Real Estate Short Sale
December 18th, 2009 by adminA real estate short sale takes place when the sales price is less than the amount of all the liens against the property. It is not just the original lender who may be foreclosing. It would include anyone who has place a lien on the property such as a home equity loan or line of credit loan.
Here is one scenario. Let’s say Bob want to sell his house. He owes more than it is worth and he has lost his job and cannot afford to make the payments any longer. His realtor advises him he has 3 options. He can let the property go into foreclosure but this will stay on his credit record for a long time which is not a desired result. He can give his lender a deed in lieu of foreclosure but this too could negatively impact him. Finally he can try and sell his property “short”. In a short sale the Borrower/Seller receives no money.
Why would a lender sell short? Because it is costly to foreclose. In some cases it could be several thousands of dollars with attorney fees, court costs etc. Also the property still has to be sold. A short sale can be a win/win for everyone. The lender recoups more money than they would in foreclosure. The seller/borrower/owner can escape without a record of foreclosure on their credit report. The Buyer can acquire a property at a rock bottom price.
Here is a problem with short sales. They take time. If the Buyer is in a hurry & needs a property now, most likely a short sale will not meet their needs. As they say time takes time and in the case of short sales this is very true. I have a short sale transaction still trying to close after 10 months which is the extreme.
They take a long time because of the current economic climate. The lenders are swamped. What used to be done in 45 days can now take several months depending on the lender. Bank of America is the slowest. Most sales require 1 or 2 BPO’s (a Broker’s Price Opinion) and maybe an appraisal to confirm the current value of the property in today’s market. Then the investor…the institution who loaned the money in the first place needs to approve the sale as well. The investor can be a bank or a loan servicing company or any number of entities.
Patience as I stated will go a long way to keeping one’s sanity during a short sale.
Always consult an attorney with all legal concerns with this process.
Will Indian Real Estate Industry Shake in Dubai Crisis?
December 16th, 2009 by adminA widespread apprehension has spread across the real estate Indian industry as to whether the ongoing Dubai crisis will shake it. Reportedly, the real estate industry along with the oil and other major industries which control the financial nerve of the Middle East is in crisis and there is a fear in India that its it will have detrimental ramifications in the Indian Industry. However, the widespread apprehension notwithstanding, the investment and infrastructure development companies in India are savvy and sanguine that they will remain unaffected by the Dubai crisis. This is because, they aver and argue, the Indian property market has only very limited exposure to the Dubai market and it remains with its insular operations. Though their assertions and assumptions exude confidence, the real estate stocks along with the rest of the market at first dipped a little, though recovered later.
The apprehensions as to whether the Indian real estate Industry will shake in the Dubai crisis seem to be out of place when we consider the averments of industry veterans. They hold that the effect of Dubai on Indian market is two-fold. In the first place, some developers in Indian had plan to invest in Dubai. Secondly, The Government of Dubai and other Middle East infrastructure developers wanted to start project in India. However, Anuj Puri, chairman and country head of the international real estate consultant Jones Lang LaSalle Meghraj avers: “This would not have a major direct impact on India’s real estate market, which is largely locally driven.” Further, he adds “Dubai’s real estate market was not sustainable in the long-term, as it was not driven by end user demand.” The executive director of the Indian real estate major DLF, Rajiv Talvar says: “Our contacts with Dubai-based entities were minimal. Luckily for us, we do not have any exposure to that market. The one deal for which we were negotiating fell through.” “The plans to enter Dubai have been postponed for a while,” said a DLF spokesman.
Revelations of other Indian real estate majors as to whether real estate properties in India,industry will shake in the Dubai crisis are also hopeful. Pradeep Jain of Parsvnath Developers and Sanjay Chandra of Unitech triumphantly said that they have nothing to do with any Dubai-based entities. However, another construction major Omaxe’s subsidiary Rohtas Holdings (Gulf) are reported to be in the early stage of two residential projects in Dubai. Also, the Mumbai-based builder, Hiranandani Group is in the midst of the construction of the tallest residential project of the world, the 90-storey structure, 23 Marina Dubai. Hopefully, officials at Hiranandani say that the project has been very well received with only 15 percent of work remaining and 30 percent of the payment outstanding.
