Mr. David Moore, CCIM will be the featured speaker at the Portland CCIM's monthly luncheon on April 1st at the MAC Club. He and brother/partner Tom founded Equity Advantage Incorporated in 1991. Since then EAI has become the heavyweight of 1031 Exchange Accomodators. They have leveraged their thorough knowledge of contract law, taxation, and investment analysis with a customer centric focus to earn a reputation for getting the tough deals done.
MULTI-TALENTED: While I always learn new aspects of exchanges from listening to David, my hope is that his presentation will focus on his new firm's services. For years the public was led to believe that Wall Street Mutual Funds were the sole options for 401K investments. David and Tom founded Equity's sister company, IRA Advantage to empower the investors they'd worked with for the past eighteen years, and offer them a self-directedalternative. With IRA Advantage's Checkbook LLC structure you receive a time tested procedure that literally gives you the flexibility of writing a check when the investment opportunity arises. No more waiting for a custodian to rationalize your next investment. They utilize proven procedures to enable IRA holders and ease of investment while maintaining their IRA's integrity. I recommend preparing for your future, and calling your own shots by contacting IRA Advantage to set up your IRA Checkbook: 503.635.1031. I also recommend looking at multifamily investments for solid long term gains without wide fluctuations in value. I'll go to a rodeo if I want a wild ride.
CCIM LUNCHEON TIME: 12:15 to 1:30 PM on Wednesday, April 1, 2009. Members $35/Guests $45; $5 off early registration.
LOCATION: The Multnomah Athletic Club is located at 1849 SW Salmon St. At over 550,000 Sq. Ft., The MAC is the worlds largest indoor athletic club. Phone: 503.223.6251 Web: www.TheMac.com
CCIM:There are fewer than 9,000 professionals worldwide that have earned the designation; many industry insiders refer to CCIM as the "Doctorate of Real Estate." The CCIM Institute provides cutting edge training on a broad range of Real Estate Investment topics, as well as significant networking opportunities. The Portland Chapter meets at the MAC on the first Wednesday of each month. Brokers network and share "Haves and Wants" from 10:00 am to noon; top tier industry specialists speak at the luncheon, 12:15 to 1:30 PM.
SolarWorld Group not only reaffirmed their commitment to the Portland area, they're increasing their investment in a major way. So reports Brian K. Miller in today's Globe Street:
HILLSBORO, OR-SolarWorld Group said Friday it plans to expand its five-month-old, 480,000-square-foot operation here with a new 210,000-square-foot building. The existing building serves as a production facility for the Germany-based solar panel manufacturer. The new building, slated for completion in November, will be primarily a distribution facility.
"We are fully committed to not only marketing the proven renewable energy of photovoltaic technology in the United States but also manufacturing it here," Boris Klebensberger, SolarWorld's chief operating officer and president of SolarWorld Industries America, said in a prepared statement. "This project further demonstrates our resolve."
This is welcome news to an area that's 10.9% unemployment rate is almost 2 points higher that the national average.
www.Globest.com is a great source for business news. They offer updates on local, regional, national and international developments that impact business owners and investors. Globe St.'s feeds can be tailored to focus specifically on Retail, Multifamily, etc. When you want to up to date information think Globe St. For excellence in Real estate, think Rose Commercial Real Estate.
If you follow my blog, you know that I'm a strong advocate for training all multifamily employees, and that I hold Grace Hill as the creme d' la creme in that niche.
Their newest online course, Property Management Financials, is now available! Grace Hill's Apartment Management Learning Center, the premier destination for online multifamily education for more than 10 years, has expanded offerings yet again.
By completing this highly interactive course, you will learn how to manage your community's financial performance in order to maximize value and earn a positive return on investment. Property Management Financials includes engaging exercises and scenarios to reinforce knowledge. In addition to the thorough course content, Property Management Financials includes numerous downloadable resources to be used as job aids. You will be empowered to take control of your community's fiscal fitness, which is more important than ever thanks to today's challenging market.
