Investing :: The Construction Management Pro

Property Management for Scattered Site Rental Property

October 4, 2011

A NeighborWorks® Place-based Training brought to you by the Network

October 17 & 18  9:00 AM – 4:00=PM

145 W Hanover St. Trenton, NJ

This two day course will explore how to manage geographically scattered and small-scale rental properties which pose a unique and difficult challenge in affordable housing ownership. A portfolio of small properties requires the owner to possess or obtain special property management skills. Management will not have the advantages of on-site property management staff, or the economies of scale a multiple-unit building provides. This course is designed to help the participant identify ways of mobilizing and adapting a management operation to effectively monitor the operational performance of a scattered-site real estate portfolio. Through case study analysis and discussion of best practices, participants will learn to identify and examine the different property management options available to best meet their organization’s needs. Approaches to keep such housing stock healthy and energy efficient will be addressed. A special module will cover the specifics of managing REO properties

Presented by Brett William, Neighborworks Training Institute

Fee: $150 Members/ Non Members $200.  (a savings of $295/$245 off this NeighborWorks® course) At this time we currently are NOT accepting electronic payments.  Registration includes Continental Breakfast, Breaks, Lunch and Workshop materials. Please address all checks and money orders to The Housing and Community Development Network of New Jersey and send to the following:

Housing and Community Development Network of NJ
attn: Scattered Site Rental Property Training
145 W Hanover Street
Trenton, NJ 08618
 
Event Location: HCDNNJ Conference Room
145 West Hanover Street
Trenton, NJ  08618
 
Parking and Directions
The session starts promptly at 9:00a on Monday, October 17 and Tuesday, October 18. ; We strongly recommend you arrive by 8:30am as parking is limited; Meter parking is available on the streets adjacent to our office, and there are surface parking lots in the vicinity as well.   DO NOT park in the Network’s parking lot, as these are reserved spots and subject to towing if occupied by non-authorized vehicles.  If you need directions, go to
www.hcdnnj.org and select Click Here to view Agenda

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Trenton’s new director of housing and economic development holds spotty business record

October 3, 2011

Let me know what you think this does to Trenton’s ability to move Housing and Economic development efforts forward?

Carmen Melendez, the city’s newly appointed acting director of housing and economic development, and her husband owe more than $50,000 in unpaid local and federal taxes,

Has failed to pay taxes due, NJ.Com reports.

3 failed business, federal taxes due!!

Read NJ.COM article here

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Mortgage Servicer’s turn to Short Sales

September 8, 2011

Mortgage servicer’s contending with attorney general investigations and extended foreclosure delays turned more to short sales in the past year according to industry reports.

In August 2009, short sales accounted for only 8% of all liquidations of distressed properties. That number grew to 25% by the middle of 2011, according to research from Moody’s Investors Service.

Meanwhile, the time it took from a borrower default to eventual REO liquidation grew from an average 14 months in early 2009 to 24 months by the summer of 2011. Part of the added time was a result of servicers having to halt the foreclosure process in October 2010 to correct forged documents and mishandled foreclosures as part of the robo-signing scandal. New regulations from federal agencies and ongoing negotiations between the state AGs have left servicers turning to an early sale of properties before filing foreclosures. The increased time to foreclose has resulted in higher losses on the eventual sale of those properties.

“To reduce their expenses and mitigate the high loss severity on liquidated loans, servicers are increasingly opting to bypass the foreclosure process and liquidate properties more quickly through a short sale,” Moody’s analysts said.

Researchers at Deutsche Bank said servicers are using the transactions to also cut into the shadow inventory of properties stuck somewhere in the foreclosure process. Standard & Poor’s said the market actually cut into the shadow inventory during the second quarter for the first time since 2009.

Deutsche Bank found short sales actually take less time to complete than REO sales because of the documentation problems.

The average REO took 17 months to sell in the middle of 2011, compared to just under 12 months for short sales completed in that time, according to Deutsche Bank.

Loss severities dropped as well. Servicers experienced a 70% loss rate on REOs sold in the middle of 2011, compared to less than 60% for short sales.

These transactions also do less damage to a borrower’s credit score, dropping it between 50 and 200 points compared to an REO sale, which can slash the FICO score for the borrower as much as 400 points.

Borrowers who manage a short sale can buy a new home between one and two years as well, according to researchers. Those whose homes sell through REO must wait between five and seven.

However, short sales continue to be a struggle as investors often squabble over whether or not to approve the transaction.

“Short sales, like other servicer loss mitigation strategies, may stir a fierce ‘class warfare’ between investors in different parts of the deal capital structure,” Deutsche Bank researchers said.

