The late 1990’s and especially 2003-2007 experienced an unbridled push of retail, office and industrial speculative development. Lenders were handing out non-recourse money on projects which, to any experienced commercial broker, had little chance of success. The immediate reward of development and loan fees along with short term interest put blinders on banks and investors and has led to some dire circumstances.
Hopefully, we are nearing the end of the fallout on commercial loans. However, the result of the madness may have permanently reshaped the landscape of loan underwriting thereby changing the future of new commercial development.
Before the drama, a qualified developer could get financing on a pure spec development (i.e. no tenants, all vacant) on terms of 60% loan to value…sometimes even better, with interest only and no real principal reduction required for up to 48 months. This combined with over inflated appraisals led to loans teetering on default with even the hint of slow lease up.
Fast forward to 2nd qtr. 2010. While brokerage is my bread and butter and what I really feel I am best at, I also am involved in several joint venture developments. Although our group has impeccable credit and deal history, we are unable to secure ANY bank/lender money for purely speculative development. Such development can be investing in tech assets (check out the ecobee3 review, similar gadgets are gaining huge popularity for energy effiency). Unless we have a strong tenant in tow for at lease 40% of the project, the only funding that is available is private. Thankfully, our stable of investors provides us the equity required to pursue the industrial developments with which we have done so well.
This model will become the new norm with smaller spec development deals. While this definitely can limit the transaction size, it does have its advantages.
Quick closing process
No lender origination fees, appraisal fees, bank inspection fees
No interest expense
There will always be people with more money than sense. I continue to see development, primarily retail, going up around the Houston area which makes no sense. Why build in a depressed market which is already oversupplied with product?
Banks are still shedding assets a record pace and this will probably continue for some time. There are some great deals out there for tenants, investors and user-investors as well. You just have to know where to look and what to ask. Read More »
All business websites want to be on the top search result on Google. Why in Google? Google is a search engine where people often visit to search for almost everything. Websites at the top spot in Google or in any search engine surely have incorporated specific SEO strategies like keyword research, link building, SEO plugins, blogs and web 2.0 and a whole lot more.
With all the SEO strategies that promises higher ranking, you might be wondering what SEO strategy is the one that weighs much compared to other strategies. But of course, the combination of these SEO strategies plays an important role in your rankings. It’s like saying that your higher rankings won’t be possible without blogging even if you are an expert in link building and keyword research. Let’s take real estate websites as an example. Competition in local markets especially in keywords is very high due to its usage. So if you have a real estate business at Preston Idaho, surely you will use Real Estate Preston Idaho as one of your keywords.
Moving forward, blogging is considered one of the best ways to help you reach the top spot in Google. A Realtor or a real estate agent can have his own blogging platform either under his own personal domain or that installed on his company’s web host. This method maximizes a real estate website’s web presence. Having a blog in your website will have a huge impact on your real estate website’s search engine rankings. Articles are surely a great way to generate traffic to your website through article submission directories. Moreover, blogs are powerful tools for building professional relationships among real estate professionals, readers, and interested clients.
WordPress is a popular choice not by SEO experts and bloggers but by Google itself. Let’s say you’ve decided to write one blog post per week. In this case, a new page is indexed by search engines every time a new blog post is added and with each indexed page, it’s like you’re participating in Google’s lottery as some say. The more articles you post and submit, the better chance you will land on the top spot of Google or other in search engine rankings. If you are looking for a blog publishing platform with amazing SEO capabilities, WordPress is the answer.
Don’t forget about incoming links that are relevant to the content of your real estate blog. Take note that Google don’t just consider any incoming links. Search engines like high traffic sites so if a higher-traffic site is linked to your article which is related to the keywords indexed on your blog, Google will surely move your rankings with the reason that your blog must be an important one since your posts are linked to big and high-traffic sites.
Take the proper steps and surely your real estate website will land at the top of the search results. So are you ready to do some changes on your SEO methods? Read More »
This is a branch in real estate that is involved in ownership, purchase, management and/or sale of real estate for profit. It can be beneficial if you know how to use this for your own benefit. There are many clients who have aditional homes that they don’t use and often those properties suffer damages and stubborn clients don’t want to sell them. This is bad for the real estate agents business because people don’t realize how many other richer people can buy their home and turn it into something greater.
What is there to know about real estate investing? Well, it is generally considered to be a sub-specialty of the real estate investing called real estate development, which is a business on its own, encompassing activities that range from the renovation and re-lease of existing properties to the purchase of raw land. There are many risks regarding on renovation of the real estate because of the search and demand market. Not every home is a multi-million worth of funds, and those houses that have lower prices are often in bad neighborhoods.
There were cases where people would spends thousands of dollars in renovating their homes and then selling it to the real estate people, not making any profit. This is not the fault of the real estate, this is the fault to the clients who didn’t know the risks of buying and selling which however happens, but there isn’t much that real estate workers can do.
Real estate markets are not the same in every country, but in countries that real estate market is thriving there are often competitions on what market sells more homes. This happens very often and it doesn’t seem to be the problem because however you look at the situation, both parties win the market.
Here are some typical sources of investment of the properties that include:
-Market listings (through many listing services or commercial information exchanges)
-Real estate agents and real estate brokers
-Real estae wholesalers and investors
That moment when the property has been located, the investor can negotiate the sale price and sale terms to the seller, then he can execute a contract for sale. Because sellers can sometimes be very stubborn with their terms of the prices, often there are real estate agents and real estate attorneys involved to assist with this process because of the complexity and improperly execution of transactions. After that, furing the aquisition an investor will make a formal offer to buy including payment to the seller at the start of their negotiation to reserve the investor’s rights to complete the transaction.
Real estate assets can be very expensive in comparison to other investment instruments. Sometimes a large portion of the purchase price can be financed by debt and it is referred to as leverage. If the damaged property requires repair, banks will often not lend on a property and the investor may be required to borrow from private lender which is bad, but banks have the right to do this. This can be bad for the real estate too because often there is a really good deal to that particular part of land but such damages can damage the business in the real estate. Read More »