Tuesday, January 3, 2017

First Position Commercial Mortgages Offer Safer Income Alternative


A graduate of American University, Barry M. Kornfeld is an experienced financial advisor who functions as the principal of First Financial Tax Group in Boca Raton, Florida. In this position, Barry Kornfeld offers the firm’s clients a wide range of financial services, including the opportunity to obtain first position commercial mortgage notes, or FPCMs.

A first position commercial mortgage note refers to a financing approach that offers clients a safer fixed-income alternative. Secured by high-value commercial real estate as collateral, clients who use FPCMs in their portfolio loan an amount of money over the course of only one year. In doing so, these clients receive fixed interest payments on their FPCM note at an annual rate that starts at six percent. This interest is paid out monthly, which is often ideal for Kornfeld's largely retired clientele.

The FPCM is a fixed-income alternative that provides a higher degree of safety due to the fact that the client is listed as the first position lien holder on the mortgage of a commercial property. In the event of default on the commercial bridge loan by the property owner, the specialty mortgage company that Kornfeld's team uses for these transactions is contractually obligated in the documents to make the interest & principal payments to FPCM note holders, thus providing continuity, and much desired peace of mind. Kornfeld says, "...they due this to protect their own second interest which is subordinate to all FPCM note holders, in every transaction available..."