Will Lane's Real Estate Blog

Will Lane's Real Estate Blog

 

 

Aug. 26, 2016

INVESTING IN MULTI FAMILY HOUSING vs SINGLE FAMILY HOUSING

 

Investing in multifamily properties versus single-family properties continues to be one of the great debates in the world of real estate investing. While each offers several compelling advantages, each side represents a very different exit strategy for investors, including management style and income earned. Because these properties are viewed differently by investors, insurers and lenders, comprehending the ins and outs of multifamily and single-family properties is critical for success.

For those considering taking the plunge and investing in multifamily properties or single-family properties, it’s important to understand which investment vehicles do what. Deciding among single-family or multifamily properties is largely about personal preference and goals, and the following will explain the major differences between the two investments, including the various advantages and disadvantages of each strategy. If you are looking for an answer for the single-family vs multi family debate, I encourage you to keep reading.

 

 Investing in single family properties A single-family property, otherwise referred to as a single-family home (SFH), is defined as a free-standing residential dwelling built on a single lot with no shared walls. Unlike a multi-family home, these properties contain only one unit which is neither attached or built in unison with any other type of structure. In addition, a single-family home will generally include a front and backyard, as well as a garage.

Traditionally used for owner occupancy, single-family homes can also be used as an investment vehicle to generate monthly income. With record low mortgage rates and fast-rising rental rates, these investment properties offer an assortment of advantages compared to multifamily homes, especially for beginner investors. The following examines the benefits of investing in single-family properties:

 

More Affordable: One of the more obvious advantages of investing in a single-family property is cost. The price for these real estate investments is generally much lower than multifamily properties, including additional expenses such a down payment and maintenance. Rather than 25-30 percent down, which would be the case for a multifamily home, investors simply need to ante up 10-15 percent for the down payment. In addition, most rental agreements will require the tenant to pay for the majority of utilities, as well as take responsibility for the landscaping, which makes long-term maintenance costs much cheaper. Also, insurance rates will be more affordable for single-family homes than multifamily properties.

 

Higher Appreciation: For one reason or another, single-family investments tend to appreciate more than other types of properties. It could be a variety of factors, but it mostly pertains to how lenders value each type of investment. Unlike multifamily properties, which are valued on the rents coming in and the condition of property, single-family homes are valued on supply and demand of owner-occupied buyers. If well-maintained and situated in a thriving neighborhood, buyers will always be in demand for single-family properties.

 

Easier To Finance: Although financing guidelines and rules vary from bank to lender, financing a single-family property is typically much easier than its multifamily counterpart. Lower interest rates and higher loan-to-value (LTV) ratios are one of the main benefits of financing single-family homes. And because these properties are typically much more affordable than multifamily homes, many investors will forgo financing options and purchase the property with cash.

It’s important to note that financing a property for the intentions of rental income (non-owner occupied) will subject borrowers to different mortgage rates than an owner-occupied loan. Investors can expect to pay 0.25 – 0.50 percent more than owner-occupied mortgage rates.

 

Easier To Manage: Managing one unit over four has its appeal. The one aspect many investors fail to consider when investing in real estate is the cost of managing it, which can vary depending on the amount of units. With only one tenant, single-family rentals are much easier to manage. Investors can choose from becoming the landlord and managing the property themselves and hiring a professional management company to oversee the investment.

Investing in multifamily properties and single-family homes continues to be one of the more popular investment vehicles for both seasoned and up-and-coming investors. Like with any real estate deal, however, investors shouldn’t go into it blind or uninformed. Instead, investors need to perform their due diligence to ensure the deal not only makes sense financially, but it aligns with the long-term strategy for their business.

 

 

Aug. 12, 2016

Investing in Multifamily Housing

 

The Oldest rule of Real Estate value applies to multifamily real estate as well; location, location, location. If for nothing else, the perceived value of a property will be heavily attributed to the location in which it resides. Remember, you can always change the features of a home, but you can’t change where it is located. Investing in the right location will greatly increase your chances of success.

 

However, simply knowing the importance of a great location is only half the battle; you must be able to pick a great location if you hope to realize success in the multifamily investing industry. That said, let’s take a look at the criteria you should prioritize in an attempt to get into multifamily investing:

 

Where are the Best Multi-Family Investing Opportunities?

 

Location, location, location not only applies to where the property is, but equally as important is where the property is in relation to where you are located. If you are going to manage the property yourself, you can expect to spend a lot of time at the home; don’t invest in a property you think will become a problem due to location or condition. In many areas there are local property managers that can hired to handle anything from simple monthly rent collection to full property management which would include regular property maintenance, repair calls and responding to tenant issues. Beware these services can run as much as 20% of your renal income plus additional fees for parts and emergency calls.

