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Council Post: How To Prepare For The Recession As A Real Estate Investor

It seems like all the talk these days is centered around the inevitable recession. I see an article every day claiming that the end is near. Recently, the yield curve inverted, which many point to as a strong indicator of an oncoming recession. But, there are also many experts who claim the economy is strong. They cite strong growth, spending, development and other indicators to support their theory. No matter which way you lean, it is inevitable that there will be a market correction/recession at some point. It’s impossible to say for sure when or how bad it will be.

As a real estate investor, you want to be prepared for when it does happen. If you think back to the last crash in 2008, the best deals were the years after that. If you had capital, you made a lot of money. It almost didn’t even matter what you bought because prices were so insanely low. What I’ve heard most from investors looking back at it is, “I wish I would’ve bought more properties.”

Even though you can’t predict when it will happen, you can still take steps to get prepared. If you’re prepared, you’ll be able to capitalize. Let’s go over how people will be affected during the recession.

Sellers

In a recession, there will be many more distressed sellers than there are today. Since the last downturn, sellers have been able to refinance or sell if they got in a tight spot because of appreciation. Since prices will be going down, many will not have enough equity to refinance or sell. They’ll have to face foreclosure or a short sale. The sellers who do have equity will want to sell out of fear that they’ll lose their equity if they wait any longer.

Flippers

Many flippers will have exited the market. Prior to the recession actually happening, they’ll notice inventory rising, days on market increasing and their properties selling for less than anticipated. As a result, their margins will tighten. They may lose money or simply not make the return needed to justify the risk. Therefore, there will be far fewer flippers than you see today.

Wholesalers

Many wholesalers will leave the market. Even though there are more distressed sellers, there are fewer sellers with equity. They’ll notice that there aren’t as many flippers to sell to anymore either. The flippers who have weathered the storm will ask for significant discounts in order to do a deal. Wholesalers’ margins will begin to tighten to the point where it doesn’t make sense to spend marketing dollars anymore.

Contractors

Contractors will not have as many job opportunities since there will be fewer people buying and renovating homes. In order to get jobs, they will have to lower their prices to stay busy.

Real Estate Agents

With fewer buyers and sellers in the marketplace, there will be more competition to acquire clients. Real estate agents will have to spend more marketing dollars to attract them or take discounted commissions.

All these people play a vital role in real estate investing. You should ask yourself where you fit in with all of this. What’s the best position to be in?

The answer: become a cash investor.

In today’s market there are a lot of cash investors, but many will be wiped out or scared during the recession. So there will be far less competition in all aspects of real estate investing. The cash investors who do stay in it will own the market during a recession. With cash, you have many options. You can choose to flip homes with little competition. You can buy a bunch of discounted rentals and build your portfolio. Or you can lend the money to operators and have them do all the work for you.

Again, the No. 1 regret people told me they had after the last recession was that they didn’t buy enough homes. It wasn’t that they wish they would’ve wholesaled more homes or sold more homes as an agent. The person actually buying homes is the one who thrives in the recession.

The cash investor will be able to buy directly from all the motivated sellers with less competition. They’ll be able to buy from wholesalers at deeper discounts because there are more deals than money. They’ll be able to get cheaper labor from contractors because they’ll be one of the only sources of consistent work, and agents will work harder to find deals for cash investors because there will be fewer retail clients.

As you prepare for an oncoming recession, the most important thing you can do is become a cash investor. Here are a few ways how:

• If you have properties or assets, consider selling some so that you have more liquidity.

• If you’re a wholesaler or real estate agent, look into raising capital so that you can start buying the deals you find.

• If you’re a flipper, start building more relationships and using more lenders now so a trusting relationship is in place before the recession hits.

We don’t know when the next recession will be, but it doesn’t really matter. You should be preparing as if it could be tomorrow. Figure out how you can become a cash investor, and you will be ready for it.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

Ryan Pineda is the CEO of Homerun Offer.

