As with any investment, real estate has several categories to evaluate prior to making the best choice for your plans. In some cases the categories are broken down further, thus it is important to evaluate your goals, and your skills alongside the options available to find the best real estate investment fit for your budget.
Real [...]
As with any investment, real estate has several categories to evaluate prior to making the best choice for your plans. In some cases the categories are broken down further, thus it is important to evaluate your goals, and your skills alongside the options available to find the best real estate investment fit for your budget.
Real estate investment begins by a simple and obvious division, commercial and residential. With each side there are specific guidelines to justify their function, and value in real estate. Once you are aware of the kind of investment you want to make, you can learn what each sub-category is for the respective options.
If you are considering residential real estate, then the next obvious division comes with single family vs multifamily units. A single family home is independent of all others, and as the name indicates, only one family can reside in it. A multifamily unit indicates that more than one family will reside in portions of the building. Often these are apartments, condos or duplexes. They do not have yards and the leasing or sales agreements vary only slightly.
In commercial real estate the next category varies a bit more. These properties can range from office buildings in specifically designed clusters or parks to manufacturing sites that require adaptation from lessor to lessor. The difference between these and a residential option is the regulations and taxes associated with each end. With regard to commercial real estate, zoning rules also apply.
Under unique situations there is the option to own both residential property and commercial property. In this case, the mixed use development has unique zoning laws that apply. This will require a clear understanding of the laws and tax regulations associated there with. Talk to your real estate agent or broker for details on the area and where to find the regulations associated with this unique form of real estate investment.
As real estate is often the most stable investment you can make, long term considerations and consulting with the right team is crucial. Finding the right real estate agent such as Joe Cline, will enable your real estate investment venture to be built on a solid foundation.
In real estate, as with any investment, the last thing you want to find is that you are on the wrong end of the deal that should have been equal. There are ways to avoid common pitfalls and simple misunderstandings.
The first thing to keep in mind when approaching the investment, regardless if it is a [...]
In real estate, as with any investment, the last thing you want to find is that you are on the wrong end of the deal that should have been equal. There are ways to avoid common pitfalls and simple misunderstandings.
The first thing to keep in mind when approaching the investment, regardless if it is a private home or otherwise, is to investigate the terms and options applicable to you. The second is to move through the investment process logically. Lastly double check what information you find against what you know and consult with your real estate agent, or representative. The agent will be able to tell you if there are better options applicable to your needs.
One common problem that homeowner encounter in the investment process is receiving the wrong information.
This can often be attributed to misunderstandings or not asking questions when something appears to be difficult to understand. It is important to make sure you are getting all of the information applicable to your situation. You do not need to sign papers that lock you into a loan with a payment schedule you do not understand, or that turns out to be the wrong form of financing for your needs. Understanding the terms and possibilities associated with your loan is important from the start. Ask questions, and consult often with your representative or lawyer.
The second common pitfall that people encounter is ‘falling in love’ with a property or area before they are aware of all of their options. This creates a sense of urgency instead of a mood of understanding and evaluation. This urgency will often cloud judgment and create an obstacle. Approach each aspect of the investment process with an open mind and rely on your real estate agent to provide you with every suitable option, before you settle on which investment you will make.
Approach this investment with ears, eyes and mind wide open and the possibilities will come. As questions with every aspect related to the investment, and you will obtain the best information. Ask the questions that sound insane to you, because those are easily misunderstood. This can be and often is a lifelong investment, so approaching it correctly the first time will provide the foundation of the future.
Many small businesses find that sharing a facility with other companies, while receiving the same benefits available to many large corporations, to be an economical and reasonable solution for their business needs. Which benefits are used here? The option to share copy costs, energy pricing and in some cases, phone or secretarial services as [...]
Many small businesses find that sharing a facility with other companies, while receiving the same benefits available to many large corporations, to be an economical and reasonable solution for their business needs. Which benefits are used here? The option to share copy costs, energy pricing and in some cases, phone or secretarial services as well. This offers the cost cutting over head choices and still allows for the prestige of having an office for your business.
Business Office Centers can be used by start-ups and small businesses, or organizations. Historically speaking, when a larger corporation has used them, it has been as a remote office for sales teams or investment holding. Now they are the alternative to their real estate holdings. This means that this design of office building is becoming more in need. For Austinites this equals the most efficient use of green resources for large corporations. There is no need for new building construction or major upgrades. There is also the opportunity for the Virtual Office bundle, which often includes a bill for the office and covers all the major services required to present the major corporation image.