Green Real Estate: Everybody’s Into It
December 13th, 2009 by adminNotwithstanding the refusal to implement the Kyoto Protocol, the United States of America still gives back to Mother Nature by moving into green real estate. This does not only mean a boost in the number of construction supplies businesses with eco-friendly produce, it also leads to international players having a piece of green properties.
Based on recent real estate news, organizations like Goldman Sachs, IBM Corp., Toyota Motor, and JPMorgan Chase have already made a move into green friendly buildings. Aside from these, there are other companies such as Accenture and Bank of America are starting to get themselves their own real estate made using green building materials. Either through leasing or construction, these companies are determined to go green.
Possibly due to the number of information dissemination about global warming along with other environment-related problems, green real estate is now becoming one of the fastest growing sectors of what is already a booming industry of commercial real estate. According to current reports about the market, about 5% of new commercial structures in the United States of America have attained the Leadership in Energy and Environmental Design (LEED) certification just||as of last year. While 10% more are to follow by the following year. This doesn’t even include residential buildings, that are also assumed to undergo a change.
Furthermore, the occurring change is spreading not only in new real estate, but also with already existing ones. Developers like the Durst Organization as well as Hines are cutting half-full office towers and then putting it under renovation. Everything is altered based on eco-friendly standards. This is done to accumulate rent by 3% higher than the previous charge as well as amplify the building’s value by 7.5%.
Real estate news further states that as well as a possible increase in rent, also, these buildings are used because they can save up to ten percent in utility costs per year. Some of the already existing green buildings use up forty-two percent less energy and consumes 34% less water than traditionally built properties. More importantly, as discoveries on sustainable materials continues, eco-friendly buildings are seen to be cheaper.
Thus, aspiring investors are suggested to participate on this particular sector of the market. The simplest way is to get in touch with the best and the largest environment friendly buildings company such as Blackstone Group and GE Real Estate.
Competing For Clients: Santa Barbara Real Estate
December 10th, 2009 by adminNearly every Santa Barbara real estate agent will tell you that business is tough these days. While it’s certainly a buyers market and agents can work rigorously with buyers an agents bread and butter are sellers. Though many people have put off placing their home on the market there are still plenty of homes for sale in the Santa Barbara area and plenty of agents with a good number of listings to choose from. The real trick however in these tough times is getting sellers to choose you as their agent. Lowering commission rates is one way to make yourself look like a more attractive option however as it’s already difficult to earn a living in today’s market agents considering that route might want to rethink their strategy. Lowering your rates to much might also raise a cautionary flag with some sellers as the old adage “you get what you pay for” has never rang truer.
Many Santa Barbara real estate agents, rather than lowering their rates have begun experimenting with alternative ways to attract clients. Some real estate agents promote themselves as being willing and able to go the extra mile for you. In all honesty however this is something both buyers and sellers should look for in a Santa Barbara real estate agent and something that ever agent should be doing normally. Going the extra mile shouldn’t be something that’s based on market conditions. Other Santa Barbara real estate agents have begun offering discounts on commission when you sell in a specific area or a specific home and while this looks attractive on the surface, an agent should be offering a fair commission rate across the board, regardless of what homes or areas the seller is working out of.
The smartest Santa Barbara real estate agents however have gotten quite crafty and begun offering special promotions for both assisting in the sale of a home and for referrals. Some agents regularly hold raffle type drawings for a number of different prizes. Others bypass the tickets and drawings and simply give away one valuable item such as big screen TV’s. There are also some Santa Barbara real estate agents that offer things like a free bed and breakfast for clients who bring successful referrals to an agent and for those who buy or sell a home through them. These types of give-a-ways and promotions are not only fun for the clients but can motivate those who have trusted agents to spread the word and be on the lookout for those who need a good Santa Barbara real estate agent.
Whatever you choose to do in order to attract more business, a Santa Barbara real estate agent needs to do something. With the market being as difficult as it is there’s no room for agents who take a “business as usual” approach to their work and it’s likely that sellers and even buyers are going to opt for the real estate that gives them not only an opportunity to win something but incentives to help an agent as well. Working together for mutual benefit is the new order of the day and Santa Barbara real estate agents should be striving to give their clients and prospective clients all they can. This type of market makes real estate fiercely competitive and Santa Barbara real estate agents need to be ready to compete.
