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Some Basic Forms of Real Estate Investment

A nice short article on property purchase, real estate investment trusts and flipping properties.

Don MacKenzie Blog

Real Estate Investment  pic Real estate has become an increasingly popular investment vehicle in the last few decades. While many individuals think of real estate investments in terms of buying and then renting a property, several other investment avenues exist.

Purchasing a property to rent is the most basic form of investment, but individuals who want to avoid the issues involved with managing the property can turn to real estate investment groups. Similar to a mutual fund for rental properties, this group includes investors who own one or more units in a larger building or block. All properties fall under the management of a company operating the investment group.

Another option for real estate investors is the real estate investment trust (REIT), a company that pools the money of investors to buy a portfolio of properties. Investors buy and sell stock in REITs on major exchanges. This provides them with liquidity not available in…

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Buying a prime investment property for under $400,000

A solid post on investing in real estate.

The Real Estate Blog

It is important not to overexpose yourself to debt and risk as a property investor, so knowing how to source properties under $400,000 can be an important building block to creating a successful property portfolio.

With interest rates expected to be cut even further next year, the outlook for the  real estate market looks very positive.

Western Australia still enjoys the highest population growth rate in Australia, increasing by 2.5 per cent over the past year, and this continued strong population growth will drive demand for property.

One of the key lessons I have learnt over more than 26 years of investing in  real estate is that you do not have to buy an expensive property to achieve high rates of capital return. For example, you can still buy an older-style unit in beachside suburbs such as for under $360,000 and achieve rates of capital growth equivalent to or even higher…

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Two Incredible Advances in Green Construction

As the effects of the Great Recession on economic confidence begin to wane, construction projects are on the rise. One of the most exciting elements of these new real estate developments is their usage of some of the newest green construction techniques in commercial real estate. Not only do these features provide environmental benefits like lower energy usage and carbon emissions, but they also save builders money through a rising opportunity for municipal incentives.
There was a great article in howstuffworks.com on some of the most valuable and effective advances in green building. Here are a couple of the highlights!

Electrochromic Glass

Electrochromic Windows

Electrochromic Glass saves a bundle in HVAC costs

Used in windows, electrochromic glass uses nanotechnology to electrically change windows between translucent and opaque depending on the amount of light coming into the space. This serves to save energy by reducing the stress on a heating/cooling system. For example, when sunlight comes into a space, it heats it up, sometimes to an extent where you need to compensate by using a central cooling system. This is inefficient and can wind up costing a lot of money to regulate. By regulating the amount of light that can come into the space with a centralized electric system controlling the electrochromic glass, it becomes possible to largely control temperature without the use of an HVAC system.

Microform Technology

Mycelium gary richetelli

Mycelium can grow with organic materials to provide a strong material

This is one of the most exciting technologies, which uses natural materials that would otherwise be deemed waste and unusable to provide strong, high-integrity building materials. Using a combination of bulk waste materials, mycelium, and heat, builders can create an incredibly material for walls. Basically, if you put the waste and mycelium together, the spores will grow to fill its container. Using heat on the outside, the growth stops at whatever point the builder desires. Even though the organic waste and mycelium is biodegradable, the casing for these bricks could be made out of a long-lasting material like aluminum for support. We should see a rapidly increased use of this technology because it’s cheap and doesn’t require toxic chemicals to produce.
The benefits of switching to green building are clear. It’s becoming cheaper to use them now and will be in the long run in terms of energy bills and the toll taken on the planet’s environment as a whole.

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Willis Tower to Be Sold

According to a recent article in the Wall Street Journal, Chicago’s iconic skyscraper formerly known as the Sears Tower has been sold for the second time in 11 years.

The Deal to Buy the Willis Tower

At $1.3 billion, 233 South Wacker LLC, the group that currently owns the tower, will be turning a profit of nearly $450 million, having bought the building in 2004 for $841 million. The purchase is a departure for the private equity group Blackstone, which is more widely-known for purchasing assets that have fallen into distress and are being valued below their potential. The purchase signals a rebound in commercial property values, which took a big hit during the recession, dropping by more than 30% between 2007 and 2009.

Blackstone says that it’s looking to capitalize on increasing interest from various companies to move into and expand in Chicago, requiring premium office spaces. It also sees great opportunity in the building’s retail and tourist appeal, seeking to expand retail spaces on the ground floors while revamping the observation deck to make it into one of the most accessible tourist attractions in Chicago.

New York vs. Chicago

The purchase furthers the competition between Chicago and New York City, who have argued over whether the Willis Tower or the Freedom Tower in NYC is taller. The $1.3 billion price tag is the highest for an office tower in the U.S. outside of New York City.

The Willis tower stands 1,730 feet tall (including antenna), whereas the Freedom Tower is 1,776 feet tall at the tip of its antenna, reflecting the year of the Declaration of Independence. There has been a contentious back-and-forth between the two cities over whose is actually the tallest tower and what technically constitutes the “highest” point of a skyscraper (in terms of whether it’s the top of the structure or whether it also includes the antenna atop the structure).

