IMF of Key West



Preparing Your Business for Refinance

	A.	Uses of Financial Statements

		1.	Profit & Loss (P&L), Income & Expenses
		2.	Balance Sheet (Assets, Liabilities Equity)
		3.	Cash Flow - Whence (from) - Thither (to)

	B.	Past vs. Future Performance

		1.	What was accomplished, missed, and why?
		2.	What will be accomplished, when, at what cost?
		3.	EBITDA - Earnings before interest, taxes (corporate) depreciation (regular & Section 179), and amortization.
		4.	Capitalization ("cap") rate equals net operating income (N.O.I.) divided by the asset's value or selling price. The lower the cap rate; the higher, the value. Examples: At 4% cap rate, a $300,000 net cash flow indicates value of $7.5M. At 6%, a value, a value of $5M.

	C.	Ways to Save

		1.	Simultaneously issued (S.I.) title insurance.
			Because only an owner's policy (not a mortgagee's or lender's policy) offers a re-issue credit and because a new owner's policy costs usually a minimal ($200-$250) additional fee - obtain a new owner's policy along with each new mortgagee's policy whenever amount of new refinance exceeds amount of old owner's policy.

			For $1M new refinance, A's premium is based on $200,000 prior owner's policy and B's is based on $800,000 prior owner's policy.

			A B Savings
			Policy Charge $4,630 $3,430 $1,200

		2.	Assignment rather than satisfaction of old mortgage.
			Major loan costs are (a) documentary note at rate of $0.35 per $100 multiple or fraction, and (b) intangible at rate of $2 per $1,000 (or $.002). Examples of satisfaction compared to assignment, followed by modification. Note that this requires approval from old and new lender.

			Based on $800,000 Old Balance and $1M New Loan

			Satisfaction Assignment ($200,000 New Money)
			Due Note $3,500 $ 700
			Intangible $2,000 $ 400
			TOTAL: $5,500 $1,100

Independent Mortgage and Finance
600 Whitehead Street
Key West, Fl. 33040
Office: 305-294-5105
Fax: 305-294-5354
susie@KeysMortgages.Com
B.G. Carter, Principal Representative

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