Month: April 2019

Real Estate Crowdfunding Firms Push Further into the Mainstream

Long-time real estate investors and lenders appear to be growing more comfortable with crowdfunding platform offerings.

When the first real estate crowdfunding firms launched about five years ago, they were met by plenty of skeptics. Yet the sector has continued to shake off uncertainty and win over a growing base of sponsors and investors.

“The initial stigma of crowdfunding is long gone and everyone in our industry, even the largest groups, recognize it as a viable source of capital raises,” says Stephen Cassidy, president at Denholtz Associates, a Piscataway, N.J.-based private investment company that has been in business for more than 60 years. For Denholtz, crowdfunding has proved to be a very effective way of sourcing equity.

The company completed its first crowdfunding equity raise on the CrowdStreet platform in early 2016 for a Downtown Orlando office building and now uses the online platform to source capital on three to four deals per year, raising anywhere from about $500,000 to $3 million in equity.

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    Not Your Grandfather’s Mobile Home Park

    The investment opportunities in the mobile home sector have grown enormously in recent years.

    What other multifamily rental property type enables investors/owners to collect monthly rental homesite lease payments; PITI home loan payments; and when present, apartment rent on homes sited throughout this unique, income-producing community?

    Answer: None!

    That’s the reality of today’s ‘land lease community’–a contemporary trade term used to account for more than six types of shelter commonplace in this property type nationwide. No longer just ‘mobile homes’ & ‘manufactured homes’ on-site, but also modular homes, park model RVs, RVs for a season, stick-built homes erected in-community to imitate manufactured homes; and of late, the occasional Tiny Home or other Accessory Dwelling Unit (‘ADU’).

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      Slower, More Sustainable U.S. Economy Emerges

      The Federal Reserve’s dovish pivot has been reinforced by the abundant liquidity in the capital markets, according to David Shillington of Marcus & Millichap Capital Corp.

      Amid ongoing strength in the domestic economy, concerns over the global economy present a more balanced approach to the growth outlook for this year. Weaker data in Europe and Asia, coupled with the risks associated with a broader U.S. trade war with China, represent potential economic downsides.

      As a result, the rapid economic expansion that dominated the U.S. economy in 2018 has largely been replaced with a slower and more sustainable scenario. The Federal Reserve has eyed these developments, putting further rate hikes for this year on hold at its latest meeting in March. The Fed also announced plans to end quantitative tightening, its process of reducing its balance sheet, by September of this year. This follows a tumultuous fourth quarter in financial markets, with spiking volatility in equity markets leading to a steep drop in 10-Year Treasury yields from nearly 3.25 percent to 2.5 percent, the lowest level since the beginning of 2018. The yield curve has begun to price in a much more dovish Fed, with flattening interest rates across a range of maturities leading to a partial inversion in some short-dated issues.

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        Industrial Sector Remains ‘Red Hot’ Despite Headwinds

        Ongoing trade tensions do not concern investors in the industrial sector.

        Investors still see industrial properties as favorably as they did six months ago, despite global trade tensions and labor shortages.

        Trade talks between the U.S. and China are looming over the industrial sector. Due to these ongoing trade tensions, retailers are importing larger quantities of products than normal, in an attempt to beat potential hikes in tariffs on goods from China.

        Barring successful negotiations, the U.S. plans to raise the 10 percent tariff on $200 billion worth of Chinese goods that took effect in September 2018 to 25 percent this spring. The U.S. has already imposed 25 percent tariffs on $50 billion worth of Chinese goods. On the other hand, reciprocal tariffs imposed by the Chinese government lowered Chinese demand for American-made goods. If this trend continues, demand from manufacturing occupiers could decline, according to real estate services firm Colliers International.

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          Top 5 Ways To Increase The Revenue On Your Rental Properties

          1. Increase Occupancy (Smartly)

          Each month you have a vacant unit sitting you lose about 8.3% of the potential yearly revenue from that unit, which means that every month it sets vacant it starts to add up quickly. As soon as you find out that you will be having a vacant unit you need to do a market survey to confirm the current market rate on your unit. Have your lead maintenance person that does your final walkthrough prepare the list of repairs/maintenance issues (if any) as they do the walk through so they can order the needed material that day and they can be prepared to start the turn of the unit as soon as it becomes vacant. Once the unit is vacant begin placing your ads so that as soon as the crew has the unit ready for market you can show the unit immediately. Make sure your market survey is current allowing you to set the best price for your available units and know the specials (if any) that are working the best in your area, if you need to fill several units consider running an aggressive special to get your units filled but be sure you don’t give money away that you don’t need to. Always offer your residents a referral for bringing someone. Most importantly listen to the market, if you are not getting interest in the unit, you may need to lower the price.