Brazilian Real Estate- Get a Good Agent
December 7th, 2009 by adminThe sun-kissed beaches of Brazil have always seduced travelers and its rich and colorful culture and friendly locals have made it a prime real-estate target. Brazilian real estate may be for investment purposes or a second holiday home or to lead the life of an expatriate. The dream of living overseas amidst a new culture and in, perhaps, better weather, is becoming a reality for many foreigners and they are arriving in droves to seek property in Brazil. Prime real estate in Brazil is being snapped up in the choicest of locales.
Brazilian real estate is flourishing and from bustling cities to small, fishing villages, buyers are queuing up to grab a piece of land. Not even the remote towns are being spared and there is a flurry of activity in the real estate market in those places also. Blessed with the longest coastline in Brazil, the city of Salvador is a magnet for both international and local visitors and other cities like Natal, Fortaleza, Aracaju are also drawing their fair share of real estate seekers. One can spend weeks in each place simply going through different properties. Beach front homes, farms, countryside hotels, ranches, oceanfront condos; you name it, they have it on the market!
Every year, Brazil real estate transactions are done in thousands and most of the work is done through an estate agent. It is not enough to simply like a place and think of buying or hiring it etc and a good agent is necessary for the purpose. Before investing in real estate in Brazil, get hold of a reputable real estate agent. But, bear in mind, however reputable the agent or agency maybe, their sole mission is to ’sell, sell, and sell! So, don’t ever reveal your desperation to buy a house and don’t ever give in to sales pressure tactics.
All this apart, an agent becomes essential for conducting the business especially if you are a foreigner interested in Brazilian real estate. Firstly, the language may itself pose a problem and a local multi-lingual agent can act as a conduit between the buyer and the seller. Secondly, if you are not a local, it may not be possible for you to fly down miles to checkout something on the proposed property. The nitty-gritty has to be taken care of and an estate agent is the best person to handle all the formalities as well as give you the right information.
There is no denying that with its strong economy, temperate climate and an abundance of natural beauty, Brazil attracts millions of visitors every year and more and more people are getting tempted to own a slice of this paradise in the form of Brazilian real estate.
The Importance Of Real Listings
December 6th, 2009 by adminReal listings are useful for both the buyers and sellers of properties. The property owners and the realtor’s agents list the properties for sale on different web sites. This helps to advertise the property and reach a large number of buyers.
Some web sites offer this service free of cost while others charge a fee. The real listings contain a he detailed description of the property, like the location, total area, amenities, age of the building and so on. Nowadays, some web sites also allow pictures of the property. The seller can upload pictures of the exterior, living area, bedrooms, kid’s room, and garden. Some sellers also upload a virtual tour of their property. These features are really useful for buyers because they can have a glimpse of the property on the Internet. This saves their time because they can screen the properties even before visiting them. Moreover, it is a boon for people who are planning to buy homes in another city or state because they do not have to travel to see a property that might not even interest them.
Another useful feature of the real listings is that they are of different types depending upon the property. So, if you want to sell a foreclosed property, you should choose a foreclosed listing; if it is a vacation home, then you should list it in the relevant category, and so on. This helps buyers in finding homes quickly according to their choice. They do not have to go through a long list before finding the property of their choice. Buyers can use the search feature available in the listings to find properties based on their location, area, number of rooms and even the price.
Another way to list your property on the Internet is to hire the services of the realtor’s agent. These agents are members of several listing web sites or Multiple Listing Services (MLS), and therefore can help their clients to increase the visibility of their properties for quick sale. Some of them even have their own listing web sites. The realtors work in close association with one another and use each other’s listings to drive up sales. Using their services might help you to buy or sell a property quickly.
Real listings on the Internet have several benefits as compared to placing classified advertisements in newspapers and magazines. One of the reasons for this is that people use the Internet extensively for buying and selling homes. Moreover, it is a cost-effective method to list the property until it sells, and, unlike the print medium, you can also add a virtual tour of the property in Internet real listings.
Real Estate Appraisers
December 4th, 2009 by adminWhether you are buying or selling a home, business or parcel of land the need for an expert opinion about the worth of the property is critical to all parties involved. Real Estate Appraisers are trained and experienced in the art of figuring out how much property is worth. They take into consideration many factors and come up with an professional opinion about the monetary value of the property.
