A WSJ article on the flubbed Facebook IPO article linked by Barry Ritholtz on the TBP blog had this quote: “Since the flash crash [ in May 2010], $370 billion has been withdrawn from U.S. stock funds by small investors, according to EPFR.”
The article contains a host of reasons and stats on why and how retail investors are abandoning the stock market but it all comes down to this: Continue reading $370 billion withdrawn from US stock funds since the May 2010 flash crash Via TBP blog
1) The availability of attractive financing. Plus, the spread between fixed-rate financing and actual year one cap rates is certainly the widest that it’s been in recent history, perhaps ever. (There’s rumor that there was a bigger spread during the Roman Empire, but that may just be an old wives’ tale.)
From a macro perspective, the spreads between the treasury indexes and the premium on multifamily interest rates will almost certainly widen in the near term, but cap rates should remain stable in Class-C properties. They will probably continue to compress to a certain degree for Class-B assets.
2) Job growth Continue reading Two Key Factors for Apartment Building Investment Growth.
Property Taxes can be one of the largest fixed costs in apartment building investing. Properly accounting for them when running the numbers on a potential purchase (called the ‘underwriting’ process) can make the difference between a nicely cash flowing property and an expensive headache. Multi-Housing News has a good article with the five key questions investors should have answered before making an apartment building investment:
Don’t let this happen to your deal: Continue reading The 5 Most Important Property Tax Questions for Apartment Building Investing
In the aftermath of the worst housing crisis in a generation, more people are eschewing the American dream of homeownership and embracing apartment rentals in the still-fragile economy.
Surging demand for apartments, particularly by younger consumers, has given a boost to the nation’s apartment landlords. Multifamily properties represent one of the few corners in the commercial real-estate industry where rents are rising rapidly. As such, lenders are giving the green light to multifamily construction projects even as development grinds to a halt in other property sectors.
“People weren’t buying homes anymore, but they still needed shelter, Continue reading Apartment Building Investment: People aren’t buying homes anymore but still need shelter.
With so many online ad sources to choose from, how can you be sure which is best for your apartment building investment? Below Jason Velazquez, VP of Strategic Initiatives at Colliers of offers 5 tips for choosing a great ILS:
Does their traffic measure up? Most Internet Listing Services (ILS) will happily provide you with their web statistics. Take the time to thoroughly review any report offered to you before you sign on the dotted line.
Check whether they’re popular in your city. Simply because an ILS is nationwide, doesn’t necessarily mean they have high web traffic in your city. A simple way to gauge an ILS’s regional market penetration is to google the keywords – apartments in city name, and then scroll through the search results until you see their site. Don’t just search using the city you are located in; type other city names that your prospects move from.
If the ILS isn’t on the front page of Google, you may want to find an alternative ad source. Studies have consistently shown the majority of renters look for their apartment using search engines.
Before you run a Google search: Continue reading 5 Tips on how to choose the best internet listing service (ILS) for your apartment building advertising.
M&M tracks 40 metro apartment investment markets and delivers quarterly reports on occupancy, rents, absorption, new construction and permits (See list below). You may have to register with them to access the reports.
If you have questions about a specific market Continue reading Q2 Local Metro Apartment Building Investment Reports Now Posted.
The April 2012 National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions was conducted April 16-23, with 91 CEOs and other senior executives of apartment-related firms nationwide responding.
Capital availability lacks uniformity. Only 17 percent of multifamily firms reported that capital is available for all property types in all markets. By contrast, 36 percent said it is constrained in secondary and tertiary markets and 34 percent said it is constrained for all properties other than top-tier ones – even in primary markets.
The Debt Financing Index declined to 65 from 74. As the only index that dropped below 50 in the past nine quarters (48 in Q4 2010), borrowing conditions continued to improve for the industry. Just four percent believed conditions worsened from last quarter, compared to 34 percent who reported improving conditions.
The Equity Financing Index grew slightly to 62 from 60. One third of respondents reported quarter-to-quarter equity financing as more available, compared to nine percent reporting less availability.
See the excellent exec sum on Joseph Bernard Investment Real Estate’s blog here: Market Conditions Improve For Apartment Industry
This was an eyeopener for us in the apartment building investing business: Large US cities with falling rents. The table is from TransUnion, I wonder what their sampling methodology is- And I wonder how that breaks out by asset class.
Yes of course there are cities with rising rents but Denver rents down almost 9% in a year? In 2011? Even Chicago down almost 5%? And DC the apartment hotbed has falling rents? Supposedly their data comes from managers supplying info for tenant screening and if that’s the case it seems like there are some serious concessions being given.
Apartment building investment sales continued their ascent in the first quarter of 2012, jumping 31 percent over the same time frame in 2011, according to New York–based commercial real estate research firm Real Capital Analytics (RCA).
The volume trends are consistent across tertiary, primary, and secondary markets, but cap rate trends vary. In secondary markets, they remain unchanged; in tertiary markets, they’ve increased slightly; and in major markets, they’ve compressed.
See the whole MFE article: Apartment Sales Jump 31 Percent in Q1 2012
Tertiary markets still represent a value opportunity and at Ashworth Partners we’ve identified a few markets with unique drivers that catch the upswing. Contact us to find out more.
From the NY Times:
THE past couple of years have left many people staring in disbelief at the returns on their individual retirement accounts. Consider last year, when the Standard & Poor’s 500-stock index finished the year essentially where it started.
So it makes sense that people are looking for ways to earn more for retirement — or to make up for losses. Yet when I heard that an increasing number of people were moving money from traditional I.R.A.’s to self-directed I.R.A.’s that focused on real estate, I was skeptical that this was a good idea.
First, I wondered, how could this be done with retirement money? Was it even legal? And were people who had worked and saved money for their retirement really putting it into real estate so soon after the bubble burst?
Could you really have a conservative investment in your IRA today that earns 6, 7, 8% or higher? That’s legal? Yes you can, here’s the secret that your Wall St. broker and banker don’t want you to know: You can open a Self-directed IRA. That is an IRA account set up with an independent Custodian who makes the investments you direct it to (clever name huh?) instead of steering you into the products that earn them the biggest commissions and bonuses.
Of course there are some limits on the kind of investments but we’re not looking to corner the market on Greek reverse CDO squared repos (whatever those are). We’re looking for good income, inflation protection and Continue reading The secret to owning income producing apartment building investments in your IRA.