Multi-Family Properties Might Be The Way To Multi-Millions

In the current commercial real estate market, investing in multi-family homes should be on the radar. Multi-family properties don’t always have to be 20 floor sky rise apartments in a big city. They can be smaller duplexes, town homes Read more

New Real Estate View: Why The Homeless Are Big Business In New York

It's a grim scenario: In New York, there are more than 50,000 homeless. Of that number, 21,000 are children, an increase of 21 percent from last year, according to a report by the Coalition for the Homeless, a New Read more

Red Is the New Green – Chinese Investors Eye US Assets

***This blog entry is a guest post from Elton Steinberg, Marketing Associate at United Realty*** American fund managers should be aware of current and future trends that may make the Chinese account for a more significant portion of overall foreign Read more

Gimme Shelter - Foreign Investors Seek Returns and Safe Haven in US Real Estate

***This blog entry is a guest post from Elton Steinberg, Marketing Associate at United Realty*** Foreign investment has been a significant driver of the US real estate market recovery. Investors from across the globe have been responding to negative stimuli Read more

investing

Multi-Family Properties Might Be The Way To Multi-Millions

In the current commercial real estate market, investing in multi-family homes should be on the radar. Multi-family properties don’t always have to be 20 floor sky rise apartments in a big city. They can be smaller duplexes, town homes or small condos. These smaller properties are recommended for startup investors.

Investing in multi-family homes is a great way to enter the real estate market. As opposed to investing in single family homes, the cash flow of multi-family homes is increasing due to lower property values, mortgage cost and rent increases. This can lead to many advantages for an investor. There is also less risk and less cost as opposed to owning five single family homes where you have to maintain five different properties. With all five families in the same building, there is only one roof to maintain and the tenants are in the same location.

With many unable to afford homes in the suburbs, the demand for multi-family homes is increasing. Also, the construction on new multi-family apartments is bouncing back. Many are having trouble finding stable jobs so they are leaning toward renting apartments as opposed to buying single family homes. The baby boomer generation is starting to live more frugally because they realize that they don’t have enough saved for retirement. As a result, they are spending less and recognizing that they can’t live their current lifestyles. They are working longer and see renting as a more cost efficient option. With the overall increase in demand, this inevitably leads to an increase in rent which makes investing in multi-family homes very attractive.

Now speaking of rent, if an investor is going to rely on rent to cover the property’s debt and operating costs, it is necessary for the investor to choose an area where the rent demand is high and the vacancy rates are down. Depending on the right location, a larger apartment can rent faster than a smaller one. Location is critical for a successful multi-family home to reap high rewards.

As new investors, starting off investing in multi-family properties is a good foundation for a strong and diverse portfolio. It is important to know all the “ins and outs” of the market. Evaluating past transactions and possible properties for transactions is essential. A small investment in a multi-family complex can be the outlet for a cash flow gaining investment. The right multi-family properties are income producing assets that provide great long term returns.

 

Posted on by Jacob Frydman in Commercial Real Estate, Guest Blog Post, Housing Market, multi-family, News, Residential Real Estate Comments Off

New Real Estate View: Why The Homeless Are Big Business In New York

New York Residential BuildingsIt’s a grim scenario: In New York, there are more than 50,000 homeless. Of that number, 21,000 are children, an increase of 21 percent from last year, according to a report by the Coalition for the Homeless, a New York advocacy group. Even worse, the numbers haven’t been this high since the Great Depression. But some landlords have managed to find a lucrative return from a commercial real estate angle.

Though the methods differ, and opposing views persist, the goal – more homeless individuals and families housed – is aligned, to a degree. Landlords can use their real estate to offer shelter to the percent of New Yorkers who need a place to stay. As reported by the New York Times, landlords can receive up to $3,000 (from the Department of Housing Services), and some are offering tenants up to $25,000 to move out of their current homes to make room. Somewhat problematic, these are often rooms without bathrooms or kitchens. The conditions, as reported by some, are worse, due to drug use, violence, and even prostitution.

Meanwhile, the Department of Housing Services (DHS) has been critical of Mayor Michael Bloomberg’s handling of New York’s homeless population, and recently claimed that the homeless shelter population under his administration increased by 61 percent. Additionally, the shadow of Hurricane Sandy looms rather large, albeit the numbers are not included in the report, it can be inferred that a number of displaced New Yorkers affected by Sandy are likely in the system. The DHS concludes that “for the first time since modern homelessness began, the City now provides no housing assistance to help homeless children and families move from shelters to permanent housing.”

