Multi-Family News on multihousingnews.com

The multi-family housing market is a viable market segment in many metro areas as people move in from the suburbs to be closer to work and to entertainment. I scanned many articles and blogs on multihousingnews.com and am here sharing with you some of the statistics I found for our Texas market.

Austin

According to the “Austin Multi-family Report – Spring 2019 and an article on the “Top Multi-family Completions in Austin,” both by Anca Gagluc in the Multi-Housing News, the Austin multi-family market had a strong year in 2018 with rent growth of 4.5% despite 11,000 units coming online. The 11,000 units that were constructed and rented in 2018 were in the upscale lifestyle segment and the 20,500 units underway in 2019 are also targeted for that same segment of the market. 

The largest multi-family projects delivered through the end of May 2019 included

  • Bexley Round Rock, 330 Units, Round Rock
  • Hillstone at Wolf Ranch, 332 Units, Georgetown
  • Latitude at Presidio, 337 Units, Cedar Park
  • Crestview Commons, 353 Units, Austin
  • Terra, 372 Units, Austin

Multi-family housing can come in several classifications, affordable, lifestyle, senior, student, or worker housing. Most of the inventory discussed here is in the Lifestyle segment. A multi-family unit in the lifestyle segment is one that offers amenities that improve your daily life. These may be as simple as open areas and great walking trails or more expensive shared amenities like a stable, fitness center, or sauna and pool. The lifestyle property is supposed to enhance your life. It is in effect a neighborhood, or a community. Lifestyle communities are generally upscale in price, can even be luxurious, and often do not meet the need for affordable housing.

Austin added 36,800 jobs in 2018, up 3.5 % from the previous year.  Occupancy rates for Austin multi-family housing rose to 94.4% as of March 2019 and rent growth was 3.7% percent through April 2019.

Dallas-Fort Worth

According to the “Dallas Multi-family Report – Spring 2019” from Anca Gagiuc in Multi-Housing News, the Texas multi-family market continued to show plenty of supply, dampening rent growth, which was 2.8% year-over-year through March, slightly below the U.S. average.

More than 26,800 units were delivered in 2018 with an additional 44,700 underway as of March 2019.  The metro remained a nation leader in job creation last year, adding 102,500 positions for 2.6 percent expansion. Last year’s multi-family transaction volume was $5 billion.  Investors have already traded nearly $900 million in multi-family assets in the first quarter of 2019 at a per-unit-price of $105,032. The average Dallas-Fort Worth rent is expected to rise 4.3% in 2019.

Houston

According to the “Houston Multi-family Report – Spring 2019” from Laura Calugar in Multi-Housing News, the Houston multi-family market showed rent growth on a downward slide, but the market was still strong, underpinned by employment gains and economic expansion. Houston’s occupancy rate was 92.4%, down 140 basis points from the previous year, fueling fears of overbuilding.

Houston added 72,600 jobs in the 12 months ending February 2019. Last year’s transaction volume was $5 billion.  Roughly 14,000 units were under construction as of March 2019, most of that geared to high-income residents. The average Houston metro rent is expected to rise 2.2% in 2019.

REI Capital Resources is a funding source for SFR Fix-n-Flip, Fix-to-Rent, and Refinance projects as well as larger commercial projects such as office buildings, 5-40 door multi-family buildings, and many others.  These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

REI Capital Resources Long-Term Rental Program

We offer asset-based and experience-based loans for long-term rental projects, including multi-family projects with the following terms: min FICO 650, BPO required, Up to 85% of purchase price, Cashout/Refinance up to 65% LTV (BPO), Max of 80% ARV, Interest rates starting at 6.5%, and points as low as 2.25%.

Give me a call or send an e-mail.

Patrick StCin, 512-213-2271,

e-mail: patrick@REICapital.cash 00000000 00

Home Affordability Update

According to Realtor.com’s May 2019 monthly housing trend report, the national median listing price for a home sets a new record at $315,000.  Despite the continued rise in home prices, rising wages, more inventory, and declining mortgage rates, have made 74 of 100 metro areas more affordable to buyers in their market.

“…the boost in affordability has yet to translate into more home sales perhaps because. while the shift in trend is welcome, the current monthly savings are small and some buyers are waiting for markets to tip further in their favor.”