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Crowdfunding in Real Estate

Crowdfunding is on the Rise

Crowdfunding has received more attention than any other “big idea” in real estate during the beginning of 2015. A recent article from TheRealDeal.com describes the crowdfunding phenomenon as being the most successful advent to the New York City real estate network. “Crowdfunding allows investors to put their money directly into real estate projects of their own choosing, rather than investing blindly through a middleman such as a real estate investment trust or a pension fund,” writes Hiten Samtani.

Gary Richetelli Crowdfunding Real Estate

Crowdfunding is picking up in the real estate market

Take Fundrise.com for example, a innovative idea that allows building owners to create their own personal profile describing the project they are funding. Potential investors are then allowed to decide to put in as little as $5,000. According to therealdeal.com, the concept is getting a lot of financial backing. People enjoy having the ability to put their money where they would like to and to grant someone that opportunity, is a new concept for real estate!

“I think the concept of democratic investment in real estate has the opportunity to grow dramatically if managed and done well.” – Tal Kerret (President of Silverstein properties)

Moreover, companies that use crowdfunding rely on various business models to earn their money.  Companies like Fundrise.com, Realty Mogul, Realty Shares, Crowd Street, Collaperty, Groundbreaker, CrowdBaron, iFunding and Prodigy Network are the top real estate crowdfunding platforms used to assist realtors and investors in their next crowdfunding endeavor.

Real Estate “Crowdinvesting”

According to the Crowdfunding Industry Report, there was $2.7 Billion dollars raised online as a result of crowdfunding in 2012. In 2013, an estimated $5.1 Billion dollars was raised online. Prior to now, a vast majority crowd funded dollars has come from rewards-based crowdfunding where people purchase products or experiences.

Gary Richetelli Real Estate Investment

Crowdfunding investment or “crowdinvesting” is on the rise.

At first, real estate didnt seem like an obvious market for crowdfunding. Nevertheless, using crowdfunding in real estate seems to have caught on, though mostly for millionaire-accredited investors. Keep your eyes open for the several firms vying to become the Kickstarter of real estate!

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Real Estate in the Digital Age

Technology in Real Estate

The first in the Dot Com and real estate industry to focus on real estate but primarily address the residential market are companies like Zillow, Trulia, Naked Apartments and StreetEasy. These companies continue to showcase the power that technology can have when applied to a market that is as large and lucrative as residential real estate.

Gary Richetelli Web Icon

Real Estate is moving into the web space

The commercial real estate market consists of office buildings, hotels, malls, retail stores, multi-family housing, industrial property, warehouses, medical centers and garages. Currently, innovation and technology on the commercial side of the market has been limited with the exception of CoStar and LoopNet.

While the economy is beginning to  recover, money is also beginning to flow back into commercial development, which means the most tedious roadblock is being lifted and the market is, “ready for new entrants to build upon the work of the early pioneers in commercial real estate technology.’

How is technology changing the real estate industry?

Real Estate Industry in the Digital Age

New technology will continue to revolutionize the world we live in. During the process many industries will slowly become outdated. According to Brenton Hayden of entrepreneur.com, it is very likely that the real estate industry will be one of the next industries to respond with changes forced by the digital age. We’re already seeing the aforementioned websites having an impact on real estate, and with Air BnB listings that are available for long-term stays, we have yet to see the larger implication.

Gary Richetelli Real Estate TechnologyIt’s time for a change. As commercial real estate becomes more and more prominent, technology like automated agent selection and virtual staging will become available for commercial real estate clients as well. Smart real estate agents will welcome these technology changes and use them to excel, while others will fail at adapting to a newer way of thinking and growing within the real estate industry.

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Seattle Market Cooling Off?

Seattle Real Estate

Is Seattle’s scorching real estate market starting to cool?

Although Seattle is still hot when it comes to the strength of its commercial and residential market, it is starting to cool off.

Surprisingly, it was the Puget Sound region’s prospects for the housing market the dragged Seattle down, while the outlook for the industrial, hotel and office sectors are still among the top in the nation.

The Emerald City overall fell two spots to No. 8 in the annual Emerging Trends report, which was released in Seattle Tuesday. Two Texas cities, Houston and Austin, came in at No. 1 and 2, respectively, followed by San Francisco, Denver, Dallas/Fort Worth, Los Angles and Charlotte, N.C. Coming it ninth was Boston followed by Raleigh/Durham, N.C.

Urban Land Institute, a nonprofit research group and global accounting firm PwC ranked the cities based on their surveys of more than 1,400 real estate industry experts.

Seattle is the second strongest in the industrial market, the third best hotel market and fourth for office.

“If any hesitation about investments in Seattle exists, it seems focused on the housing market,” the Emerging Trends report states. Seattle’s multi-family sector is ranked tenth, while the single family-housing markets is No. 17

The market in Seattle can expect to see their capital continue to flow in. The region is one of the top capita destinations outside of the core major markets and is attractive to local investors. Locals believe the strength of the local economy will continue to grow and support the investor demand.

For more information read the full article at BizJournal.

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