A Challenging Year Ahead Commercial Real Estate 2023

High interest rates and a recession will make 2023 a challenging year for commercial real estate. Though inflation eased in late 2022, it was still running at more than 7%. The Fed will continue raising rates until it sees a marked reduction in inflation nearer to its 2% target. Weakening fundamentals and higher cost of capital will generally lower asset values.

The recession will not be particularly deep. Corporate finances are in good shape and employers will shun excessive layoffs to avoid losing employees in a tight market for skilled labor. While consumer confidence is highly subdued, average household debt is low compared with the onset of previous recessions.

These factors suggest a moderate downturn, with unemployment unlikely to breach the 6% level. Inflation will be significantly lower by the second half of 2023, setting the stage for falling interest rates and the beginning of a new cycle that will last to the 2030s.

Despite economic headwinds, the pace of change will not ease. ESG considerations and the growth of the digital economy will continue to affect real estate demand.

Hybrid working offers many benefits for businesses and employees, but companies and the office sector will have to evolve. Cities too will need to adjust to new commuting patterns and reduced office demand. The resurgent retail sector is just now reaping the benefits of a long period of change, which is attracting keen investor interest.

Data centers and industrial real estate will probably be the most resilient sectors and the housing shortage will benefit the multifamily sector. The hotel sector’s recovery from pandemic restrictions will continue but life sciences activity, which was turbocharged by COVID, will ease for a while as venture capital becomes scarcer.

All sectors in all places will be required by governments, occupiers and investors to make significant decarbonization efforts.

Our 2023 outlook details the major trends that will dominate the year. Should you have any questions about how these trends may impact your specific real estate strategy, please don’t hesitate to contact us.

Winston Rowe & Associates

Commercial Real Estate Mid-Year 2022: The Big Slowdown

Winston Rowe and Associates

To paraphrase Ernest Hemingway, distress in commercial real estate markets typically develops gradually, then suddenly. Perhaps that is because we spend a long time talking about trends, and then suddenly investors wake up to a more risky market and spreads instantly widen. In our 2022 outlook, we explored the hightened complexity within the real estate markets as economic dynamics alter the math in predicitng investment yield. Most importantly, we are transitioning from an artificial landscape of monetary and fiscal stimulus that inflated returns and asset values toward a market-based interest rate and pricing environment as both the federal government and the Federal Reserve withdraw. At the beginning of the year we knew interest rates would rise, but we didn’t know the pandemic would continue to unleash waves of new variants around the world, exacerbating global supply chain disruption.

And we couldn’t know that the first major war in Europe in eighty years would erupt, causing unimaginable human tragedy, dislocating the energy markets, and intensifying already high inflation. What a difference six months has made. The magnitude and unpredictability of change has resulted in a riskier investment market for all asset classes and the accompanying requirement for higher risk adjusted returns.

The immediate impact of this more challenging investment environment, particularly the higher cost of capital, has been a slow down in transactions. Higher interest rates to real estate are like fire to a scarecrow. They reduce profit margins on new deals and can spoil the anticipated exit on existing deals.

Accordingly, investors and their lenders are taking more time to model cash flows and valuations. The longer-term impact will bring both opportunity and pain. As the market transitions so will owners and investors, from the sprint of the last few years to a marathon. As we wrote in January, focusing on the longer-term horizon is not only an appropriate strategy in a period of volatility but healthy for the markets. In the next few years, as market participates adjust to the new reality, it will likely take more capital and sweat to achieve success in real estate investing.

Despite the economic volatility, most properties continue to outperform expectations. The fundamentals of real estate remain strong, creating somewhat of a disconnect between the property markets and the capital markets. Of course, real estate is a leveraged business, and each must exist with the other. The strength in market liquidity and property performance heading into this period of change will soften the blow of the newly emerging interest rate and inflation environment. This article will highlight the factors investors will need to consider in response to a new investment environment. While investors are currently taking a risk-off approach, long-term real estate investment opportunities remain.

The Exogenous Factors – Economic Volatility

The inflation caused by supply chain disruptions during the pandemic and exacerbated by the war in Ukraine has proven to be stubborn. The 7.5% annual Consumer Price Index (CPI) was expected to fall during the year but instead rose to 9.1% by June.1 The Wall Street Journal’s June Economic Survey indicated an average estimate of year-end inflation of about 7% (the lowest estimate was 4.5% and the highest 9.9%), twice the 3.4% estimated in January. Interestingly, the same group’s estimate for year-end inflation in 2023 is a relatively modest 3.26%, but the markets do not appear to be thinking that far ahead.

Inflation is often the real estate industry’s friend, enabling increases in rents that are hopefully higher than increases in operating costs. Hence the view that real estate is an inflation hedge, particularly for properties with short-term leases. But the sword cuts both ways as the market’s response to inflation has been significantly higher interest rates, both through the Fed’s aggressive remedies and the market’s anticipation of further Fed rate hikes. Recent fears of recession have tempered interest rate escalation. With first quarter Gross Domestic Product (GDP) down 1.6%2 and second quarter estimates hovering around neutral, the recession may already have arrived. The probability of a recession rose from 18% in January to 44% in June in the WSJ Survey. But not all recessions are alike, and whatever comes will likely be far more benign than our memories of the Great Recession fifteen years ago. Today’s buffers against a severe economic downturn are immense liquidity and a strong job market. At the same time, reductions in the Fed’s balance sheet and investor concerns have the potential to gradually, then suddenly, pull capital out of real estate.

The 10-year Treasury rate started the year around 1.6% and ended the second quarter around 3%, reaching a peak of 3.5% mid-June (awkwardly during the CRE Finance Council’s annual meeting, putting the group in a rather somber mood).3 At the time this article was written the rate had fallen to about 3.0%. Reflecting higher risk in the system, credit spreads have also widened, resulting in a cost of capital double whammy. According to data from Trepp, CMBS AAA spreads have widened between 70 and 90 basis points since the beginning of the year and BBB spreads have widened between 185 and 215 basis points, depending on the issuer of the bonds.

It is important to remember that real property performance, with the exception of hospitality, is far more correlated to job growth than GDP. The June job creation number surpassed analyst expectations. We are enjoying record low unemployment. There are over 11 million job openings nationally.4 As long as Americans have jobs and their wages grow more than long-term inflation, the performance of most property sectors should be sustained through a mild recession.

Property Performance Supported by Demographics and Jobs

The higher cost of capital, rather than real estate fundamentals, is what is slowing down real estate investment. Of course, inflation and a recession could dampen demand for some property types; as discretionary spending decreases more people may stay home rather than spending money on retail and hotels. But overall, demographics and other demand generators are keeping occupancy up and rents high.

Multifamily and industrial continue to be the two most desired property types. The rapidly rising cost of owning a home is further fueling multifamily demand. The Case Shiller U.S. Home Price Index rose more than 20% year-over-year through April. On top of continued higher prices, the 30-year fixed rate mortgage rate rose from about 3.2% at the beginning of the year to 5.7% at the end of June.5 The upshot is that the National Association of Realtors Housing Affordability Index fell 24% between January and April, which does not reflect the steep rise in rates in June. Based on home prices, down payment requirements and mortgage rates, only a quarter of American households qualify for a mortgage on a medium-priced home.6

Multifamily demand is being further bolstered by new Gen Z household formation. A study by Cushman & Wakefield estimates that Gen Z will comprise over 30% of renting households by 2025, roughly equivalent to Millennials. Additionally, more Boomers are taking advantage of the hot market to sell their homes and rent for a while. Each of these factors has driven up apartment rents and pushed down vacancies. A recent analysis by Moody’s indicates that national rents are up about 17% in the last twelve months. As apartments become unaffordable, household creation is likely to slow. Rents will continue to grow, but at a slower pace.

Industrial demand also remains strong. While there are risks of over-building in several markets, many companies are increasing product inventories to avoid supply chain disruptions and extending their reach toward customers through last mile distribution centers. According to Marcus & Millichap, a record 551 million square feet of industrial space was absorbed in the twelve months ending April 2022. Robust property performance is expected to continue.

Retail has been the problem child of the real estate industry for many years as oversupply is slowly and painfully wound down and retailers adjust to new consumer behaviors and preferences. The University of Michigan Consumer Sentiment Index fell from 67.2 in January to 50.0 in June, the lowest in the history of the index, and the Conference Board’s Consumer Confidence Index fell from 113.8 to 98.7 during the same period. These gloomy statistics are not surprising given the recent spike in inflation, particularly gas and food prices, and recession fears. Yet retail sales are holding remarkably well, with only a small decline in May. The good news is that online spending as a percent of all sales has been flat as consumers are eager for in-store shopping experiences with family and friends. Even malls have recently had more traffic. This recent in-store performance does not suggest retail real estate is poised for growth; a recession would put continued stress on retailers and the nation continues to be severely over-stored.

The office market continues to pose significant risks for investors and owners. The number of workers going back to the office is increasing every month. However, most workers no longer want to be in the office full-time, especially as gas prices increase the cost of commuting. Office tenants are listening to their employees and watching their checkbooks. Many are trying to renegotiate rent and reduce space prior to the expiration of their leases. Others will clearly reduce space and move to higher quality properties as leases turn. A recent tenant study by CBRE found that over 50% of respondents expect to reduce office space over the next three years.

Despite this, we read a lot about new office leases. Almost all companies need office space, and many of those new leases are companies moving to better quality space. The net effective rents achieved on new leases are not part of the press release, so rent trends are not clear. And national vacancy remains stubbornly high, particularly in gateway cities. According to CoStar, office availability in New York City has risen almost 40% since the beginning of 2020. Hemingway was not an office investor, but his adage holds particularly true for this segment of the market. Owners will go through the drip, drip of lease negotiations until suddenly, over a period of years, they run into trouble with their lenders. We are already seeing, very early in this process, a slight uptick in office loan delinquency. A recent study by New York University predicted an average 30% reduction in office values. The pain will be mostly felt in older, lower quality buildings that lack what tenants now demand: excellent design and floorplans, state of the art air flow, excellent light, building amenities, and environmental and wellness certifications.

Whenever the investment environment becomes riskier, investors differentiate assets and markets in the pursuit of rent growth. Sun Belt and Mountain markets continue to experience in-migration and above average job creation, and investment dollars will follow those trends. Around the nation suburban markets are outperforming the cities they surround as people work and play closer to home. Property users are more focused on environmental vulnerabilities and impact, as well as health and wellness. In a recession there is always a flight to quality, including higher quality properties. These and many other variables will be used to distinguish investment options for the foreseeable future.

Capital Flows and Valuations in an Upside-Down Market

Rent and cash flow growth is even more critical for successful investing as the cost of capital rises. Investors are currently faced with the unusual inversion of lending rates and capitalization rates, or negative leverage. Theoretically, cap rates reflect the aggregate of required returns of both equity and debt. But during the past decade a wave of capital, fueled by artificially low interest rates, compressed cap rates below their historical averages. Many investors believe that liquidity has made cap rates invulnerable to rising interest rates. However, when lending rates rise and yields fall, capital often seeks a new home in other asset classes. Real estate is always cyclical. The only way to deal with the current rate environment is through cash flow growth, which will vary greatly by property type and market and may be mitigated by a prolonged economic slowdown. Hence, the investors are pausing to re-evaluate their strategies.

The cost of debt becomes even greater when considering the higher cost of locking in rates. Many investors want the flexibility of mortgage prepayment and therefore prefer floating rate loans. Uncertainty in the rate market has blown out the cost of swapping from floating to fixed or buying interest rate caps. This is putting further pressure on transaction yields and making investment in transitional properties more difficult.

Of course, the other impact of rising cap rates, particularly without adequate rent growth, is a fall in valuations. This is perhaps the most alarming development for investors. We are currently in a period of price discovery where buyers are looking for deals and sellers are unwilling to reduce asking prices. It will take many months and many transactions to fully assess the impact on valuations, but anecdotal evidence suggests modest cap rate increases to date, with the resulting diminution in value.

Given these new dynamics, perhaps the most difficult part of the investment process is estimating the exit. Existing investment syndicates planning to improve and sell a property within the next few years may not be able achieve the expected exit price, reducing investor returns and sponsor promotes. And predicting exit prices on new deals is next to impossible. Hence, the major slow down in transaction volume ahead of us until rates and valuations find their new equilibrium.

Real estate lenders, which provide most of the capital that fuels the industry, are also slowing things down. With higher rates and recession concerns lenders have tightened underwriting, often reducing proceeds and adding structure to bolster credit. Lenders are particularly focused on debt service coverage given the potential for weaker cash flows and the certainty of higher rates. They are also laser focused on near-term maturities and the ability of borrowers to refinance the loans in a higher rate environment. Transitional lenders, particularly debt funds, are carefully monitoring the performance of their collateral, and requiring more frequent reporting from borrowers on their ability to achieve their business plans.