Danielle Hale, chief economist at realtor.com

The top ten cities showing the biggest improvements in availability of affordable homes also added decreasing listing price. The ten include:

Charlotte, North Carolina, median home price $329,450

Dallas-Fort Worth, Texas, median home price $350,000

Austin, Texas, median home price $369,995

Cape Coral-Fort Meyers, Florida, median home price $299,900

Portland, Oregon, median home price $474,975

Atlanta, Georgia, median home price $335,00

Lakeland-Winter Haven, Florida, median home price $231,500

San Francisco-Oakland, California, median home price $954,500

Des Moines, California, median home price $288,000

San Jose-Sunnyvale, California, median home price $1,167,444 000.

This data is not telling us that that there are more homes in the lower prices for first-time home buyers. According to the realtor.com report, the number of houses below $200,000 decreased 8% year-over-year, and the number of houses priced above $750,000 increased 11%.

The data is telling us that the price of homes in a specific metro area market, when compared to the price in the same market, became more affordable over the past year to the residents in that market. The market itself may still be a very pricey market, but the buyers in the market with increased income and lower interest rates are more able to afford the median home.

San Antonio-New Braunfels, Texas was also one of the 74 metro areas that became more affordable over the last year with a median home price of $295,000. Houston-The Woodlands et al, Texas metro area registered no change year-over-year with a median home price of $324,945.

So affordable homes in the lower prices are still needed to round out the market and where there is a demand, investment will follow.

REI Capital Resources is a direct lender as well as a broker of funding solutions. We offer short and long-term financing options and are eager to support your project with funding.

Please give me a call when you find that perfect real estate investment and know how much money you need. We are “focused on funding your success.”

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash  ffff

West, East, Central: Where to Invest

According to the 2019 Americas Investor Intentions Survey, CBRE,

The Top Ranked (Tier I) Metros for Investment in the Americas include

  • West
    • Seattle, San Francisco/Northern California, Los Angles/Southern California
  • East
    • Miami/South Florida, Washington D.C., New York, Boston
  • Central
    • Chicago

The Tier II Metros for Commercial Investment include

  • West
    • Portland, San Diego, Denver, Phoenix
  • East
    • Atlanta
  • Central
    • Minneapolis/St. Paul, Dallas/Ft. Worth, Austin, Houston

Tier III Metros for Commercial Investment include

  • West
    • Las Vegas
  • East
    • Orlando, Tampa/St. Petersburg
  • Central
    • Nashville

In Canada: Toronto

In Latin America: Mexico City

Texas

Three Texas cities, Dallas/Ft. Worth, Austin, and Houston appear in the Tier II category, the middle market. As with property classes, being in the middle has its benefits. Market sections move around. In good times and with infrastructure investment, the lower tier markets move up and in times of recessions or obsolescence, businesses in the upper tiers may relocate to cheaper markets to save money.

There is much to consider when investing in commercial real estate. Really the only thing you can tell from this data is that the investors surveyed, whatever their market, were intending to invest in these cities in 2019.

REI Capital Resources is a direct lender as well as a broker of funding solutions. We offer short and long-term financing options for your real estate investment needs.

We are “focused on funding your success!”

Patrick St.Cin
512-213-2271
Patrick@REICapital.cash 

Old Malls: Transformed in Texas

While studying what is being done with abandoned malls around the country, I ran into the April 2, article in Dallas News by Steve Brown about plans for the struggling, not dead, Collin Creek Mall in Plano, along Highway 75. The mall is being redeveloped into a mixed-use village centered around a crystal lagoon.  The plans support dense property usage in the area with office space, multi-family apartments, single-family homes, senior-living units, a hotel, restaurants, retail space, a park and hiking trails with all the parking underground sharing the location where the mall is now. The developer, Centurion American, will begin construction in July 2019. Entertainment will be a big component of the project.


