Showing posts with label real estate industry. Show all posts
Showing posts with label real estate industry. Show all posts

Wednesday, September 8, 2021

TRET Short: For Sale By Owner


Join the TRET team as Conrad Bastien Jr. discusses For Sale By Owner properties in our third TRET Short:

TRET Short: For Sale By Owner

Tuesday, August 31, 2021

The End of Summer

Stephon Martin

Waves, real estate, summer, commercial real estate, residential real estate
August is coming to a close and although Summer isn’t officially over until September 23rd, the end of August has an unofficial feel of transition. School will soon have begun for all children in the United States and the country will attempt to push forward out of the shadow of COVID-19. Some areas will forge ahead more successfully than others, but an attempt will be made by all. The beginning of September means that the holiday season is just around the corner. With the impending change of the season, how will the real estate market be affected?

Residential Prime Time

The first few months of the school year, be they August or September, typically trigger a time of reflection for homeowners. The start of the school year is one of the many ways that people mark the passage of time and the beginning of yet another academic year frequently prompts many homeowners to put their houses on the market. The current seller’s market should only serve to further motivate more homeowners to try to capitalize before prices drop. As Bob Vila.com points out, a few select markets have already begun the decline or, in some cases, never quite started the climb. September, October and November will be true indicators of how close to a new normal we really are, both socially and in the residential real estate market.

Commercial Watershed Moment

The current commercial real estate press is praising the bustling commercial real estate market, fueled primarily by multifamily acquisitions and refinances. This praise, however, is a bit shortsighted, as it fails to address the woes of the office market and the real issues of use and change in the retail market. With the economy so tenuous, any good news is great to hear, but commercial real estate has some real questions on the horizon. It seems that most participants in the commercial real estate market are taking a “wait and see” approach, while continuing to invest in the few small pockets where retail and office are making some headway.

Well, that is my quick take on today’s market. I couldn’t let August pass without giving a recap. Please feel free to put your comments below. 

Monday, August 23, 2021

Moving to a Bigger House to Start a Business: How to Do It

 

House, business, start business, how to

Suzie Wilson

Starting a business in a new community can be challenging. Preparing to move because current living arrangements do not allow you to run a business from your home can be difficult, but it's doable. House hunting, moving, and starting a venture all require detailed planning. However, the enthusiasm, economic growth, and products or services you bring to the new community will reward your efforts.

To succeed in finding the right home for your business and prepare for future expansion, The Real Estate Think Tank offers the following tips below.​

Wednesday, July 14, 2021

Press ‘Home’ — Selling Properties With Smart Tech

 Image by Unsplash

Please enjoy this article from guest author Suzie Wilson  of  Happierhome.net

There are many advantages to home automation: ease of use, better accessibility, and let’s face it — there’s something cool about a fireplace that starts up when you clap. What you may not have foreseen, however, are the benefits that technology provides when selling a property.

The Role of Tech

 In almost all areas of life, it’s clear that the pandemic has increased our reliance on tech. This is no less true in the housing market, where the need to actually step inside a property has been somewhat reduced by the use of 3D walkthroughs, video-chat tours, virtual open houses, and Zoom realtor consultations. This is good news for prospective sellers as, in the wake of COVID, housing sales have bounced back to levels unseen since pre-2008. If you are looking to sell your property, physical limitations need not slow you down.

Tuesday, July 13, 2021

Wednesday, June 30, 2021

Foreclosures and the Moratorium


The Biden administration has extended the COVID-19 moratorium on foreclosures to July 31, 2021. Totally avoiding the policy and ideological discussions that could be had about such a decision, one thing is apparent—the additional month extension will increase the backlog of foreclosure and eviction cases that courts around the country will face once this moratorium has ended. Absent any legislative changes, the implementation of creative government programs mitigating distressed loans or both, foreclosure filings, executed foreclosure judgments and foreclosure-related evictions are all set to see an uptick over the next year.

An increase in residential foreclosures and evictions is certainly bad news for affected homeowners and tenants, who will have to find new living arrangements, undergo costly moves in short timeframes, uproot their lifestyles and, in some instances, face long term financial effects. Increasing foreclosures will also serve as a market correction in the real estate market, which is currently driven by inventory scarcity. Amidst the market change and its social implications, many real estate investors can be left wondering which strategy to employ. The answer is simple—any or all of them.