Not all transitional loans will make it. Despite the many tailwinds supporting property performance, the new interest rate regime is certain to result in pockets of distress. As mentioned, loans with near term maturities are the most vulnerable, but lenders will likely kick the can down the road for a while and see what happens before racking up defaults and impairments. Loans collateralized by retail properties offering the wrong product in the wrong market will continue to default. And office loans are waiting in the wings. The proliferation of debt funds in the last two years (Commercial Mortgage Alert listed more than 150 in a recent issue) have a tough road ahead. They are not only providing loans to fund property repositioning, but mezzanine loans at a time when values will likely fall. Unlike banks, the funds are reliant on warehouse lending to originate loans, and often refresh capital by selling loans into the commercial loan obligation (CLO) market. On the front end the borrowing rates on the lines have rapidly risen, and on the back end the CLO market is practically closed. Again, things are slowing down, and the more complex transactions will move particularly slowly.

Finding a New Path Forward

The suddenness of rate increases and recession concerns in the second quarter has left many real estate investors and operators in the doldrums. The Commercial Property Executive’s CPE 100 Quarterly Sentiment Survey in June revealed that 92% of respondents believed real estate performance will weaken in the next six months versus only 23% in their first quarter survey. Despite the gloomy outlook there are always opportunities. As we concluded in our January market review, investors need to work harder to navigate the uncertainty and risk in commercial real estate. Investors can no longer paint with a broad brush, but must differentiate by property and market, seeking quality in the path of growth.

The math in real estate investing has changed. Transitioning to higher interest rates and cap rates, lower valuations and less robust yields will be a painful process. Once things have settled down and investors are accustomed to the new reality, liquidity and transaction volumes will return. Patient investors with longer term horizons will win out, as long as they have short-term leases and long-term debt maturities, and have avoided the office sector. Above all, investors need to be nimble and rapidly adjust their strategies. We are entering a new real estate cycle, not because of real estate supply and demand but because of economic volatility and a regime change in government support for liquidity. The respective timing of rising cap rates, rising rents, lease renewals, and loan maturities will sort out the winners and losers.

Building Your Real Estate Investment Team

Whether you like it or not you can’t do it all by yourself. Investing in real estate requires many different professionals. There are realtors, appraisers, inspectors, builders, remodelers, mortgage companies, banks, property managers, attorneys, partners, accountants, sign companies, printing companies and yes even mentors, buyers, sellers and tenants.

I have heard in business that you are only as good as your weakest link. I want to suggest that you choose your team carefully. You may even want to go as far as interviewing your team players.

After all this is a business and the dollar amounts can be substantial so you want to make sure that your team members have the same morals, ethics, business philosophy and personality as you. This is not to say that you will not make some mistakes and or changes along the way but when you start out with a list of the qualities that you are looking for in your team it makes the decision process much easier. Yes I did say qualities and not experience or education. It’s easy to find someone who knows the business or has experience but it can be a challenge to find the right qualities and personality in the person you are looking for.

I would start my search by seeking a referral from someone who is already in the business and is successful. Make sure you know the person you are seeking the referral from well enough to know that you will be well received when you contact whomever they referred. Notice that I indicated that you seek a referral from someone who is not only in the business but is “successful”.

It doesn’t do any good to contact a banker for a line of credit when you have been referred by someone the banker just turned down nor does it look good to contact a realtor referral from someone who just backed out of the last deal they had under contract.

I think it is only appropriate to note here that if you are making a referral to someone who is building their team, make sure you know a little about this person also. It doesn’t help you by referring someone to your banker who just got out of bankruptcy and has a history of shady deals.

Once you establish your team players you should be loyal to them. Let me give you an example. Who are you going to call when you find a listing online or another realtors listing while driving the neighborhood? Most people would say I call the listing agent. I used to do the same thing. Let me suggest you call your team player and let them go to work for you.

If you call the listing agent it and buy the house it may be the only sale you give that realtor this year. By calling your realtor that closed 30 transactions for you last year they will go to bat for you to get you the price and terms that they already know you are looking for.

Not to mention the fact that you will be the one they call when they find a deal that has to be sold fast. Trust me on this, as I know from experience.

I hope that this will help you in building your team.

How to Get Involved in Real Estate Investing in Your 20s

About 85% of millennials believe real estate is a good financial investment — and they aren’t wrong. Unlike the stock market, real estate investing allows you to collect cash flow — or immediate financial returns. Plus, there are tax benefits, the possible appreciation of your property and equity paydown. At the very least, your profits will help you pay the mortgage — and even your own bills.

Here are a few ways to enter the industry and start investing in your 20s.

1. Educate Yourself

Investing in real estate doesn’t require formal training or a college degree. However, if you want to succeed, you must educate yourself. Read articles and books about basic concepts, terminology and strategies. Listen to podcasts and talk radio and learn how to analyze properties and invest with little to no money.

Be sure to gather information from a variety of sources to explore different approaches and perspectives.

2. Start Saving

Once you have a working knowledge of investing in real estate, it’s time to start saving your pennies. In most cases, you’ll need a relatively large sum of money to make your first down payment. Skip that morning coffee run and pass up that new pair of boots and prioritize your investment instead.

Additionally, continue to pay down debt. Doing so will help you save money and establish good credit, which you’ll also need to purchase your first property.

3. Make Connections

Build a network as soon as possible by making connections with others in the real estate industry. Join an investor group, follow blogs, attend meetings and completely immerse yourself in this new world of buying and selling. Learn from others’ mistakes and listen to any advice they have to give.

Connecting with professionals will ensure you start off on the right foot and may even help you find a partner or mentor.

4. Research Financing Options

Generally, financial experts recommend gathering cash upfront or making a standard down payment to avoid private mortgage insurance. You want to save as much as you can and put 20% down to kick off an initial property investment. However, if you can’t afford a conventional mortgage, you may investigate alternative financing options.

Hard money loans, private lenders and even Federal Housing Administration loans may offer possible solutions. Research the requirements as well as the pros and cons of each option to understand which ones are best for your particular situation.

5. Consider House-Hacking

Recently, millennials have made house-hacking one of the more popular real estate investment strategies. This creative method entails renting out portions of your primary residence and using the income to pay for your personal expenses.

House-hacking can lower your taxable income and help you earn. Multifamily properties, additional dwelling units and multiple bedroom houses typically make for lucrative hacking.

6. Rethink Your Strategy

You might also consider a few other popular strategies if you don’t have the means to make a conventional entrance into the real estate market. For instance, you might try wholesaling or flipping homes. These investments are short term and usually more affordable.

Crowdfunding may be a profitable option, too. This method is similar to real estate investment trusts, but now you can invest online with just a few hundred dollars.

Real Estate Investing is Possible in Your 20s

When it comes to making a profit in real estate, the sooner you invest, the better. When you’re in your 20s, there’s truly no limit to how much you can make. However, to be successful, you must start now. Homes are long-term investments, so waiting won’t do you any favors.

Write down a plan and stick to it. Set deadlines and create a feasible timeline. Then, spend time learning all there is to know about the industry. With a little luck and a whole lot of dedication, your investment will prove to be more than worth the time and effort you put into it.

How To Analyze Demographic Data Before Investing

When it comes to real estate investment, there are many factors that should be considered before taking the leap. Investors often speak of the general economic conditions as their main impetus for investing or holding back. However, this should not be the only criteria that you work under. Demographics should also be very carefully considered. Here are three reasons to analyze demographic data before investing in real estate.

Age and Spending Habits

You might think that a younger, more vibrant population is where the money is, but you may be wrong. Consider the fact that a twenty-something is likely to have student loans, very little savings, and less experience in making sound financial decisions. Not only that but, younger people are less likely to have the funds and stable career that it takes to buy a home.

Financial newsletter writer, Harry S. Dent, Jr. has done some impressive research that reveals that human spending habits follow a predictable path. Most notably, spending on homes hits its peak between the ages of 46 and 50. Therefore, if the demographics show a population in that range, it may be a good indicator of a viable market should you be interested in flipping an investment property.

Jobs and Population Growth

Simply put, if people cannot find a good job, they are not going to be able to buy or rent a home. That also means that the population in the area is likely to decline, rather than grow. Take a good, hard look at the trends in employment in and around the area you are thinking about investing in. Dig into those numbers and look for indicators that the population and job opportunities are changing.

Rentals vs. Owner Occupied

Another important demographic that you need to take a look at is the percentage of rental homes versus those that are owner occupied. If you’re most interested in buying, remodeling and flipping houses, you’re going to want to look at areas where the owner occupancy is higher. Likewise, if you’re looking for an income property, a predominantly rental oriented area may be best.

Although you’ll get some indication of the viability of a rental or flip from that data, it doesn’t tell the whole story. You also want to know what the rental occupancy rate and average rental rate are so you can determine whether or not you can recoup your investment. If you’re flipping, you’ll want to know the average home sales price so that you can manage your investment to make a profit when you sell.

If you’re a real estate investor with questions about using demographic data, investing in properties, or you’re looking for an investment partner, contact us. We’re experts at helping investors find the money they need to invest in properties with promise.

How to Write a Real Estate Business Plan

Winston Rowe and Associates No Upfront Fee Commercial Real Estate Lending

Success in the real estate investing industry won’t happen overnight, and it definitely won’t happen without proper planning or implementation. For entrepreneurs, a real estate investing business plan can serve as a road map to all of your business operations. Simply put, a real estate business plan will serve an essential role in the formation of your investing career.

Investors will need to strategize several key elements to create a successful business plan. These include future goals, company values, financing strategies and more. Once complete, a business plan can create the foundation for smooth operations and outline a future with unlimited potential for your investing career. Keep reading to learn how to create a real estate investment business plan today.

What Is A Real Estate Investing Business Plan?

A real estate business plan is a living document that provides the framework for business operations and goals. A business plan will include future goals for the company and organized steps to get there. While business plans can vary from investor to investor, they will typically include planning for one to five years at a time.

Drafting a business plan for real estate investing purposes is, without a doubt, one of the single most important steps a new investor can take. An REI business plan will help you avoid potential obstacles while simultaneously placing you in a position to succeed. It is a blueprint to follow when things are going according to plan, and even when they veer off course. If for nothing else, a real estate company business plan will see to it that investors know which steps to follow to achieve their goals. In many ways nothing is more valuable to today’s investors. It is the plan, after all, to follow the most direct path to success.

8 Must-Haves in A Real Estate Business Plan

As a whole, a real estate business plan should address a company’s short and long-term goals. Though in order to accurately portray a company’s vision, the right business plan will require more information than a future vision. A strong real estate business plan will provide a detailed look at the ins and outs of a company. This can include the organizational structure, financial information, marketing outline and more.  When done right it will serve as a comprehensive overview anyone who interacts with your business, whether internally or externally.

That said, creating an REI business plan will require a persistent attention to detail. For new investors drafting a real estate company business plan may seem like a daunting task, and quite honestly it is. The secret is knowing which ingredients must be added (and when). Below are seven must-haves for a well-executed business plan:

Outline the company values and mission statement.

Break down future goals into short and long term.

Strategize the strengths and weaknesses of the company.

Formulate the best investment strategy for each property and your respective goals.

Include potential marketing and branding efforts.

State how the company will be financed (and by whom).

Explain who is working for the business.

Answer any “what ifs” with backup plans and exit strategies.

These components are what matter the most, and a quality real estate business plan will delve into each category to ensure maximum optimization.

Vision

A company vision statement is essentially your mission statement and values. While these may not be the first step in planning your company, a vision will be crucial to the success of your business. Company values will not only guide you through investment decisions, but will also inspire others to work with your business time and time again. They should align potential employees, lenders and possible tenants with the motivations behind your company.

Before writing your company vision, think through examples you like both in and out of the real estate industry. Is there a company whose values you identify with? Or, are there mission statements you dislike? Use other companies as a starting point when creating your own set of values. Feel free to reach out to your mentor or other network connections for feedback as you plan. Most importantly, think about the qualities you personally value and how those can fit into your business plan.

Goals

Goals are one of the most important elements in a successful business plan. This is because not only do goals provide an end goal for your company, but they also outline the steps required to get there. It can be helpful to think about goals in two categories: short term and long term. Long term goals will typically outline your future plans for the company. These can include ideal investment types, profit numbers and company size. Short term goals are the smaller, actionable steps required to get there.

For example, one long term business goal could be to land four wholesale deals by the end of the year. Short term goals will make this more achievable by breaking it into smaller steps. A few short-term goals that might help you land those four wholesale deals could be to create a direct mail campaign for your market area, establish a buyers list with 50 contacts, and secure your first property under contract. Breaking down long term goals is a great way to hold yourself accountable, create deadlines and accomplish what you set out to.

SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis involves thinking through each of these areas as you evaluate your company and potential competitors. This framework allows business owners to better understand what is working for the company and identify potential areas for improvement. SWOT analyses are used across industries as a way to create more actionable solutions to potential issues.

To think through a SWOT analysis for your real estate business plan, first identify your company’s potential strengths and weaknesses. Do you have high quality tenants? Are you struggling to raise capital? Be honest with yourself as you write out each category. Then, take a step back and look at your market area and any competitors to identify threats and opportunities. A potential threat could be whether or not your rental prices are in line with comparable properties. On the other hand, a potential opportunity could be to boost the amenities offered at your property to be more competitive in the area.