Source: Council Post: How To Prepare For The Recession As A Real Estate Investor

Lets talk about a potential recession, what might happen, and how you can best prepare – enjoy! Add me on Instagram: GPStephan – Avocado Toast Merch: https://bit.ly/2DhFyo3 GET $50 OFF FOR A LIMITED TIME WITH COUPON CODE: THANKYOU50 The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $125 million in sales: https://goo.gl/UFpi4c Join the private Real Estate Facebook Group: https://www.facebook.com/groups/there… So first, lets talk about what’s influencing the market and what factors we should be made aware of: The first is rising interest rates: This means that the cost of borrowing money is expected to INCREASE over the next few years. When borrowing gets more expensive, you either need to RAISE prices to keep the profit margins the same – which means things get more expensive to you as the customer. Second, we’ve begun seeing the warning signs of the INVERTED YEILD CURVE – which, according to just about every article out there, the inverted yield curve has historically been associated with a high likelihood of upcoming recession. Third, we have the tariffs and the uncertainty surrounding what may or may not happen. And when it comes to investments, the ONE thing all investors dislike is UNCERTAINTY. When people are UNCERTAIN, they don’t invest, they hold cash…and that causes stock prices to fall. And fourth…we’re seeing a slow down in nearly all markets. Here’s what I think is going to happen… First, I’ve noticed QUITE a lot of what I call “gamblers fallacy.” This is the expectation that the market will drop, JUST because we’ve been in the longest bull market in HISTORY and that means it’s “overdue” and more likely to happen. Second, I believe that a lot of our “Recession Talk” is already SOMEWHAT factored into the price. Think of all the people NOT investing right now because they want to wait for lower prices…that is, in itself, self fulfilling and lowering prices. And third…no one, including myself, knows whats going to happen. No ONE. And fourth, you have so many false news articles designed to APPEAR like credible new sources so they get pumped through Facebook and Blogs for the sole purpose of manipulating you into buying their products. Well here’s the reality: First, NO ONE can predict when a recession will happen. We’ve been seeing these articles since 2013 from people who claim the recession is coming any month now. It’s never ending. You’ll read about this one expert predicting something, then another expert predicting something else, and they keep repeating themselves until eventually, one of them is right. Then they use that credibility of being right ONCE to propel them into the next opportunity. Second, it’s important you PREPARE for a recession in ways you can CONTROL: First, you CAN control whether or not you keep a 3-6 month fund in the event you lose your job or something unexpected comes up. This is absolutely ESSENTIAL for you to do. Second, you CAN control whether or not to have too many outstanding debts that might need to be paid down. If you’re over leveraged, or if you have high interest debt, it’s in your best interest to pay those off to free up cashflow in the event of a downturn. Third, you CAN control how much you spend…if you’re spending is too high, it’s important to cut those back so that you can save more money to invest. And when you DO invest, invest long term. Ideally, these are investments you should plan to keep 10-20 years. For me, I see lower prices as an opportunity. And to alleviate some of these concerns, you don’t need to just drop ALL of your money in the market at once…buy a small amount each and every month. This way, if the price goes down..you’re buying in cheaper and cheaper over time. If it goes up, you’re buying in little bit little…and anytime when it comes to investing, slow and steady wins the race. This isn’t about making an immediate 10% profit in a month…this is about investing for your future in a slow, stable way where you don’t feel stressed whether the market goes up or down. For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com My ENTIRE Camera and Recording Equipment: https://www.amazon.com/shop/grahamste… Favorite Credit Cards: Chase Ink 80k Bonus Point Offer – https://www.referyourchasecard.com/21… American Express Platinum – http://refer.amex.us/GRAHASOxHd?XLINK…

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Real Estate Math: How Much Do I Need To Save For A Down Payment On A House?

If you’ve been thinking of buying a house, you probably know that you should start saving up toward a down payment. However, if you’ve ever asked yourself how much you should be saving, you’re not alone. I’ve broken down the math for you below. Use these equations – and calculators – provided to figure out your savings goal.

Find out how much you can afford to pay in housing costs each month

Conventional wisdom states that housing expenses should never exceed 28% of your total monthly income. Using that figure, if you make $5,000 per month, that would translate to a monthly housing payment – which should include additional costs like taxes, mortgage insurance, and HOA fees – of $1,400 per month.

To find your amount, the math would look like this:

Your monthly take home pay x 0.28 = Your ideal monthly housing payment

Learn how much house you can afford

Once you have your ideal monthly housing payment in hand, you can use that to find out how much house you can afford. To do this, you’ll also need some additional information. You’ll also need a projected annual interest rate and the number of monthly payments you’ll make over the life of the loan.

Today In: Consumer

The formula for this is as follows:

Loan amount = (Monthly payment/(Annual interest rate/12) ) x (1 – (1/(annual interest rate/12)*number of monthly loan payments)

The math here can get pretty complicated so I suggest using this calculator to do the legwork instead.

