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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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What Challenges Can I Expect When Buying CRE?

What Challenges Can I Expect When Buying CRE?
Buying commercial real estate can be an exciting opportunity if you are venturing into the CRE scene. There are a few challenges that you may encounter, such as qualifications for a loan, financing issues like amortizations, down payments, and interest rates. We will be discussing these challenges below.   Qualifications for a Loan Start with making sure that you have a good credit score before venturing out into any business. Though there are cases where many choose not to loan from a bank, you may still need to go through some bank assistance if the property owner requires that the payment goes through bank financing. It is also always best to be prepared in case you may need a loan in the future. If you decide to get a loan, you will need to make sure it is clear what it is for and how it will be used -- the bank will ask these questions. It is also advisable to do as much research as you can moving forward and due diligence on the area where the property is standing. Besides a good credit score, you will also need to convince the leader that you will pay back the CRE loan.  The next step is to have the requirements to qualify for a commercial real estate loan. You will need different applications and supporting documents such as a business plan, personal tax returns, and other legal documents. If you already have other businesses, they may ask to see your business......
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Things a Successful Commercial Real Estate Agent Should Keep in Mind

Things a Successful Commercial Real Estate Agent Should Keep in Mind
In the past, the main role of a CRE Agent was to help their client find a property. This sounds quite straight forward and it typically was.  An agent would first utilize their market knowledge to see if they knew of any spaces/properties that might meet the criteria of their client, and if not, begin to reach out to all of their contacts to see if they had anything, or if there was anything new coming out. If all else failed, they would resort to sign chasing, driving the areas their clients were interested in, and call on the signs on buildings to see what, if anything, was available.  Along came the internet which dramatically changed how this works now.  The control of information no longer flowed just through the agent. Unfortunately, many agents didn’t adapt to the change and continued to see their role as just finding a property for their client. Many clients also kept this mentality, thinking that an agent's role was just to find a property. This, of course, led to many clients thinking they only needed an agent to find a property and if they could find one then they wouldn’t need an agent and could get a better deal on their own.  Good agents realize that finding a property for their clients is just a small part of what they do. Finding the right property is a bigger role, and their most value lies in negotiating the best deal for their client.  Finding the right pro......
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Things you should know before going back to the office after the pandemic

Things you should know before going back to the office after the pandemic
Let's face it; there is no reset button. The pandemic that put most of the world on total lockdown in 2020 changed so many lives. As we ease our way into the new normal, there is hope that someday, things will go back to the way it was. In the meantime, we move forward with additional health precautions, more resilience, and a more vital empathy for those who lost much more than time.    While some businesses survived by moving onto online platforms, others have been anticipating re-opening their physical stores such as gyms, recreation stores, retailers, restaurants, etc. These businesses that need to have the regular brick and mortar set up to generate income will bring thousands from stay-at-home setups to finally return to the workplace. It sounds easy, but some things may take some time. Here are a few tips for going back to the office after the pandemic. 1.   Ask Where Your Employees Stand Before calling everybody back to the office: 1.    Make sure the company has made guidelines regarding vaccination. 2.    Discuss options with employees who are not open to getting vaccinated or are unable due to medical reasons. 3.    Before requiring employees to return to the office, ask if this is possible for everyone. While some businesses have resumed, schools and daycare may still be closed, leaving parents no other place for their children when they are working. 4.    Check with your local municipality regarding their laws on re-opening, and make sure......
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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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Due Diligence for Acquiring Commercial Property

As a buyer of commercial properties, you should accomplish two types of due diligence before moving forward with the acquisition. These types of due diligence will protect you against incurring liabilities, and you will be made aware of precisely what you are purchasing. It also gives you a more straightforward overview of what you can negotiate and the terms you could offer. The two types are physical due diligence and financial and operational due diligence. Physical Due Diligence Start with a PCA report or property condition assessment, which physically checks the property's construction. It will also tell you about the capital needs you need to address and the property's future. Next, you will need environmental testing to rule out any hazardous contaminants present on the property. There will be physical surveys done to measure the property, determining the property's legal boundaries.  For older properties built more than 40 years ago, there are two kinds of asbestos surveys you may need. These surveys ensure that the property does not contain the material that, once disturbed, the fibers can be inhaled, risking the development of fatal asbestos diseases. Make sure that the roofs are in good condition, ask when they were last repaired or replaced. These include checking on the elevators, air conditioning, and ventilation that can cost hundreds of dollars in repairs.   Inspect the properties of fire escapes and areas that could be fire hazards. You can also check the property's historical capital expenditure analysis to check what the previous owners spent......
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