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            Owners will spend almost $21,000 to sell their home in 2019, Zillow says

            8 out of 10 will finish at least one project prior to listing

            Homeowners in the U.S. will spend an average $20,851 to sell in 2019, according to a report released Tuesday from Zillow. That includes real estate commissions, taxes and projects such as painting and landscaping to prepare for listing.

            The total transaction expense will include an average $14,281 in agent commissions and transfer taxes, according to the report. Those are based on sale price, and will range from about $76,015 in San Jose, California, one of the nation’s priciest markets, to about $9,046 in Cleveland, Ohio.

            Some of the other markets covered by the report included San Francisco, where sellers will spend an average $58,534 this year just for commissions and transfer taxes; Philadelphia, where the average will be $16,296; Chicago, at $13,825; Dallas, Texas, at $14,580; and Boston, at $30,085.

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              Bank of America aims to boost homeownership, will give borrowers up to $10,000 to close a loan

              Launches $5 billion affordable homeownership initiative

              Bank of America is committing $5 billion to help boost homeownership for “low- to moderate-income and multicultural homebuyers and communities” across the country, the bank announced Tuesday.

              According to the bank, it plans to commit an additional $5 billion over the next five years to its Bank of America Neighborhood Solutions program, which “will help more than 20,000 individuals and families thrive through the power of homeownership.”

              And as part of the program, Bank of America is rolling out a host of new loan programs and options, including grants of as much as $10,000 to help a borrower close a loan.

              One of the new options in the Neighborhood Solutions program, which is set to launch in the second quarter, will see the bank giving “eligible borrowers” as much as $10,000 that can be used toward their down payment or closing costs when they get a Freddie Mac Home Possible mortgage.

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                Simplifying the Leasing Process

                Nurturing leads and getting them to sign a lease is no easy feat, and operators owe it to their hardworking associates – as well as to their prospects – to make the leasing process as simple and as efficient as possible.

                To my eye, there are several ways to significantly improve the leasing process, and I’ve summarized a few of these recommendations below.

                Make sure solutions and software programs integrate. The lack of integration between property management solutions, lead management programs, online leasing technologies and the universe of other ancillary products has long plagued multifamily.

                It’s not uncommon for a prospect to go to a site like Apartments.com, provide some information and request to be contacted by a community. Then, when the prospect goes to the property and talks to a leasing agent, the agent has to ask most, if not all, the same questions again because the prospect’s information didn’t come into the community’s systems. This results in frustrations for both associates and leads.

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                  Zillow is now a mortgage lender, launches Zillow Home Loans

                  Rebrands Mortgage Lenders of America to carry Zillow name

                  Zillow has owned a mortgage company for approximately six months, having purchased Mortgage Lenders of America in November 2018, but now, the online real estate giant has truly become a mortgage lender as well.

                  Zillow announced Tuesday that it is launching its own mortgage lending operation, which it is calling Zillow Home Loans.

                  For years, prospective homebuyers could search for a mortgage through Zillow’s site, as lenders paid to have their interest rates and terms listed on Zillow’s mortgage marketplace. Now, they’ll have a new competitor: Zillow itself.

                  The company is rebranding Mortgage Lenders of America to carry the Zillow name, and will use the lender to finance home buying and selling through its Zillow Offers platform.

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                    David & Goliath – Top 5 Marketing Tips for Smaller Apartment Communities

                    How do you beat the “big guys” at apartment marketing?

                    While many large property management firms and developers have substantial budgets for their apartment marketing, a considerable number of smaller apartment communities don’t, so it takes a unique and creative approach to generate leads for your community.

                    With that in mind, we have put together the top 5 marketing tips for smaller apartment communities.

                    Local Co-Branding Promotions

                    While promotion through local businesses, hospitals and colleges have always been a staple of “local” marketing, try taking it one step further. Instead of merely leaving a flyer behind at these locations, try a “co-branding” promotion. An example would be a promotion with a local pizza shop that offers free application fee with the purchase of a pizza. Same can be true on your end. Allow that business to place a flyer in your community. The key to this is building relationships with high-value local merchants.

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