Investment Strategy

Any good real estate investment business plan requires the ability to implement a sound investment strategy. If for nothing else, there are several exit strategies a business may execute to secure profits: rehabbing, wholesaling and renting — just to name a few. This is where investors will want to analyze their market and determine which strategy will best suit their goals. Those with long-term retirement goals may want to consider leaning heavily into rental properties. However, those without the funds to build a rental portfolio may want to consider getting started by wholesaling. Whatever the case may be, now is the time to figure out what you want to do with each property you come across. It is important to note, however, that this strategy will change from property to property. Therefore, investors need to be able to determine their exit strategy based on the asset and their current goals. The reason this section needs to be added to a real estate investment business plan is because it will come in handy once a prospective deal is found.

Marketing Plan

While marketing may seem like the cherry on top of a sound business plan, marketing efforts will actually play an integral role in the foundation of your business. A marketing plan should include your business logo, website, social media outlets and any advertising efforts. Together these elements can build a solid brand for your business, which will help you build a strong business reputation and ultimately build trust with investors, clients and more.

To plan your marketing, first think about the ways your brand can illustrate the company values and mission statement you have created. Consider the ways you can incorporate your vision into your logo or website. Remember, in addition to attracting new clients, marketing efforts can also help maintain relationships with existing connections. For a step by step guide to drafting a real estate marketing plan, be sure to read this guide.

Financing Plan

Writing the financial portion of a business plan can be tricky, especially if you are just starting your business. As a general rule, a financial plan will include the income statement, cash flow, and balance sheet for a business. A financial plan should also include short- and long-term goals regarding the profits and losses of a company. Together, this information will help when making business decisions, raising capital and reporting on business performance.

Perhaps the most important factor when creating a financial plan is accuracy. While many investors want to report on high profits or low losses, manipulating data will not boost your business performance in any way. Come up with a system of organization that works for you and always ensure your financial statements are authentic. As a whole, a financial plan should help you identify what is and isn’t working for your business.

Teams & Small Business Systems

No successful business plan is complete without an outline of the operations and management. Think: how your business is being run and by whom. This information will include the organizational structure, office management (if any), and an outline of any ongoing projects or properties. Investors can even include future goals for team growth and operational changes when planning this information.

Even if you are just starting out, or have yet to launch your business, it is still necessary to plan your business structure. Start by planning what tasks you will be responsible for, and look for areas you will need help with. If you have a business partner, think through each of your strengths and weaknesses and look for areas you can best complement each other. For additional guidance, set up a meeting with your real estate mentor. They can provide valuable insights to their own business structure, which can serve as a jumping off point for your planning.

Exit Strategies & Back Up Plans

Believe it or not, every successful company out there has a backup plan. Businesses fail every day, but by creating a backup plan investor can position themselves to survive even the worst-case scenario. That’s why it’s crucial to strategize alternative exit strategies and back up plans for your investment business. These will not only help you create a plan of action if something does go wrong, but will also help you address any potential problems before they happen.

This section of a business plan should answer all of the “what if” questions a potential lender, employee, or client might have. What is a property remains on the market for longer than expected? What if a seller backs out before closing? What if a property has a higher than average vacancy rate? These questions (and many more) are worth thinking through as you create your business plan.

The impact of a truly great real estate business plan can last for the duration of your entire career, whereas a poor plan can get in the way of your future goals. The truth is: a real estate business plan is of the utmost importance, and as a new investor it deserves your undivided attention. Again, writing a business plan for real estate investing is no simple task, but it can be done correctly. Follow our real estate investment business plan template to ensure you get it right the first time around:

Write an executive summary that provides a bird’s eye view of the company.

Include a description of company goals and how you plan to achieve them.

Demonstrate your expertise with a thorough market analysis.

Specify who is working at your company and their qualifications.

Summarize what products and services your business has to offer.

Outline the intended marketing strategy for each aspect of your business.

Executive Summary

The first step is to define your mission and vision. In a nutshell, your executive summary is a snapshot of your business as a whole, and it will generally include a mission statement, company description, growth data, products and services, financial strategy, and future aspirations. This is the “why” of your business plan, and it should be clearly defined.

Company Description

The next step is to examine your business and provide a high-level review on the various elements, including goals and how you intend to achieve them. Investors should describe the nature of their business, as well as their targeted marketplace. Explain how services or products will meet said needs, address specific customers, organizations or businesses the company will serve, and explain the competitive advantage the business offers.

Market Analysis

This section will identify and illustrate your knowledge of the industry. It will generally consist of information about your target market, including distinguishing characteristics, size, market shares, and pricing and gross margin targets. A thorough market outline will also include your SWOT analysis.

Organization & Management

This is where you explain who does what in your business. This section should include your company’s organizational structure, with details the ownership, profiles on the management team and their qualifications. While this may seem unnecessary as a real estate investor, the people reading your business plan may want to know who’s in charge. Make sure you leave no stone unturned.

Services or Products

What are you selling? How will it benefit your customers? This is the part of your real estate business plan where you provide information on your product or service, including benefits it has over competitors. In essence, it will offer a description of your product/service, details on its life cycle, information on intellectual property, as well as research and development activities, which could include future R&D activities and efforts. Since real estate investment is more of a service, it’s critical for beginner investors to identify why their service is better than others in the industry. It could include experience.

Marketing Strategy

Generally speaking, a marketing strategy will encompass how a business owner intends to market or sell their product and service. This includes a market penetration strategy, plan for future growth, channels of distribution, and a comprehensive communication strategy. When creating a marketing strategy for a real estate business plan, investors should think about how they plan to identify and contact new leads. They should then think about the various options for communication: social media, direct mail, a company website, etc. The marketing portion of your business plan should essentially cover the practical steps operating and growing your business.

Winston Rowe and Associates is a national consulting firm you can review them on line at www.winstonrowe.com

Free Business And Real Estate Investing eBooks

Contact Winston Rowe and Associates

Welcome to Winston Rowe and Associates knowledge blog, scroll down to the right for posts about commercial real estate.

This is a list of free books about real estate investing, commercial real estate financing and business strategy.

We’re always on the lookout for great free books so bookmark this blog and check back for monthly updates.

These links are not affiliate marketing links, just publications that we feel may add value to people and businesses.

Commercial Real Estate Finance

The eBook Commercial Real Estate Finance, by Winston Rowe & Associates discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

Real Estate Investing Articles

This is a link to 1226 real estate investing articles written by industry veteran’s.

25 Productivity Tips for Successful Business Owners

Productivity is critical to your success at work. Business owners, managers and executives all want to get the most from their employees. If you’re not performing as efficiently or effectively as others, your long-term job prospects could be in trouble.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers

“Real Estate Investing: How to Find Cash Buyers and Motivated Sellers” teaches real estate investors and those interested in learning to invest in real estate how to define and target ideal cash buyers and motivated sellers. The book covers absentee owners, rehab investors, Section 8 landlords, and other buyer types. Some of the marketing topics include mailing lists, postcards, both online and offline marketing strategies along with examples. Anyone who wants to wholesale a house or is curious about flipping houses should pick this book to get educated on cash buyers and motivated sellers for their real estate investing.

Real Estate – Breaking Bad How to Flip Decaying Real Estate Properties for Profit

Tired of working 9 to 5? You should think of making money with real estate! Yes, the effort is well worth it! You just have to ditch the misconceptions and embark with all the passion you have in store for this amazing trip of rehabbing old houses and giving them a new look and a new owner.  Your reward? A nice profit!

Real Estate Forms Portfolio

A FREE and ready-for-download eBook consisting of a comprehensive collection of real estate-related forms for real estate investors.

Real Estate Secrets Exposed

This FREE e-Book sheds some light on the often mysterious and sometimes daunting world of real estate.

Use 1031 Real Estate Exchanges to Create Multiple Streams of Income

Discover how to use 1031 tax-free exchanges, tenants in common interests, and zero cash flow properties to create new sources of income. Learn how to offer bundled services and attract new clients. This FREE, ready for download eBook is perfect for anyone involved in real estate, taxes, mortgages, insurance, or law.  Download it now!

Make Money Through Real Estate Renovations

Download this FREE eBook and learn how a successful investor makes thousands of dollars from real estate renovations. Download it now!

Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders

Download this FREE e-Book, and discover the new secrets of funding real estate deals in the post-bubble real estate market, where traditional lending sources are getting very difficult to obtain. Download it today!

Real Estate Investing Strategy for Rehabs

This eBook is about residential rehabbing and the multiple strategies that can be used to maximize profits in this current economic climate. My goal has always been to share knowledge with folks that are truly interested in rehabbing and view it as not only for monetary gain but also see is as an “art and science” like I do. Happy Rehabbing!!

How to Be A Super Property Investor

A FREE, step-by-step guide that will help you become a super real estate property investor. Learn all the basic and some advanced investing techniques that have generated millions for property investors. Ready for download now!

Financial Terms Dictionary – 100 Most Popular Financial Terms Explained

This practical financial dictionary helps you understand and comprehend more than 100 common financial terms. It was written with an emphasis to quickly grasp the context without using jargon. Every terms is explained in detail with 600 words or more and includes also examples. It is based on common usage as practiced by financial professionals.

The Prince by Niccolò Machiavelli

Niccolò di Bernardo dei Machiavelli was an Italian diplomat, politician, historian, philosopher, writer, playwright and poet of the Renaissance period. He has often been called the father of modern political philosophy and political science.

The Science of Getting Rich by W. D. Wattles

This book is pragmatical, not philosophical; a practical manual, not a treatise upon theories. It is intended for the men and women whose most pressing need is for money; who wish to get rich first, and philosophize afterward. It is for those who have, so far, found neither the time, the means, nor the opportunity to go deeply into the study of metaphysics, but who want results and who are willing to take the conclusions of science as a basis for action, without going into all the processes by which those conclusions were reached.

Sun Tzu Art of War

Written in the fifth century B.C., Suntzu and Wutzu still remain the most celebrated works on war in the literature of China. While the chariot has gone, and weapons have changed, these ancient masters have held their own, since they deal chiefly with the fundamental principles of war, with the influence of politics and human nature on military operations; and they show in a most striking way how unchanging these principles are.

Make Extra Money Flipping Houses While On Vacation by Jason Medley

Reveals his simple and proven systems to automate, delegate and outsource nearly every function of his business except cashing his checks. He shows the exact steps that has allowed him to go on multiple vacations with his family throughout the year while having his system continue to flip houses for him.

Achieving Wealth Through Real Estate: A Definitive Guide To Controlling Your Own Financial Destiny Through a Successful Real Estate Business

Have you ever thought about making money with real estate? In Achieving Wealth Through Real Estate: A Definitive Guide to Controlling Your Own Financial Destiny Through a Successful Real Estate Business, author and entrepreneur Kirill Bensonoff takes you through the process of starting your own real estate business step-by-step, featuring his expert tips and tricks.

Business Loans Uncovered

Knowing if you qualify is one of the most important things to know when applying  for a loan of any type. Blindly applying for a loan and being declined increases the chances of you being declined again and again because you not only lower your credit score each time you apply, multiple inquires also serves a red flag to other lenders and as a result lenders put you in a high risk category and charge higher interest rates in the event of an approval Includes: ​Traditional Lenders, Government Sources, The 7(a) loan guarantee program, SBA Low Doc loan program, SBA Express loan program, Factoring, Venture Capitalists, Angel Investors.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Marketing Strategies for Real Estate Photography

One of the biggest problems that real estate photographers have once they have set up their business as a legal entity, obtained all the right equipment and perfected their technique is obtaining new clients.

Clients and customers are the lifeblood of any business, but how do you obtain new clients after starting your business?

By developing and executing a strategic marketing plan tailored to your business.

This short guide has been written to help real estate photographers develop their marketing plan and assist with winning new business.

It includes a series of digital and direct marketing strategies along with useful tips and lessons the author has learned from his own experiences that can save you time and money when growing your business.

A marketing action plan template has been included to help photographers execute the strategies learned in this guide book.

Books by Dr William Edward Deming

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.

Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.

In his book The New Economics for Industry, Government, and Education Deming championed the work of Walter Shewhart, including statistical process control, operational definitions, and what Deming called the “Shewhart Cycle, which had evolved into Plan-Do-Study-Act (PDSA). That was in response to the growing popularity of PDCA, which Deming viewed as tampering with the meaning of Shewhart’s original work.

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in July and August 1950, in Tokyo and at the Hakone Convention Center, when Deming delivered speeches on what he called “Statistical Product Quality Administration”.

Many in Japan credit Deming as one of the inspirations for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war on the road to becoming the second-largest economy in the world through processes partially influenced by the ideas Deming taught

Important Things to Consider When Renting Out Property

To avoid problems, owners should be mindful of the things that can affect the rental value of their property.

Tenant Reference and Employment Checks

This should go without saying, however, too many landlords meet prospective tenants in person and trust them because they are nice and affable people.

Systems Failing and Things Breaking

Have a plan before things break and systems fail. Build relationships with plumbers, electricians, handymen, etc., creating a strong network of vendors that you can trust.

Eviction Rights

Don’t rent to anyone you can’t evict. Who rents your home will make or break your rental income?

Realistic Rent Amounts

Check local rental listings to find out what you can realistically charge. If you want to find a good tenant, the rent must be comparable to the going market rate.