 

Outside of the location, consider its proximity to your current location. Neglecting to account for the logistics of travel is an oversight that far too many new investors make. I recommend investing in a multifamily property that is easy for you to get to, as traveling is a business expense. As you gain more experience, there is no reason you can’t broaden your search criteria, but new investors are better off investing close by.

 

Only once you have identified an area that you are comfortable visiting on a regular basis can I recommend furthering your efforts. For starters, you will need to identify the area’s demand. Don’t think that just because you like the region that everyone else will. Mind due diligence and determine if there will be a demand for your property once it is on the market.

 

Provided you are convinced the local market has sufficient demand to meet your needs, proceed to evaluate the region’s yield. Not surprisingly, the ideal location will boast properties valued for less relative to their income potential. Ideally you will want to maximize your cash flow and reduce your expenses. It’s not rocket science, but don’t assume that the higher a home can rent for the better off it is; higher rents will typically come with higher costs. The key is to find the middle ground. You may be better off joining the multifamily investing sector in a secondary market, or at least one that has yet to meet its potential.

 

In the multifamily investing sector, those that can identify up-and-coming areas have and are showing signs for success. Predicting growth is as simple as identifying trends and minding due diligence.

 

As a multifamily investor, I encourage you to do a little homework and identify trends that may impact the future of your next investment. Is there a new school going in down the road? Will a new mall or business park attract more tenants? Look into the plans for the area in question and determine whether or not they will help your investing endeavors.

 

In addition to forecasting future trends, identify the market’s current fundamentals. For starters, focus your efforts on areas with encouraging employment statistics. For what it’s worth, strong employment numbers are a great barometer to gauge an area’s multifamily investing viability. Ideally, you will want to invest in an area that has shown not only employment growth, but diversity as well. The more diversified employment is in a respective area, the less likely it is to be impacted by a downturn.

 

In understanding how growth potential, yield and personal viability impact a multifamily investing opportunity, it’s not hard to see why some cities are doing so well. If for nothing else, the following cities are at the forefront of the multifamily investing movement:

 

The Top 5 Multi-Family Investment Markets

 

Sacramento, CA: Spearheading the country’s most promising multifamily investing cities, Sacramento has become the beneficiary of some impressive rent growth. Having recently passed the halfway mark of 2016, the capital of California saw its multifamily rent growth reach as high as 7.3 percent. At just over seven percent, the rent growth recently witnessed in the Sacramento multifamily housing market has surpassed every major U.S. metro.

 

Salt Lake City, UT: Salt Lake City’s multifamily rental market has proven that it belongs in the same discussion as the nation’s best cities for investors. For what it’s worth, Salt Lake City has a track record of offering strong returns to those investing in multifamily properties, and this year is no exception. With a multifamily rent growth rate of 6.6 percent, Salt Lake City comes in at number two on our list, and you can bet investors have already taken notice.

 

Phoenix, AZ: Multifamily rental housing has seen growth of near 6% this year. This has been attributed to high employment rates of unskilled labor in the construction, and hospitality industries. Smart money in Phoenix is quickly moving into this segment of the market.

 

Jacksonville, FL: The state of Florida, for the most part, has taken the recovery and run with it. Not surprisingly, some of its biggest cities have led the way, but none more so than Jacksonville, at least in terms of multifamily rent growth. With the first six months of 2016 in the books, Jacksonville’s multifamily market has seen rent growth reach 4.2 percent. While not quite on pace to keep up with Sacramento, Jacksonville looks to be one of the favorite locations of multifamily investors.

 

Seattle, WA: It shouldn’t surprise anyone that the Seattle real estate market is currently firing on all cylinders. However, it is important to note that the Emerald City owes a lot of its recent success to the state of the multifamily rental industry. In the last six months, multifamily

 

If you have just read this blog, and you have an interest in getting involved in the MultiFamily Market or you would like help Buying or Selling a Home CALL ME NOW @ 602-435-2522.

MY OATH TO MY CLIENTS IS TO REPRESENT, PROTECT YOU, ADVOCTE FOR YOU TO THE BEST OF MY ABILITY, AND SELL YOUR HOME FOR THE MOST MONEY IN THE SHORTEST PERIOD OF TIME. 

 

July 10, 2016

FSBO A NO NO

 

Hmm… How is this for the only reason you need not to sell your own home.

