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Rental Housing - The Saving Grace

Written by: Carl Moore

Article Overview: More overleveraged developers and owners, surviving on loan extensions, will be forced to turn in the keys in 2010 as fundamentals continue to fall before the market hits bottom around the end of the year. Once there, value declines will approach about 40 percent, on average, from the mid-2007 peak-the worst decline since the Great Depression and worse than seen in the early 1990s.

Rental Housing - The Saving Grace

In a recently released report by PricewaterhouseCoopers, more overleveraged developers and owners, surviving on loan extensions, will be forced to turn in the keys in 2010 as fundamentals continue to fall before the market hits bottom around the end of the year. Once there, value declines will approach about 40 percent, on average, from the mid-2007 peak-the worst decline since the Great Depression and worse than seen in the early 1990s.

If the commercial real estate market doesn't improve fast enough to increase values, and you can't refinance because your property value is down 30 percent, you're going to either have to come up with a lot more equity or sell. Additionally, multifamily cap rates are expected to rise at least another 30 basis points, on average, ending 2010 at around 8 percent nationally, forecasts the report.The good news is that multifamily will be the first commercial asset class to recover, based on demographic demand and constrained supply and remains the one property sector where there is relatively-decent financing.

Competition ahead - Units aren't closing so Trump says: Rent 'em out

That disillusionment, coupled with the real estate bust, has killed plans for tens of thousands of condo units across the nation. Trump has an innovative solution. The real estate developer has decided to lease units up to one year as upscale furnished apartments. Realtors are hailing it as a trendsetter that may catch on with other developers, whose sales are stagnant. The problem is simple. Even a guy like Trump has to borrow money to build buildings and to pay the loan back. He has to find a way to take care of that carry and the best way to do that is to make those units apartments.

In Las Vegas, Trump is listing all of his units for lease, including studios, one bedrooms, two bedrooms and penthouses. The lowest price is $1,600 a month for a one-year lease on a studio. One bedrooms are as low as $2,600 and a three-bedroom penthouse is $6,500 for a one-year lease. Those same units are $7,500 a month for those who only want it for three months and $7,200 a month for a six-month lease. The units could ultimately be sold when the economy improves.

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Article Tags: apartment financing, Condo Financing, developers, HUD Lender, loan extensions



Related Forum Posts
Re: Social financing solutions... - CFS can assist social landlords in coming up with practical solutions to combat financial exclusion among their tenants and the local communities where they operate. In the past 10 years, we have worked with a wide range of social landlords, including Trafford Housing Trust, Golden Gates Housing and Southern Housing Group. Based on our expertise in housing and financial inclusion, we offer a range of research and advisory services to social housing landlords: * Needs and gap mapping: We can map the nature and extent of financial exclusion among tenants to help social landlords direct resources where it is needed. * Service provision gap identification: We can map and identify gaps in the provision of financial services, and money and debt advice, and advise social housing landlords on how best to fill these gaps. * Assessing effectiveness of existing interventions: We can help landlords estimate costs of financial exclusion, in the form of evictions and lost rent income, calculate savings in implementing financial inlusion interventions and advise on how to improve existing interventions. * Solutions development: We can help social housing landlords develop practical solutions to problems such as over-indebtedness, arrears and financial exclusion. * Stakeholder engagement and management: We can advise on, facilitate and organise stakeholder engagement events to underpin financial inclusion interventions.............
ZipCar costs - Kevin, They've got a really good selection of cars from Toyota matrix's to mini's to 4x4's to BMW's. they have a daily limit of 150km and then it's about $0.15/km. You can also rent for the full day for $76 +taxes. That's really helpful on the weekends as most Rental companies require a 2 day rental.
Website value via Cap-Rate - Evan, no I haven't seen it used for websites as it struck me as a way of determining value when I look at Rental properties. I'm sure if you look at the basics of the formula you can figure the numbers you'll need to extract from your Web metrics. I know in the rental market you want to look for a property that has a Cap rate of 10%. In the Toronto market you'll be lucky to get 7%. It's a quick way for an investor to determine if a property is a good buy at first glance and then go deep into the numbers reported. short answer: no I haven't seen it being used to determine website value.
How Can I Make Money Out of This Need? - I came across an interesting piece of news while surfing the web today. A site called Mortgage Loan Place had this paragrpah: If you bought your home after Sept. 1, 1983 with a FHA loan, chances are you had to purchase mortgage insurance. The FHA was supposed to refund that insurance back to you if you made all of your payments and have paid off your mortgage. The Department of Housing and Urban Development (HUD) says that approximately 30 percent of those refunds never get claimed. $450 million waiting to be claimed And there is a search box there where you input a last name, and a list of all the people with that last name who are owed money by the FHA comes up. Most of those people seem to be owed only a couple of hundred dollars, but some are owed over a thousand dollars. And the records cover everybody from 1983 onward... So I'm wondering... is there any point in contacting these people (their addresses are given), telling them that they've forgotten to claim this refund? The thing is... that would be the good samaritan thing to do... but I'm wondering if there's any way to monetize the service. All I can do is tell the people they're due a refund - they just have to apply for it, so it's not like I'd actually be providing any kind of service, except one of information dissemination. Anyone have any thoughts?
Re: Plan Your Retirement NOW - Hi Barbara, Thanks for your in depth post. I would have thought, someone would have responded to you by now. I think it is a good idea to check which post have had no response. That is why I often check these out and endeavour to reply. I do it for two reasons: one is a kind of appreciation for the person who took the time and wrote it and 2ndly, actually to revive it if at all possible. We are living in a microwave society, we need every thing very quick and find it hard to exercise delayed gratification. It starts with the young ones. They watch their parents getting everything so they want the same. The word Saving is almost not heard of in today's society. There is a sale, it looks good and I need it now is todays mentality . I am in England, where the statistics and demographics are similar. There might be some fluctuations, but in general it is a world wide issue. The government borrow money, too. Not many people are interested in that sort of information. One thing I need to add, worry is never the sole answer. It has a negative affect on the health of the people. That is a total different subject, but you have mentionned several times. Any other ideas from our colleagues?


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