The 8 Things You Must Know

by Craig Higdon

© 2016 Craig S. Higdon Phone (888) 578-5441 x81 [email protected]

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Here’s A Copy of the FREE Special Report I Promised You:

“The 8 Things You Must Know - Before You Invest a Dime in

Commercial Real Estate”

Greetings! Thank you for requesting this FREE report! Buying a commercial property is a major event in any investor’s life – especially if it’s your first time through the process! It is important that you understand how the commercial property purchase process works, what it takes to be prepared, and how to separate the facts from fiction! That’s the purpose of this report…..

And Here’s Where I Can Help You. My name is Craig Higdon. I’m with C. S. Higdon, Inc. and I specialize in helping real estate investors, like you, identify the most cost-effective, low-risk ways available to finance and purchase income producing properties – and I get paid in the most professional, risk-free way possible . . . on a contingency basis only! In other words, the only way I make money is if and when I’ve succeeded in helping you to acquire financing and purchase a building. If I can’t get you financing and you’re unable to purchase a property, you won’t owe me a dime -- whether we spend two hours together or twelve months! But that’s very unlikely to happen. You see, I don’t represent your “typical” bank or savings and loan. I represent a mortgage brokerage – a brokerage that specializes in mortgages, and mortgages alone. A broker represents many different lenders, which means there’s a good chance I’ll not only help you find the best possible interest rate, but I can also help you find financing whether you’re self-employed, have good or bad credit, have a lot of money for your down payment or are just scraping the bottom of the barrel to find whatever money you can.

How do I do this? Simple! I have over 23 years of experience helping thousands of investors just like you! Because I don’t represent a “typical” bank or savings and loan, I’m not locked in or committed to offering you the interest rates and programs of only one bank. I’m able to take your loan application and shop three, six, ten, or even dozens of different lenders and investors in order to find you the best possible rate and program available for YOUR circumstances. I have contacts with lenders all over the country for hundreds of different loan programs.


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By doing this, I’ll not only be able to provide you with a competitive interest rate ... but I can assure you that whether you have enough money available to put 20 percent down or even less, you’ll have an opportunity to purchase an investment property. It doesn’t matter if you have good credit, bad credit, or no credit at all! Now on the other hand, if you were to go to a local bank, there’s a good chance you’d be locked into taking only the interest rate and program they have to offer. They’d probably require a minimum down payment on a building of at least 25 percent (or more) and you may not be getting the best rate or terms for which you qualify. The rate they have is the rate you’d get, and if you’re a little short on cash for a down payment ... “tough luck.” Now, with that in mind, who would you rather deal with?

So I’d Like To Do Something Special for You . . . Absolutely FREE Of Charge – and Without ANY Further Obligation!

I’d like to “buy” you 15 minutes of my time to discuss anything that may be of interest to you. During our time together, I’ll ask you a number of questions. The answers to all of these questions will be kept strictly confidential and will be shared only between you and me. I’ll detail my basic philosophies and I’ll ask you about yours. I’ll tell you how I work with my clients and I’ll ask you if what I offer is something you want for yourself. If it is, then I’ll work out the perfect plan to help you finance a building. If this isn’t what you want, there will be no questions asked, and no hard feelings. You see, I understand I’m dealing with your livelihood, and more importantly, a highly prized possession -- your real estate! I want our relationship to be a long and enduring one, not just a simple half-hour session. So, if you’re interested in taking me up on this special offer, I can be reached toll-free at (888) 578-5441 x81. I keep normal business hours, but I’m available for evening and weekend consultations as well. My number, once again, is (888) 578-5441 x81. Sincerely,

Craig S. Higdon Director, C. S. Higdon, Inc. P.S. I hope you enjoy the “special report” you’re about to read. I think you’ll find it very helpful.


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Important Legal Information The author and publisher of this report and the accompanying materials have used their best efforts in preparing this report. The author and publisher make no representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this report. The information contained in this report is strictly for educational purposes. Therefore, if you wish to apply ideas contained in this report, you are taking full responsibility for your actions.

Every effort has been made to accurately represent this product and its potential. Even though this industry is one of the few where one can write their own check in terms of earnings, there is no guarantee that you will earn any money using the techniques and ideas in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this as a "get rich scheme."