Continuing with the example above, that $1,4000 monthly payment over a 30-year loan with an interest rate of 5% would average out to a loan amount of $260,794.26. For the purposes of this article, I’ll round it to $260,000.

Zero in on your down payment amount

These days, you need to be prepared to make a down payment of at least 3.5% – 5%. However, if you aim higher and save up a down payment between 10% and 20%, you’ll have access to better interest rates, which could save you money over the life of the loan.

No matter how much you decide to save, the math will look like the following:

Your total loan amount x down payment percentage = down payment amount

In the example above, if I used my $260,000 loan amount and wanted to make a 20% down payment, it would look like:

$260,000 x 0.20 = $52,000

The answer you get is equal to the amount that you should aim to save up to put towards a down payment.

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As a real estate blogger and content creator from a family of Realtors, home buying and selling is what I know. In addition to Forbes, my work can be found on Realtor.com, ApartmentTherapy.com, and Freshome.com. I also work with individual real estate agents to boost their digital marketing strategies. Find me at TMRealEstateWriter.com or on Twitter @TaraMastroeni.

Source: Real Estate Math: How Much Do I Need To Save For A Down Payment On A House?

For more than 40 years Donaldson Real Estate School has prepared students effectively for the real estate exam. A major part of student success is their mastery of the real estate math portion of the test. In this video, Chris will explain what we call our “secret sauce” to mastering real estate math: The Donaldson Math Circle. The Donaldson real estate math circle helps applicants preparing for their real estate exam by breaking down many of the algebraic formulas needed to pass the test into one simple to use system. ———————————————————– Donaldson Educational Services is the #1 source for professional exam preparation, pre-license education, post-licensing, and continuing education in a variety of industries. Featuring programs to gain a real estate license, insurance license, mortgage license, appraisal license, home inspection license – Donaldson is truly a one stop shop for your professional education needs. Keep up with Donaldson here: http://donaldsoneducation.com Twitter: http://www.twitter.com/donaldsonschool Facebook: http://www.facebook.com/donaldsoneduc… Subscribe on Youtube: http://www.youtube.com/donaldsoneduca…

Real Estate Investing 2.0: Unique New Approach Goes Beyond Crowdfunding

A combination of legislative reform and advances in cloud-based digital technologies has made crowdfunding a reality in real estate investing, but it has done little to overcome other barriers to entry. Now, a new business model is taking things to the next level.

While companies like RealtyMogul and Fundrise used crowdfunding to make real estate investing more financially accessible, many investors still consider it too daunting a prospect to venture into. Crowdfunding marketplaces require individual participants to choose the ideal investment and assume most of the risk themselves, and many people are simply not comfortable doing that.

Recognizing those barriers, entrepreneur Eran Roth came up with a plan to take real estate investing to the next level. Iintoo, the company he founded, is built around a REIMCO (real estate investment management company) business model and only offers deals that have gone through a rigorous vetting process based on a data-driven methodology. It actively manages those deals through their entire lifespan (typically 36 months), and underwrites every project on a firm commitment basis, so it has real skin in the game.

Active management makes a difference

The active management component is one of the most significant differentiators between iintoo and crowdfunding marketplaces, Roth stresses. “We had a student housing project in Georgia where the developer passed away suddenly. Foreclosure typically follows in a case like that, but given our hands-on model, our team traveled to the site, helped find a new developer, and made sure the bank would continue working with us. In a marketplace model where the platform is hands-off, the investors would simply have lost their money, but that property ended up returning a 20.82% yield to iintoo’s investors when we exited.”

While all investments, including iintoo’s involve risk, iintoo has come up with a unique way to address investors’ concerns about risk, with a program called epiic (Equity Investment Protection Community*). Epiic offers investors two kinds of protection against loss of principal. The first is a social community pool funded by a small percentage of each initial investment. The second is a $150 million insurance policy underwritten by Everest Re Group, one of the largest reinsurance companies in the world.

Focused on deals lasting 18 to 36 months, epiic provides a seamless and easy investment option for  investors looking to make one contribution into a diversified, risk-mitigated real-estate fund. There are risks associated with investing and principal loss is possible. Certain restrictions and limitations apply.