Sunday, April 4, 2021

ARMs: A Quick Look


Adjustable-Rate Mortgages (ARMs) are a viable financing option for both single, multifamily and owner-occupied commercial property owners. Ever since their formal establishment by Title VII of the Garn–St Germain Depository Institutions Act of 1982, ARMs have offered the opportunity to link mortgage payments to marketplace activity. Coupled with the rate collars, ceilings and floors, these financial instruments have the potential to lock in the conditions of a favorable interest rate market, at interest rates that are typically lower than a fixed-rate mortgage. In the world of retail real estate, lower rates can translate into increased purchasing power. For the real estate investor, however, rate fluctuations and potential for sustained above market-rates usually tends to also lead to an early refinance. With the January 3, 2022 deadline for ARMs to decouple from the LIBOR index imposed by Fannie and Freddie, now is an opportune time to take a look at ARMs and their role in the mortgage market.

Tuesday, December 29, 2020

The End of 2020: Now What?

2020 has been a life-changing year for everyone, literally everyone. From the global pandemic, to the fluctuating economy, not to mention the seismic shift in the perception of "going to work," it is safe to say that the world is different place than it was 12 months ago. Now what?

Every year Bloomberg Business Week puts out its "Bloomberg 50"--a list of 50 individuals that have made their mark during the prior year. Although this year's list contains a number of impressive men and women who were able to quickly mobilize and make moving, positive contributions during this tumultuous year, it is notable that not one member of this list was mentioned for contributions to the real estate market. In fact, there are many executives on the list that are touted for reducing the size and/or the footprint of their companies, which in many instances includes real estate divestment. Furthermore, Blackrock, a private equity that is well know for its real estate investments, has made the list, not for real estate, but for its renegotiation of national debts in South America.

Sunday, August 16, 2020

Lesson From the Pandemic For Residential Landlords

The effects of Covid-19 on the residential rental market are apparent—many jurisdictions have enacted rent freezes, landlord/tenant courts have been shut down and moratorium on evictions and foreclosures have been set. Moreover, the accompanying downturn in the economy has left many without the ability to pay rent on time, if at all.

Considered rationally, the need for all of the social safety nets put in place for renters is obvious. The only way to truly survive a global disaster is to band together and implement a series of solutions. Radical measures had to be taken to mitigate the global pandemic. “We’re all in this together,” is not just a motto, it’s a reality. As a society, we are tasked with taking care of our most vulnerable populations, because the repercussions of not doing so are far more expensive than the costs of their protection. In this instance in particular, increased homelessness and/or a wave of relocations due to a rise in home displacement would only serve to exacerbate infection rates around the nation. That said, here are some clear lessons that residential landlords can learn in the wake of this global event.

Friday, June 26, 2020

Real Estate in the Time of Pandemic

Photo by CDC

With our country beginning to find its way to a new normal at the end of months of quarantine, we in the real estate market are all left with one nagging question—What should we expect from here? 

Like most people, I do not have definitive answer. If you are over the age of thirteen, however, this pandemic is certainly not the first market disruption that you have experienced and with each such occurrence, we all learn some valuable lessons about the real estate industry. With that said, here are a couple of lessons that we can learn from this particular time of change: 

Friday, June 12, 2020

Social Justice Real Estate


I try my best on this blog to focus on the issues effecting the real estate market and offer a perspective uninfluenced by political factors. To the extent that social factors effect the real estate market, I am happy to address them, but I work diligently to ensure that this blog does not serve the dual purpose of promoting any particular political ideology. With that said, we are all contextual creatures and I, as an African-American male, cannot ignore the current outcry regarding police brutality against my fellow brothers and sisters.

Tuesday, April 28, 2020

Back in the Saddle Again

Hello Readers/Subscribers of the Real Estate Think Tank,

I once read that it's not how many times that you fall off the horse, but how many times you get back on. With that said, I want to announce that I am back on "the horse" and will once again begin to deliver to you once again real estate content from an industry-insider's perspective. 
I have been blessed to have had the opportunity to try my hand at a few occupations and have had success in a couple of careers, but one thing remains consistent--no matter how far I try to stray, real estate is my calling. That said, I am going to begin to deliver content on a regular basis. In doing so, I will try my best to both be more technical, as well as more topical and will look to strike a balance between the two. 