According to the Wall Street Journal, the budget for adult shelters has gone up 43 percent to $317.2 million since 2008, while family shelters now cost $464 million a year, up 15 percent from 2008. And in the past two years, the city has added nine single-adult shelters, six adult family shelters and 11 shelters for families with children. Two hundred and thirty-nine shelters are in the system. So, a shortage of shelters, means opportunity for some land owners. Whether it takes advantage of the system (and displaced New Yorkers) is another matter best left for politicians and newspaper opinion pages.

The facts are this: in January, an average of 11,984 homeless families slept in shelters each night, which was a rise of 18 percent from the previous year. And advocates on both sides have valid arguments. Is it morally gray to offer less-than-favorable apartments to individuals and families in transitional housings? Possibly. But when the shelters are more crowded, and the options for moving from transitional housing has stalled, other solutions should at least be examined.

A policy in response to court settlements in 1979 and 2008, pushed for every homeless person in New York to have some type of housing that would be provided by the city. Landlords willing to house the homeless were given freedom to set their own rental prices and terms. In 2005, Bloomberg’s administration ended the  policy, which had up to that time allocated a share of federal public-housing apartments and federal housing vouchers to homeless families.

The action plan outlined by DHS points to ending “the so-called cluster-site/scatter-site shelter program (i.e., apartment buildings used as temporary shelter at enormous cost),” and phasing out the use of commercial hotels and motels as temporary shelter for families. New mayoral candidates have already started their stump speeches to include this issue. But, really, where does the discussion on this really begin? True, you will possibly have a number of landlords who will use the plight of the homeless as a way to make a profit. However, the idea, if properly implemented with at least a modicum of oversight, could allow for positive results to surface.

When transitional housing and commercial real estate converge – or collide – in New York, there’s bound to be a passionate response. At best, we should be able to find a middle ground. One where real estate thrives, and more people have access to a higher quality of life, moving outside the homeless system, and into independence. It’s good business for everyone.

Posted on by admin in Commercial Real Estate, Housing Market, Residential Real Estate Comments Off

United Realty Launches Students Scholarship Program

At United Realty Partners we believe that we can invest in our future by investing in education, which is why we have recently launched United Realty Students.  Our scholarship program is awarding $100,000 to students over the next 12 months.

In recent years the cost of attending college has skyrocketed.  Bloomberg reported that the cost of tuition and fees has risen at a rate of 1,120% since 1978, four times faster than the increase of the consumer price index.  Also, CNN Money publishes that the cost of a four-year public college has risen 4.8% in the last year. While many factors have contributed to the rise of prices, the amount of students needing help to pay for higher education is rising too.

Students Scholarship

In the years to come these students will be running corporations, taking seats in government, educating the youth and many other jobs.  We believe that students are the key to our future and we must invest in them the same way we would invest in our personal portfolios.

As tuition costs have continued to raise so has the average amount of student loan debt students are graduating with.  Government aid, parents’ and students’ incomes have not increased in conjunction with the rising cost of tuition.  Students are more motivated to look for alternative ways to pay for their education.  Scholarships provide great opportunities for students as they are awarded and are not required to be paid back.

United Realty Students is providing students with multiple prizes, awarded every two months.  Investing is at our core of our beliefs and we would like to hear from students about their thoughts on investing.  Entry for the scholarship is for students to submit a short, original, previously unpublished written response to the scholarship question, “How Do I Invest In My Future?”  Students can win scholarships ranging from $5,000 to $10,000 — just by writing a response to this short essay. Scholarships will be awarded on an ongoing basis.  The first submission period has begun, and will run until March 1, 2013.

Click here to Apply.

Posted on by Eric Fischgrund in News, United Realty News Leave a comment

Preparing For Coming Inflation

Whenever you turn on the news, you hear about our country’s $16 trillion of national debt which we cannot pay off.  Unfortunately, that’s just a small portion of our country’s financial problems.  Did you know that we also have more than $60 trillion of unfunded government pension obligations, unfunded Medicare and Medicaid and social security liabilities?  And that this debt is increasing at more than $1 trillion per year?