Crystal Lagoon & Real Estate Strategy

Wondering what a crystal lagoon is, I visited their website, crystal-lagoons.com, and found that the crystal lagoon is a water amenity that will increase the value of the surrounding real estate and allow higher rents to be charged for office space, hotels, and apartments because it actually brings the beach or water-front to the neighborhood, no matter where the neighborhood is in the world. Although it was developed first for private use, the public access lagoon model allows communities to be developed around the water feature. According to crystal-lagoons.com, the technology claims to make an unviable project viable. Remaking the land where old malls are located, in the middle of suburbs, into new communities for a long time has been a potentially unviable project. It is good to see that this concept can reform and reuse these massive abandoned spaces in our cities.

Sustainability

The crystal lagoons advertise that they are sustainable, using less chemicals, less energy than conventional pool filtration systems, and less water than parks and golf course, yet providing water as crystalline as swimming pools and tropical lagoons. They use any type of water, salt, fresh, or brackish and control evaporation with a film cover system and by capturing rainwater that falls.

Safe, Smooth, and Clean Water

Even along the coast of an ocean, the crystal lagoon concept offers a safe and controlled environment for water sports and beach activities.

Master-Planned Communities around Lagoons

Here in Texas, there are a couple of communities that include a crystal lagoon as part of their planned amenities. Like the Collins Creek Mall replacement project, these are master-planned communities where entertainment, shopping, and employment can be found within minutes of home.

One of these communities is Windsong Ranch in Prosper, Texas.  Another community, Lago Mar, is a 2,033-acre master planned community located along Interstate 45 in Texas City. The 12-acre Lago Mar crystal lagoon is opening in 2020. The entertainment district features multiple beaches, a floating obstacle course, a swim bar, a 10,000-square-foot beach club, and restaurants on the boardwalk. 

Balmoral in Houston is a 750-acre new home community in the West Lake area of Houston that offers Texas’ first crystal clear lagoon surrounded by glistening white sand beaches. The lagoon encompassed 2 acres of sparkling blue water that is 8 feet at its deepest and 3 feet in the swimming areas.

As you are considering investing in real estate, think about amenities like these. Are there any crystal lagoons, walking trails, fishing lakes, or theatres, near the property you are considering. These entertainment amenities affect the value of property and the amount of rent you can charge.

Focused on Funding Your Success

I can be reached at
Patrick@REICapital.cash
512-213-2271
Austin, Texas

Image credit: Azwar Thaufeeq [CC BY 3.0 (https://creativecommons.org/licenses/by/3.0)%5D

A Family of Land Websites to Admire

I recently stumbled onto a family of fascinating websites for those of us who love land.   Whether you are interested in a vacation rental or garlic farming, solar farming or raising timber, hunting quail, or building a deer hunting preserve, this family of sites has much to offer those with land on their minds.

agriculture barn clouds cloudy

The first one I discovered was landflip.com because I was thinking about investing in vacant or rural land.  Land Flip lists the best vacant and rural land available.  So, if you  are looking for hunting land with a cabin, 100 acres in Sierra Blanca, or a poultry farm in Arkansas.  This is the site to visit.  And it is a beautiful site with property descriptions and lots of gorgeous land photos in its galleries.

The sibling in the family is lotflip.com.  Here is the site to go to if you are looking for commercial sites and land. Some of the same properties appeared here as on Landflip.com, like the poultry farm and the land in Sierra Blanca, but they were joined by industrial sites in New Jersey and housing sites in Northern Arizona.

The middle child in the family is farmflip.com, a site that features just what it promises, farms, but with much variety. Here you can find that horse farm in Wyoming, hobby farms, a working cattle ranch in Sabine County Texas, and timber tracts in Florida.

Auctionflip.com is the next site, and it features upcoming auctions, including galleries showcasing fenced land in Kansas, residential development land for auction in Indiana, a home on 15 acres in Platte County, Missouri, and a log home and bed & breakfast lodge with 52+ acres in Houston being auctions on April 27th at 10 am. The property includes a barn, a shop, horse stalls, feed room, chicken coop, dog kennels, and 2 ponds. This could be an interesting investment for the right person.