Any claims made of actual earnings or examples of actual results can be verified upon request. Your level of success in attaining the results claimed in our materials depends on the time you devote to the program, ideas and techniques mentioned, your finances, knowledge and various skills. Since these factors differ according to individuals, we cannot guarantee your success or income level. Nor are we responsible for any of your actions.

Materials in our product and our website may contain information that includes or is based upon forward-looking statements within the meaning of the securities litigation reform act of 1995. Forward-looking statements give our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a description of potential earnings or financial performance.

Any and all forward looking statements here or on any of our sales material are intended to express our opinion of earnings potential. Many factors will be important in determining your actual results and no guarantees are made that you will achieve results similar to ours or anybody else's, in fact no guarantees are made that you will achieve any results from our ideas and techniques in our material.

The author and publisher disclaim any warranties (express or implied), merchantability, or fitness for any particular purpose. The author and publisher shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this material, which is provided "as is", and without warranties.

As always, the advice of a competent legal, tax, accounting or other professional should be sought.

The author and publisher do not warrant the performance, effectiveness or applicability of any sites listed or linked to in this report.

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This report is © (copyrighted) by C. S. Higdon, Inc. No part of this may be copied, or changed in any format, sold, or used in any way other than what is outlined within this report under any circumstances.


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A Special Report

For

Commercial Real Estate Investors

Commercial real estate can be a faster way to investment success than single-family properties. However, after helping hundreds of real estate investors, I have discovered that there are 8 very important things that you should know before buying a commercial property. Here they are:

1. Knowing your credit situation ahead of time. 2. Being very selective about the “neighborhood” in which you invest. 3. Selecting the site should be a high priority. 4. Becoming an expert in a Property Type. 5. Doing a thorough investigation of Operating Expenses. 6. Assessing the management issues of your chosen property. 7. Understanding your Financing Options. 8. Carefully choosing your Mortgage Professional.

Evaluating and being aware of these eight things will help you avoid most of the costly mistakes associated with commercial real estate investment, and help you earn significantly more profit in less time. Enjoy!

“The 8 Most Important Things You Need to Know - Before You Invest a Dime in

Commercial Real Estate”


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Important Thing #1

Examine and Repair Any Credit Problems Prior to Applying For Your Loan

As with any other loan, your credit plays a major role in obtaining financing, determining how much financing you’ll qualify for, and what kind of an interest rate you’ll get on the loan. Unfortunately, most people don’t pay attention to or monitor their credit files on a regular basis. If you’re going to invest in real estate, this is an absolute “must.”

“So, what is good credit?” Good credit for a commercial investor usually means a person has about twelve to fifteen solid pieces of seasoned credit with several real estate loans either showing as active or having been paid off successfully. For example, car loans, current mortgages, and charge cards which are at least two years old and show no late payments. Again, for real estate investors, successful maintenance of real estate loans is a “must.” Now granted, not everyone is perfect (in fact, very few are!) and we all have our ups and downs, so don’t be worried if you have a few 30-day late payments or some old collection accounts on your credit report. Today, credit reporting systems use a complex method of evaluating credit patterns which is distilled into and issued as a “credit score.” The higher the number, the less risk there is that a borrower is likely to “default” on a loan. Most underwriters (the people who would approve your loan) and underwriting systems that review your track record are looking for trends. In other words, they’re looking for a history or recent pattern of good or bad credit. Isolated incidents should not affect your ability to get a loan.

“How Can I Repair My Credit?”

In most cases, a simple letter or phone call to the credit card company or business that originally gave you the “credit” can put you on the right track to having that “scar” removed from your report. It may not even be necessary though, based upon your recent credit patterns! Sometimes they’ll require you to pay-off the balance of your debt or send in a letter explaining why you were late with your payment. Don’t pay any creditor off without talking to a qualified professional credit repair specialist first!