Local Laws

Landlords will be tempted to rent more space than is locally allowed, such as a finished basement that is not approved as a legal unit.

Your Investing Goals

One thing many first-time landlords forget to do is define their investing goals. We certainly did this with our first rental property.

If the Numbers Work

Before you get emotionally invested in the idea of converting your home into a rental, you have to run the numbers.

Condition of The Home’s Maintenance

In assisting a client with finding a rental property, you must consider the condition of the home’s maintenance.

Getting Long-Term Tenants

Consider finding tenants that are interested in longer-term leases as this will save you time and money in the long run.

Renters Insurance

Make sure that the tenants who rent my clients’ properties have rental insurance coverage.

Vacancy Costs

Remember that pricing a property at market rate helps you become cash flow positive sooner and lowers vacancy costs.

Home Warranty Plans

Becoming a landlord? Be sure to pay a few hundred dollars a year on a home warranty plan that covers repair costs with a minimum fee upfront and make the tenant pay the fee each time.

Property Inspection

Getting a property inspection prior to tenants moving in is always a good idea.

Winston Rowe and Associates provides consulting services for commercial real estate investors nationwide. Review them on line a www.winstonrowe.com 

The Difference Between Primary and Rental Mortgages

Winston Rowe and Associates

Primary Mortgage: The primary mortgage is underwritten based on the assumption that your day job income + other alternative incomes will be around so that you can comfortably pay every month. Your W2 income viability is the ANCHOR that propels a bank to move forward and give you a new mortgage. After assessing your W2 income will the bank then account for your alternative income streams if needed?

The most important ratio your bank will look at is your debt to income ratio. They ratio they are generally looking for is roughly 33% or lower. That said, my recent loan modification required just a D/E ratio of 42% or less. Each bank is different. The number one goal for the bank is to earn a consistent spread over the life of the loan.

Rental Mortgage: Your rental property mortgage is underwritten based on the assumption of the feasibility in collecting rental income. The bank then looks at your W2 income to arrive at your total income. W2 income is preferred, however underwriters try to match income sources with the types of mortgages they are lending. The main issue is the viability of your income streams.

If you are refinancing an existing rental property, you’ve got to come up with a lease and rental history. No lease and a sketchy rental history full of missed payments will probably end your rental property mortgage refinance. Rental property mortgages often require a 30% or more down payments compared with your typical 20% down payment for a primary residence.

Risk Reward: It’s all about risk assessment for a bank. From the bank’s point of view, they are making a default assumption that you as the landlord require rental income to pay the mortgage. Even if you have a huge salary and lots of money saved in the bank with the existing institution, the mortgage underwriter does not put as much weight as the rental history of the property. For rental mortgages, they are essentially making a derivative bet.

Last Property Standing: In a housing downturn, the first properties to go are vacation homes followed by rental properties. A primary residence is the last mortgage a multi-property owner will default on since s/he has to live somewhere. The primary home mortgage is presumably more affordable once the multi-property homeowner gets rid of other debt. Banks know this and are more stringent in their rental mortgage lending practices. The last thing a bank wants is to repossess a property. Banks are not in the business of buying and selling properties!

THINK LIKE A BANKER WHEN YOU BORROW MONEY

Now that you understand why a bank places a higher risk on rental properties, you now know why rental property mortgage rates are often 0.5%-1.5% higher than the SAME primary property mortgage rate. Due to higher risk, banks demand a higher return on their investment in you. Banks have tighter lending standards post crisis.

Take my current San Francisco rental for example. My 5/1 ARM rate for a conforming rental loan (<$417,000) is 3.375%. Meanwhile, my 5/1 ARM jumbo primary resident mortgage is only at 2.625%. My primary home mortgage is more than double my rental property mortgage and my rental property income is more than quadruple my rental mortgage interest payments, yet the rental property mortgage is still 0.75% higher.

Source: Financial Samurai

Detroit Emerges From Bankruptcy Today

Click Here For No Upfront Fee Commercial Loans

The city of Detroit’s historic Chapter 9 bankruptcy will end Wednesday, Today setting in motion a sweeping plan to slash $7 billion in debt and reinvest $1.4 billion over 10 years to improve city services.

The Berkshire Hathaway chairman is bullish on the Motor City.

Investing in Detroit, he says, is an increasingly appealing proposition, and will be “much better after the bankruptcy than before.” In part, that’s because the city’s finances were clearly unsustainable before now, and no one wants to invest in a place that’s headed for Chapter 9. But Buffett added that the city is going to be “employing a lot more people five years from now or 10 years from now,” than it does today.

Now the need for alternative sources of capital in the Detroit commercial real estate industry has never been greater.

Winston Rowe & Associates is a capital source that provides flexible, reliable and timely solutions for owners of commercial real estate throughout Michigan.

Detroit Commercial Financing Solutions:

No Upfront or Advance Fees to Underwrite Your Transaction

Loan Amount Starting at $500,000. with no Upper Limit

All Commercial Property Types Considered

Fast Hard Money Bridge Loans

Conventional, CMBS and Private Capital

Whether it’s an initial purchase or a refinance they have the solution for you. Winston Rowe & Associates offers expert friendly service combined with years of experience and will work with clients to find the best solution that fits your needs.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective clients.

They can be contacted at 248-246-2243, or check them out online at http://www.winstonrowe.com

 

The Art of Pre-acquisition Due Diligence

Due Diligence

The use of the word “art” in discussing pre-acquisition due diligence may seem confusing, even odd, to some readers. But just as with constructing an investment thesis and execution plan for a special situations acquisition, there’s an art to executing effective pre-acquisition due diligence.

Every special situations investment opportunity is unique, posing particular transactional, financial, integration, and human behavioral challenges.

As such, the art lies in taking a comprehensive due diligence template and effectively and efficiently customizing it to fit a particular special situations transaction.

Although this article discusses certain technical and technological aspects of executing effective pre-acquisition due diligence, it can’t pretend to teach the art of the process.

The art manifests itself when discussing the theoretical objectives of performing effective due diligence in combination with providing practical examples of certain procedures that result in successful investment decisions.

Theoretically, the fundamental objective of pre-acquisition due diligence is to validate the investment thesis of a particular acquisition or transaction. However, a more comprehensive objective of pre-acquisition diligence exists.

Utilized by certain special situations equity sponsors, these best practice due diligence procedures include investigations, analyses, strategies, and tactics relevant to the people and process decisions necessary to predictably close the transaction and integrate the post-acquisition 90-day business plan.

Although more difficult to execute, especially in scenarios involving uncertain outcomes (e.g., a Chapter 11 Section 363 auction sale), these procedures are essential to forecasting the likelihood of a successful return on investment. An acquisition that integrates pre-acquisition due diligence with a transaction’s closing and initial post-acquisition integration plan has higher levels of predictability and probability of success.

To achieve this requires a distressed investor to develop a comprehensive understanding of the key qualitative and quantitative elements of an acquisition target—past, present, and future—especially as these elements relate to people, products, processes, trends, and markets.

Accurately predicting post-acquisition revenues and variable and fixed costs on both an accrual and cash-flow basis is one of the expected outcomes of executing best practice due diligence procedures.

Achieving predictability is much easier said than done, but experienced special situations investors understand what factors addressed through due diligence drive a post-acquisition forecast.

What are the target’s distinctive capabilities in relation to its competition (e.g., its hedgehog)? Which products and customers, suppliers, internal processes, and people are critical to executing the post-acquisition integration plan? If the investment is an add-on acquisition to an existing industry or product platform, what synergies does it bring to the existing platform?

Understanding key elements enables the acquirer to successfully flex the post-acquisition business plan to predictably exploit economic opportunities, including exit strategies, in both expansion and recessionary scenarios.

Of course, achieving high levels of predictability is impossible unless the numerous people decisions essential to identifying and underwriting the target, closing the transaction, and integrating the acquired asset are properly executed.

What should the decision criteria be for who is on the pre-acquisition team? The transaction closing team? The post-acquisition board of directors and senior leadership team? What should the composition be between the acquiring sponsor’s investment partners vs. operating partners vs. the target’s management team vs. outside professional advisors vs. other players?

These decisions have profound long-term effects on the predictability of an investment’s operational and financial performance, and thus investment values, under a variety of scenarios.
Understanding the respective performance goals for each of these positions; creating criteria and processes for deciding the initial who, what, when, where, and at what price questions; and establishing criteria to score and evaluate the respective performances of the people chosen should be established during the pre-acquisition due diligence processes.

That there is an art to the making these critical people decisions is evidenced by the number of private equity sponsors that engage outside professionals to advise them on these matters.

What America’s $2 Trillion Underground Economy Says About Jobs

Winston Rowe & Associates Online

Doing what they can to survive in a dour job market, millions of Americans exist in an underground economy that has ballooned to $2 trillion annually.

By “underground economy,” we’re talking about all the business activity that is not reported to the government, which includes a growing number of people getting paid for their labor in cash.

That means the shadowy figures of the underground economy – the drug dealers and Mafia godfathers, for example – now have a lot more company.

But most of these new participants in the underground economy are ordinary hard-working Americans who are increasingly taking jobs that pay “under the table” either because nothing else is available or they need a second source of income to make ends meet.

America’s underground economy is nothing new, but since the Great Recession hit, experts estimate it has doubled in size, driven by unemployed or underemployed people desperate for income.

Paying workers off the books also has great appeal to employers, who then can avoid paying benefits and, starting next year, some of the costs imposed by the Obamacare law.

“It’s typical that during recessions people work on the side while collecting unemployment,” Bernard Baumohl, chief global economist at the Economic Outlook Group, told The New Yorker. “But the severity of the recession and the profound weakness of this recovery may mean that a lot more people have entered the underground economy, and have had to stay there longer.”
Who Lives in America’s Underground Economy?

Some of the folks who’ve become trapped in the underground economy have been there for years, such as construction workers, childcare workers, illegal aliens and housekeepers.

People who do such service jobs often get paid partly or entirely under the table. The huge job losses caused by the Great Recession forced more people to switch to service jobs.

Many long-term unemployed people have struggled to survive by taking odd jobs, for which they almost invariably get paid in cash.

But the biggest contributor to the underground economy in the past few years has been employers increasing their use of freelancers or “independent contractors” – even many who actually work full-time.

The weak U.S. economy has already given businesses plenty of incentives to cut costs by paying workers under the table. But the arrival of Obamacare Jan. 1 – particularly rules that requireemployers with 50 employees or more to offer health insurance while allowing them to avoid offering plans to part-timers — will give them even more.

“This type of regulation could put more people out of work and into an underground economy,” Peter McHenry, an assistant professor of economics at the College of William & Mary, told CNBC.

It’s a sea change in how businesses traditionally have hired, and if it sticks through a recovery of the U.S. economy, it will have grim implications for American workers.

“Businesses are not angels, and they exist to make a profit,” Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver, told CNBC. “They are going to do everything they can to keep costs down, and if that means paying people off the books, they will do it. The government doesn’t really have the resources to track down every business that does this.”
A Crash Bigger than 2008
Watch the full presentation.
What the Underground Economy Costs

The rapidly growing amount of unreported wages in the U.S. is costing the nation billions in lost tax revenue.

The Internal Revenue Service estimated that the losses from unreported wages have grown from about $385 billion in 2006 to about $500 billion last year.

State governments lose another $50 billion to the overall underground economy.

That means the people who play by the rules are getting a raw deal.

Benefits of Managing Your Own Commercial Properties

WINSTON ROWE AND ASSOCIATES ONLINE

Investing in commercial real estate can be a very profitable venture – if you find a building for the right price, with good potential cash flow and in a good investment location. If the location is not desirable, it won’t matter if you have the nicest building on the block or offer the most amenities for the lowest rents.

You need to crunch the numbers to make sure you have a profitable investment.

Winston Rowe & Associates, a national advisory and due diligence firm specializes in structuring; acquisition, refinance and portfolio repositioning of large and small commercial buildings.

They have prepared this knowledge based news article to provide current and prospective commercial real estate investors with a strategy of managing you own properties.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective client’s 248-246-2243.

They also have many other solutions that meet almost every need. Check them out online at http://www.winstonrowe.com

Cost of a Property Manager

Some property owners decide to hire a management company to handle their commercial property, which can provide several benefits, but may wonder if the outcome is worth the cost.

Most property management companies charge between 5 to 10 percent of the rental fee.

To avoid paying the fee, a property owner can handle the same services and improve the return on investment.

Marketing

You can use advertising locally and online to find an appropriate tenant. Placing a “For Rent” sign outside of the property that includes basic details may be effective. An ad in a local weekly publication or flyers distributed in the area can also generate interest.

Placing an ad on Craigslist or another online website or publication may also be a good option. Finding a responsible tenant can be one of the most key steps in making your rental experience profitable.

Screening

Screening a potential tenant to your comfort level may involve a credit or background check, and a tenant application. When meeting the prospective renter in person, engage in a discussion with them to establish rapport and use your best judgment with the following goals in mind that can increase your return on investment give you fewer headaches:

The property will be well-kept and therefore require fewer repairs and maintenance.

Rent will be received on time.

The lease could extend beyond the first year.