It's great to be back at the Real Estate Think Tank and like a pair of well-worn jeans, it just feels right!

Yours Truly,

Stephon Martin

Wednesday, August 8, 2018

The Real Estate Sales Game (Part 2)

In Part 1 of this post, three aspects of real estate sales were addressed--lead generation, asset valuation, asset management. These real estate sales characteristics require a specific approach when applied to real estate sales. In this post, the remaining two aspects of real estate sales will be discussed--marketing and customer relations. These aspects of sales are more uniform across all sales profession, both in and out of the real estate industry.

As a reminder, the term real estate salesperson includes all real estate professionals that spend a significant portion of their time selling real estate assets, including property salespeople, real estate capital markets sales professionals and commercial and residential loan officers. 

Monday, August 6, 2018

The Real Estate Sales Game (Part 1)

Interestingly, I have over 10 years of experience as a real estate salesperson and attorney and have yet to write a post on the mechanisms of real estate sales. An understanding of real estate sales can be useful in informing the perspective of a real estate investor. Real estate salespeople have an intimate understanding of market activity, market trends and asset valuation that can prove valuable to all real estate investors.

Friday, July 27, 2018

How To Approach A Defaulting Second Mortgage


Default happens, hopefully not often, but it is a fact of lending. Upon default, however, a holder of a second mortgage must find an objective, value-driven manner in which to evaluate its options. Unfortunately, in many instances second position lienholders opt for one of two extreme approaches—accepting a nominal amount in exchange for the release of the lien or demanding an unreasonably high sum for satisfaction of the lien. Both approaches are harmful for different reasons. Despite such prevalent behavior, with proper management, a defaulting second mortgage can provide a lienholder with a number of options.

Monday, July 23, 2018

Real Estate Asset Managers


In the real estate industry, there are many different professions, each with its unique role. I have focused on different real estate professions in the past on this site, so let us take a look at more obscure and lesser known profession--the Real Estate Asset Manager.

Role of a Real Estate Asset Manager

Although the title Asset Manager has multiple meanings in the world of finance, the Real Estate Asset Manager has a specific task—to manage properties resulting from mortgage default or property acquisition on behalf of a real estate investor, whole loan investor or mortgage servicer. Typically, real estate asset managers maintain a network of vendors, such as contractors, real estate brokers, real estate marketing companies and appraisers in order to maintain, market and sell properties under their management. Resultantly, much of the role of the Real Estate Asset Manager consists of vendor management.

Most real estate asset managers work with mortgage servicers through either a client or a subsidiary relationship. For example, Altisource, the nation’s largest real estate asset manager, is an independent but related company to Ocwen Loan Servicing, one of the nation's largest mortgage servicers, whereas SingleSource, another well-known real estate asset manager, is a wholly independent company that is hired by some of the largest loan servicers. Given the size of the whole loan portfolios of the larger mortgage servicers, many find hiring a real estate asset manager more cost effective than building and managing property vendor networks and tracking sales activity.

Sunday, January 22, 2017

In the Weeds: How a Multidisciplinary Approach to Real Estate Can Lead to Increased Success

I once had a conversation with a coworker in which I expressed my frustration regarding the siloed view of real estate that many real estate professionals seem to employ as a matter of course. I complained that so few real estate professionals truly attempted to view real estate as a multifaceted asset and instead cared only to focus on their specialization within the industry. I wondered out loud how productive the industry could truly be if, in addition to their own professional perspectives, appraisers attempted to see the industry a little more like attorneys and attorneys tried to orient themselves to view the market like investors and investors like Relators, etc. 

My coworker listened politely until I was finished and wisely stated that the reason such cross-pollination of perspectives was not present in the real estate industry was that everyone was too “in the weeds” in their various roles and on their various projects to even attempt to take such a view. It was at that moment that I realized that I realized that my coworker had accurately described a condition that plagues much of the real estate industry—myopia. Indeed, many real estate professionals become so great at their specialization that cannot see the forest for trees or better yet, the weeds. 