Homeowners selling without a Realtor think they will trade a little time and effort and save the OUTRAGEOUS 3% a listing agent will charge.

The hard facts according to the National Association of Realtors are in 2015 FSBOs lost an average of 16% with a median selling price of $210,000 while agent-assisted homes sold for about $249,500.

 

 

If you think you know a friend or family member that is going to buy your house. Be clear on how that transaction typically winds up for a FSBO seller. If a FSBO sold to someone he or she knew, the median dropped to $151,900 (because uncle Ben thinks he is doing you a favor and expects a deal, and you wind up giving him one).

 

FSBOs take longer to sell than homes listed with an agent. For the same reasons, they can’t get the right selling price. On average18 percent of FSBOs were unable to sell within their chosen time frame last year.

 

With no representation a seller is susceptible to a myriad of scams. So numerous are the scams out there, I would have to devote a whole blog to them.

 

100% OF THE LIABILITY ON A FSBO SELLER. Everyone makes mistakes. A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes. Attorneys can close a real estate transaction, but they don’t carry errors and omissions (E&O) insurance. A SIMPLE MISTAKE ON YOUR SPUDS COULD LAND AN UNREPRESENTED SELLER IN COURT, AND COST YOU TENS OF THOSANDS OF DOLLARS. 

 

Documenting Real Estate transaction is complex. The 2015 National Association of Realtors’ Profile of Home Buyers and Sellers showed that understanding paperwork was one of the most difficult tasks for FSBOs.

 

FSBOs have limited resources to market their home. The 2015 NAR Profile of Home Buyers and Sellers showed 42 percent rely on a yard sign, 32 percent rely on friends and family, and about 15 percent use social media. Relying on friends and Uncle Ben second cousin has its limitations. Even paying for the MLS listing won’t be enough because there’s no incentive for an agent to bring a buyer to a FSBO.

 

The mindset for most FSBOs is saving money. Unfortunately, FSBOs are stepping over quarters to pickup nickels. They’re paying for a lot of extras: signage, flyers, photography, MLS listing, home warranty, home inspection, and the lists goes on and on.

 

The biggest cost to a homeowner is their time. You might hear the argument that it doesn’t take an agent that much time to sell a house. But it will take a homeowner a lot longer. They don’t have the expertise or the resources agents have. What is their own time worth to them? How much time will the seller spend researching the market and studying contracts?

Let me ask you, are you willing or able to leave work to unlock the house each time there’s a showing?

 

If you have just read this blog, and you are thinking of selling your home, CALL ME NOW @ 602-435-2522.

MY OATH IS TO REPRESENT, PROTECT YOU, ADVOCTE FOR YOU TO THE BEST OF MY ABILITY, AND SELL YOUR HOME FOR THE MOST MONEY IN THE SHORTEST PERIOD OF TIME.

 

CALL THE WILL LANE GROUP TO HANDLE ALL YOUR REAL ESTATE NEEDS @ 602-435-2522.

Posted in News
June 19, 2016

Scottsdale Quarter Apartment living

One of the basic needs of every human being is having a roof over their heads and there are various structures that people refer to as home. Some of them are not the best representation of what a home is supposed to be and for anyone who minds about where they opt to stay, everything about a prospective home will be scrutinized keenly.

Scottsdale Quarter, and Kierland Commons boast some of the best retail shopping, and fine restaurants such as The Ocean Club, Dominick’s steak house, and Eddie V’s to name a few.  Anyone seeking for a place to stay will not just be indulged by the many amazing restaurants, challenged by world class golf courses, or energized by the nightlife this area has to offer, but will immediately be seduced  by the  five-star residential apartment living in this area.

Some of the things you will enjoy are resort-inspired amenities, sophisticated interiors of the Crescent at Quarter as well as indulgent services. This is one of the most popular places for people wanting to live in an upscale urban contemporary environment that the Scottsdale Quarter, and Kierland Commons offers. You will not be disappointed and your expectations will be exceeded. Liv North Scottsdale is the other complex worth checking for apartment seekers. If you consider comfort, style and convenience at the  top of your list when seeking an apartment home then, this is the place to be. These are the things that upscale apartment living should offer, and developers of these properties have taken apartment living to the level of an art form.

These complexes include a 24-hour fitness center, 24-hour access to resort like pool and spa amenities, Outdoor and indoor entertainment areas complete with High end barbeques, and lush furnishings, alarm systems, 24-hour business center, as well as 24-hour emergency maintenance. These services are vital to luxury apartment living, and you can be sure you are opting for the best by choosing to live in the Scottsdale Quarter, and Kierland Commons area.