Legal Issues

Taking a class that reviews real estate and rental property legal issues will help you avoid complications, such as observing discrimination laws during tenant application and screening, drafting a secure lease agreement and minimizing risk in the property and on its grounds.

Timely Maintenance and Repairs

Handling repair and maintenance requests quickly can maintain a positive owner-tenant relationship and can prevent smaller repairs from growing and becoming costly expenses.

You may need to find a maintenance and repair and HVAC company to retain for standard and emergency repairs. Read about preventive maintenance requirements

Winston Rowe & Associates has some of the most aggressive rates and terms available, while managing every step of the financing process from document collection to commitment negotiation and closing.

 

National Housing Markets Improving Slowly By Winston Rowe and Associates

WINSTON ROWE AND ASSOCIATES ONLINE

Markets in 56 of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released this week. This represents a year-over-year net gain of seven markets.

 

The index’s nationwide score moved up slightly to .89, meaning that based on current permit, price and employment data, the nationwide average is running at 89 percent of normal economic and housing activity. Meanwhile, 78 percent of markets have shown an improvement year-over-year.

 

“Things are gradually improving,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “As the job market grows, we expect to see a steady release of pent up demand of home buyers.”

 

Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.39 – or 39 percent better than its last normal market level. Other major metros leading the list include Honolulu; Oklahoma City; Houston and Austin, Texas. Rounding out the top 10 are Los Angeles; San Jose, Calif.; Salt Lake City; Des Moines; and New Orleans.

 

“With the national tally only reaching 43 percent of normal, single-family housing permits continue to be the lagging component of the index,” said NAHB Chief Economist David Crowe. “The big bright spot is employment, where the number of metro areas having reached or exceeded their norms grew from 26 to 46 in a year.”

 

“In the 22 metros where permits are at or above normal, the overall index indicates that these markets have fully recovered,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. “This finding shows the impact that an uptick in permits can have on the overall health of markets.”

 

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning their markets are now at double their strength prior to the recession. Also leading the list of smaller metros are Bismarck, N.D.; Grand Forks, N.D; and Casper, Wyo., respectively.

 

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

 

In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. The LMI is published quarterly on the fourth working day of the month, unless that day falls on a Friday — in which case, it is released on the following Monday.

OFFICE BUILDING MORTGAGES AND FINANCING – NO UPFRONT FEES

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Commercial Office Building Financing

With a commitment to quality Winston Rowe & Associates is becoming a recognized leader as an office building financier.

In these times of tightening credit, it is more important than ever to have a specialist working to secure the office building financing you need. Winston Rowe & Associates specializes in difficult to place loans, providing private funding solutions when needed, and securing institutional financing.

Winston Rowe and Associates success is measured by their clients’ success, and their mission is to be your source for the most appropriate and advantageous office financing solution that helps you achieve your goals.

Office Building Financing Terms:

No Upfront or Advance Fees
Capital Deployment Nationwide
Loan Amounts Starting at $1 MM
Purchase, Refinance & Cash Out
No Recourse Available
Joint Venture
Interest Only Option
Hard Money that can close in 10 Days

Winston Rowe and Associates can assist in financing for new acquisitions or refinancing for both single tenant and multi tenant office buildings whether the borrower is seeking the lowest rate, highest leverage, no prepayment penalty, or a long-term fixed rate.

Office building mortgages, due diligence and advisory services are provided in all 50 states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Zillow Launches New App

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Zillow, the leading real estate and home-related marketplace, just launched the Postlets® App for iPhone® and iPad®.

Postlets is a free listings creation and distribution tool, and is owned by Zillow®.

With the new Postlets App, users can distribute their rental listings to more than 20 of the top real estate and rental sites on the Web and mobile and easily share them on social media sites, all with the touch of a finger.

The app, specifically for rentals, allows landlords, property managers and real estate agents to quickly create, distribute and manage their rental listings on the go, and eliminates the cumbersome trudge back to the office desktop.

Postlets is the path for posting rental listings to the Zillow Rental Network, which includes Zillow.com® (the largest rental site on the Webi), Zillow Mobile, HotPads„¢, Yahoo!® Homes, AOL Real Estate, and HGTV®’s FrontDoor®. Postlets also makes it easy to publish and manage rental listings to other top rental sites on the Web.

With the Postlets App for iPhone and iPad, landlords and property managers can:
Upload an unlimited number of photos.
Specify available amenities and write descriptions on the spot.
Instantly publish rental listings to the most popular rental sites on the Web.
Instantly share rental listings on Facebook and Twitter.
The Postlets App is available for free from the App Store on iPhone and iPad or at http://postlets.com/iOS.

How To Retire Early Investing In Apartment Buildings

MULTIFAMILY LENDERS WITH NO ADVANCE FEES

We all work hard at our J.O.B., don’t we? We work hard each day and hope to retire when were 65, that’s the American dream, right?

Many of us are looking for something better, maybe a scenario where we can retire earlier or perhaps enter a state of semi-retirement. The answer: investing in apartment buildings.

Imagine working really hard to find a good building at a fair price, putting the financing together, and hiring a property manager to run the whole thing. Was that a lot of work? Of course. But don’t you work hard anyway? Here’s the difference….

Apartment Ownership – What’s It Really Like?

Imagine the day you close on the building and your property manager takes over. Ask most apartment building owners, and they will say they spend anywhere between 2 and 5 hours per week on their building if its managed by a professional management company.

What have you done? You went from a job that took 40-50 hours of your time each week to one that takes a fraction of that. And you replaced part or all of the income of your job with that from the apartment building.

You’re working less while maintaining your income.

What would this mean to you? Maybe you could spend more time with your family. Maybe you want to travel more. Pursue a hobby. Give back. Or maybe do more de”als.

How is something like this possible with apartment buildings? The answer is in how apartment buildings are valued.

How Do you Make Money On Apartment Investments?

The value of an apartment building is driven by its net operating income, the amount of income left after all expenses are paid. The more money the building spits out after all expenses, the more its worth.

In many parts of the country, a building is worth 10 times its net operating income. This 10 times multiplier is referred to as the capitalization or cap rate for short. Don’t worry about this for now – its not important to the point I’m trying to make. Lets just use a cap rate of 10 for our discussion.

Lets say a building has a net operating income of $100,000, which would make it worth $1M. If you could somehow make the building generate $10,000 more each year, maybe by increasing rents or decreasing expenses, you would have generated $100,000 in value (a cap rate of 10 times the additional income of $10,000 is an additional $100,000 in value).

Lets look at a more specific example, so that you can start visualizing how this math could work for you in real life.

Assume you bought a 10-unit building for $540,000, and you had to put 30% down. The building was bought at a 10-cap based on our formula we’ve used so far. Which means its net operating income (or NOI) is $54,000 per year, times our cap rate of 10 is $540,000. The income per unit is $1,000, and the expenses are 55% of the income. The building is in great shape and has been managed by the owner himself.

So far there is nothing special about this deal.

However, suppose you found out that the average market rent in the area is actually a $200 higher per month. Suppose further that you meet a property manager who manages two similar buildings in the area, and he tells you that his expenses are only 45% of income.

Lets say it takes us 3 years to get the building to where it should be, i.e. with each unit bringing in $1,200 per month and lowering our expenses to 45% of income. Here’s how this would impact our financials:

By making small improvements each year, we have added $25,000 to our Net Operating Income. What is our value now?

Our new NOI is $79,000, so our value now is about $790,000 ! That is an increase of $250,000 in three years! Isn’t that incredible?

But that’s not all.

You also had between $2,600 and $4,700 in monthly income from this building over those three years.

 

Led By Multifamily, Improvement Seen in All Commercial Real Estate

NATIONAL APARTMENT LENDERS ONLINE

Despite disappointing economic growth during the first quarter of 2014, the outlook for all of the major commercial real estate sectors is slightly improving, according to the National Association of Realtors® quarterly commercial real estate forecast.

Lawrence Yun, NAR chief economist, said the sluggish growth experienced in the first quarter is not indicative of the actual health of the economy. “Gross Domestic Product should expand closer to 3 percent for the remainder of the year. The improved lending for commercial loans and continuing job gains we’ve seen this spring bode well for modest progress in commercial real estate leases and purchases of properties.”

However, Yun cautions that with rising long-term interest rates on the horizon, consistent economic growth is imperative to solid commercial real estate investment in the years ahead.

Multifamily has led the way. “The multifamily sector continues to be the top-performer in commercial real estate with the lowest vacancy rates. However, tight availability – despite new construction – is causing rents to currently rise near 4 percent annually in many markets,” said Yun. “Many renters who are getting squeezed may begin to view homeownership as a more favorable, long-term option.”

NAR reported earlier this month in its annual Commercial Member Profile that despite subpar economic expansion, Realtors® who practice commercial real estate saw an increase in sales transaction volume and medium gross annual income in 2013.

NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.

Multifamily Markets

The apartment rental market – multifamily housing – should see vacancy rates edge up from 4.0 percent in the second quarter to 4.1 percent in the second quarter of 2015, with added supply helping to meet growing demand. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.

Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.3 percent; Ventura County, Calif., 2.4 percent; and New York City; San Diego; Hartford, Conn.; Oakland-East Bay, Calif., and San Diego, at 2.5 percent each.

Average apartment rents are projected to rise 4.0 this year and in 2015. Multifamily net absorption is expected to total 221,400 units in 2014 and 173,100 next year.

Commercial Real Estate Market Trends – Due Diligence Tips

NO UP FRONT FEE COMMERCIAL LOANS

 

Winston Rowe and Associates prepared this article to provide commercial real estate investors with information concerning due diligence investigations for commercial real estate transactions.

 

Commercial real estate investors have been turning to Winston Rowe & Associates they are a national no upfront fee finance firm.

 

Winston Rowe and Associates can guide you through the process.

 

Due Diligence Tips

Local Pricing – Fluent in the latest real estate market trends, investors know in-demand commercial real estate markets, areas that offer rapid price acceleration and what’s a smoking hot good deal. Local newspapers, real estate agents and even courthouses that regularly record property deeds are all excellent sources of information, offering great insight into property value trends.

 

Catalyst – New infrastructure is often the precursor to up-and-coming areas. New roads and schools are signs that community growth is anticipated. Investing in new communities often means lower initial tax rates. Spotting these communities can be as simple as paying attention to new traffic lights, survey crews, land clearing and traffic lanes widening. Local building and transportation departments are also aware of new projects.

 

Taxes – If two identical towns were situated side-by-side, commercial real estate investors would choose to invest in a community that offers lower taxes. Real estate investors can take advantage of public information by contacting local tax assessors to inquire about tax rates and potential reassessments. Communities that are already at a maximum capacity for population may be planning to increase taxes to pay for more schools, roads and local infrastructure.

 

Schools – Investors need to invest in areas that are well rounded. The state boards of education provide updated information about school rankings. Good schools are an attractive selling point for parents and families.

 

Outskirts – As large metropolitan areas continue to grow, the outlying surrounding areas will continue to grow too. Often times, these outlying areas provide more affordable housing alternatives. Real estate investors should research areas that are close to public transportation. Additionally, public transportation expansion is often a key sign that areas may be gearing up for additional growth.

 

They are a national no upfront fee commercial hard money firm offering fast, flexible private money loan solutions. Winston Rowe and Associates has aggressive capital solutions that underwrite, fund with the flexibility to quickly structure the right loan package for your needs.

 

Winston Rowe and associates has commercial hard money loan solutions in the following states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

How To Find Hard Money Real Estate Capital

WINSTON ROWE AND ASSOCIATES

 

Finding the right real estate deal may seem like a most daunting task to an inexperienced investor but more seasoned ones know that there is an excellent alternative to traditional lending institutions – private or “hard” money. In fact, hard money offers some distinctive advantages to the funds provided by banks, savings & loans, and other traditional lending institutions.

Here are just three:

Hard Money Advantage #1: Enhanced Versatility

The most advantageous aspect of hard money loans is their versatility, since the loans are made by accredited investors – who make decisions about their money on their own – there is no need to jump through hoops of traditional lending institutions with their subjective loan criteria and their loan approval boards. Instead, if a lender and borrower can agree on terms, the deal can be consummated in a legally binding and very secure way.
Hard Money Advantage #2: Superior Security

Hard money loans are always secured by a first deed trust with a relatively low loan to value ratio. While these facts certainly benefit the lender, they are also useful to the borrower as he can be sure that his payments will be at an affordable level. Secondly, hard money loans are consummated with all the same protections as a traditional mortgage including appraisals, inspections and legally binding contracts.
Hard Money Advantage #3: Lowered Costs

Most homeowners don’t realize the amount of fees that are built into the closing costs of the home they are about to buy. The bank just calls them and tells them to bring a check. While these fees are “disclosed” in a mass of paperwork at the closing, they are simply identified and not really explained. This is how traditional lending institutions make the bulk of their money in real estate. Hard money loans, on the other hand, are made by investors who will see their returns come from the payments on the loan over time. You are always aware and in control of the origination fees, and can shop around for the hard money lender who will charge you the least amount of points and processing fees. The result is simply that less money is required to consummate the deal.

