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The Biden’s Administration’s Plans to Combat Workforce and Low-Income Housing

The Biden’s Administration’s Plans to Combat Workforce and Low-Income Housing
The Biden-Harris administration released a statement of September 1st, 2021, announcing immediate steps that would increase the affordable housing supply. The administration has recognized that major investors have stepped up to purchase real estate, such as urban and suburban single-family homes, and convert them into rental properties. However, the government has also recognized that this may have led to a shortage of affordable housing. In a White House statement, it was revealed that “One out of every six homes purchased in the second quarter of 2021 was acquired by investors.” This has created a limited supply, which drives up pricing.    However, the administration recognizes there is more to the dilemma than investors buying up most of the supply. The increase in material costs, labor shortage, the global pandemic, and prohibitive zoning laws all add to the problem. Therefore, more can be done to increase the affordable housing supply.  They announced steps that “create, preserve, and sell to homeowners and non-profits nearly 100,000 additional affordable homes for homeowners and renters over the next three years, with an emphasis on the lower and middle segments of the market.”   These steps include giving federal agencies the resources and authority to:  Relaunch partnership between the Department of Treasury’s (Treasury) Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program Expand financing through Freddie Mac, Fannie Mae’s and the Federal Housing Administration’s (FHA) Leverage existing federal funds Explore federal levers to reduce exclusionary zoning Launch learning and listening sessions with local le......
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How Can Landlords Mitigate Their Losses Now That the Eviction Moratorium Has Ended, or Will Be Ending Soon.

How Can Landlords Mitigate Their Losses Now That the Eviction Moratorium Has Ended, or Will Be Ending Soon.
The nationwide eviction moratorium had prevented families from being removed from their homes, helping families face pandemic-related financial hardships while mitigating the risks of further spreading the virus when people were forced to move out. People who took advantage of the measure will still have to pay their landlords the total amount accrued during the moratorium. Since the CARES (Coronavirus Aid, Relief, and Economic Security) Act was introduced on March 27, 2020, the eviction moratorium deadline has been extended multiple times. The extension from June 30, 2021, to July 31, 2021, was the third time it was extended. On August. 26, 2021, the U.S. Supreme Court overturned a moratorium on evictions ordered by the Centers for Disease Control and Prevention (CDC) targeting areas with high transmission rates. In a 6-3 vote by the Supreme Court, the moratorium will no longer be extended. With the moratorium ended and the pandemic still ongoing, landlords worry that their tenants may still not keep up with their contractual obligations. Tens of billions of dollars of rental relief were made available to struggling tenants; however, as of August 2021, only $3 billion of the allocated $46 billion rental relief fund has made it out. Each state has its own process for disbursing the relief funds. Helping Tenants Apply for Rental Relief Unfortunately, gaps remain in the program as many citizens either don’t know how to apply for it or don’t know if they are eligible. One of the main challenges, particularly low-income tenants with no internet acc......
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How to Combat Workforce Housing Shortage in Major Metros

How to Combat Workforce Housing Shortage in Major Metros
Workforce housing is not to be confused with affordable housing. The best definition for workforce housing is “housing that is affordable to households earning 60 to 120 percent of the area median income.” However, that median may vary by state. Unfortunately, major metros still struggle with filling the gaps with workforce housing programs. Recently, housing prices have outpaced income in many major metros around the U.S., causing a housing shortage for those trying to find affordable housing close to their work. The housing crisis has been discussed extensively by politicians and economists alike. From connecting investors with developers to partnerships between building owners and tenants, creative programs can help combat the workforce housing shortage in major metros. Let's look at some of the solutions that experts feel can help keep the workforce housing shortage under control. 1. Leverage technology that helps developers build faster for less New construction technologies and structural frames may be the answer to building better and faster. Innovative materials may also prove to be more affordable without sacrificing durability and quality. 2. Remove administrative and regulatory barriers that make it challenging to build more homes and apartments cost-effectively A good place to start would be automating the local, state, and federal systems that analyze the planning and zoning codes and reducing processing time. If the processing of legal analysis could be shortened from months to weeks or days, less time and money would be wasted waiting on whether housing can be built on a particular property. 3. Pro......
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HOW TO BUY YOUR 1st COMMERCIAL PROPERTY