Moody’s analysts said short sales steadied loss severities over the past year, as foreclosure problems continue to plague the recovery.

“We can attribute the stabilization of average loss severities in part to a rising number of liquidations through short sale, which by reducing liquidation timelines, foreclosure expenses, and legal costs, can reduce the losses incurred on defaulted loans,” Moody’s said.

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A Kiss from Irene

August 29, 2011

While Irene wasn’t as devastating as predicted, it still caused several fatalities. My prayers go out to all those who lost someone or had severe property damage.

My last blog post gave you three simple steps to Be Prepared for Irene. Now I have to take some of my own advise.

Aftermath of Irene, Tree falls on house

Tree roots after Irene

 

 

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Three Steps to Prepare for Irene

August 26, 2011

Someone once said, “Proper preparation prevents potential problems” or something like that. The point is that now is the time to take some basic steps to prepare for what Irene may bring and protect your real estate investment. As a real estate investor and construction manager here are a couple of things I suggest that you do right now.

1. Take pictures of all your properties inside and out. Don’t forget the roof, basement, windows and your neighbor’s property as well. This will make it easier for you to file a claim for damage as a result of the storm. The pictures of your neighbor’s property may allow you to demonstrate the location of windblown debris which causes most of the storm related property damage.

2. Locate and review your insurance policy(s). Make sure you know what is covered and what isn’t. If you have more than one policy, be sure you know which one covers what.

3. Secure your property. This may seem obvious, but again, windblown debris causes most of the damage. Be sure your landscaping and trees are trimmed and cleared of dead branches; windows are secured and protected.

Taking these three simple steps will put you in a better position to deal with the aftermath of what could be a disaster. While no one wants to see it, take a page out of the Boy Scout’s motto, “Be Prepared!”

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Homeownership Rate Hits 13 Year Low

August 5, 2011

The Bush Great Recession has forced unprecedented numbers of homeowners out of their homes, made for a difficult homebuying environment, and tainted many Americans’ ideal of owning a home. The increase in the homeownership rate seen during the housing boom has been more than completely wiped out by the bust.

The Census Bureau says homeownership in the United States has fallen to its lowest level in more than 13 years. The nation’s homeownership rate dropped to 65.9 percent in the second quarter. That’s a full percentage point lower than the second quarter of 2010 and a half a percentage point below the rate recorded in the first quarter of 2011. With nearly 3 million foreclosures in the pipeline, no sign of a major improvement in credit requirements or the labor market, demand for owner-occupied housing is likely to remain weak.

The flipside will be a further increase in the demand for rental housing. This will boost rental rates and bodes well for the multi-family sector, and real estate investors with a buy and hold strategy. In line with the steep declines seen in homeownership, the share of all households renting has naturally increased to a new 13-year high of 34.1 percent in the second quarter. That’s up from 33.6 percent in the first quarter. The rental vacancy rates have fallen to 9.7 percent from a peak of 11.1 percent in 2009, which has driven a recovery in rent prices. Landlords could see rental yields of more than 5 percent over the next few years.

Paul Dales, senior U.S. economist with the research firm Capital Economics says there are 1.9 million homes up for sale that are still sitting empty. He says another 3.9 million homes are empty but, for one reason or another, are being held off the market. The excess supply of housing remains high, and Dales stressed that the combination of weak demand and high supply almost certainly will not translate into higher house prices any time soon.

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So You Want to Invest in Real Estate?

March 9, 2011

Are you interested in investing in real estate but don’t know where to get started?

Do you have questions about the real estate investing process? Do you know how to make an offer when you find that dream

investment property?

Did you know you can use your IRA to invest in Real Estate?

 Join Carl Fischer, CAMA Self Directed IRA and

Rick Stein, Sales Manager/Vice President of Prudential Fox

Saturday, March 26th

10:00 – 11:30 am

For additional information, click here  http://www.camaplan.com/

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Generation Y: The Challenge for the Nation’s Economy

December 10, 2010

I recently read an article stating that Generation Y is the “Next Challenge for Cities.” What is interesting is the statistics included in the article. John K. McIlwain states that Gen Y (those between their late teens to their early 30′s) are forming households at a rate of 400,000 per year; just a quarter of what it was prior to the recession (i.e. 1.6 million). In addition, this cohort is facing an unemployment rate of nearly 30% and carrying an average debt load of $23,000 per person. Click here to read the article

Household formation is what drives housing absorption. If we are not forming new households, there will be no demand for the housing industry to produce new housing, let alone liquidate the shadow industry of foreclosed property. Without a vibrant housing sector, there will not be construction jobs and consumer durable sales will also lag. Isn’t that what we are seeing? That is why I say this is the challenge for the Nation’s economy.