Tips For Finding Off Market Real Estate Investment Deals

REVIEW WINSTON ROWE AND ASSOCIATES ON LINE

Off market real estate deals whether you’re looking for real estate for sale by owner or bank-owned properties, off market deals are frequently the best ones. Here are some strategies that can help you find them:

Off Market Real Estate Tip #1: Property for Sale By Owner

While FSBO pricing has improved with the availability of Internet data sources, it still isn’t always as spot-on-the-market as the list price that a qualified real estate agent will come up with. As such, you might find some FSBO deals that are under priced relative to other properties in the market.

Dealing directly with the owner may also give you additional negotiating leverage that you can use to turn even an overpriced property into a great deal.

Off Market Real Estate Tip #2: Expired Listings

When real estate that was listed expires, sometimes, the owner still wants to sell it. Furthermore, once real estate goes off the market, you can go directly to the owner and make an offer that is less than what he needed to get when he had to pay an agent.

These properties can turn into very good deals just on the basis of that discount alone.

Off Market Real Estate Tip #3: Know Area Lenders

While most conventionally-mortgaged homes end up going through Fannie, Freddie or Ginnie Mae’s sale process, properties that have loans held by local banks or private lenders have a much less predictable sale process.

Sometimes, you can contact the lender directly while the property is in foreclosure and carve out a position for yourself before the real estate goes on the market. Getting to know the realtors that work with private lenders can also give you a leg up.

Off Market Real Estate Tip #4: Contact Owners Directly

Another way to find property for sale by owner is to contact owners directly. When you do this by calling or writing and delivering the straightforward message that you are willing to buy the property, you can not only potentially avoid brokerage fees, but you can also avoid competition and maybe save money.

Success Strategies For Commercial Real Estate Investing

WINSTON ROWE AND ASSOCIATES REVIEW ON LINE

 

There are two different types of real estate investors: those that are speculative and take higher risks and those that are more conservative and desire safe, long-term investments.
While speculative investing can be fun and exciting, it can also result in financial ruin. It is necessary that speculative investors thoroughly analyze investments before committing to property purchases.

The most common formula used in commercial real estate investment properties is the capitalization rate. Otherwise simply known as CAP, this rate compares a property’s annual income, factoring in operating and vacancy expenses, and ultimately equates this in net operating income (NOIP) terms, comparing sales price ratios. The CAP rate does not reflect the individual investment’s return percentage, but if no financing is involved, the CAP rate will be relatively close in number.

The CAP rate can be found by dividing the NOI by the price or value of the property. This number is expressed as a percentage. Many banking institutions and hard money lenders focus on the CAP rate when lending money to investors.

If a property investment has long-term tenants, lengthy leases and limited commitment for landlords (low building maintenance costs and repairs), then it may be sufficient for an investor to accept a lower CAP rate. If a property, however, has unstable tenants and a volatile local real estate market, a higher CAP rate is reflected. A higher CAP rate reflects a higher investor risk.

There are five factors that define good commercial real estate investments.

Income – Commercial properties produce income. Stockholders only see income when stocks are sold; however, real estate investors receive income through rent payments.

Capital Appreciation – This financial concept revolves around if rent prices increase, then property values by default also increase.

Leverage – With nearly 70- to 80-percent of commercial property funding in the form of mortgages, investors are able to free up other capital for additional investments.

Security – While stocks are based on the simple price-to-earning concept, real estate is based strictly on demand.

Diversity – Commercial properties often house diverse tenants, ranging from grocery stores, clothing vendors, restaurants and gift shops to retail businesses. This allows landlords to diverse their holdings, not putting all of their eggs in a single basket.

Success Tips for using LinkedIn

WINSTON ROWE AND ASSOCIATES WEB SITE

 

Winston Rowe & Associates is a national non investment due diligence and advisory firm with a core focus of assisting clients with the structuring complex commercial real estate transactions.

 

We have prepared this knowledge based article to help business professionals to utilize LinkedIn to grow their businesses and to build professional social networks.

 

Many people set up a profile, connect with some friends, and then leave it at that. Another class of LinkedIn users are much more active, but perhaps too active, spamming their connections and LinkedIn groups with get-rich-quick schemes or articles, the posting of which is designed more to bring attention to the one doing the posting than to provide any true value to LinkedIn users.

 

Effective Communication

 

Connecting and effectively communicating with people through LinkedIn is no different than dealing with people outside of the network. Whether they are a supplier, potential partner or customer you need to build enough value for them to trust you in order for them to grow an interest in your company and therefore your product/service.

 

I can’t recall how many times I have accepted a connection invite from someone to then receive an email marketing spiel about who they are, what they can do for me and how much it is going to cost me. Oh and I forgot to mention that none of this was addressed to me personally, no name at the top of the email.

 

To be successful on LinkedIn and in business overall you have to add value first. Just because they accepted your connection invite doesn’t mean they are interested in what you have to say, remember this quote: “To be interesting you have to be interested.”

 

Before you start emailing marketing to your contacts, think of a few ways you could add value to them. For example it may be that within your connections there are about 100 accountants of whom you have recently connected and would like to potentially partner with. Your first email could be a sending a link to a recent article knowledge based article that you published. This shows you were thinking of him/her. Your second email could be a FREE EBook you have found that helps accountants generate more business etc.

 

This will help develop the trust and rapport necessary between your connection so that when you contact them to hold a meeting they not only recognize you but most importantly interested.

 

Building Your Connections

 

Building your connections for the sake of having a large following is not really a sound strategy if you want to effectively grow your business using LinkedIn. Every connection needs to be linked to your goals and objectives in business both now and in the future.

 

Before growing your network on LinkedIn take a step back and think about some of the goals you would like to achieve within your business over the next year or so. With these goals in mind now think about who you need to connect with in order to help you achieve those goals. For example when I first started using LinkedIn I just launched my business advisory service and given I had no personal brand other then my results in business I knew this was one of the areas I needed to develop.

 

And as many of you would know one way to build your brand is through PR. With this goal in mind I then connected with over 500 journalist, editors and bloggers online and in a space of a couple of months I managed to get featured in over 40 publications and now write for a few business magazines.

 

Segmenting your connections

 

I learnt the importance of segmenting your connections the hard way. Within my first 6 months of using LinkedIn I had connected with over 1000 people within 3 different industries: Media, Accounting & Events.

 

My aim was to use the media contacts to get some PR exposure, accounting connections to create a few joint venture relationships and connections within the events industry to hopefully get some speaking gigs.

 

There was just one problem though: All my connections were mixed in with one another, not by choice but by default. You see, little to my knowledge I wasn’t aware that all new connections are automatically tagged under a folder which LinkedIn calls: Untagged.

 

I knew that in order for me to reach any level of success I would have to personalize my communication and because I could not properly assess who was who quickly within the tags section I had to go through the entire (1000) connections in the untagged folder and re-tag them accordingly.

 

Whilst it was tedious and frustrating at the best of times it was also very empowering. By the end of the process I knew precisely how many connections I had in each industry, which therefore helped me effectively, communicate my message.

 

NO UPFRONT FEE COMMERCIAL REAL ESTATE FINANCING AND INVESTING

WINSTON ROWE & ASSOCIATES WEB SITE

 

Winston Rowe and associates is presenting this third quarter market update to assist and inform real estate investors nationwide.

Whether you are in need of short term financing such as a private capital, private equity and traditional permanent financing, they work with clients to structure a transaction that will meet or exceed their expectations. They have capital to deploy nationwide.

Prospective clients can review Winston Rowe and Associates at http://www.winstonrowe.com or they can be contacted at 248 246 2243. A principal is always available to take your call.

FreddieMac’s current Multi-Indicator Market Index SM (MiMiSM) shows the U.S. housing market overall largely flat compared to the prior month and especially since last year at this time.

Of those markets that are improving or experiencing a stable range of housing activity, most are benefiting from the energy boom taking place along the country’s mid-section.

Figures indicate a weak housing market overall with only a slight improvement from February to March and a 3-month flat trend. However, on a year-over-year basis, the U.S. housing market has improved by 0.66 points. The nation’s all-time MiMi low of -4.49 was in November 2010 when the housing market was at its weakest.

Ten of the 50 states plus the District of Columbia are in their stable range with North Dakota, Wyoming, the District of Columbia, Alaska, and Louisiana ranking in the top five and unchanged from last month.

Four of the 50 metro areas are in their stable range, San Antonio, New Orleans, Austin and Houston.

The five most improving states month-over-month are Ohio (+0.12), Rhode Island (+0.11), Illinois (+0.10), Texas (+0.10) and South Carolina (+0.09). From one year ago the most improving states remained unchanged: Florida (+1.83), Nevada (+1.60), South Carolina (+0.99), California (+0.97) and Texas (+0.96).

The five most improving metro areas month-over-month are Cincinnati (+0.11), Columbus (+0.11), Houston (+0.10), Riverside (+0.10), and San Antonio (+0.10). From one year ago the most improving metros remained unchanged: Miami (+2.37), Orlando (+1.91), Las Vegas (+1.71), Tampa (+1.57), and Riverside (+1.44).

Overall, in March, 13 of the 50 states plus the District of Columbia are improving based on their three month trend, and 20 of the 50 metros show an improving trend.

“Less than half of the housing markets MiMi covers are showing an improving trend, whereas at this same time last year more than 90 percent of these same markets were headed in the right direction. We’re hopeful that many of these markets that have stalled will start moving again now that mortgage rates have eased over the past month and the spring home buying season is upon us. House price gains are a double-edged sword at this stage of the recovery. They help those hard-hit markets where prices are still low and many homeowners are underwater, but in areas where supply is constrained, they’re creating an imbalance and pricing out many first-time homebuyers.”

MiMi monitors and measures the stability of the nation’s housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 50 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on time mortgage payments in each market, and the local employment picture.

The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.

At Winston Rowe & Associates, their primary objective is to provide the most reliable and efficient means of sourcing both debt and equity for your commercial real estate loans. Recognizing that people and relationships drive this business, they are staffed with some of the industry’s most committed professionals.

Winston Rowe & Associates provides no upfront fee commercial bridge financing in the ensuing states.
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Investing In Commercial Real Estate

WINSTON ROWE AND ASSOCIATES WEB SITE

There’s an old joke in commercial real estate: If you think nobody cares you’re alive, just miss a few mortgage payments.

Unfortunately, there was a lot of that going on during the credit crisis that started in 2008, as commercial real estate values went into a freefall.

According to the Massachusetts Institute of Technology Center for Real Estate, commercial property values fell by 10.6% in the fourth quarter of 2008, alone – the biggest price drop since 1984.

But to savvy real estate investors, times of lower prices typically reveal genuine investment opportunities. For instance, according to a survey by Marcus & Millichap Real Estate Investment Services, of 1,129 commercial property investors, 51% planned to increase commercial real estate allocations during the 2008 credit crisis.

So, despite the significant drop-off in acquisition plans from the peak in 2005, more than half of investors still planned to increase their commercial real estate holdings. A mere 11% planned to reduce their real estate portfolios in 2009.

Finding a Good Commercial Real Estate Deal

Ask any real estate professional about the benefits of investing in commercial property and you’ll likely trigger a monologue on how such properties are a better deal than residential real estate. Commercial property owners love the additional cash flow, the beneficial economies of scale, the relatively open playing field, the abundant market for good, affordable property managers and the bigger payoff from commercial real estate.

But how do you evaluate the best properties. And what separates the great deals from the duds?

Like most real estate properties, success starts with a good blueprint. Here’s one to help you evaluate a good commercial property deal.

Learn What the Insiders Know

To be a player in commercial real estate, learn to think like a professional. For example, know that commercial property is valued differently than residential property. Income on commercial real estate is directly related to its usable square footage. That’s not the case with individual homes. You’ll also see a bigger cash flow with commercial property.

The math is simple: you’ll earn more income on multifamily dwellings, for instance, than on a single-family home. Know also that commercial property leases are longer than on single-family residences.

That paves the way for greater cash flow. Lastly, if you’re in a tighter credit environment, make sure to come knocking with cash in hand. Commercial property lenders like to see at least 30% down before they’ll give a loan the green light.

Map Out a Plan of Action

Setting parameters is a top priority in a commercial real estate deal. How much can you afford to pay? How much do you expect to make on the deal? Who are the key players? How many tenants are already on board and paying rent? How much rental space do you need to fill?

Learn to Recognize a Good Deal

The top real estate pros know a good deal when they see one. What’s their secret? First, they have an exit strategy – the best deals are the ones where you know you can walk away from. It helps to have a sharp, landowner’s eye – always be looking for damage that requires repairs, know how to assess risk and make sure to break out the calculator to ensure that the property meets your financial goals.

Get Familiar With Key Commercial Real Estate Metrics

The common key metrics to use for when assessing real estate include:

Look for Motivated Sellers

Like any business, customers drive real estate. Your job is to find them – specifically those who are ready and eager to sell below market value.

The fact is that nothing happens – or even matters – in real estate until you find a deal, which is usually accompanied by a motivated seller. This is someone with a pressing reason to sell below market value. If your seller isn’t motivated, he or she won’t be as willing to negotiate.

Discover the Fine Art of Neighborhood “Farming”

A great way to evaluate a commercial property is to study the neighborhood it’s located in by going to open houses, talking to other neighborhood owners, and looking for vacancies.

