Real estate developers in California and around the country are finding it increasingly difficult to secure the funds they need to keep their commercial projects on track. Obtaining bank financing for commercial property was generally a fairly straightforward process throughout most of 2015, but things became a lot more difficult for developers during the fourth quarter after the Office of the Comptroller of the Currency issued a stern warning about lax underwriting standards.
Commercial real estate investors in California may have a better idea about where and when to invest if they stay up-to-date on new construction trends. When a certain market sector overbuilds, rent prices in the area will likely decline.
California residents may be aware that several major banks have recently been issued multi-billion dollar fines by the U.S. Department of Justice. The fines were issued for financial fraud that the banks engaged in before and during the financial crisis in 2008. Bank of America agreed to pay $16.65 billion in 2014, and Goldman Sachs just agreed to pay $5 billion this year.
Due to the rising prices of commercial real estate in major cities, investors in California may be more interested in properties that are located in medium-sized markets like San Jose. Prominent commercial real estate investment firms have started to look outside of places like New York, San Francisco and Boston because the prices are getting so high.
Many people are passionate about investing in the California restaurant industry. However, restaurants can be very expensive to operate and difficult to make money from. Opening a food truck could be a less expensive alternative that may have a better chance of success for a first-time commercial real estate investor.
Commercial real estate investors who want to invest in California properties may have heard of hard money loans. These loans differ from traditional commercial real estate loans in several ways, and they should be used only as a last resort when investors are having financing issues regarding the targeted properties.
Californians who follow the real estate market might be interested in the latest study by the National Association of Realtors into real estate trends. The organization recently issued its report entitled the "2016 Home Buyers and Sellers Generational Trends."