Experience the CRESTICO Difference
Thinking of Buying, Selling or Refinancing your existing mortgage?
CRESTICO, INC. is a full-service regional real estate firms in the Western United States. Established in 2008 and headquartered in Woodland Hills, California, the firm continues to be a front-runner in the growing middle market and distressed assets and provides comprehensive real estate advisory and transaction services.
What We Offer
We take the time to understand your business – from your operations to your long-term vision and goals.
And we support you with local relationship managers and bankers, who work alongside your team to help keep your business on track and moving forward.
We focus on building long-term relationships with our customers. As our customer, you have a local team that works alongside your team to help you keep your business on track. This local support, combined with our comprehensive suite of products and services and Wells Fargo’s time-tested strength and stability, mean we can support your business now, and for many years to come.
Our comprehensive suite of products and services can support your business now and for years to come.
- Commercial Real Estate 60% 60%
- Commercial Financing 80% 80%
- Project Development 43% 43%
Financing a property is the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full price in cash up front from their own accounts at the time of the purchase. Financing for non-residential real estate is generally obtained from a bank, insurance company or other institutional lender to provide funds for the acquisition, development, and operation of a commercial real estate venture. Commercial financing loans are secured primarily by real estate and related assets owned by the debtor. Assets used to collateralize commercial finance loans, aside from the real estate, may include fixtures, equipment, bank and/or trade accounts, receivables, inventory, general intangibles, and supplies. Documents evidencing and securing the loan typically include: loan agreements, promissory notes, mortgages or deeds of trust, assignments of rents and leases, financing statements, environmental indemnity agreements, guaranties, subordination, non-disturbance and attornment agreements, estoppel certificates, and other ancillary documents.
What is commercial financing in general?
While many of the concepts are the same, there can be huge differences between commercial and residential real estate. Commercial real estate transactions can be far more diverse and wide-ranging than selling homes. Any real estate deal has its share of risks, and problems can arise that you could never possibly foresee. In general, however, the risk and potential liability exposure that you face on a commercial real estate deal can be much greater than when you buy a house. Look at it from this perspective: by and large, we all have a pretty good idea of what goes on in a typical family home, but can you say the same thing about a piece of business property? Depending on the nature of the business, commercial property may have all kinds of liens and title problems. There may be greater concerns about hazardous materials or zoning issues. Also, there will always be questions about the suitability of the property’s location for your business needs.Furthermore, in many instances, you aren’t afforded the same consumer protections on a commercial real estate deal that may be available when you purchase a residence. In some states, for example, residential homebuyers are given greater protections against abusive lending practices than are business owners. Likewise, there are mandatory disclosures required in residential real estate matters that may or may not be required in a commercial transaction.
Are there really that many differences between a commercial real estate deal and buying a house?
Regardless of whether you’re buying a home or a piece of investment property, there will always be risks involved. Your goal should be to lessen these risks as much as you can. Examples of potential problems that oftentimes lead to legal disputes include:
- Defects in title
- Debt service and lender requirements
- Mechanics liens
- Zoning and land use problems
- Market fluctuations
- Hazardous waste and environmental contamination
Real property interests are usually conveyed by a deed. In order to track how property changes hands, every state has a public record system where real property deeds are recorded, becoming a part of the public record system for everyone to see. In theory, this is a great system for keeping track of who owns what, but deeds are sometimes not recorded. Sometimes people sell or transfer partial interests in property. Lenders make loans against properties and record mortgages or deeds of trust that become liens that are of public record. Easements given to cross over or use property may or may not be of record. A judgment against a person can be recorded and become a lien against any real property that person owns, even without his consent. All these things can become a lien against title. You may not be buying everything you though you were buying, because someone else may have a prior claim that you didn’t know about.
If you’re borrowing money to acquire a piece of real property, the lender is no doubt going to want security for the loan. While a personal guarantee may work if your net worth is substantial, a lender will usually want a mortgage or deed of trust against the property. This will give the lender the right to foreclose if you fail to comply with the terms and conditions of the loan. Beyond the repayment requirements, these terms and conditions can give rise to other concerns that could become a problem. For example, some lenders prohibit borrowers from taking out more loans on their property, which could stop you from getting more financing that your business may need down the road.
Often times, a commercial loan will also require that a business maintain a certain “net equity.” Pre-payment penalties are also common on real property loans. Also, many lenders on a big commercial real estate deal require that their legal fees and costs be paid by the borrower(s).
In a business context, contractors who do work on real property have a process called a “mechanics lien” that they can use to make sure that they get paid. This is a statutory lien that contractors, laborers and materialmen place on property when they’ve performed work or furnished materials in the erection or repair of a building or an improvement. They must generally give advance notice that they’re going to file the lien, and must then take action to enforce the lien within strict timelines if they aren’t paid. Ultimately a mechanic’s lien could be used to foreclose on property, so it can be a very powerful tool for a contractor, a laborer or a materialman.
A big concern for a business is to make sure not only that property used in the business is properly zoned, but also that the zoning of nearby or adjacent properties is not going to be a problem. Believe it or not, many people fail in new businesses because they don’t investigate the land use and zoning issues carefully enough. Even if you do your homework, issues can come up down the road if governmental agencies or neighbors try to change the zoning on your property to limit your use of it.
If you’re in the real estate business, changes in property values and other market fluctuations can have a profound effect on your operations. Rents can go up or down; tenancy rates can increase and decrease. Changing property values and market fluctuations can also affect any other type of business that owns property. With retail space, for example, a company that owns rather than leases a store location may decide to change locations to follow their customer base, only to find out that they can’t afford to move because of property values having dropped to the point that their business premises can’t be sold at the price they need. (In contrast, a lease may provide more flexibility because, at the end of the term, the business could simply pack up and move without having to worry about selling the premises.)
The biggest potential concerns to owning business property, though, are hazardous waste or environmental cleanup problems. Property owners are the ones who have primary responsibility for fixing such problems, even if the current property owner didn’t cause them. These problems may not be obvious or apparent to the naked eye, and could arise from anything ranging from an underground storage tank to an old garbage dump. If you’re in the chain of title to contaminated property (meaning that a some point you held an ownership interest in that property), you’re potentially responsible for paying for the clean up. The costs for an environmental cleanup operation can run into the millions of dollars.
CRESTICO is a full-service Real Estate Brokerage and Mortgage Lending firm in Los Angeles offering a variety of services including First Time Home Buyer Purchase Programs, Short Sale, Foreclosure Prevention, Relocation, Real Estate Investment as well as providing financing for purchasing new homes or refinancing existing mortgages to reduce interest rates and/or lower monthly payments by offering no fee, no cost transactions.
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