Use a “Three-Pronged” Approach to Evaluate Properties

Be adaptable when searching for great deals. Use the internet, read the classified ads and hire bird dogs to find you the best properties. Real estate bird dogs can help you find valuable investment leads in exchange for a referral fee.

The Bottom Line

By and large, finding and evaluating commercial properties is not just about farming neighborhoods, getting a great price, or sending out smoke signals to bring sellers to you. At the heart of taking action is basic human communication. It’s about building relationships and rapport with property owners so they feel comfortable talking about the good deals – and doing business with you.

INVESTING IN COMMERCIAL REAL ESTATE

WINSTON ROWE & ASSOCIATES WEB SITE

Real estate investing has been around for centuries, but the factors shaping today’s real estate investment market and the strategies that work to succeed as an investor are markedly different than they were just 5 or 10 years ago. However, below are five sustainable real estate investment tips that can help you prosper as a real estate investor no matter what shape the market is in.

#1 – Invest in undervalued rental property on the fringes of desirable neighborhoods. Rental properties located in lower to middle income area on the edge of more desirable neighborhoods typically sell for half the cost — or less! — of similar properties in bordering areas, but rent for about the same price. Your property has the potential of delivering a return of twice or more than the initial investment.

#2 – Don’t speculate. Invest in properties with proven cash flow. With speculative investing, you are left hoping and waiting for the property to increase in value. And sometimes, this just never happens. Investing in middle to lower homes allows you to greatly increase your chance of having guaranteed profits because as the economy improves, lower class families move up to better homes and during economic downturns, middle class families move to lower cost properties.

#3 – Increase the security deposit and decrease your risk. Two of the most costly problems for rental property investors are unpaid rent and risk of property damage. Raising your security deposit will help protect your profits and it will also help you attract more qualified renters.

#4 – Rethink your tenant pool. Most rental owners shy away from renting to families with children and pets because they are afraid of the wear and tear on their property. But this is a mistake you should avoid. Families tend to be more responsible and take better care of the house, plus they already expect to pay higher security deposits and are actually the most likely group to become long term tenants because they have trouble finding other landlords willing to rent to them

#5 – Communication is key. Negotiation skills are essential in real estate investing but instead of focusing on getting only what you want, work towards win-win solutions that let others know you have taken the time to understand their needs as well. Listen carefully and determine what is most important to the person you are communicating with. With practice, you’ll learn how to develop win-win deals that provide solutions to other people’s problems and lead to your own personal financial gain.

Review of Winston Rowe and Associates Commercial Real Estate Financing

Free Book Review

Announcing , The Free eBook Commercial Real Estate Finance published by Winston Rowe & Associates  discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

It will enable you to make the right decisions when it comes to commercial properties. After you have read this book, you will be able to successfully choose a commercial property for your real estate business.

This book will help you to figure out everything that has to do with commercial properties. Also included with this book are different ideas on what you can do to make sure that you are getting the best financing possible. You will be able to truly enjoy the opportunities that come along with financing and with the different options that you have.

It’s loaded with all the check lists you’ll need to conduct your due diligence to avoid a bad investment. There are detailed descriptions of the various types of capital sources and how to prepare and submit your financing proposal.

You will need to make sure that you can secure financing but it is not a cut and dry experience for everyone. The tips that are included with this book will give you the best chance at getting financing.

 

 

Non-Recourse Commercial Loans And Standard Carve Outs

The common understanding of a non-recourse commercial real estate loan is that an individual has little to no personal liability should a default occur. However, this isn’t always the case. An individual signing on behalf of the borrowing entity, Sponsor, isn’t always immune from personal liability.

Non-recourse loans have exceptions within the loan documents that essentially transfer personal liability to the Sponsor for certain “bad boy” behaviors. Or more specifically, there are personal guarantees required with non-recourse loans.

Not only is the Sponsor personally liable for bad boy behaviors, individuals or entities providing limited guaranties or indemnification can still be liable.

Typical exceptions include:

Losses for fraud or intentional misrepresentation

Losses for waste

Losses for misappropriation of tenant security deposits or rents

Specific performance of the loan documents

To foreclose and obtain title to the collateral

To enforce any guaranty

To enforce any indemnity

To enforce any environmental indemnity

To enforce any release of liability

To obtain a receiver

To enforce the assignment of leases and rents

Losses regarding required insurance of the collateral

Losses from the failure to pay over insurance proceeds

Losses from the failure to pay over condemnation awards

Voluntary bankruptcy or insolvency

Involuntary bankruptcy or insolvency

While these are typical carve outs, each lender’s loan documents will differ and each state will have their own “legal” interpretation of these carve outs.

Examples where carve outs can affect Sponsor liabilities include:

The lender may be able to sue the Sponsor if fraud or material misrepresentation affects the selling price of an asset creating a deficiency of proceeds to cover the loan.

Losses for misappropriation of tenant security deposits or rents: The lender can pursue its rights to the security deposits or rents as additional security under the loan documents. If the security deposits or rents are unavailable, then the lender is left with seeking a personal judgment against the borrower for the missing security, and the lender could pursue tort claims such as for conversion.

Additionally, rent skimming is using revenue from the rental of residential real property at any time during the first year after acquiring the property without first applying the rent (or an equivalent amount) to the mortgage payments.

To enforce an environmental guaranty: An environmental indemnity will survive a non-judicial foreclosure sale. A lender may sue for money or to enforce an “environmental provision” (a representation or covenant concerning hazardous substances) without violating a state’s anti-deficiency laws.

To enforce any release of liability: A release of liability should survive a non-judicial foreclosure sale because a release has nothing to do with obtaining a deficiency, or otherwise trying to enforce a monetary obligation of the Sponsor.

To enforce the assignment of leases and rents: In the event of a non-judicial foreclosure, the lender can still obtain pre-sale rents held by a receiver under an assignment of rents clause, up to the amount of the deficiency, since the assignment of rents is treated as additional security. (Simply suing the Sponsor prior to the non-judicial foreclosure sale for enforcement of the assignment of rents and lease provisions of a deed of trust is also allowable).

Losses regarding required insurance of the collateral: Insurance proceeds are treated as additional security that is available to the lender. The lender can seek a personal money judgment against the Sponsor for its breach of the loan documents.

Losses from the failure to pay over insurance proceeds: After a non-judicial foreclosure leaving a deficiency the lender can seek to recover insurance proceeds to which it is entitled under the loan documents. If recovering the proceeds from the Sponsor proved impossible, then the lender is left with seeking a personal judgment against the Sponsor for the missing proceeds. The lender could sue in tort for conversion.

While it seems non-recourse commercial loans have “teeth” when it comes to personally liability, it may not always be the case. In the event of a non-judicial foreclosure, if the lender bids at the sale and obtains the property, or if someone else purchases the property, the amount of bid must be deducted from the amount owing. If there is no deficiency, the lender has little recourse attempting to enforce any of the bad boy carve outs. Additionally, the lender will always need to prove its actual losses directly caused by breach of any bad boy provision.

Buyers of Commercial Notes National Report

 

Winston Rowe & Associates is actively acquiring commercial real estate notes nationwide. They have a core focus on both performing and non performing acquisitions starting at $5,000,000. through $100,000,000.

What makes their acquisition programs unique is that they work with all note holder types that include individual investors, regional banks and institutions through the United States.

Winston Rowe & Associates has some of the most responsive service in the business providing their clients with a hands-on, customer service-centered experience that will guide them through the acquisition process quickly and efficiently.

Commercial Note Purchase Criteria:

Coverage: Nationwide

Deployment: $5,000,000. through $100,000,000.

Asset Class: Performing & Non Performing Commercial Real Estate Notes

Time Frame: 30 Days

When you contact Winston Rowe & Associates, a principal is always ready to speak with prospective clients. For more information about their commercial loan solutions check them out on line at http://www.winstonrowe.com (http://www.winstonrowe.com)  or call them at 248-246-2243.

National Commercial Real Estate Investing Loans No Advance Fees

Winston Rowe & Associates a national no advance fee commercial real estate investing financing firm. With direct access to the most aggressive investor sources in the world, they can structure a customized financing solution for clients, with the best terms possible.

For more information about Winston Rowe & Associates apartment building loan programs, they can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

They provide their clients with a private banking approach through specialized lending solutions to quickly and efficiently determine the best options for their clients.

Winston Rowe & Associates Financing Solutions:

Loan Amounts From $1,000,000 through $500,000,000
Hard Money Bridge Loans Fast 2 Week Closings
Private Equity Solutions
Small Business Administration (SBA) Loans
Purchase, Refinance & Portfolio Repositioning
Bank Discounted Note Financing (DPO)
Eligible Commercial Properties Include:
Multi-family
Single Family Residential
Office
Industrial
Mixed Use
Hotels
Special Purpose
Retail
Health Care

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Commercial Loan Underwriting and Due Diligence Winston Rowe and Associates

Winston Rowe & Associates offer expert due diligence, underwriting and funding solutions for apartment loans, office, hotel, industrial or retail property loans, with no upfront or advance fees.

Whether you are a seasoned investor or new to the market, Winston Rowe & Associates is there to help you explore your best options for commercial financing.

They can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Professional Underwriting & Due Diligence:

With almost a decade of experience in structuring commercial real estate deals, they have direct relationships with private equity, private capital. agencies, life companies, conduits, and “out-of-the-box” regional and national commercial lenders.

It’s important to work with a partner who understands your industry and can structure the right program to help you achieve your goals.

In addition to permanent debt financing, Winston Rowe & Associates regularly structures transactions using high-leverage bridge loans, mezzanine debt, construction loans and straight equity.

At Winston Rowe & Associates, their primary objective is to provide the most reliable and efficient means of sourcing both debt and equity for your commercial real estate loans. Recognizing that people and relationships drive this business, they are staffed with some of the industry’s most committed professionals.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

National Association of Realtors Economic Outlook

According to the National Association of Realtors® quarterly commercial real estate forecast, all of the major commercial real estate sectors are seeing improved fundamentals, but multifamily housing is becoming a landlord’s market commanding bigger rent increases. These trends also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey.

Lawrence Yun, NAR chief economist, said vacancy rates are improving in all of the major commercial real estate sectors. “Sustained job creation is benefiting commercial real estate sectors by increasing demand for space,” he said. “Vacancy rates are steadily falling. Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest.”

NAR forecasts commercial vacancy rates over the next year to decline 0.4 percentage point in the office sector, 0.8 point in industrial real estate, 0.9 point in the retail sector and 0.2 percentage point in the multifamily rental market.

“Household formation appears to be rising from pent-up demand,” Yun said. “The tight apartment market should encourage more apartment construction. Otherwise, rent increases could further accelerate in the near-to-intermediate term.”

The Society of Industrial and Office Realtors® shows a notable gain in its SIOR Commercial Real Estate Index, an attitudinal survey of 297 local market experts.1

The SIOR index, measuring the impact of 10 variables, jumped 8.3 percentage points to 63.8 in the fourth quarter, following a gain of 0.6 percentage point in the third quarter. The index remains well below the level of 100 that represents a balanced marketplace, which was last seen in the third quarter of 2007.

Most market indicators posted advances in the fourth quarter, but 71 percent of respondents said leasing activity is below historic levels in their market – an improvement from 83 percent in the third quarter. Only 29 percent report there is ample sublease space available.

Office and industrial space remains a tenant’s market – 87 percent of participants feel that tenants are getting a range of benefits ranging from moderate concessions to deep rent discounts.

Construction activity is still low, with 95 percent of experts reporting it is below normal, and 83 percent said it is a buyers’ market for development acquisitions; prices are below construction costs in 78 percent of markets.

Participants are broadly expecting stronger conditions for the current quarter, with two out of three expecting market improvement.

NAR’s latest Commercial Real Estate Outlook2 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc.,3 a source of commercial real estate performance information.

Office Markets

Vacancy rates in the office sector are projected to fall from 16.4 percent in the current quarter to 16.0 percent in the first quarter of 2013.

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5 percent; New York City, at 10.0 percent; and New Orleans, 12.4 percent.

After rising 1.6 percent in 2011, office rents should increase another 1.9 percent this year and 2.4 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year.

Industrial Markets

Industrial vacancy rates are likely to decline from 11.7 percent in the first quarter of this year to 10.9 percent in the first quarter of 2013.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.8 percent; Los Angeles, 4.9 percent; and Miami at 7.6 percent.

Annual industrial rent is expected to rise 1.8 percent in 2012 and 2.3 percent next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.

Retail Markets

Retail vacancy rates are forecast to decline from 11.9 percent in the current quarter to 11.0 percent in the first quarter of 2013.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 5.1 percent; and Long Island, N.Y., at 5.4 percent.

Average retail rent should rise 0.7 percent this year and 1.2 percent in 2013. Net absorption of retail space is projected at 9.9 million square feet this year and 23.9 million in 2013.

Multifamily Markets

The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.7 percent in the first quarter to 4.5 percent in the first quarter of 2013; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are New York City, 1.8 percent; Minneapolis and Portland, Ore., each at 2.5 percent; and San Jose, Calif., at 2.7 percent.