For a typical home purchase, the Appraisers will take into consideration how old the home is, how large the home is, any renovations that have taken place after the initial construction as well as the overall value of the land the home sits on. It will also take into consideration where the home is located, the proximity to parks, schools, freeways and other geographical variables. Two items that are directly influenced by the final decision of the Real Estate Appraisers value of the home will certainly be the monetary amount of future bank loans and the price at which the home can be sold at.
When looking for the right Appraisers it is important to do your research and make sure they have their proper credentials. Laws vary from State to State with the majority of US States requiring all Appraisers to undergo extensive training and pass required tests before they get their Real Estate Appraiser credentials. It is also valuable to speak with any past clients of them as this will be the best indication about how they performed their services and a good company will be more than happy to provide a list of satisfied past clients.
Real Estate Bad Guys: A Day in the Life of a Foreclosure Specialist
November 30th, 2009 by adminThe view from the other side of the foreclosure door
Walking up to a person’s home to evict them is never an easy job. Even though those of us in the foreclosure field are not the ones who have made the bad choices, or caused the bad luck, leading to this terrible moment, we are still regarded as the bad guys. It is definitely one of those cases when just by being the messenger, you take the brunt of emotions the people you are dealing with are feeling. The typical day for a foreclosure specialist is filled with bargaining, tears, threats and sadness.
How it all begins
Here is how it all starts. Homeowners have defaulted on their mortgage, they are no longer able to make their monthly payments and haven’t for a while. The bank with the home loan contacts a foreclosure specialist in the area and hands over the case. The ball is in our court. We must now run an analysis on the property in question. Next, we contact the homeowner and give a choice of two options. The homeowner can take us up on a cash for key incentive, meaning they have an offer like two weeks to be out of the home in exchange for $1000. The alternative is that we will bring the local sheriff to assist with evicting the former owners.
I’ve experiences the gamut of the human race in this field. I’ve see a range of emotions pass the faces of those who are losing their homes. There are the ones who appear strong, who hold it in and regard you impassively as you deliver the spirit-breaking news. Yet, so many of those I face with the news will break before my eyes. I seen tears from men you wouldn’t think were capable of crying. One of my worst experiences was evicting a family during the Christmas season, while their Christmas tree was still up, lights and all. The worst can be the fact that you know there are children losing the only home they have ever known.
You Can’t Take it With You
On occasion, former homeowners refuse the cash for key offer, but take everything else. When we, the foreclosure specialists, check the house on the pre-set eviction day, we find that they have taken everything that is not bolted down: water heaters, light fixtures, stoves and refrigerators. To show even more anger they will knock holes in the walls and turn water on to warp the floors. There have even been cases where upset individuals left a gift of feces in the middle of the living room floor. The only thing I can do is photograph the evidence and send it to the bank.
Of course my first response is “OLD SHIT”
Foreclosure is unpleasant for all concerned. Even those of us who work in the industry are just trying to survive the economic downturn, like everyone else. The U.S. housing market has been on a downward spiral for quite a while and it has taken many casualties with it. The only honest answer to this situation is education and participation by all. It is essential to focus on educating the home owning public, and especially minority homeowners and those who live in the inner city. This is what will ultimately make the most difference in our economy. Education is essential to turning around the lives of those otherwise destined to foreclosure. Participation of all parties; Real estate Brokers, lenders, mortgage brokers; non-profits, title companies, attorneys, escrows, many others in the business sector will move this issue on.
The real estate foreclosure specialist is not the bad guy, we are just working to feed our family.
Real Estate Bad Guys: A Day in the Life of a Foreclosure Specialist
November 30th, 2009 by adminThe view from the other side of the foreclosure door
Walking up to a person’s home to evict them is never an easy job. Even though those of us in the foreclosure field are not the ones who have made the bad choices, or caused the bad luck, leading to this terrible moment, we are still regarded as the bad guys. It is definitely one of those cases when just by being the messenger, you take the brunt of emotions the people you are dealing with are feeling. The typical day for a foreclosure specialist is filled with bargaining, tears, threats and sadness.
How it all begins
Here is how it all starts. Homeowners have defaulted on their mortgage, they are no longer able to make their monthly payments and haven’t for a while. The bank with the home loan contacts a foreclosure specialist in the area and hands over the case. The ball is in our court. We must now run an analysis on the property in question. Next, we contact the homeowner and give a choice of two options. The homeowner can take us up on a cash for key incentive, meaning they have an offer like two weeks to be out of the home in exchange for $1000. The alternative is that we will bring the local sheriff to assist with evicting the former owners.