HOW TO BUY YOUR 1st COMMERCIAL PROPERTY
Commercial property is an asset that is real estate referred to use as business activities. It serves as land for rental purposes and generates profit. Commercial property can be malls, industrial estate, manufacturing stores, grocery stores, and many more. Investing in commercial property sound always healthy, but the cost of such property is far higher than residential property. But it can aid in getting a long-term source of income. Buying a commercial property is always a tough row to hoe. And some serious points need to be considered while investing an enormous amount in commercial property. There are five primary types of commercial investments, which are as follows. OFFICE The office building can be small or big in a different commercial zone. INDUSTRIAL A commercialized industrial area can be a storehouse or a manufacturing site. RETAIL It includes shop around the corner of your house to any regional shopping center. HOSPITALITY It includes hotels that attract tourists and earn you a rental payment. MULTIFAMILY It includes apartments that can be used for several desired purposes. After deciding on the commercial property that attracts you, you Have to build up a strategy to invest in it. Some important points that need to be considered are as follows.   LEARN SOME COMMERCIAL REAL STATE VOCABULARY There are a lot of learning things that are required by a person to be familiar with. Some major terms are as follows. DEBT SERVICE COVERAGE RATIO It tells how much income will help you in covering the......
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Difference between Commercial and Residential Real Estate Management

Difference between Commercial and Residential Real Estate Management
If you have ever owned a house or duplex that you have rented out and you feel like you are ready to move to the next level I have a few guidelines to help you get started. First and foremost, you’ll need to decide what asset class you would like your next investment to be in. Here are a few different types of assets that you can focus on:   1. Office  2. Industrial  3. Retail  4. Multifamily  5. Hospitality   The Commercial Leases  You will find the commercial lease is a lot longer and much more detailed than your residential lease and it will spell out common area maintenance fees, increases in rental amounts at certain dates, concessions, tenant improvement work, and just about everything else. Even in the same building, the terms negotiated on a commercial lease can substantially vary from one tenant to the next. There is a good chance that your tenant will have an attorney review all lease documents and you will have a few revisions before the lease is actually executed. Commercial leases are either a gross lease (the owner pays all the utilities, taxes, and insurance), a net lease, or a modified gross lease. There are several types of net lease, but the one you’ll hear about most often is a triple-net lease where the tenant pays their proportional share for everything (taxes, insurance,utilities maintenance, repairs and capital improvements) on the building. A modified gross lease is where a tenant may pay their share of ......
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What Are the Main Differences Between Commercial Real Estate Loans and Residential Loans?

What Are the Main Differences Between Commercial Real Estate Loans and Residential Loans?
Investments can be tricky, and if you are looking into making more money in real estate, keep in mind that loans may appear the same, but they are not. Before venturing into commercial or residential real estate, there are a few things that you will need to consider, from different interest rates, loan terms, amortization periods, and penalties. Banks will also look into the types of income you have and if the real estate property generated revenue.    Interest Rates Commercial real estate or CRE and residential loans have different interest rates; CRE are considered at a higher risk, therefore, are required to pay more than residential loans. Commercial interest rates will go up or down depending on the standard index. On the other hand, residential interest loans usually have a fixed rate, depending on the term.   Additionally, the index for interest rates tied to CRE loans is typically different then residential loans, and do not have as much volatility in rate changes.   Down Payments Both residential and commercial loans will require a down payment. For residential loans, it can be as low as 3-5% of the loan. Commercial loans require more, with minimum down payments depending on the asset class typically starting at 25%, but many types of assets start at a minimum of 35% down.       Amortization Periods and Loan Terms Since the risks are higher for commercial real estate loans, their loan term is also made shorter. They typically have a “due in ten year” clause, wit......
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Common Metrics/Terms an Investor Uses to Analyze Commercial Real Estate

Common Metrics/Terms an Investor Uses to Analyze Commercial Real Estate
It’s not a secret that numbers drive real estate investment decisions. But the real question is, which metrics are valid? Which metrics matter? Depending on your investment goals and property type, some metrics are more important than others. The following metrics/terms real estate investors commonly use when making portfolio decisions:  1. Capitalization Rate (Cap Rate)  Cap rate is mostly used for apartment complexes and commercial buildings. Capitalization rate can also be used for houses and small multifamily properties, but the flip side is that operating expenses are unpredictable with houses since you can’t know how often or how bad your turnovers may be. Cap rate allows you to compare properties in the same asset class with different characteristics that make direct comparison impossible. The disadvantage of the Cap rate is that it’s only a snapshot. It says nothing about the expected growth in expenses, rents, property value, and whether using leverage will increase your return.  2. Cash Flow  When evaluating rental properties, it’s vital to figure out your expected monthly cash flow. When determining total expenses, you should include:  Property taxes  Flood and hazard insurance  Water  Sewer  Garbage  Electricity  Property management  General maintenance and upkeep  Capital expenditures  Vacancy rate  3. Return on Investment (ROI)  RoI is helpful for analyzing how well a deal did in the past. This measurement is always good to have because you can’t adjust your future investing unless you know how your previous investments performed.  4. Internal Rate of Return (IRR)  The internal rate of return is used to m......
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Is Investing in an Opportunity Zone Really Worth It?