A home is a place where all should feel welcome, at peace and relaxed, while at the same time being just a few steps away from premier dining, entertainment and shopping.

Welcome to North Scottsdale, whether you are interested in apartment/condo living, or finding a large Estate home in a gated community, renting or buying, please call THE WILL LANE GROUP for your Arizona real estate needs. You can count on Will Lane and his team at Realty ONE Group for superior area knowledge and five-star service.

Call THE WILL LANE GROUP at 602-435-2522

Posted in News
May 19, 2016

Learn History and Eat Great Food Near Your Scottsdale Home

Take a food tour near your Scottsdale home.Scottsdale home owners have a great opportunity to explore the culinary abundance of Old Town. Book a tour with Arizona food tours and discover the best restaurants and cafes. There are three lunch tours available, each with its own emphasis and different stops. Two dinner tours are also available. No matter which one you choose, you’ll get a multi-course meal, which includes either craft beer, fine wine, or a cocktail, as well as a decadent dessert. These tours last around three hours. Wear shoes that are comfortable for walking, come hungry, and get ready to learn about the historic Scottsdale real estate of Old Town.

Tour Historic Scottsdale Real Estate

For a somewhat shorter tour, book the Sip n’ Sample on Saturday afternoons. This tour runs for only two hours, but it still includes five fabulous stops. Get some tasty appetizers, try wine and craft beer, and finish up with a sweet treat. Afterward you can head back to your favorite stop for dinner.

A food tour is a fun way to get to know your city’s history and entertain if you’re hosting guests at your Scottsdale home. Accommodations can be made for vegetarians and people with most dietary restrictions. Visit Arizona Food Tours to find out about the tour stops and book your spot.

 

Posted in News
May 18, 2016

Play Golf on Scottsdale Real Estate at McDowell Mountain Golf Club

Play golf on Scottsdale real estate.Get your golf game on just a short drive from your Scottsdale real estate! Featuring quite an impressive list of nearby courses, Scottsdale is the place to be. Golf enthusiasts will especially not want to miss a trip to the McDowell Mountain Golf Club. Sitting on the foothills of the McDowell Mountains, this beautiful course has recently undergone a course enhancement. Thanks to the original course architect, Randy Heckenkemper, additional teeing areas and wider playing corridors have allowed golfers of all abilities to feel success and enjoy playing this course. Club fittings and lessons are also available here. Rub elbows with Phil Mickelson and "Coach" Steve Loy, who have acquired operating rights to this course.

Scottsdale Home Owners Hold Special Events on the Grounds

In addition to offering a great round of golf, McDowell Mountain Golf Club also offers Scottsdale real estate owners a beautiful location for a wedding or event. Whether a small birthday party or a large reception, there is an option available for an affordable and stress free gathering. While coming out to check out the facilities, grab a bite to eat at the Mesquite Grille. There is something on the menu for everyone and the sunsets that occur while gazing at the sky from the patio are truly breathtaking. All who call Scottsdale home are invited to visit the golf club to learn more about the course and facilities, and to book a tee time.

 

Posted in News
May 17, 2016

Visit Historic Scottsdale Property at the Museum

Visit historic Scottsdale property.Stop into the Scottsdale Museum today and learn about local history with the Winfield Scott Exhibit. The founding father of Scottsdale Arizona paid 50 cents for his Scottsdale property in 1888. A Civil War veteran, Winfield Scott was an original Arizona pioneer. With his wife Helen, he helped establish the neighborhood. Their Scottsdale home became a beacon for those in need for the couple was known to offer a helping hand and never turned anyone away. This dedicated space in the museum honors their achievements which in turn became the foundation of the Scottsdale community today.

Scottsdale Home Owners Learn about Their City’s Past

The One Room School House exhibit recreates school days as they might have been prior to 1900. Imagine a single classroom with one teacher trying to satisfy the minds of curious students of all ages and grade levels. Today’s students will marvel at the differences from writing materials to lunch boxes, and then shutter to realize that for the students of the past the air conditioning was an open window.

There is also a Scottsdale High School display to pause at. View memorabilia of days long gone by on the campus of this Scottsdale property. Vintage letterman’s jackets, band uniforms, mascots, trophies and more date as far back as 1923.

The Scottsdale Museum embraces the past while providing encouragement for the future. This enchanting museum should be on everyone’s list of places to see.

 

Posted in News