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However, if you have a history of recent late payments, you’re probably going to have to let time take its course (although there might be trick or two here you can use). I can help you determine that through a quick review of your credit report, at no cost or obligation. I suggest that you obtain your credit report from www.AnnualCreditReport.com, get all three bureaus and all three credit scores. Doing so from this site will NOT affect your credit score and most lenders will accept this credit report for underwriting purposes. If you DO find “derogatory” items, then you will want to engage a credit repair specialist to help remove them and increase your score (call me for a referral). There are a million scenarios I could review, but I think it’s important you walk-away with two key thoughts from this: 1) Your credit can make or break your ability to acquire a loan; and 2) you must know what is on your credit report, your credit score, and begin to examine and, if necessary, repair any credit problems immediately.

“What role does my investment history play?”

Your investment history will play an important role in whether or not a lender will want to finance your next property. Investment properties are often looked upon as a higher risk than if you were buying your own home. However, if you have a proven track record of successfully selling or managing investment properties with a profit, then you are more likely to get your loan.


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Important Thing #2

Be Very Selective In Choosing a Neighborhood in Which to Invest!

Selecting the neighborhood of your potential investment property is an important step, whether it is commercial or single-family real estate. What neighborhood a property is in can affect many important factors – including how much the property will initially cost, how much you will be able to collect in rent for each unit, and what kind of tenants your building will attract. Realtors call this process “farming” and the neighborhood on which they focus is called their “farm.” You need to become a very good “farmer” in your area. The more you know about your farm, the faster you can move when an opportunity comes along. For example, a run-down property in an upscale neighborhood is an investor’s dream, because you can always fix the building, but never the area. This type of property will usually be hard to find, and there will be a lot of competition for it when it becomes available. This drives up the price and makes the investment less appealing. For this reason, you may have to find a good balance between the type of neighborhood in which the property is located and how much you are willing to invest in the property.

“What Should I Know About A Neighborhood?” There are several key things to know about a potential investment area. Is the neighborhood improving or declining? Growing or shrinking? Do you see lots of graffiti, or is the area clean? Is there redevelopment zoning in effect? What’s the residential versus commercial mix? What is the traffic like? Are there any major improvements to be made in the area? The answers to these questions will have a strong bearing on your choice of investment area. Remember, the potential rent that you can make from each rental unit will need to offset the mortgage payment, property management fees, the costs associated with finding and screening tenants, advertising, taxes, and any renovations or maintenance that the property may need. And don’t forget that it still needs to make a decent profit for your time and effort! You choice of neighborhood will directly affect your ability to collect top end rents and keep the property occupied.

“What If There Aren’t Any Good Areas Near Me?”

One of two things may occur in your investment process. While unlikely, you may not find a nearby area that appeals to you for investment, or you hit an “investing wall.” This is when you have explored all of the highly profitable investment opportunities in your area, and they’re maxed-out. The smaller your city or town,


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the sooner you’ll likely reach this point. When this happens, you will have three choices. You can either:

1. Opt for properties that are less profitable, 2. You can look for properties in others areas, or 3. Retire!

Let’s assume that you’re not ready for #3 yet. As far as #1 goes, the problem with investing in less profitable properties is that if you are not careful, you can end up spending more money than you make each month because of poor quality tenants, or to make building repairs (potentially because of poor tenants) and upgrades. You may also run into the problem of getting out of a poor quality property, since no one will want you buy you out of your problems for a premium price. The best advice here is to follow the path of least resistance and stay away from poor collateral or areas. So that leaves us with #2. The best option may be to look for properties outside of your immediate area. Often, certain areas of the country will be outperforming the overall market. There will be costs involved with traveling, but you can make up for them by finding a few very profitable properties. Furthermore, doing a bit of traveling may actually be enjoyable for you, and worth spending a little money. Also, there are many ways to minimize travel expenses. By opening up your investing options in this way, you are also opening the door to more profitable properties.


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Important Thing #3

What You Need to Consider About Site Selection

Once you’ve picked the neighborhood area for your investment efforts, you need to consider other factors about selecting your actual site. Although investment real estate focuses on income, one of the most important things to remember is that an attractive property … “attracts.” The more amenities that you can offer your tenants or their clients, the more traffic you’ll have, and the higher the rent you can charge! Properties within walking or easy driving distance of the major attractions or useful facilities (in the case of industrial property) in the area, will sell for more money.