“Initially, I learned of iintoo’s platform through a friend. It seemed like a new way to invest in real estate,” says investor William Raff. “The more I learned about iintoo, and especially its equity protection, the more interested I became. Since then, I’ve invested in a number of geographically diverse residential properties in the U.S., including student housing and multifamily apartments. iintoo’s expertise lies in this area, and it provides an easy-to-use platform that enables individuals to efficiently access these investments.”

Diversification

Financial strategists have long recommended alternative investments such as real estate to increase portfolio diversification and potentially boost returns. Accredited investors ($200K individual/$300K joint annual income or $1M household net worth) can now access this market through iintoo with a minimum investment of $25,000. Average historical annual returns on iintoo’s full-cycle investments have averaged 16.63%* since the company’s launch four years ago.

Becoming an iintoo member is easy. It’s free to join, and there’s no commitment. Simply go to www.iintoo.com and sign up. Within a matter of minutes, you’ll be opening the door on an investment world once available only to the world’s elite.

This is an advertisement for iintoo.com. Securities offered through Dalmore Group LLC, a registered broker-dealer and member of FINRA/SIPC.

The testimonials contained in this article may not be representative of the experience of other customers. The testimonial is no guarantee of future performance or success.

This is not an offer to buy, sell or trade securities.   Investments are not FDIC insured, have no bank guarantee, and may lose value.

*When we refer to “Equity Protection” we are referring to an arrangement between an affiliate of Everest Re Group, Ltd. (“Everest Re”) and iintoo epiic GP LLC, the general partner of each covered issuer (“Covered Issuer”), pursuant to which the latter promises that, even in the event the underlying project is not profitable or records a loss, the investor in the Covered Issuer shall receive a specified amount equal to the original principal investment he/she/it provided (less other amounts already received by such individual investor during the course of the investment).

Equity Protection has significant limitations, including, but not limited to, repayments for losses in the Covered Issuer are only made up to a maximum amount of funds available from the retention account and the policy, repayments are on a first come, first serve basis, and risk is pooled across Covered Issuers subject to the same retention account and policy. Iintoo epiic GP LLC, and not the investors, is party to the policy with Everest Re. As a result, investors have no direct legal rights under the policy. In addition, beyond use of the Equity Protection proceeds from the retention account and the policy, neither iintoo epiic GP LLC nor the Covered Issuer has any obligations to indemnify investors for losses.

For more information, please see “Business of the Company-;Equity Protection” and “Risk Factors-;Risks related to the Equity Protection” in any of our issuers’ private placement memoranda.** The exit annual yield is equal to the ratio between the total profits from the equity investment (before tax) and the total raise (amount invested by iintoo’s equity investors in the project) divided by the investment term.