Here is what is covered in this 2-hour title:
Property Management Financials is an Essentials title and included in our Unlimited Training Subscription at no extra charge. Property Management Financials is also available at the Pay-Per-View price of $79 per student, per course.
WHO SHOULD TAKE ADVANTAGE OF THIS OPPORTUNITY?
Multifamily managers, assistant managers, leasing teams, investors, and multifamily service providers that want to understand facility owner's perspectives.
Grace Hill can be reached at: (866) 472-2344, or www.gracehill.com.
For quality training think of Grace Hill...for quality investment properties, think of Rose City Commercial Real Estate. You deserve the best, don't you?
Look at current and future job growth as key factors when evaluating a market for multifamily purchases. To research opportunities I have traveled to Reno, Albuquerque, Phoenix, Seattle, and Los Vegas. Without exception job creation/population growth seemed to be the common fundamentals that told the tale. It seems that folks would move to hell if they could get a job.
That's why I'm so strong on Portland. We've seen good job growth on a consistent basis here for years and the promise of the future is for the pattern to continue or accelerate.
For those that are dour about the current multifamily market...remember that while Cap Rates are decompressing currently, there are many properties that were purchased at the average 8.3 Cap in 2002. They would now trade at a 6.50 Cap. Do the math: 8.3 divided by 6.5 equals a 28% increase in value even if NOI only stayed constant. The truth is that this market enjoyed significant increases over that period and many Portland multifamily investors have huge sums of redeployable equity, and this is the time to act.
Contact me for equity redeployment information now at: rick@rosecitycre.com
Simply expressed, LTV is the loan amount divided by the property's value, expressed as a percent. The value used will be the lower of the sale amount and the appraisal. Banking theory goes that the lower the LTV the more the investor goes from involved to committed. Yogi Berra might explain that discrepancy thus: "In a ham and eggs breakfast the hen that laid the egg was involved, but the pig the ham came from was committed."Example: What would a bank with a 60% LTV maximum, loan on a 42 unit multifamily asset under contract at $117,000 per door that was appraised at $4,850,000? The lesser of:
60% of Purchase = .6 X ($117,000 per unit X 42 units) = $2,948,400
60% of Appraisal : .6 X $4,850,000 = $2,910,000.
The answer is $2,910,000. That applies to most banks currently lending practices...there are other options.
TRENDLINE: a year ago the internet was rife with commercial multifamily loans with 90 -95% LTV's...those are yet another victim of the lending crisis. For most purchases now banks want a minimum of 25% down (75% LTV) but many require 40% down (60% LTV). I'm working with a lender on a multifamily loan right now that is requesting an additional down payment to be submitted that will bring my client's effective down payment to 51% (49% LTV.) Stricter LTV requirements are probably here to stay...at least for awhile. But to those that think the forces that caused this change are permanent, please remember that $6 trillion bucks of market value was lost when the tech bubble burst...but only a few years later the DJ not only recovered...but went well past the pre-bubble highs. The recent downturn has again wiped those gains out...but I long ago transferred my 401K and stocks into a self directed program with checkbook control so that I can focus on Real Estate.
In the interest of full disclosure...while I wish LTV's were lower...I'm definitely not a fan of extremely high LTV loans. Remember that as the LTV rises resources available to make it through difficulties diminish. As banks have become more risk adverse they are requiring those taking out loans to have more "skin in the game." They want committed investors. Think of it this way: A buyer of a $1,000,000 property who puts down 5% ($50,000) often is creating a no cash flowing deal with no funded reserves. If the economy in that area goes soft and rents drop $50 per month he's going to have a "Cash Call" every month. Then he stops maintaining his property and stops making full payments. This creates a distressed property that lowers values of competing properties. If that same property had a 30 or 40% LTV loan the debt service would be less, making it possible to weather the storm better.
I mentioned previously that there are other options...among them are HUD Loans...which I'll cover in a future post.
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