The Role of Nature

If you prefer apartments as an investment vehicle, keep in mind that people love to be near beautiful places, such as parks, botanical gardens, or beaches. Many find it relaxing, which allows them to unwind and clear their minds. Having such amenities around your property will attract higher quality tenants who are likely to pay a higher monthly rent. These tenants tend to earn higher incomes and may actually pay on time, which reduces the hassle and expense that can often accompany residential income property. The reason why these amenities are more profitable than those that are added to the property is because they are things that would be impossible or very costly to reproduce. Anyone can add a swimming pool to their property, but truly breath-taking natural scenery is hard to find.

The Role of Transportation

A property that is directly in or very near a major area in a city will also tend to sell for more. First off, these areas are in high demand because there is greater access to major roads, rail, shipping, and airports. Retailers need to receive goods, manufacturers need to ship goods, and wholesalers do both. Access to major routes of transport can be a key issue in these types of investment. For residential income investments, there are money saving advantages to living within walking distance of major retailers or transportation hubs such as rail and subways. For instance, many families who live in the suburbs have 2 or even 3 cars and have to maintain the monthly payments, car insurance premiums, and gas for all


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of them. This can add up quickly, and many end up shelling out an additional $500 - $1,000 a month on top of their monthly mortgage or rent payments. On the other hand, when people live within walking distance of needed services they often don’t need more than one car. Rentals in these areas are also highly attractive to younger people who don’t have children (which often means they have more disposable income each month to put towards rent!), who like to live near places that feature good night-life so that they can unwind after a long day at work without worrying about how they will get home. If you’re planning on renting to retail tenants or companies who need office space, then your property will need to be conveniently located near other retail centers or corporate offices, and be easy for customers or employees to reach. Things that are usually appealing to these kinds of tenants include a busy intersection, traffic signals and cross-walks, proximity to large department stores, and proximity to major transportation facilities!

The Role of Trends There are all kinds of trends which you need to consider when choosing an investment site. Some of them were mentioned in Important Point #3. Others include:

What are the demographics of the area? (Age, income, family size, etc.?) What are the psychographics of the area? (Independent, nesters, etc.?) Are people active in the community, athletically, in the arts? Is there sufficient green space to appeal to locals? What is the trend in these areas … more or less of each?

As you can see, there are many things to consider when choosing a site within a neighborhood. Do a good job, and you’ll be rewarded with significant profits!


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Important Thing #4

What You Need to Consider About Selecting a Property Type

“What Kind Of Property Should I Choose?”

When it comes to commercial real estate, there are several types of properties to choose from, including:

Apartments and Mobile Home Parks Offices (single tenant, multi-tenant, professional, medical) Retail (stand alone, strip center, regional mall, power center) Warehouse Industrial (R&D, light & heavy) Hospitality (hotel/motel, restaurant, golf course) Automotive Specialty (marinas, churches)

The type of property in which you invest will determine how much your initial investment (equity) will need to be, how much maintenance it will need, what types of management and environmental issues you’ll face, how much rent you will be able to charge each month, and what your overall profit will be. Some investors specialize in a single property-type and others choose a different type of property each time they invest so that they can determine which works best for them. Not every type of property will be successful for every investor. You’ll probably find a property type from which you can make the most money, but you’ll first need to discover what it is by trying the different commercial real estate opportunities available or by talking to other investors. When you start out in commercial real estate, it’s best to first get a small property and then expand each time you’re able to finance a new one. It can be easy to get in over your head if you don’t know what to expect. Investing in a smaller property carries many advantages for the first-timer:

1. Less financial risk, in case you learn that commercial real estate is not for you!

2. A smaller property with few rentable units will be easier to manage while you are learning the process.

3. It will require less capital from you and you probably won’t need any partners.


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4. Since the loan payment will be smaller, you’ll have more time to find great tenants rather than renting to the first tenants that apply.

“How Does A Lender View Investment Potential?”

A major consideration for most lenders in determining a property’s investment potential, will be whether the property can be sold or rented out relatively quickly, thus enabling you to turn a profit in less time. A secondary consideration will be how quickly the lender can sell it for what they’re owed, in the event that they need to take the property back. You may have an easier time receiving financing if:

Your property is already well-maintained and is not a “fixer,” The property is fully leased or rented, The tenants are well known and the leases have corporate guarantees (retail,

office, industrial, etc.), and Your property is in a high demand area.