Source: Real Estate Investing 2.0: Unique New Approach Goes Beyond Crowdfunding

Let’s debunk some common myths about real estate investing, and share what it’s ACTUALLY like, no sugar coating – enjoy! Add me on Snapchat / Instagram: GPStephan Jeremy’s Channel: https://www.youtube.com/channel/UCnMn… Financial Growth Conference: https://financial-education2.teachabl… Join the private Real Estate Facebook Group: https://www.facebook.com/groups/there… The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $120 million in sales: https://goo.gl/UFpi4c First expectation: Real estate investing is passive. The reality is that creating the type of rental property to the point where it’s passive income takes a LOT of work. But the work is, at times, still ongoing. Eventually you’ll have a vacancy. Eventually you’ll need to fix things up again. Nothing will last forever. Sure, you can get a property manager who’ll handle much of this for you – but you will need to do SOME work yourself, even if it’s as small as choosing between finishes or approving bids on work. It won’t be an insane amount of work, but it will be something. So yes, real estate CAN be fairly passive…but it’s not passive if you don’t put in the work UPFRONT. Second Expectation: In order to invest in real estate, you need to do the repairs yourself or be a good handyman. The reality is that I can’t do anything besides change a lightbulb. While I do know some landlords who do the work themselves to save the money, this is absolutely not a requirement – and depending on how much your time is worth, it’s often cheaper just to pay someone else to do it the right way. It’s also worth noting that since all these repairs are a write off, you can write off the costs against your income…but, if you do the work YOURSELF, you cannot deduct the cost of YOUR OWN LABOR. Third Expectation: It takes a lot of money to start. The reality is that it often takes 10%-25% down to begin investing in real estate. This COULD be a lot depending on your definition of “ a lot,” and also on your area. Buying a property in Los Angeles would be significantly more expensive than in Kentucky, for instance. Where one person might be able to buy a property for $20,000 down, someone else might need $200,000. Fourth Expectation is that it’s often like the TV shows. The Reality is that it’s NOTHING like what they portray on TV. Oftentimes those TV shows will be loosely scripted around creating drama and creating a show that’s actually interesting enough to watch all the way through. Every episode needs a goal, a problem that arises, a solution to that problem, and then a resolution at the end. The real life problems that come up just aren’t that exciting or interesting. It’s often boring and mundane. The fifth expectation is that you’ll make a lot of money investing in real estate. The reality is that oftentimes one property won’t make you rich. Most mom and pop landlords won’t make a lot early on, but as they scale up, they can earn a significant amount of money from a lot of smaller sources. This is how many landlords start making money, enough to quit their jobs and invest in real estate full time. It’s growing your portfolio over one or two DECADES and accumulating those properties that might make you only $900 a month….but buy one of those every 18 months, and in 15 years you’re making $9000 per MONTH. That’s how most landlords make their money, and make a LOT of it. But the beginning will be slow and frustrating until you begin adding more and more to your portfolio. For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com Suggested reading: The Millionaire Real Estate Agent: http://goo.gl/TPTSVC Your money or your life: https://goo.gl/fmlaJR The Millionaire Real Estate Investor: https://goo.gl/sV9xtl How to Win Friends and Influence People: https://goo.gl/1f3Meq Think and grow rich: https://goo.gl/SSKlyu Awaken the giant within: https://goo.gl/niIAEI The Book on Rental Property Investing: https://goo.gl/qtJqFq Favorite Credit Cards: Chase Sapphire Reserve – https://goo.gl/sT68EC American Express Platinum – https://goo.gl/C9n4e3

Inside The Outrageous FIVE Jumeirah Village In Dubai Featuring 254 Floating Swimming Pools

An outrageous new resort opens this Fall, dramatically changing the skyline in Dubai. FIVE’s second hospitality and residential project, FIVE Jumeirah Village Dubai, offers a luxury tower with 247 hotel rooms and suites, 221 one and two-bedroom hotel apartments and 33 four-bedroom hotel apartments, all with private pools or Jacuzzi’s.

Located a short drive from Dubai’s new Al Maktoum International Airport and Expo 2020 site, the stunning design of the property, developed in-house by FIVE, has been registered as a trademark by the company in 168 countries.

This is not just another tower in Dubai’s skyline, it is a futuristic new property providing each unit with a landscaped garden and private swimming pool, even at the height of 800 ft.

The mastermind behind this one-of-a-kind design is CEO of FIVE Real Estate Development, Nabil Akiki. Mr. Akiki created a rotating design that features advanced architecture to maximize natural daylight and create spaces that simultaneously conserve energy.

The open space architecture allows sunlight to shine through the core of the 60-story tower while a vertical micro-climate with over half a million sq. ft. of plant life helps to naturally maintain the temperature. Each apartment benefits from a dramatic 200- degree view of Dubai and offers an astounding 156 pools and 134 Jacuzzi’s.

Nabil Akiki told me about his design inspirations and challenges in creating this spectacular property. “The connection between humans and nature is a basic and natural necessity. As such, each apartment incorporates an extensive outdoor terrace, including pool, to bring the outdoors indoors. The concept of this connection combined with open spaces and this lifestyle has accompanied me since my childhood and has served me positively as inspiration for the design of FIVE Jumeirah Village.”

Describing what separates this building from other hi-rises, he says “Conventional buildings are valued from top to bottom, wherein your highest floors at the highest rates compared to the lower ones. With FIVE Jumeirah Village, all levels are penthouses and equal the features and value of each other, increasing the value of the conventionally, underselling levels by far.”

“With conventional architecture, you lose land and turn it into concrete. The concept of integrated lush terrace apartments allow you to gain seven-times more green living compared to the land you have lost for the construction. It’s a contribution into ecology and green community concepts with a focus on sustainable lifestyle and LEED regulations.”

“This pioneering design features three revolving wings on each floor, which rotate continuously through the building. The roof becomes the garden of the upper apartment. The revolving void creates a natural cooling system, decreasing the temperature by 2-3 degrees compared to conventional building approaches.”

