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U.S. is top 2012 property investment pick

(reprinted from Reuters Jan 1, 2012)

The United States will remain the top choice of most global commercial real estate investors in 2012, but the country has lost ground to Brazil which ranked No. 2 this year, according to a survey released Sunday. While the United States offers the most stable and secure option in commercial real estate, investors said improvement in rent and occupancy growth and the repeal of a 1980 foreign investment tax would have the strongest impact on their investment decisions, according to the 20th annual survey of Association of Foreign Investors in Real Estate (AFIRE) members.

For about the past year or so, investors in U.S. commercial real estate have focused on gateway cities such as New York, Washington, Boston, San Francisco and Los Angeles, driving prices up and yields down.

Meanwhile commercial property in Brazil, with its bubbling economy and safer investment environment, has become a hot spot for global investors. Sao Paulo, Brazil’s largest city, jumped to the fourth best city for real estate investment dollars in 2012, up from 26th place last year.

The United States is still very desirable and was second behind the UK in attracting cross border investment in 2011, according to Real Capital Analytics preliminary figures.
“The negative is it doesn’t promise a whole lot of capital appreciation because the prime markets are already fully priced,” AFIRE Chief Executive Officer James Fetgatter said. “By no means will Brazil replace the U.S., at least not in the foreseeable future. Brazil is considered now a much safer place to invest and a place where you can get capital appreciation and good yield.”
AFIRE’S survey respondents hold more than $874 billion of real estate globally, including $338 billion in the United States.
Sixty 60 percent of respondents said they plan to increase their investment in U.S. real estate in 2012, down from a record 72 percent last year, according to the 20th annual survey.
Some 42.2 percent said they believed the United States in 2012 would offer the best opportunity for the price of their commercial real estate investments to increase, down from 64.7 percent last year’s survey.
The United States lost ground to Brazil, with 18.6 percent saying Brazil’s property market offered the best growth opportunity for their investment dollars. That’s up 14.2 percentage points, moving Brazil up to second place from fourth, and pushing China down to No. 3, according to the AFIRE survey.
Seventy percent of respondents picked one of the three countries as their favorite, while the remaining 30 percent had top choices from 13 other countries on five continents.
Respondents said they would invest more in U.S. commercial property if the fundamentals of rent and occupancy growth were stronger.

Another U.S. barrier respondents cited was the Foreign Investment in Real Property Tax Act (FIRPTA). The 1980 act, originally designed to protect farm property from foreign ownership, subjects foreign buyers to both their domestic and U.S. taxes when they sell their investment, unless their home country has a taxation treaty with the United States.
FIRPTA opponents have argued that the act unfairly penalizes foreign investors of real estate. Such double taxation does not apply if they buy U.S. stocks or bonds.
As for the top cities for foreign investment in 2012, New York remained No. 1. London moved up to No. 2 from No. 3, swapping ranks with Washington. Sao Paulo was fourth, and San Francisco moved up to No. 5 from No. 10 last year.

Europe’s sovereign debt problems and looming recession pushed most of the countries there – except for a few such as Switzerland and Poland – off the map for real estate investors. Germany lost about half its support among respondents in terms of stability and price appreciation, according to the survey.

Emerging markets also seem to be getting more popular among potential investors. Respondents identified 25 countries they would consider for investment, up from 18 last year. Brazil topped the list, with China in second place, as each did last year. Turkey moved up to No. 3 from No. 7 last year. India and Vietnam each dropped down one spot, to No. 3 and No. 4 respectively. Appearing for the first time were Colombia, at No. 10, Hungary at No. 12, and Qatar at No. 17.

As for U.S. commercial real estate, respondents said that this year they would most likely invest in apartment buildings, the fourth consecutive year multifamily topped the list. Of all the types of U.S. commercial real estate, the multifamily sector has not only recovered from the post-2007 real estate slump but rents and occupancy are even stronger than before.
Warehouse and distribution centers ranked second, up from No. 5 last year. Office properties were third, up a notch from No. 4. Retail properties – shopping centers and malls – slipped to No. 4 from No. 2. Hotels ranked No. 5, down from No. 3 last year.
The survey was conducted in the fourth quarter by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.
(Reporting By Ilaina Jonas; Editing by Richard Chang)

Originally posted to Blog on

Why Your Purchase Price and Rehab Costs are Going Up

Be sure to factor in the new EPA rule on your next house rehab or purchase. Beginning in April 2010, federal law will require that any contractor that performs renovations, repairs and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination. This law will apply to single-family homes, as well as multi-family cooperatives and condominiums. “Do it Yourself” landlords may also be required to hire certified lead paint contractors.

 These rule apply if:

  • your project disturbs 6 square feet or more of paint per room inside,
  • or 20 square feet or more on the exterior of a home or building.
  • Electrical or plumbing work can also be included.