Thursday, September 8, 2016

My How Local Lending Has Changed!

Today's banks are unabashedly international businesses which thrive on providing services and taking advantage of opportunities throughout the world. Long gone are the days of the local Savings and Loan as the provider of the community's mortgage needs. Instead, behemoths of consolidations dominate today's lending scene, thriving off of large economies of scale that make any potentially smaller competitors shutter. This change in the role of banking in the community, although the largely the product of intentional moves by the banking industry and Congress, is not without its effects on the real estate industry, particularly the residential market.

In order to explain the effect of big banks on the residential real estate market, one must understand the role of local banks prior to the expansion and consolidation of banks that led to the current situation. Until the 1980's, US mortgage lending was dominated by small local banks and Savings and Loan Associations (S&L's), local banking entities that engaged in lending and offering savings deposit accounts. Initially, S&L's were heavily regulated and restricted from offering consumer loans and investing deposits in most of the investment vehicles available in the market. The Savings and Loan model relied on a favorable treatment by the Federal Reserve to allow for an increased spread between the rate charged on mortgage lending and the rate offered on deposit accounts. S&L's also frequently managed underwriting risk with local market knowledge.

Friday, January 29, 2016

Same Mechanism, Different Crisis

I recently read William Seidman's book Full Faith and Credit, which contains a detailed explanation of the S&L crash of the early 1990's that was spurred on by a crash of the US commercial real estate market. William Seidman was head of the FDIC at the time of the crash. A day after I finished the book, I walked by my bookshelf and noticed the book Bull By Its Horns, by Shelia Bair, the chairman of the FDIC during the 2007/2008 financial crisis, when it hit me--both publications are the same book written nearly 20 years apart. Although each of the authors have their individual differences, they are both similar in that they were Republican chairmen (or is the term chairpeople?), serving during Republican presidencies, who presided over the fallout of a banking crisis that resulted in the largescale nationalization of private assets and companies.

The political affiliation of both former heads of the FDIC is tangential to my point, however, I mention it to make two observations. The first observation is that both Mr. Seidman and Ms. Bair are linked by political party. The second is that the economic climate forced them to participate in the goverment takeover of private companies and their assets, an idea that is antithetical to most Republican ideology.

Although one of the chief duties of the FDIC is to close failing institutions and liquidate their assets, under most normal economic circumstances, this duty of the FDIC is either carried out infrequently or confined to a certain sector of the market. Both the S&L crisis of early 1990's and the Great Recession of the late first decade 2000's, however, forced the FDIC and other government agencies to either take ownership an stake or fully national financial institutions in a large, systemic manner.

Friday, January 30, 2015

Second Mortgages: Why They Are Less Prevalent In Commercial Real Estate Than In Residential Real Estate

Early in my whole loan trading career, an investor once offered to fund a partnership that would purchase second position liens, also known as second mortgages, secured by commercial real estate. The investor promised to pledge a substantial amount of capital, if I was able to assemble a portfolio of target assets. Understanding the risk/reward profile of such an investment and desiring to deliver for what seemed to be a potential source of new business, I quickly began to work on finding commercial seconds to underwrite and select. After a few days on the phone with a number of commercial lenders, real estate debt funds and large financial institutions, I began to realize that commercial real estate second mortgages were not easy to find. Finally, after a few weeks of searching, I informed the investor that I was unable to find any asset worth purchasing that met his mandate.

Nearly ten years later, I now understand why the second mortgage, an established method of financing in the world of residential finance, is so infrequently used in commercial real estate. To state it plainly, the property-income focus of commercial real estate, makes commercial seconds more of a liability than an asset. It is this income focus that leads most commercial lenders to emphasize property performance over the qualifications of the borrower. As a result, most commercial financing is offered with no recourse to the buyer upon default, giving the lender as much control over a distressed asset as possible and incentivizing the owner of a distressed property to “walk away” when there are no more options. In order to maintain as much control over the property as possible, most commercial real estate lenders will insist that they be on the only creditor of the property and that the property be structured in such a way that it is remote from the bankruptcy of the borrower. These goals are typically accomplished by establishing a holding entity for the property to be financed, placing the borrower in the equity position of the entity and making the lender a creditor of the entity, secured by its largest asset.