The Office Centers are both cost effective and green, making them an ideal commercial location for many businesses. It enables a company to know they are creating the basis for a successful growth while helping the environment, and bettering Austin along the way.
It has not been a fruitful few years in regard to any housing market. The current recession that continues to plague the nation was first indicated through an enormous surge in foreclosures. Not long after the housing bubble burst, unemployment took its turn at rising to levels not seen in years. While Austin has been [...]
It has not been a fruitful few years in regard to any housing market. The current recession that continues to plague the nation was first indicated through an enormous surge in foreclosures. Not long after the housing bubble burst, unemployment took its turn at rising to levels not seen in years. While Austin has been a city that has maintained overall decent economic health, it has not been completely untouched. The market here has slowed significantly, with March home sales down by around 22% when compared to the same month last year.
Buyers are still skeptical about buying in a down market. This is evident from the low home sales so far through 2009. One major hurdle that interested buyers are facing is the credit crunch that has limited many options for loans. These days, it is harder than ever to secure financing for a large investment. While this may mean that those who are purchasing may have less trouble with continuing payments, it has taken a lot of people out of the running for new homes. People who may have been approved just a few years ago are no longer eligible.
Home values in Austin have not dropped as dramatically as in other cities, though they are down by about 4% from last year. The strong local economy, availability of employment, and pleasant atmosphere all help to boast the housing market. These traits continue to bring newcomers to the area, which will continue to help the housing market. The market here is not expected to start looking up until late this year, or possibly into 2010. Until then, Austin will likely remain as steady as possible in such a difficult time.
Austin has been a haven for many businesses, even throughout the recent economic crisis. Dell has its headquarters here. The fast population growth, technology enterprises, and proximity to colleges have made it a great city for business development. The current state of the economy, however, has put a damper on planned building for 2009.
Mixed used [...]
Austin has been a haven for many businesses, even throughout the recent economic crisis. Dell has its headquarters here. The fast population growth, technology enterprises, and proximity to colleges have made it a great city for business development. The current state of the economy, however, has put a damper on planned building for 2009.
Mixed used properties are the most recent addition to the downtown Austin skyline. There remains demand for apartment space as well as commercial in this area. With an increase in supplies for building at lower rates has only helped in these developments. Unfortunately, it appears that the demand is not as high as originally expected. Many mixed use and commercial properties are being built without pre-leasing. There are many buildings that sit vacant in Austin. Experts blame the same factors that have drawn people here for the current crisis. Apartments have been in high demand here based on local college. The tech boom brought many new employees to the area in the last several years and while the population is expected to continue its increase, less people are able to move now with the credit crunch. Many developers have put construction projects on hold as they wait for the economy to steady.
Austin is still expected to come out of the recession in better condition than many other cities. Unemployment rates here remain lower than the national average, and it is still considered a good investment city for many businesses. The economy is expected to get better here by 2010.
A new investment firm is moving to Austin from Fort Worth. N3 Capital Partners, LLC, had changed its name to Pennybacker Capital, LLC, and will be relocating to downtown Austin in October of 2008. The new name and logo reflect their change of location, evoking the famed Austin landmark: Pennybacker Bridge.
N3 Capital Partners LLC, a [...]
A new investment firm is moving to Austin from Fort Worth. N3 Capital Partners, LLC, had changed its name to Pennybacker Capital, LLC, and will be relocating to downtown Austin in October of 2008. The new name and logo reflect their change of location, evoking the famed Austin landmark: Pennybacker Bridge.
N3 Capital Partners LLC, a real estate development firm, was co-founded in December of 2006 by Tim Berry and quickly became a nationally recognized developer of commercial real estate – having developed and sold or leased over 70 projects in 14 different states. The team of 30 plus real estate professionals with backgrounds in real estate development and investment, securities law, investment banking, private equity, as well as corporate leadership and restructuring, among other disciplines.
The firm keeps their eye on opportunities in the southwestern United States and their focus is on revitalization of distressed properties, restructuring and reposition of existing assets to bring these opportunities back into the positive column. This will be a fantastic step in the right direction for the local Austin market.
The firm’s inaugural fund, the N3 Opportunity Fund I, will invest primarily in undervalued commercial, mixed-use, and multi-family though joint efforts with other real estate development firms that have a proven track record and experience in the same sort of investment strategies.
The principals at Pennybacker Capital are, in addition to Tim Perry:
George P. Bush, who has legal expertise in mergers, acquisitions, securities filings and divestitures.