I’ve experiences the gamut of the human race in this field. I’ve see a range of emotions pass the faces of those who are losing their homes. There are the ones who appear strong, who hold it in and regard you impassively as you deliver the spirit-breaking news. Yet, so many of those I face with the news will break before my eyes. I seen tears from men you wouldn’t think were capable of crying. One of my worst experiences was evicting a family during the Christmas season, while their Christmas tree was still up, lights and all. The worst can be the fact that you know there are children losing the only home they have ever known.
You Can’t Take it With You
On occasion, former homeowners refuse the cash for key offer, but take everything else. When we, the foreclosure specialists, check the house on the pre-set eviction day, we find that they have taken everything that is not bolted down: water heaters, light fixtures, stoves and refrigerators. To show even more anger they will knock holes in the walls and turn water on to warp the floors. There have even been cases where upset individuals left a gift of feces in the middle of the living room floor. The only thing I can do is photograph the evidence and send it to the bank.
Of course my first response is “OLD SHIT”
Foreclosure is unpleasant for all concerned. Even those of us who work in the industry are just trying to survive the economic downturn, like everyone else. The U.S. housing market has been on a downward spiral for quite a while and it has taken many casualties with it. The only honest answer to this situation is education and participation by all. It is essential to focus on educating the home owning public, and especially minority homeowners and those who live in the inner city. This is what will ultimately make the most difference in our economy. Education is essential to turning around the lives of those otherwise destined to foreclosure. Participation of all parties; Real estate Brokers, lenders, mortgage brokers; non-profits, title companies, attorneys, escrows, many others in the business sector will move this issue on.
The real estate foreclosure specialist is not the bad guy, we are just working to feed our family.
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
November 28th, 2009 by adminRecent CRE Headlines ? Which Ones Should We Believe?
FDIC Frets Over CRE Loan Losses
3 Signs of the Next Real Estate Collapse
Is a Market Bottom Imminent?
Plan Coming on Commercial Loans
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
So the commercial real estate market will be the next economic catastrophe but the market bottom is near, investors have amassed substantial acquisition capital, and the FDIC is getting ready with a plan. Will CRE be the next shoe to drop? No one is certain how this will play out and varying sources have varying opinions, but something must budge when $1.4 trillion of commercial real estate debt matures over the next three years.
As reported, those likely to budge will be community banks, many of which hold portfolios containing a large percentage of commercial real estate and construction loans. NREI reports that nation-wide, community banks hold roughly 11% of total CRE industry assets. To this point, FDIC Chairman Shelia Bair is encouraging these banks to restructure existing and maturing loans in hopes of avoiding or minimizing larger losses. Unless value returns quickly, community banks might be the next shoe to drop. That will sting, but does it mean that the commercial real estate market is collapsing, and what will the overall impact be on Main Street and the financial system.
Fear and history has everyone thinking about the residential mortgage meltdown and the widespread financial impact, but commercial real estate is a different beast. First, the majority of loans causing concern are construction and development loans, not existing buildings. Secondly, even though CRE property values are down, the underlying assets are/or have potential to be income producing properties, which can be value-add opportunities to capable investors. Lastly, there is a market for distressed commercial real estate (as opposed to second homes). Investors have been amassing cash and REITs have been raising capital to acquire many of these troubled CRE assets. According to a NREI survey, 70% of investors are preparing capital to acquire real estate assets indicating that some investors see great opportunity in commercial real estate despite the doom and gloom reports. Who are you going to believe and what’s your appetite for risk?
Real Estate Investing: How And Where To Invest
November 25th, 2009 by adminReal estate investors are perhaps the only group of people whom can profit from a downtrodden market. With the prices of most homes having dropped considerably, homes for sale are being snatched up by hungry investors for a mere fraction of their original or true market value. Buying homes at well below their true value means that at some point these investors will have the opportunity to turn a hefty profit once the market has recovered. The types of homes being purchased by investors vary from area to area though most real estate investors will agree that there are a number of specific areas that boast the most lucrative deals.