Is Investing in an Opportunity Zone Really Worth It?
The main aim of Opportunity Zones is to encourage long-term investments, especially in low-income rural and urban areas throughout the country, and to boost the economy. An Opportunity Zone is an economically distressed rural or urban community that has been identified by state, local, and federal qualifications.  Opportunity Zones offer a great investment opportunity for smart real estate investors. However, investors should bear in mind the risk profile of Opportunity Zone deals, which can be much higher in some targeted census tracts than the exchange. The key is to stay diversified while taking advantage of the capital gains tax relief that is available through the program. On the other hand, if investors remain diversified, there may not be enough funds flowing to these vehicles.  Only time will tell if this latest program will succeed in identifying the areas that will benefit most from the subsidy, as well as in overcoming the issues that have limited the effectiveness of similar initiatives. Although this concept sounds socially responsible, investors are only delaying or deferring their capital gains taxes.   This program could be good for investors in the sense that it lowers their capital gains taxes, but whether or not it’s going to be good for the people in those communities is still to be seen within the next decade. However, waiting may not be the best move for investors, since these assets are as cheap as they’re ever going to be.  Opportunity zones offer three benefits that make real estate attractive to professional inves......
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What Does Barriers to Entry Mean in Commercial Real Estate?

In commercial real estate, an investor can encounter barriers to entry in their investment.  With the competition in the real estate market, the entry of new businesses can bring many challenges. Existing businesses can take advantage of these barriers, such as economies of scale, implementing vertical integrations, and maintaining strong customer loyalty. Let us take a closer look at what those mean and see if they make a better investment. Economies of Scale If the business has been in the area for some time, they are at an advantage. They would have grasped a better understanding of the existing economy. They have learned most of what they need to know to stay on top and be more effective. They can better manage the resources based on the season to save on cost reductions. Other factors can also include their purchasing power from suppliers, whereas newer businesses may have difficulty getting lower prices. They could get better deals even on loan terms based on their existing credit standing.     Vertical Integration Vertical integration is another barrier to entry. These are a combination of two or more businesses operating separately but owned by one entity that complements each other. They could be sports drink businesses that also own the manufacturing plants that bottle the drinks. They may also have several gyms in the community promoting their drinks. A famous example is “McDonald’s,” which owns the properties where their stores operate. For these companies, these integrations reduce their costs and expenses that come with deali......
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The Evolution of CRE Agents and Lead Generation on Social Platforms

The Evolution of CRE Agents and Lead Generation on Social Platforms
COFFEE IS FOR CLOSERS!  Glengarry Glen Ross was spot on for that time, cold call, cold call, cold call. When asking many CRE Agents how they choose to market themselves many say they focus on cold calling, they don’t see the value in utilizing social platforms. However, the modern-day CRE agent has so many more options to generate leads that it’s almost overwhelming.  With so many new social platforms, email programs, CRMs, referrals, cold calling, blog writing it’s almost too daunting to figure which is best for you to utilize.   Sales agents often forget about long-term lead generation, and how social platforms can impact them. The long history of outbound lead generation has proven to be successful but like any marketing tactics it’s designed to create relationships for the long term, that can easily be done on social platforms and create blogs and a good email campaign. The evolution of any business is critical to its success and CRE is quickly evolving thanks to social networks and APPS.   Most brokerages have their social platforms, email marketing campaigns, and sometimes blogs, which are all good except many companies are not showing their agents how powerful of communication tools these have become, and how they can exponentially increase their leads. I am a firm believer in an agent creating their own identity in the marketplace, and social marketing helps to create that personal.   Cold calling everyone if your community can be difficult, plus many other agents are making the same calls to the same pe......
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