Vince Reyna, a certified financial analyst who was vice president for CIT Corporate Finance.
Michael O’Malley, a certified public account who was chief operating officer and financial officer at Vision Web, Inc.
Austin may have one of the most trend-defying markets in the country, growing steadily as the remainder of the nation declines, but that doesn’t mean you can assume success is inevitable. It’s not. You still have to put work into your commercial property before your investment can grow. If you don’t, your purchase won’t be [...]
Austin may have one of the most trend-defying markets in the country, growing steadily as the remainder of the nation declines, but that doesn’t mean you can assume success is inevitable. It’s not. You still have to put work into your commercial property before your investment can grow. If you don’t, your purchase won’t be an investment but a money pit, something that eats up your savings with no hope of return.
But what’s the smartest kind of work to do? You don’t want to waste valuable time and resources on projects that will net little to no profit. So think toward the future and features that appeal to the residents of your region.
Right now, the people of Austin are interested in commercial structures that combine their residential and business needs. They want businesses to hand it all to them, which is exactly what Stratus Properties Inc. and the Canyon Properties Urban Fund are doing. They’ve joined to create W. Austin Hotel & Residences, a building that will include condos for sale and hotels for rent nightly. The plan is ingenious, combining the city’s growing population with its even more rapidly advancing tourism and business markets.
Of course, if you can’t afford to do something like that or it simply doesn’t coincide with your business plan, think green instead. Austin is one of the most eco-conscious cities in the world. Consumers flock to green homes, green stores, green . . . anything. Whatever you can do to make your structure environmentally friendly will pay off in the long run. It will help keep that investment an investment.
The key to making your commercial property a smart move rather than a poor purchase is planning. Think about what the people around you want and give it to them. It’s the only way to get ahead.
What Did Interest Rates Do This Week?
** according to Freddie Mac **
30-yr Fixed – Lower
This Week: 6.03%
Last Week: 6.24%
1yr Ago: 6.14%
15-yr Fixed – Lower
This Week: 5.47%
Last Week: 5.72%
1yr Ago: 5.86%
5/1 ARM – Lower
This Week: 5.34%
Last Week: 5.43%
1yr Ago: 5.90%
Highlight of This Week’s Major Economic Reports
According to Freddie Mac, “Weak economic reports that indicated declines [...]
What Did Interest Rates Do This Week?
** according to Freddie Mac **
30-yr Fixed – Lower
This Week: 6.03%
Last Week: 6.24%
1yr Ago: 6.14%
15-yr Fixed – Lower
This Week: 5.47%
Last Week: 5.72%
1yr Ago: 5.86%
5/1 ARM – Lower
This Week: 5.34%
Last Week: 5.43%
1yr Ago: 5.90%
Highlight of This Week’s Major Economic Reports
According to Freddie Mac, “Weak economic reports that indicated declines in the job market, slowing in manufacturing, and low consumer confidence drove bond yields lower this week and mortgage rates followed. Interest rates for 30-year fixed-rate mortgages are now at the same levels as they were two weeks ago, erasing last week’s upward jump.
“Meanwhile, the housing market continues to take a toll on the rest of the economy. Residential fixed investment shaved 1.25 percentage points off economic growth in the fourth quarter of 2007. More recently, the median sales price of new homes fell 15.1 percent in January, representing the largest annual drop on record. Residential construction fell 19.7 percent over the twelve-months ending January 2008, the largest decline since March 2007.”
Moreover, as liquidity continues to be a concern in the financial markets, the Fed has announced an expansion of its Term Auction Facility, which will open up an additional $40 billion in “cheap money” to banks and lenders. This should help keep money flowing and loans going.
Finally, HUD finally announced changes to conforming and FHA loan limits, as outlined by the Economic Stimulus Package. For the Austin metro area, FHA loans can now be made for up $288,750 for single-family residences. The conforming loan limit, however, will stay put at $417,000, so there is no change to what will be classified as jumbo loans for our market.
What to Look for Next Week
Retail Sales and the Consumer Price Index will help to determine the direction of rates.
Short-Term Rate Outlook
Stable
Tools to Help Your Buyers & Sellers
Rate Protection from Coldwell Banker Mortgage can provide that win-win situation for your clients!
Whether rates go up or down, with Pre-Purchase Rate Protection, it doesn’t matter! Protect your buyers’ purchasing power by offering them the ability to cap their interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements.
Call me to learn more @ (512) 691-6757
