — part 1 of 2 . . .
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10. Get organized — most competent lenders can give you a checklist of their needed documents immediately. Full documentation loans (like the ones we specialize in: 504’s) are worth spending the extra time on in order to shave a couple hundred basis points (100 basis points equals 1.0%) off interest rates. This will add up to tens of thousands of dollars, if not more, over the life of your commercial loan.
9. Get pre-approved — this saves you time by knowing what you can afford to “shop” for. There is no sense wasting your time looking at $3 million buildings if you can only afford a $300,000 one. We …
The 2007 Hotel Investment Conference brought excitement to the Hospitality Industry never before experienced in prior years. The topics of focus included technology, finance, historic trends and expert predictions on the future of this burgeoning industry.
Listening to the featured panel speakers and attending each breakout session, I couldn’t help but pick up on an underlying theme: “Finance.” I heard the refrain repeatedly, “How can we get the Hoteliers/Moteliers of tomorrow financed in today’s market?” We have seen a huge influx of capital through various avenues, but the most important capital is that which allows “new blood” into the hospitality arena. The owners of tomorrow will help support the industry through the fluctuating trends that all markets experience. The hotel/motel …
Ideal Clients by Tony Zara, Vice President, Mercantile Commercial Capital, LLC
Mercantile Commercial Capital is focused on providing Smarter Financing for owners of small and mid-sized businesses who want to own their commercial properties. Since we’ve narrowed our scope to this particular niche, we are often asked IF and HOW we are able to help with certain loan scenarios. Due to the number of phone calls and emails we get daily, we thought it might be helpful to list the attributes that our Ideal Clients would possess.
This month, we highlight two types of properties — multi-use and special-use — and describe what our Ideal Client is in each case. If you or someone you know is considering purchasing commercial real estate, consider the following lists basic guidelines of a few of …
What Does the Masters, Easter and Spring Have to Do with Commercial Mortgages?
This time of year, three of my favorite things come along: the Masters golf tournament; the arrival of Spring; and the Easter holiday. Each of these is wonderful in its own way, and believe it or not, all three teach us something about commercial mortgages.
Spring and Easter are about renewal and about things not quite being what they, at first, appear to be. Just when you think your crapemyrtle tree will never flower again is about the time little pink shoots start to appear. Up North, where I’m originally from, as the last snow melts smidgens of green start to slowly show beneath the last stubborn pieces of ice. This season is about going from seemingly certain death to …
Reflections on Four Years in Business
Recent article from our newsletter by Chris Hurn . . .
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This month we will officially be four (4) years old as a company. With that in mind, I think it’s probably time to share some reflections about our beginning, and more importantly, about our “continuing.” See, from Day One, I wanted to reinvent and revolutionize the business we’re in — it was the reason for our genesis. I had been rethinking the logic of commercial lending from my perch as a management consultant about five years ago. It needed its mold broken, in my opinion. The banking business as usual was/is dead . . . ask Geof sometime — I used to mutter this to myself regularly, and it’s only …
Happy New Year! Did you work on your goals from my first column? If not, don’t forget to go to www.504blog.com to review it while you’re still thinking about it. Best to start the New Year off on the right foot, and my free web-based gift to you is the perfect tool to help make 2007 your Best Year EVER.
As you may or may not realize, my company finances commercial real estate for owners of small and mid-sized businesses. We’re a licensed commercial mortgage lender, so we operate just like a bank, but we only offer 5 different loan products instead of 45 different products and services like ordinary lenders. We’re extremely focused at what we do, and we believe we do it better …
Free web-based tool for keeping those resolutions!
Part of my first article from our new column in the OBJ I thought might be helpful to share . . .
Welcome to the debut post of my fortnightly or bi-weekly column. I’ve been writing a blog for nearly six months (feel free to visit: www.504blog.com), but decided to write this column in an attempt to disseminate information to a wider audience on the subjects of financing, commercial real estate and business success in general. It’s primarily addressed to business owners of small and mid-sized operations – the backbone of our country and our economy.
I’ll endeavor to keep this piece fresh, informative, personal and blatantly straight-forward if you’ll continue to visit it every two weeks or so. That’ll be our “New Year’s Agreement.” After …
Recent article from our newsletter by Chris Hurn . . .