There are waivers homeowners can sign but not every projet. A homeowner may also opt out by signing a waiver if there
are no children under age six frequently visiting the property, no one in the home is pregnant, or the property is not a child-occupied facility.
Another exemption is if the house or components test lead free by a Certified Risk Assessor, Lead Inspector, or
Certified Renovator.

 

Originally posted to Blog on

The Truth About Knowledge

The Truth About Knowledge

One of my friends and students sent me this great message or should I say illustration. Thanks Carolyn Segraves… perfect illustration of what I have been saying. ******Click Here to View It.

Originally posted to Blog on 9/23/2009

Great quote from an Entrepreneur who became a Millionaire with an idea.

Great quote from an Entrepreneur who became a Millionaire with an idea.

I was watching a great show on CNBC Sunday afternoon. It profiled entrepreneur who never gave up on their ideas or business and became multimillionaires when everyone thought it would be impossible. One of them they profiled was a woman. As soon as I heard what she said I grabbed a piece of paper and wrote it down. This is what she said.

“THE WAY TO MAKE A MILLION DOLLARS IS TO FIRST MAKE IT IN YOUR MIND… and BELIEVE you have EVERYTHING it takes, ABSOLUTELY, NO DOUBT about it EVERYTHING”

Sound familiar to you Napoleon Hill and The Secret fans?

Originally posted to Blog on 8/31/2009

 

GOV’T APPROVED: Tax Free Modifications and Short Sales

Mortgage Workouts Now Tax-Free

This will help homeowners whose mortgage debt was partly or entirely forgiven about a special tax relief provision. These homeowners may be eligible to exclude the amount forgiven from their taxable income. *********Read about who and what qualifies by downloading this brochure from the IRS.

Originally published in Blog on 7/8/2009

TGIF – NOT. Working on the upcoming Tax Deed Field Trip

Thanks to all of you that signed up for the upcoming Tax Deed Field Trip.

The 2 day trip has already got 16 people signed up…. I expected 10! Day 1 we talk about how to do the research, Day 2 we go to an Auction and then go through the courthouse records. It’s going to be a great event for those who attend. The last one we did was pretty good as well. That time we didn’t do a research day but listening to what you all tell me sounds like you need more help with the research. Anyway I just wanted to chat real quick, gotta go back to work.

As far as Day2 goes, I’ve split some people off into the 2nd auction which is Aug 26th. That day is filling up too! So I will be looking for another Auction to take the rest to. Any suggestions on any counties you all are interested in?

Originally published in Blog on 7/24/2009

Florida puts a CHERRY on the $8,000 First Time Home Buyer Tax Credit

New home buyers will not have to wait around for the $8,000 tax credit. Florida will give the new home owners the $8k upfront which they can then use towards the down payment. This is made possible thru the current administration’s Stimulus Package. The package allows first time home buyers to qualify for an $8k tax credit after the home is purchased. I believe it is only for those that have not owned a home in the last 3 years. In the most recent development, Florida will give the new buyer a short term loan of $8k now which payable when the IRS gives the homeowner the 8k federal tax credit. The state will obligate the new homeowner to repay the 8k in less than 2 years. Read more on it in the Orlando Sentinel.

Originally published in Blog on 7/15/2009

This is how rediculous buying property can be… but u gotta love this attorney’s answer!

(Kudos to Audrey for sending me this email. I’ve copied and pasted it here. Is the story True or False? You just don’t know with title companies these days. )

Louisiana Land Title

Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years.

With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership.

Here’s the story on one attorney on an issue with FHA (on behalf of a client):

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply):

“Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.”

Annoyed, the lawyer responded as follows:

(Actual response):

“Your letter regarding title in Case No..189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France, in 1803 the year of origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus’s expedition. Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana .. God, therefore, would be the owner of origin and His origins date back, to before the beginning of time, the world as we know it and the FHA. I hope you find God’s original claim to be satisfactory.

Now, may we have our damn loan?”

The loan was approved.

Originally published in Blog on 7/15/2009

‘Real’ Words: How Well Do You Know the Real Estate Language?

How Well Do You Know the Real Estate Lingo?

I was reading somewhere that the Merriam-Webster’s dictionary is adding about 100 new words to the 2009 dictionary. Some of these words include: frenemy, waterboarding, staycation, and carbon footprint among other words. This got me to thinking, what are the real estate words every real estate investor should know or at least be aware of.

From time to time I will post a new ‘Real Word’ on this blog. It’s a great way to refresh our memories and for those of you new to the business, it’s a great way to learn new real estate words. Make your own comments on this word and any other words you think should be in our Real Estate Dictionary.

Bona Vacantia

That word means a property that belongs to no person, and which may be claimed by a finder. In some states, the government becomes owner of all bona vacantia property.

Don’t forget… Make your own comments on this word and any other words you think should be in our Real Estate Dictionary.
Originally published in Blog on 6/10/2009

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