Also, once you have successfully profited from one commercial real estate property, you should have a much easier time receiving funding for future investments. You have what’s called a “track record.” This is important even if you are well-seasoned in investing in single-family properties. Commercial real estate is a whole other ball game and you need to KNOW that you can successfully manage a small commercial property BEFORE you invest in anything larger.


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Important Thing #5

Income & Expeses - Verify, Verify Verify!

Verifying and Estimating the Operating Expenses Before you close your escrow on an income property, you need to estimate all of the probable expenses associated with owning it. Do not take the Seller’s numbers as gospel! The Seller will be providing you with the Income and Expense history of the property as part of your purchase package, and the lender will want estimates before giving you a loan. In fact, the lender will be independently verifying those figures through the appraiser, as well as through their own in-house experience. So you need to get this part right to avoid any surprises at closing. Items you should estimate and verify include:

Is the property fairly valued for its income and area? How much restoration is needed before the property can be rented out or

sold? What is the rental “absorption” rate, i.e., how quickly can units be rented? What will the new real estate tax be after purchase? Monthly operating expenses – insurance, trash, landscaping, maintenance,

advertising, utilities. This can be done calling around for quotes. Estimates for annual repair costs – you can often use a “per square foot” or

“per unit” cost for this. An estimate for professional management, see below

You should seek professional estimates when determining the costs associated with maintaining the property. Again, do not to trust the numbers that the Seller of the property gives to you and, if you cannot verify an estimate through a professional opinion, that you request copies of the Schedule E’s from the Seller’s tax return once in escrow.


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Important Thing #6

Know Who Is Going To Manage The Property

Assessing the Management Issues

One issue that causes many to shy away from the profitable commercial real estate market is that of management. Many people feel that it would be difficult and time consuming to deal with tenant concerns, evictions, chasing rent, approving rental applications, and taking care of the maintenance. Well … they’re right! All of those elements are challenging. Those are all valid concerns that would take up a great deal of time that many investors do not have. So, what’s the solution? Hire an individual or company to take care of these issues for you. Yes, this will reduce your overall profit somewhat, but with the extra time you save not dealing with these problems, you will have more time to spend on investing and making even more profit. You should factor the cost of having a manager or management team into every property before you invest in it. If you can’t hire a management team and still make a reasonable profit, then forget about that property and move on to the next. If you decide to manage your commercial real estate properties on your own and find out that you aren’t cut out for the management process, never fear! You can always hire a manager later. Then you can get back to what you do best … investing! Basically, you should be able to hire a suitable manager or management team for 2% to 5% of the gross revenue for commercial buildings, and or no more than 6% for apartment buildings. Better yet, once you find a great management team, you can then stick with them for future properties. If you venture out into other geographical areas, you’ll have to go through the selection process again, but it will be well worth it considering what you’ll save in travel expenses.

Tenant Verification

Part of the management process is selecting and dealing with your tenants. An obviously important aspect of income property profitability! Problem tenants are a big issue for many landlords and can be costly if you are not careful. Although tenant screening and verification can only go so far, you are much better off with it, than without it. The lender for your purchase transaction is going to send out a form


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called an “Estoppel.” This form asks the tenant to verify the major aspects of the lease (which you provided in your loan package). For your own sake, you should do quite a bit of verification on your prospective tenants. The tenant verification process can help you discover many potential problems, including:

Tenants who have lied on their applications. Tenants who have a history of skipping out on rental payments. Tenants who have a history of abusing their rental spaces.

A credit and criminal background check does not always give you all of the answers, but they help a lot! You may also be faced with false rental history information, where you are given the name and number of a friend or family member rather than a past landlord. Although hiring a company to screen and verify each and every tenant can be costly, it can be even more costly to rent to several tenants who will abuse your property and don’t pay rent. Background verification can also help confirm whether you want to rent to a potential tenant with whom you’ve met, and about whom you have a good feeling, but who has little to no credit or rental history.


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Important Thing #7

Understanding Your Financing Options

When it comes to financing your commercial real estate property, there are many options available to you. Here are the basics:

All Cash

Yes, people do buy properties using “all cash.” This is the most conservative approach and offers the investor the sheltered income that grows year by year. Returns are lower, but are predictable and offer protection against inflation. The funds can be all yours or you can raise money from partners. This is called “syndication.”