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Like many, this is my favorite time of year — as much for the Holidays and “attitude adjustment” many people seem to go through, as for my exhaustion soon to be relieved. I’m usually exhausted physically, mentally and emotionally this time of year from another full year of mostly highs and the occasional low. It’s a favorite time because I know I’ll soon be recharging my batteries and I know the True meaning of the season and what’s coming . . .
But due to our fears, our lack of understanding and our fundamental nature, we as a society, seem to have driven most spirituality and talk of religion OUT of our culture in …
Do you think the SBA’s adrift???
An article published recently by many of the American Business Journals addressed the current state of the SBA and what their extension until February 2nd will mean for the agency. (You can find the link to this article below). One of the biggest issues addressed was the SBA’s 7(a) Program, a government subsidized program that always seems to be having budget issues.
As obvious proponents of the 504 Loan Program, we contend that using 7(a)’s for commercial real estate purchases is ill-advised, since 504 Loans have lower fees and below market, fixed interest rates. We’d rather leave 7(a) loans for working capital purposes, and therefore free up more capital for the program and make it less of a drain on the administration’s coffers.
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Several months back, I think it was a month or two after we expanded into additional space last January which would have marked the fourth expansion of our company in less than four years, Geof and I decided that while we did have informal, casual Fridays on which we allowed employees to wear blue jeans, we were kind of getting a little irritated with the sight of flip-flops with blue jeans. So, we rounded up all the troops and had a little conversation. We stated that now we were expanding again and continuing to grow the business, we didn’t want to go all the way in the other direction of becoming extremely corporate.
Having said that, however, we did think we needed to maintain a …
“What’s with all the ‘ACE of Spades’ references?”
That was the comment of at least one Member who read last month’s Newsletter, and several more probably thought the same thing. By the time you’re reading this, we will have just concluded our first-ever ACE Summit in Orlando. But let me back up a bit and explain exactly what THAT means. For some time, I’ve been wracking my brain to try and figure out a new and better way to expand our company aggressively outside of Florida. Sure, we sporadically do deals all over the country, and have closed loans in 13 states and Puerto Rico so far. All of these resulted from our marketing efforts in one way or another, but I know that having a local presence would …
True and Brief Entrepreneur Story - Richard Branson
The founder of Virgin Atlantic Airlines, Virgin Cola, Virgin Mobile, and lots of other Virgin lines, Richard Branson, had no formal training, no education, no money, and no nothing and yet he became a billionaire at the age of 39. Apparently his mother was sitting down telling true stories about her son to the BBC one day, when they asked her how this kid of hers became a billionaire — he has no training, no education, no nothing, they stated. His mother promptly replied that, well, there were lots of reasons. She then decided to give one very illustrative tale.
She told the story about when he was seven, maybe eight-years-old, and how she drove him 80 miles away from his …
Now, an Intriguing Story about Taxes
A professor of economics, Dr. David R. Kamerschen, at the University of Georgia (as a Gator fan, it nearly pains me to type that), came up with the following story that I’ve summarized below. This is like one of those fables you may have heard when you were a child — the ones that make even the most complex ideas seem very simple. Suppose that every day ten men go out for dinner, and the total bill comes to $100. Suppose, too, they decide to pay the bill in the way we pay our taxes. The following is what would happen. The first four men, the poorest, pay nothing. The fifth man pays a dollar. The sixth pays $3, the seventh pays $7, …
By the time you read this, I will have just barely submitted my 2005 personal income taxes prior to the extension deadline of October 16th. It’s a hassle I have every year, not so much because I already look at tax returns all the time in our business, but mostly because it takes a HUGE amount of effort to organize all of my documents and provide them to all my accountants. Having said that, I suppose having five K-1s also doesn’t help my cause either. My accountants, incidentally, find that I’m one of their best clients because from everything I give them, they just have to plug in the numbers and double and triple-check my spreadsheets with my receipts and forms. …
Client Spotlight interview with Joe Bert of Certified Financial Group
Client Spotlight: Certified Financial Group Joe Bert started his financial planning business in hopes of providing others with financial advice he wished he had access to earlier in his life. Now with many years of experience under his belt, he is able to provide personal financial planning advice and has much to offer as a business owner as well. In addition to serving as chairman for Certified Financial Group, Joe also hosts a weekly radio show called On the Money that is broadcast locally in the Orlando area. “When you’ve done the financial planning and shown them what they need to do — it’s that sigh of relief that you can hear and see that is very rewarding. It’s what keeps me in the business.”
