Increasing leverage becomes more difficult to achieve with ever low cap rates and interest rates on the rise. Three ways to maximize leverage:

1. Earn-Out or hold back is a promise by a lender to advance more money on the loan once you achieve a higher level of income. For example, you purchased an apartment with below market rents and will raise rents in the near future. The loan commitment could be based on increased rents with a portion of the loan held back (earn-out) until such increase in rental income is achieved.

2. Mezzanine Debt or secondary financing is additional debt placed on the property in the form of a 2nd trust deed and/or the pledging of ownership interest. The ability to enhance the leverage using mezzanine debt is best used with high opportunity projects when the source of repayment is in the near term, i.e., Condo construction, residential subdivisions, or properties financed for sale.

3. Cross Collateralization is pledging additional assets besides the subject property as security for the loan. This allows increasing the leverage over and above what could normally be done just securing the subject property.

American Banker (03/01/06); Adler, Joe According to the FDIC, banks managed record profits last year even though the fairly weak October-through-December period revealed renewed interest in commercial lending as credit quality in credit cards deteriorated further and mortgage lending ebbed. Banks searched for loan volume to compensate for margins negatively affected by a flat yield curve, and many found it in the commercial and industrial niche. FDIC chief economist Richard Brown stated, "The notion of a handoff from mortgage-led growth to commercial-led growth I think is something we have been expecting." Still, the switchover has taken years to fully realize as loan growth lagged and credit problems took their toll on commercial and industrial portfolios after the 2001 economic recession.

To keep your to-do list from becoming an overwhelming catch-all, Chuck Martin, CEO of NFI Research, offers this suggestion:

Keep two to-do lists. A master list, which is updated less frequently, holds maybe three big items that are important to you in the long run. You might write "grow sales" on this list, for example.

The second one lists day-to-day tasks to knock out things that get you closer to the objectives on your master list.

Adapted from "Just 'To-Do' It," Mark Henricks, Entrepreneur, www.entrepreneur.com