Just think – the US owes more than $76 trillion that iInflation Hits Real Estate Investments In Philadelphiat can’t pay off.  Worse, none of our politicians are willing to raise taxes or cut spending to deal with that problem, because if they raise taxes or cut spending they get booted out of office! As expected, they are more concerned with holding on to their jobs.

So how is our government going to deal with this problem? The same way governments have dealt with this problem throughout history – they print money.

By printing money they inflate the currency, and pay off the debt with cheap dollars, and while that may be good for the government, it is terrible for investors.

When the government prints money, people who saved their money and people who invested in fixed income, bonds and other liquid assets get hurt badly.  In some cases they can get wiped out.

And what’s worse – this time around, the government is artificially keeping interest rates at zero until early 2015 so they can keep inflating our currency without much backlash.

Ask yourselves a few questions:

  • When was the last time you remember not being able to get any interest on money in savings accounts?
  • When was the last time you remember the 10-year treasury at below 1.5%, or corporate bonds at 3%?
  • When was the last time you remember the Federal Reserve printing $40 Billion a MONTH, without end, (which they are now doing and calling it “QE-3”)?

So how do you protect against inflation?  — WITH HARD ASSETS – and frankly, there is no better hard asset than real estate.  Unlike gold or commodities, real estate can generate current income and grow in value with inflation – it has historically been used to generate cash flow and capital appreciation, and is also considered a hedge against inflation.

We are living in unprecedented times, and these events will create risks for some, and opportunities for those who prepare.

 

Posted on by Jacob Frydman in Commercial Real Estate, United Realty Leadership Leave a comment

High Expectations for Commercial Real Estate

After shunning the asset class since the Financial Crisis, retail and institutional investors are tiptoeing back into commercial real estate. A batch of recent studies suggest commercial real estate should outperform nearly every other asset class in 2012. A new survey by the Pension Real Estate Association indicates investors expect an average return of 9.3 percent this year – a 140 basis point increase from what the survey indicated three months ago. PREA surveyed a total of 22 firms in the first quarter, representing investment managers, financial advisors and researchers.

The 22 member firms surveyed expect outperformance primarily in the NCREIF Property Index (NPI). The biggest returns, according to the survey, are expected in the apartment sector, with returns in the office, retail and industrial sectors expected to come in slightly lower, but still outperform.

Investor sentiment for all four property types has risen since the beginning of the year, along with the overall market. Despite the increased bullishness for 2012, the average forecast still predicts a gradual slowing in returns through 2013 and 2014 as investment in the sector heats up.  Apartments are expected to remain the hottest sector with projected annual returns of 10.9 percent. In the other sectors, respondents expect higher income returns in 2012 compared with apartments, but lower overall capital appreciation. Respondents expect the retail and office sectors to each return 8.9 percent. Industrial buildings, at 8.4 percent, was the laggard.

Looking past this year to longer term expectations reveals a different picture. Over a five year horizon to 2016, the office sector has the highest average return forecast, with industrial coming in second. It’s important to note that there is some disagreement amongst forecasters about the best performing sector over the next five years. Over one-third of respondents see the office space as producing the highest returns while the same proportion chose the apartment sector. Almost one-quarter see industrial as the best performer through 2016.

A new report from the global accounting firm Deloitte & Touche finds that Real Estate Investment Trusts (REITs) are well-positioned to outperform the market this year due to improvement in property fundamentals and market dynamics as well as their relative advantage as an alternative asset class.

Unlike pre-recession times, growth prospects of REITs are now heavily dependent on mergers and acquisitions and driving increases in rental income, due to limited development activity, the report found. Although there is no certainty about the relative outperformance of REITs over competing asset classes, an improvement in the broader economy will be the key to sustained growth for this asset class. In the long term, REIT’s may benefit from global expansion as emerging markets implement REIT provisions within their tax codes to facilitate real estate investment activity.

It is noted within the Deloitte report that the performance of REITs have been a bright spot within the CRE industry over the past two years. Improved access to capital drove significant transaction growth and REITs were able to acquire prime properties within major markets at favorable pricing due to the overall market distress. REITs continue to outperform the major markets and are favorably positioned during this economic uncertainty. REIT owners are expected to focus on property operations, leasing and property management; as well as mergers and acquisition opportunities, in order to add value until a full-fledged economic recovery resumes.

 

Posted on by Jacob Frydman in Commercial Real Estate Leave a comment