Down Payment and a New Loan … With a Twist!

You’d have to call this “traditional financing.” You raise a portion of the purchase price and the lender provides the balance. What’s not so clear is exactly how much the lender will give you. In residential lending, we’re all familiar with “loan-to-value” or LTV. Well, LTV exists in commercial lending, but only as an “upper limit.” In most cases (see below for exceptions) Commercial Lenders pretend the borrower doesn’t exist and sets the maximum loan according to how much money is left over after paying all of the property’s expenses (see Important Point #6). This has been a problem recently with the low interest rates we’ve experienced. Buildings sold for MUCH more than lenders were willing to lend, requiring buyers to put up more money. Some important lending terms you need to know are “DCR – Debt Coverage Reserve” or “DSC – Debt Service Coverage.” This is a number expressed usually as a ratio such as “1.25: or 1.25 to 1. It’s a lender’s “fudge factor” and takes into account unexpected operating expenses and the borrower’s desire for profit. Without getting into detail, the DCR reduces the amount of money that is used to calculate the maximum loan as a safety factor. I can help you with any specific transaction, but the bottom line is that you might have to put down more than the maximum quoted “loan to value” would lead you to believe!

Types of Loans Most commercial loans do not “fully amortize.” This means that they are due before they are completely paid off. This is because most commercial lenders want to keep reinvesting their money as market conditions change. This applies to fixed rate loans as well as adjustable rate loans. Most carry a shorter amortization period, such as 20 or 25 years. Newer properties and apartment buildings will often get 30


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year amortizations. Apartments also tend to get access to full amortization loans, too. The source of the loan has a large impact on the type of loan you get. Here are some examples:

Banks: Adjustable rate loans, shorter pre-payment penalties, higher rates, recourse to the borrower; Construction, Land, A&D Loans.

Mortgage Banks: Low rate fixed loans sold to Wall Street “Conduits” with tough pre-payment provisions; Bridge Loans; Mezzanine Loans, non-recourse.

Insurance Companies: Low rate fixed loans, flexible pre-payment provisions, can lock at application, slow, like large high-quality properties.

Private Lenders: High rate fixed loans, Construction, Bridge, Land, A&D loans, focus on the equity, low LTV, full recourse.

Which loan is right for you will be determined by a number of factors including: Your credit, the quality of the property, the purpose of the loan, the property’s location, the lender’s appetite for that kind of loan … and other factors. A qualified mortgage professional can be the difference between a successful transaction and one that goes nowhere.

Important Point #8

Research and Find a Reputable, Honest and Experienced Commercial Loan Broker To Help You Finance Your Commercial Property

Last but not least, whom you choose to help you finance your property can make or break a transaction. Good investors research, interview, and associate themselves with a quality, reputable, service-orientated mortgage banker or broker. This is probably the most important ingredient/factor in acquiring commercial real estate financing. This is an important decision. It’s not something you want to treat lightly. And being associated with the right banker or broker can not only mean the difference between having your loan application approved or rejected, but can also save you hours of frustration and thousands of dollars in long-term costs.

“So How Do I Find the Ideal Mortgage Lender?” That’s not very hard. There are plenty of very reputable, knowledgeable professionals out there to help you. You just need to know what questions to ask to make sure you get into the right relationship.


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Here are some questions I recommend you ask: 1) Can you furnish me with the name and phone number of three past customers? This is important. If the lender or loan officer is hesitant there’s a good chance they’re trying to hide something. Don’t get involved with them. Always ask for references. 2) If my loan gets rejected, will you return the cost of my application fee? Most broker/bankers will do an initial consultation free-of-charge, and provide you with a pre-approval at no cost. Once you apply for the loan, they may charge an application fee in addition to the cost of an appraisal and credit report. Laws vary from state-to-state, but check the application documents carefully to see what their policy is. Some states require bankers/brokers to return the application fee if the loan gets rejected. However, the law may only require them to return the money if the customer asks. Check with your state banking commission on the details. Most brokers in California do not charge application fees. Most reputable bankers and brokers will tell you about their return policy at the time of application. If they don’t, you may want to reconsider who you are doing business with. Note: Do not confuse and “application fee” with a “good faith deposit.” The former is paid at the time you apply for a loan. The latter is paid after the lender has preliminarily approved your loan and you accept the lender’s terms. Call me if you have questions about this. 3) How long have you been in business? And have you ever had your license suspended by the state banking commission or any government authority? These questions accomplish two things: 1) They demonstrate that you have educated yourself about the mortgage loan process and won’t be taken advantage of; and 2) They help you decide (for yourself) if they have experience and who’s going to help you finance possibly the largest and most important purchase of your life.