One such area is the community of Santa Barbara. Santa Barbara real estate varies greatly in price, architecture, and even setting and many investors have come from far and wide to take advantage of the low prices on homes in great locations and neighborhoods. As Santa Barbara real estate possesses some of the most luxurious and upscale homes in all of California the community has become a real estate investors dream. Homes in the sub communities of The Mesa, Isla Vista, and Montecito are selling quickly and being purchased by investors. The most popular types of homes being bought are those that sit at or alongside the ocean, those that overlook the coast and have astonishing views of the city. Coastal homes have always been a big part of Santa Barbara real estate’s allure and remain so even in a market such as the current one.
Though the market has only recently begun to show signs of a recovery, some real estate investors have put their newly purchased Santa Barbara real estate back on the market at a higher price than they originally purchased the home for. Better yet, some of these investors have met with great success as Santa Barbara real estate is and always has been in high demand amongst not only individual home seekers but families as well. The most successful of investors thus far have been those that purchased Santa Barbara’s luxury homes as these homes are often the first homebuyers new to the area seek.
Today’s real estate market is a buyers market and never before have homebuyers been afforded the type of opportunities they are afforded these days. Furthermore the market has created conditions whereby many individuals have actually turned to real estate investing as a way to supplement their future income. Knowing where to purchase homes however is a key to success when investing in today’s market. The purchase of lavish homes at today’s prices will surely translate into grand profits down the line. Those who wish to follow the recent surge in real estate investment should begin by looking for areas in which prices have dramatically fallen yet have upscale homes for sale. Area’s such as these are a real estate investors best bet.
Real Estate Listing Services
November 22nd, 2009 by adminReal estate listing is not a pain experience these days. it is not expensive either to do real estate listing. most of the people these days have got their property listed for a small sum or fees, and a mass of these sellers are listing their property online. some of the online platforms where real estate listings can be posted are real estate directory sites, classified sites and auction sites. to add more real estate listing can also be done on sites of real estate agents where they will expose some of the finest properties for sale.
Since the evolution of internet and growing popularity in todays’ world, finding real estate listings online has become an easy task and helps in finding the best property you want. the best part about real estate listings posted online is that they are regularly updated many a times in a week to let buyers search the property they are looking for, at best price and best choice. this makes easier for property buyers’ as they have no problems searching for properties which might be unavailable or already sold.
To sell you property in this competitive and curious real estate market need a change in outlook. the biggest issue many homeowners face while posting their house for sale in real estate listing, is the price tag. everybody wants to get the best price and make profit while selling their home and put a good price while listing their property in real estate listing. but home sellers needs to be careful when it comes to pricing it too high. that might results in no response from buyers’ or agents.
these days with online real estate listings, buyer’s and agents will be able to view high-resolution photographs of the home you are interested in, in comparison to black and white photo in the print media. these real nice looking images of property you want to buy allow you to view, how property actually looks like. to find a perfect home of your dreams is easy these days going online and browsing the real estate listings. you do not need to go through listings at your traditional real estate agents office or searching in the newspapers. to find one that suits your needs according to rooms you needs, baths, study rooms, lawn and of course the swimming pool. its’ all accessible with click of your mouse, you could find your dream home in real estate listing.
These days in the period of internet revolution you don’t have to pay large fees. to list your real estate listing in the local listing, you need not run from pillar to post. if you have internet, visit any of the real estate listing website and get registered with them. if there is a nominal fee to get listed, the moment you pay a small fee, you are ready to post your property details in real estate listing and that will start working for the benefit of you. if you get your real estate listing listed in mls (multiple listing service), you pay small upfront fees only. a reputable flat fee realtor will be appointed to do your real estate listing of your property in the local mls listing. simultaneously the details of your property will be flashed in hundreds of websites and will be viewed by thousands of prospective buyers and buyers’ agents.
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
November 19th, 2009 by adminRecent CRE Headlines ? Which Ones Should We Believe?
FDIC Frets Over CRE Loan Losses
3 Signs of the Next Real Estate Collapse
Is a Market Bottom Imminent?
Plan Coming on Commercial Loans
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
So the commercial real estate market will be the next economic catastrophe but the market bottom is near, investors have amassed substantial acquisition capital, and the FDIC is getting ready with a plan. Will CRE be the next shoe to drop? No one is certain how this will play out and varying sources have varying opinions, but something must budge when $1.4 trillion of commercial real estate debt matures over the next three years.