John McIlwain recommend that we “Keep in mind that this is also the next generation of the workforce. Gen-Yers are the entry-level employees needed to keep businesses growing, innovating, and producing. Will they be able to afford to live near jobs now or in the future? Without savings for a down payment and with parents needing to rebuild retirement accounts, when will they be able to afford to buy a home? With wages falling, will they be able to afford market rents? This is an issue facing every community that wants its economy to grow in the years ahead.” I would add, not just every community but our nation as a whole.

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10-6-10 Signs of Recovery For Office Market

October 7, 2010

By ANTON TROIANOVSKI

In a sign that the country’s commercial real-estate market is finally turning the corner, new statistics show that office rents that have been falling throughout the economic downturn are beginning to stabilize.

The industry’s recovery is likely to be a slow one. Many businesses are continuing to give up office space as new hiring stays sluggish, the timing of the economy’s recovery remains uncertain and companies figure out how to fit more workers into less space.

Bloomberg NewsStatistics show office rents that had been falling in the economic downturn, such as those in Midtown Manhattan, are beginning to stabilize.

Investors are taking action. In the latest deal, publicly traded landlord Boston Properties Inc., run by real-estate and media mogul Mortimer Zuckerman, on Monday said it would buy Boston’s tallest skyscraper, the John Hancock Tower, for $930 million.

Commercial real estate, an enormous sector with some $1.4 trillion of debt coming due by the end of 2014, has been closely watched by regulators and financial companies because it could act as an anchor on the economy as it struggles to recover. For months the news has been bad, with declining rents and rising vacancies pushing more properties into default, foreclosure and bankruptcy. Thousands of landlords are struggling with properties valued at less than their mortgages, like millions of “underwater” homeowners.

The pressure on rents now seems to be easing. Average effective rents—taking into account concessions such as a few months of free rent—for some 4 billion square feet of office space tracked by research firm Reis Inc. fell by just a penny in the last three months, the smallest quarterly decline since 2008. At $22.05 per square foot per year, effective rents are 12% below the 2008 high of $25.07.

Read Complete Article

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10-6-10 How To Use Your 401k to Invest in Real Estate

October 6, 2010

When people think about their 401K they consider a lump sum of money that has been put away for retirement.

In fact most people completely forget about their 401K until income tax time. Which is a shame because this can be a great source for funding real estate investing.

Creative real estate investors have figured out that 401K and real estate investing have a mutually beneficial relationship. By now you are probably wondering what 401K and real estate investing could possibly have in common. The answer is that the two have several things in common. Each of these should be of interest to you if you are a current real estate investor or you are considering becoming involved with real estate investing.

The easiest way that 401K and real estate investing can work together is through the ability to take out a loan against a 401K. The primary objective with real estate investing is to use little or none of your personal money to fund the investment.

Since you are allowed to borrow against your 401K, you can use this to finance part of your investment into real estate. When the deal closes, you will receive back the amount you borrowed plus more. You can easily pay back the loan without affecting your 401K.

There are some things to note about this method of 401K and real estate investing. First, you should know that there is a cap on the amount you can borrow against your 401K. This amount is usually $50,000. However, it can be less, depending on the amount of money you have in your 401K. Another thing to note about 401K and real estate investing is that the real estate you purchase through this means is not eligible for the mortgage-interest tax deduction. There are no tax benefits when you use 401K and real estate investing together.

Another option for using 401K and real estate investing together is to put the money into an IRA, or individual retirement account.  A Self Directed IRA gives you more flexibility on what you can do with the money. You need to use an intermediary and special rules apply. Consult your tax adviser before proceeding.

If you are weary of the risks involved with 401K and real estate investing there is a safer way to invest in real estate with your 401K. Some plans offer the option to invest in real estate investment trusts. These trusts consist of companies that buy and sell real estate.

This is less risk way of using 401K and real estate investing. It also requires less work on the part of the investor since the trust companies are the ones actually doing the real estate investing.

Most people are unaware of the possibilities that exist with 401K and real estate investing. It is a creative way for investors to make a profit in real estate without actually using their own money. The good thing about 401K and real estate investing is that there are both safe and risky ways of investing to yield a profit. The decision you make is one entirely of personal preference.

Did you know there are an estimated 8 million plots of unclaimed land and real estate in this country? Download a free ebook, that shows you how to claim your share here:
http:Claim Free Land & Property Ebook

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