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MCC: …
The Leverage Power of Commercial Real Estate
I thought I’d share a fairly detailed, yet admittedly simplified explanation of something that we at MCC hold dear and attempt to communicate with small business owners daily: the leverage power of real estate. Right after owning your own business, investing in real estate gives you the highest potential return on investment (ROI). Using leverage power is the primary reason you can get such high returns on real estate. In the scenario of most of our borrowers, their business has to have a place/facility of business, so investing in their own commercial property enables them to pay themselves the rent their business would have paid their landlord.
When you invest in real estate, you essentially are in the business of finding other investors to back …
This article was written by George Livingston, Chairman of NAI Realvest. George is a member of MCC’s Board of Directors and is widely recognized and sought out for his expertise in the commercial real estate community. The article discusses the current role of warehouse properties in the commercial real estate market. We would welcome your comments and suggestions on the topic.
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Warehouses Have Value
Warehouses do not have much glamour, but they do provide excellent long term value and returns, and do so with a low degree of volatility.
The reasons for this are that this market segment is less affected by the economic cycle than other property types. Warehouse tenants tend to have stable needs and typically stay where they are, especially if the …
The 504 Experts’ Summer Loan Closings and CO’s
June and July were busy months! We closed eight loans worth over 15.8 million dollars, and four of our clients completed their commercial construction and received Certificates of Occupancy on projects totaling over 5.3 million dollars. These clients included an early education center, an insurance office, a pizzeria and a deli cafe, among others.
All of these entrepreneurs have taken one of the biggest steps toward financial independence: buying/constructing their commercial property. Go to www.504experts.com/pastprojects.asp for more of our fantastic clients’ projects!
Giacobazzi Partners, LLC dba Roofing Concepts Unlimited of FL, Inc.
90% Loan-to-Cost Financing // Total Project Cost: $2,166,000
(Acquisition with Renovations)
We provided long-term financing for a 13,100 square foot office/warehouse in Coral Springs, Florida with a 25-year fully-amortizing term at a very attractive …
Recasting a Federal Agency: A Turnaround Blueprint for the New SBA Administrator
The U.S. Small Business Administration’s (SBA) named a new Administrator: Steven C. Preston. This 22nd Administrator in has quite a job ahead of him, and among his many tasks are to resurrect the Agency — in image and in effectively delivering its programs. This is no small feat, and he’ll need all of the suggestions and support available to do this. As someone with extensive SBA lending experience and a small business owner myself, I propose this blueprint to successfully turnaround the SBA and help make it more relevant and effective than ever.
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On July 10th, the U.S. Senate confirmed the U.S. Small Business Administration’s (SBA) new Administrator, Steven C. Preston. Taking over a much maligned federal agency of late, the 22nd Administrator in its …
SBA 504 Loans: Eight Quick Tips You Need to Know Now
SBA 504 Loans: Eight Quick Tips You Need to Know Now
Get organized – most competent lenders can give you a checklist of their needed documents immediately. Full documentation loans (like SBA 504’s) are worth spending the extra time on in order to get organized and shave a couple hundred basis points (100 basis points equals 1.0%) off interest rates. This will add up to tens of thousands of dollars, if not more, over the life of your loan.
Get pre-approved – this saves you time by knowing what you can afford to “shop” for. There is no sense wasting your time or your real estate broker’s time looking at $2 million buildings if you can only afford a $1 million …
Listening to each other to build a powerful resource . . .
One of the greatest reasons we had for starting this 504 blog is that as small business owners ourselves, we recognize the importance of listening to and learning from our clients and our valuable referral partners. We hope this SBA 504 Loan forum will be a great resource for both business owners wanting to build or buy their commercial properties, as well as commercial real estate professionals like ourselves to learn from each other and more about 504 loans and their benefits.
504 Blog Entrepreneurs: what’s the good, the bad, and the ugly of what it’s like navigating through the commercial lending or commercial real estate process, and what other related experiences have you had in your own business? What advice would you like from …