I hope this little bit of information I’ve provided to you is helpful. There’s a lot more I could discuss with you and would like to discuss with you, but that should really be done through a personal, private phone consultation.


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So please give me a call immediately at (888) 578-5441 x81 and schedule a phone appointment. I keep normal business hours. I wish you well on your “Road to Real Estate Wealth,” and hope that I can be a resource to help guide you down that path. Best wishes,

Craig Higdon Director, C. S. Higdon, Inc. P.S. Remember to get your credit report from www.AnnualCreditReport.com (and get all 3 credit scores). I’ll help you to evaluate it, if you like. P.P.S. Since you took the time to acquire and read this report, I know that you’re serious. I’ll even help you evaluate any current property you own for potentially better financing or a new one you’re thinking of buying … free of charge!


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What to do Next It has been my experience that the complexity of the commercial loan process requires a different approach to helping my clients evaluate their financing options. When I started out doing commercial and construction loans, the extent of my service was limited to calling a few local lenders to see what the best rate of the day was. As I got better at what I do, I grew with my clients. I also adapted to their changing needs. Now, I fully analyze a client’s portfolio, investment goals, and risk/reward profile before making financing structure recommendations. This growth process has taught me that I have to coordinate a number of professionals in other disciplines to move a loan transaction to a favorable conclusion. Only in this manner can I truly benefit my clients, earn their trust, and provide valuable advice for transaction after transaction. But first, I would like to meet with you. Coffee, lunch, ice cream, whatever. Let’s spend a few minutes getting to know each other and the scope of our practices. Once we’ve done that, then we can move towards helping you with your commercial real estate loan needs. Please call me at 888-578-5441 x81 and let’s get together. I have also developed a “15 Minute Commercial Loan Review” which I conduct over the telephone with my clients interested in commercial and construction loans. Here is what I accomplish in this fast-paced, no-nonsense session:

Investigate The Transaction - The key to a successful commercial real estate finance transaction is to understand all of the issues that affect the property and the guarantors. Missing a key item can set the process back weeks as we try to convince the current lender to move forward or start over with a new one. This will help you uncover hidden road blocks to your loan closing.

Evaluate Financing Alternatives - There is more than one way to get to the top of the mountain, but not all of them are easy or short! There are nearly as many ways to finance a commercial property and without someone showing your client the way, getting your loan funded can be an arduous experience.

Recommend Financing Structures - At the end of the interview, I will have narrowed the choices down to one or two ways that will get you the financing you need for the project. With my recommendations you will be able to quickly and effectively package your loan request for almost any appropriate lender.

This consultation can take place at your convenience. To secure a time for the consultation, please call me at 888-578-5441 x81 or send an email to [email protected]. Thanks! Craig Higdon


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About the Author

Craig S. Higdon graduated with a Bachelor's degree in Mechanical Engineering from the University of Southern California. He subsequently earned a Masters in Business Administration from Heriot-Watt University in Edinburgh, Scotland. After leaving school, he decided that he did not look good in a pocket-protector and consequently took a job on Wall Street as a retail stock broker. This began 30+ years of work in the financial services sector where he held jobs as an investment banker, business owner, and eventually as a commercial mortgage broker.

Mr. Higdon has been in the mortgage business since 1993 and is a licensed Real Estate Broker in the state of California. Mr. Higdon has extensive background in both residential and commercial mortgage loan transactions, including significant construction loan experience. His personal mission is to help small business owners and real estate investors create wealth through the acquisition of commercial income producing property. As a second degree black belt in Shaolin Kenpo, he considers it his personal duty to protect real estate investors from commercial loan misinformation. Craig Higdon Director C. S. Higdon, Inc.

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