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Two Benefits of First Position Commercial Mortgages

Barry Kornfeld

An experienced financial advisor with nearly three decades in the field, Barry M. Kornfeld leads First Financial Tax Group, a Boca Raton, Florida-based firm he co-founded. In his role, Barry M. Kornfeld provides a range of tax and income-planning services and focuses on first position commercial mortgage notes, or FPCMs.

In this era of low interest rates, it can be difficult to increase value for investors looking for higher returns with traditional products. Consequently, first position commercial mortgage lending is becoming a more attractive option for investors who want higher rates of return than those offered by the stock or bond markets, but who also want the security of having a measure of protection by having the first lienholder position on these high-value, underlying commercial real estate assets.

Another reason that first position commercial mortgages are a good value is because they have a relatively short (one-year) term, which means that an client’s funds aren’t tied up for a significant period of time. Typically, the client receives interest-only payments throughout the year and then the full amount of the principal is returned upon maturity.

 

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