If your dream involves commerce, hard work, and land, and if you are looking for a piece of urban or rural land to perform on, the not-so-little brother in the family of websites is the one to visit, commercialflip.com.  I think this site had my favorite unique commercial opportunity, a trading post with 34 cabins in Gunnison County, Colorado, right in the heart of the Rocky Mountains. As a kid, I always dreamed of my family owning a trading post of bar in the mountains.  This would have been the place.  The site also featured a gallery of other commercial opportunities, like a Lake Michigan vacation home, a river ranch with cabins in Missouri,  and a family restaurant and motel in Michigan.

Finally, the daddy and the mommy site of the family, as far as I am concerned, where you can learn all about land is landthink.com This is where the blogs, articles, facts, and opinions live.  Here you find information to use and admire about topics like

  • the unique gourmet crops that will make money for a farm,
  • when to get into debt for land and when not to,
  • how to get a timber appraisal,
  • how to organize a community garden, and
  • how to clear land.

I am not sure but this might be my last post. I am off to plant garlic and willow trees.

Not really. But, I do recommend studying these websites for information and possible deals for your next investment, maybe a vacation rental.

Give me a call or send an e-mail and share with me your plans and needs, and I’ll see what lending solution I can generate for you.

Patrick St.Cin
W – 512-213-2271
Patrick@REICapital.cash
Info@REICapital.cash

 

 

 

 

Commercial Real Estate

Most of our fix-n-flip projects have involved residential real estate, but commercial property can also be bought and renovated as an investment with our lending tools.

The commercial market requires some scrutiny to find the best, less risky, options for your investment.

Commercial real estate is property that is used exclusively for business purposes and property that is leased out to provide a workspace rather than living space. Investopedia

According to the “2019 U. S. Commercial Real Estate Market Outlook,” by CBRE, the outlook is good for all four major commercial real estate asset types: office, retail, industrial, and multifamily and three of our Texas towns, Houston, Fort Worth, and Dallas, are on their chart of the Top-10 Markets for Annual Rent Growth over the next 5 years.

On the other hand, JP Morgan is more cautious and expects more modest growth in the commercial real estate market. In their 2019 Commercial Real Estate Outlook by Alfred Brooks, they point out certain areas that are riskier than others and some that still look like good investments.

Together the two investment experts expect 6 situations to influence the market.

  • Online Consumption of All But Food: As more of today’s shoppers move online, traditional brick and mortar real estate stores and malls will be risky investments, except for traditional grocery stores, which have not yet been affected by online competition. JPMorgan
  • Online Goods Need Storage: While trade wars and possible recession affect the value of industrial property, the expansion of e-commerce creates more demand for industrial buildings that can be repurposed to store and distribute goods sold online. JPMorgan
  • More Jobs than Workers: Strong demand for modern and efficient office spaces with lots of amenities, driven by employers in their effort to keep employees in a competitive labor market will keep this market healthy as long as the spaces themselves and lease structures are flexible. CBRE
  • Upscale versus Modest Housing: Upscale multifamily housing has been overbuilt in many markets, but housing shortages still exist in affordable housing in the Class B and Class C units that cater to renters. This shortage of affordable housing makes more modest multifamily housing an attractive investment. JPMorgan & CBRE
  • Preference for Urban Living: Young people continue to live in the city and are willing to trade square footage to avoid a long commute and live where they work and play. Their preference has kept the multifamily housing market healthy. JP Morgan
  • Interest Rates: What can I say about interest rates other than interest rates affect everything, and the Fed looks like they might be raising interest rates and are unlikely to lower them unless there is a financial crisis. This situation makes this a good time to consider buying commercial real estate so you can lock in a lower rate. JP Morgan

REI Capital Resources is a funding source for large commercial projects such as office buildings, 5-40 door multi-family buildings, and many others. These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

apartment apartment building architecture building

Photo by Expect Best on Pexels.com

Patrick St.Cin
W – 512-213-2271
Patrick@REICapital.cash
Info@REICapital.cash

 
References
Brooks, Alred R. JP Morgan 2019 Commercial Real Estate Outlook http://www.jpmorgan.com
https://www.jpmorgan.com/commercial-banking/insights/2019-commercial-real-estate-outlook

Chen, James, Investopedia Commercial Real Estate Definition, April 2019. https://www.investopedia.com/terms/c/commercialrealestate.asp

CBRE, 2019 U.S. Real Estate Market Outlook. https://www.cbre.us/research-and-reports