After rising 2.2 percent last year, average apartment rent is expected to increase 3.8 percent in 2012 and another 4.0 percent next year. Multifamily net absorption is forecast at 209,900 units this year and 223,600 in 2013.

The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Commercial Real Estate Outlook Improves Winston Rowe & Associates

Optimism over corporations’ rising profit expectations is contributing to an improved outlook for commercial real estate, according to PwC and Urban Land Institute’s 2012 Emerging Trends Mid-Year Update. The 195 industry executives who responded to the survey indicated that profitability, lending, and investor markets are looking up through year-end.

Foreign investors and private equity will remain the top purchasers of commercial real estate through the remainder of the year, according to the survey. However, private local investors and public equity real estate investment trusts buyers acquired an increasing share of properties in 1Q12, according to Real Capital Analytics.

The value of debt capital sources is showing positive signs, with insurance companies occupying the No. 1 spot and government-sponsored entities’ value increasing more than 11 percent since November 2011. Commercial mortgage-backed securities, commercial banks, and mezzanine lenders also posted positive gains.

All five major commercial real estate property sectors also reported higher values, according to the survey. Apartments continue to rank first, followed by the industrial/distribution sector, which posted a significant value increase. Hotels ranked third and logged the biggest gain overall as corporate and individual travel show signs of improvement.

Types of Commercial Real Estate Loans Explained Winston Rowe & Associates

Winston Rowe & Associates a no advance fee commercial real estate finance firm has prepared this article to assist brokers and real estate investors with descriptions of the various types of commercial real estate loan programs that they offer.

If you would like additional information about Winston Rowe & Associates their telephone number is 248-246-2243, or prospective clients can visit them online at http://www.winstonrowe.com

Acquisition

 An acquisition loan is used to acquire commercial property using the loan proceeds. This can include improved lots to already constructed and operating property. Winston Rowe & Associates loan sizes range from $1M to $500M with 15 to 30 year schedules; variable and fixed interest rates available (verify current rates); purchases are 80% of purchase price; loan to value, 75% on most products; debt service coverage- apartments (multi-family) 1.15, commercial- 1.20; assumable for most scenarios; closing time- 30 to 60 days from the receipt of the complete package and supporting documents.

Acquisition and Development

Winston Rowe & Associates provides loans to both acquire and develop real property to an improved state. Voucher control is set up to disperse loan proceeds with interest only paid on the funds distributed. Their programs can typically go to 75% loan to cost or 80% loan to value, whichever is less. They can typically provide a 2 to 3 year loan term for the construction, a 3 year mini-perm loan to stabilize the project, and permanent financing at the end. The permanent financing will vary by property type but usually Winston Rowe & Associates can provide a 30 year amortization and 10 year fixed rate financing that is a margin range of 1.85 to 2.50 over the 10-year Treasury.

Asset Based

These are loans for any purpose whereby collateral is put up for security.

ASSET TYPES: Commercial Real Estate, Equipment, Assignable Assets, Stocks, Bonds, Sports Contracts, Precious Metals, Accounts Receivable, Cash, Fine Arts, etc.

TYPES OF LOANS: Acquisition loans, Bridge loans, Development loans, Gap financing, Interim financing, Mezzanine financing, Short-term credit resolution, Project rescue funds for emergency situations, Factoring of accounts receivable; L

Loan amounts from $1M to $100M.

Bankruptcy

Debtor in Possession  (DIP) financing on real property assets until institutional financing is available or the sale of the asset occurs these loans range from $1M to $25M.

Bridge Loan

A bridge loan is a loan that is used for a short duration of time until permanent financing is put in place. Bridge loans are a perfect solution to a timely acquisition or business opportunity because they allow a purchaser or investor to act quickly. These loans can be used for acquisition, buy-outs, foreclosures, cash out and construction purposes. It is a form of short-term financing made for 1 month to 12 months (extensions are possible); up to 36 months, up to 90% financing; loan range from $1M to $50M.

Construction

A construction loan is a loan used to construct a building or other improvements of real property, with the land and improvements as collateral for the loan. Construction reserve accounts are generally maintained to disburse the money as the construction progresses. Up to 80% of the cost of the construction is available depending on the improved value.

Hard Money

For the following loan purposes: Acquisition, Raw Land, Bridge Financing, Construction, Bankruptcy Discharge, Refinance, Equity Recapture, Pending Foreclosure, and Poor Credit / Late Pay etc. will be considered; after approval, fast funding in days, when needed, on any type of commercial real estate project; credit challenges not a problem, all requests will be considered; loan amounts: $1M to $100M per project; TIMING: Loan decisions can typically be made within 24 hours from the receipt of the required items and documentation needed by underwriting; after loan approval and depending on the attorney’s time to draw up the loan agreement/contract, funding can occur within 3 to 7 days or longer; LOAN TERM: 1 to 12 months or longer; LOAN TO VALUE: 50% or more, depending on the asset/collateral; INTEREST RATE: from 13% to 20%; Points can range from 6 to 10, depending on the specific property, the borrowers credit and the loan amount; Terms: The funding parameters, specific terms, timing, and costs will be based on the business analysis and overall risk assessment and strength of the project and the Principals. Since our sources are very competitive, the Principals’ project will receive the rate and terms that it deserves.

Mezzanine

A mezzanine loan is a loan that is subordinate to a primary lender but it is debt that gives the Client the ability to drive the total financing to a higher leverage level, as compared to traditional bank financing alone (typical CLTV is 85% to 90%; in some cases, up to 95%). Mezzanine financing has become a common methodology to secure supplementary financing for real estate acquisitions and development projects. A mezzanine loan can be a freestanding loan that can be used for an existing property/properties or for properties that are under construction and the mezzanine loan can be secured by a second mortgage or a pledge of partnership interests. This is typical in cases where the primary mortgage or construction loan equity requirements are larger than 10%. The mezzanine loan provides additional funding when the first mortgage is at the maximum loan amount; the mezzanine loan amount can be $1M and larger; the preference is $3M to $30M; larger transactions will be considered on a case-by-case basis.

 

Commercial Real Estate Investment Strategies Winston Rowe & Associates

Commercial Real Estate Investment Strategies

Winston Rowe & Associates a national no upfront fee commercial real estate finance firm is finding the commercial property sector looking stronger with analysts and is predicting the sector to make a recovery in a few markets throughout the year and expecting positive growth in rent and capital values in Southern California, North Dakota, Dallas Texas, Chicago, Washington DC, Seattle and Denver.

For investors considering buying commercial property as an investment, there are some things they need to know about investing in this sector.

Building Design

Unlike retail or residential property, commercial office space and industrial property respond more strongly to changes in building design. Compliance and standards can also add to the costs of maintenance of commercial property which can affect your balance sheet.

Location

Changes to the location can also greatly affect the value of your investment. The relocation of a prime industrial districts or retail closures could drastically change the capital value and potential rental return of your investment.

Liquidity

Commercial property has much less liquidity than other investments, including residential property. Commercial real estate is heavily reliant on investors, who make their decisions on the state of the market.

Risk

The risk involved in commercial real estate investment can vary. Investing directly means you are taking on all of the risk associated with the ownership of the property, and will be responsible for any maintenance costs and upgrades that need to be made. However, there are a number of financial incentives total ownership, including being able to claim depreciation against your income. Meanwhile, if your investment lies with a Real Estate Investment Trust, you will be sharing the risk with other investors.

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

 

Winston Rowe and Associates Fee Commercial Real Estate Listings & Investing

Winston Rowe & Associates, a no upfront fee commercial property financing firm has scoured the Internet to find the best sources for free commercial real estate listings and investment analysis.

If your looking for real estate properties for commercial investing or need background information on a asset? The following link will take you directly to the free commercial real estate and investing resources:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Description of The Free Resource Links:

National Real Estate Investor.com

This is the leading authority on commercial real estate trends. The magazine’s readers represent a cross-section of disciplines — brokerage, construction, owner/development, finance/investment, property management, corporate real estate, and real estate services. No other publication provides as much independent research on a variety of topics that pertain to the office, industrial, retail, hotel and multifamily markets as National Real Estate Investor. We also produce webinars, white papers, research, custom publishing, reprints and custom conferences for our clients.

Cityfeet.com

This is the leading online commercial real estate network, connecting commercial real estate property owners and brokers to tenants, brokers and investors. Cityfeet offers commercial real estate products and services catering to the national and local needs of the commercial real estate industry. Cityfeet specializes in all commercial real estate property categories including office space, executive suites, commercial land, industrial property, retail space and businesses for sale. Cityfeet is the #1 source of free commercial real estate information for commercial real estate professionals and powers the commercial real estate area of many of the country’s most popular websites.

CIMLS.com

They provide real estate brokers and investors with a centralized online commercial multiple listing service (MLS). With over 250,000 registered members and $47 billion dollars worth of commercial property listings ranging from farms for sale to office buildings for lease CIMLS.com offers the largest free commercial real estate information service online today. Our partners attract a strong community of investors, commercial real estate brokers, appraisers, lenders and other real estate professionals. By working together, the CIMLS.com community offers you a full-service free commercial mls to buy, sell, or lease your investment properties. Join the commercial realty professionals at Century 21, CBRE, Coldwell Banker, Grubb & Ellis, Prudential and ReMax.

Commercial IQ

They are the most powerful commercial real estate search online, drawing commercial property listings from local brokerages and associations nationwide.

SHOWCASE.com

This search engine is for business professionals and investors looking for their next commercial property to lease or buy. Search from over one million properties across all asset classes, including: office space for lease, office space for sale, industrial property for lease, warehouses for sale, retail properties for lease, retail property for sale, multifamily apartments and land investments.

Zillow.com

They are one of the largest real estate Web sites in the U.S. and has become the premier destination for buyers, sellers, renters, homeowners, landlords, and real estate professionals.

Trulia.com

It’s an all-in-one real estate site that’s jam-packed with the most useful and timely information on homes for sale, apartments for rent, neighborhoods, markets and trends to help you figure out exactly what, where and when to buy. And you can get advice and opinions from local experts on Trulia Voices, your online real estate community.

LoopNet.com

They are the largest commercial real estate listing service online. Search commercial properties for sale or lease.

Savvy investors are turning to Winston Rowe & Associates, a no upfront fee national commercial finance specialist. You can contact Winston Rowe & Associates at 248-246-2243 or visit them online at http://www.winstonrowe.com

Their experienced and enthusiastic professional team has the expertise needed to make the loan process as easy as possible for their borrowers and without upfront fees.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free apartment building loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Commercial Real Estate Listings & Investing

Winston Rowe & Associates, a no upfront fee commercial property financing firm has scoured the Internet to find the best sources for free commercial real estate listings and investment analysis.

If your looking for real estate properties for commercial investing or need background information on a asset?

Description of The Free Resource Links:

National Real Estate Investor.com

This is the leading authority on commercial real estate trends. The magazine’s readers represent a cross-section of disciplines — brokerage, construction, owner/development, finance/investment, property management, corporate real estate, and real estate services. No other publication provides as much independent research on a variety of topics that pertain to the office, industrial, retail, hotel and multifamily markets as National Real Estate Investor. We also produce webinars, white papers, research, custom publishing, reprints and custom conferences for our clients.

Cityfeet.com

This is the leading online commercial real estate network, connecting commercial real estate property owners and brokers to tenants, brokers and investors. Cityfeet offers commercial real estate products and services catering to the national and local needs of the commercial real estate industry. Cityfeet specializes in all commercial real estate property categories including office space, executive suites, commercial land, industrial property, retail space and businesses for sale. Cityfeet is the #1 source of free commercial real estate information for commercial real estate professionals and powers the commercial real estate area of many of the country’s most popular websites.

CIMLS.com

They provide real estate brokers and investors with a centralized online commercial multiple listing service (MLS). With over 250,000 registered members and $47 billion dollars worth of commercial property listings ranging from farms for sale to office buildings for lease CIMLS.com offers the largest free commercial real estate information service online today. Our partners attract a strong community of investors, commercial real estate brokers, appraisers, lenders and other real estate professionals. By working together, the CIMLS.com community offers you a full-service free commercial mls to buy, sell, or lease your investment properties. Join the commercial realty professionals at Century 21, CBRE, Coldwell Banker, Grubb & Ellis, Prudential and ReMax.

Commercial IQ

They are the most powerful commercial real estate search online, drawing commercial property listings from local brokerages and associations nationwide.

SHOWCASE.com

This search engine is for business professionals and investors looking for their next commercial property to lease or buy. Search from over one million properties across all asset classes, including: office space for lease, office space for sale, industrial property for lease, warehouses for sale, retail properties for lease, retail property for sale, multifamily apartments and land investments.

Zillow.com

They are one of the largest real estate Web sites in the U.S. and has become the premier destination for buyers, sellers, renters, homeowners, landlords, and real estate professionals.

Trulia.com

It’s an all-in-one real estate site that’s jam-packed with the most useful and timely information on homes for sale, apartments for rent, neighborhoods, markets and trends to help you figure out exactly what, where and when to buy. And you can get advice and opinions from local experts on Trulia Voices, your online real estate community.

LoopNet.com

They are the largest commercial real estate listing service online. Search commercial properties for sale or lease.

Free Commercial Real Estate Investor Resources