As reported, those likely to budge will be community banks, many of which hold portfolios containing a large percentage of commercial real estate and construction loans. NREI reports that nation-wide, community banks hold roughly 11% of total CRE industry assets. To this point, FDIC Chairman Shelia Bair is encouraging these banks to restructure existing and maturing loans in hopes of avoiding or minimizing larger losses. Unless value returns quickly, community banks might be the next shoe to drop. That will sting, but does it mean that the commercial real estate market is collapsing, and what will the overall impact be on Main Street and the financial system.
Fear and history has everyone thinking about the residential mortgage meltdown and the widespread financial impact, but commercial real estate is a different beast. First, the majority of loans causing concern are construction and development loans, not existing buildings. Secondly, even though CRE property values are down, the underlying assets are/or have potential to be income producing properties, which can be value-add opportunities to capable investors. Lastly, there is a market for distressed commercial real estate (as opposed to second homes). Investors have been amassing cash and REITs have been raising capital to acquire many of these troubled CRE assets. According to a NREI survey, 70% of investors are preparing capital to acquire real estate assets indicating that some investors see great opportunity in commercial real estate despite the doom and gloom reports. Who are you going to believe and what’s your appetite for risk?
How Can You Profit Rehabbing Real Estate?
November 18th, 2009 by adminWhen searching for a new home or a potential investment property aim to buy wholesale only. There is no reason to pay retail prices when the market if flooded with inventory. Search for properties that are priced for a quick sale. And if you have a creative vision and can see prospective property for what it can be not what it is right now, you will find many great deals that may need some cosmetic improvements.
Today you shouldn’t have any problems finding several great investment properties; however it would be wise to double-check your projected repair costs. Always get at least three contractor estimates and a home inspection is a must.
You only want to buy houses that need cosmetic repairs. Try to avoid homes with major structural or mechanical problems. In older days it was possible to purchase 3 bedrooms 1 bath and add additional bedroom and bathroom to increase value of the property. You can still do it, but why? With so many deals on the market you shouldn’t have problems finding properties that need only $5,000 to $10,000 in repairs.
Homes in foreclosure are often priced well below the median price for that area. This is because banks will sell homes at or near the amount owing to them from the previous owner.
Fixer-upper properties that come under the foreclosure category can be a great way to make a profit. Not only will you potentially be able to buy the property cheap, but you’ll also be able to increase the value by completing some simple renovations.
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
November 13th, 2009 by adminRecent CRE Headlines ? Which Ones Should We Believe?
FDIC Frets Over CRE Loan Losses
3 Signs of the Next Real Estate Collapse
Is a Market Bottom Imminent?
Plan Coming on Commercial Loans
Commercial Real Estate Debt Won’t be the Next Shoe to Drop
So the commercial real estate market will be the next economic catastrophe but the market bottom is near, investors have amassed substantial acquisition capital, and the FDIC is getting ready with a plan. Will CRE be the next shoe to drop? No one is certain how this will play out and varying sources have varying opinions, but something must budge when $1.4 trillion of commercial real estate debt matures over the next three years.
As reported, those likely to budge will be community banks, many of which hold portfolios containing a large percentage of commercial real estate and construction loans. NREI reports that nation-wide, community banks hold roughly 11% of total CRE industry assets. To this point, FDIC Chairman Shelia Bair is encouraging these banks to restructure existing and maturing loans in hopes of avoiding or minimizing larger losses. Unless value returns quickly, community banks might be the next shoe to drop. That will sting, but does it mean that the commercial real estate market is collapsing, and what will the overall impact be on Main Street and the financial system.
Fear and history has everyone thinking about the residential mortgage meltdown and the widespread financial impact, but commercial real estate is a different beast. First, the majority of loans causing concern are construction and development loans, not existing buildings. Secondly, even though CRE property values are down, the underlying assets are/or have potential to be income producing properties, which can be value-add opportunities to capable investors. Lastly, there is a market for distressed commercial real estate (as opposed to second homes). Investors have been amassing cash and REITs have been raising capital to acquire many of these troubled CRE assets. According to a NREI survey, 70% of investors are preparing capital to acquire real estate assets indicating that some investors see great opportunity in commercial real estate despite the doom and gloom reports. Who are you going to believe and what’s your appetite for risk?