Building such a dramatic building did not come without challenges, and Mr. Akiki explained, “It was a challenge for even the most experience consultants to believe in the design concept. Beginning with accommodating the building’s functional infrastructure and services for each floor, such as MEP installations, due to the absence of conventional vertical shafts. The solution was to create a core building that connects the three revolving wings. All services lead below the slabs horizontally on each floor and connect to the core of the building which incorporates a vertical distribution to the ground floor level.”

“Conventional architecture balances the water and concrete weight through columns, jeopardizing the open space and gardens. Our focus was on minimizing columns to increase the open space, through cantilever slabs, specially designed for this building. Additionally, to the water weight lifted by the building, we also needed to ensure waterproofing. Due to the limitations of conventional drainage systems, our focus fell on polyurex, a sprayed system onto the concrete surface, 4-times more efficient than conventional systems.”

The design elements of the tower are also unique, and he tells me, “Each apartment provides residents with a penthouse lifestyle, which means you have three fully open, window sides. Conventional apartments feature the opposite, three enclosed walls. The increased glass, also increases the temperate your apartment is exposed to, resulting in higher cooling and environmental impacts. We used double glassed windows and created shades facing from the lush terraces to naturally balance the temperature exchange.”

The five-star resort also includes a main pool; gourmet street food restaurant; ReFIVE urban spa, and a state-of-the-art gym. Guests are also allowed access to Palm Jumeirah with its beach, restaurants, and bars.

Follow me on Twitter.

I have been a world explorer for over 30 years, having visited more than 90 countries. I am highly experienced in exotic travel and extreme luxury adventures and have been lucky to work with and travel alongside some of the biggest celebrities and billionaires. I love exploring hidden, never before seen locations, revealing exclusive over-the-top destinations and reporting on unique celebrity stories. I am passionate about supporting the environment and animal rights and will always help promote those causes with stories from around the world. Follow me on Instagram: officialjimdobson, Twitter @theluxeworld, or e-mail me at theluxeworld@gmail.com to be a part of my world.

Source: Inside The Outrageous FIVE Jumeirah Village In Dubai Featuring 254 Floating Swimming Pools

Luxury Dubai Real Estate. 6 Bedroom Golf Course Villa. HILLSIDE. So myself and Asad from https://www.rexposure.com/are so excited for you to see this Video. In my opinion, it is by far the best Video I have done and a serious amount of time has been put into the editing and production. I cant recommend Asad enough if you are looking to show of a luxury Dubai Real Estate Project! He can do it all! Regarding this luxury 6 bedroom Hillside villa located right on the golf course, I hope you will be as impressed as I was. I still don’t think the video quite does it justice but it should give you an idea of what to expect. The best part for me is the fully soundproofed private cinema room in the basement. But there are so many cool features from the lift, to the master suite and bathtub to the Bar and huge glass garage. It truly does show how the rich and famous could enjoy living in Dubai! I hope you enjoy taking a look through, as always please let me know your thoughts in the comments. You can also follow me on:

Instagram @Liamjeffreydxb You can also get in touch with me on my mobile number +971 56 25 1311.

The £1.3 Billion Splash Out In London’s Billionaire Strip

Billionaire house owners, hoteliers and property developers are pumping an estimated £1.36 billion into a neighborhood of London’s West End.

The parcel of land between Upper Belgrave Street and Grosvenor Place in East Belgravia is undergoing a construction boom due to low prices and lack of planning restrictions, according to a new report by luxury property specialists Beauchamp Estates.

“There are five distinct enclaves within Belgravia, each with unique characteristics, and the most significant hotspot for new development is East Belgravia,” said Jeremy Gee, managing director at Beauchamp Estates.

“The other enclaves are restricted by listed building and conservation area status. Wherever supply is constrained compared to demand it helps to sustain capital values and this is why Belgravia property values have outperformed the rest of prime central London.”

The names of the ultra high net worth individuals who have recently invested in the area include two sheikhs, an American billionaire and a Ukrainian oil mogul.

Sheikh Hamad bin Jassim Al Thani, former Prime Minister of Qatar and member of the royal family, bought Forbes House within Belgravia’s billionaires strip last year for around £150m and is developing a £300m property. Once completed, it will be London’s most expensive private mansion.

U.S. billionaire Ken Griffin, the CEO of investment Citadel, has bought a £100m penthouse at the new Peninsula London Hotel.

Other investors in the area include Sheikh Ahmad Al-Sabah of Kuwait–who owns a £36m house in Belgrave Square–and oil and gas magnate Gennadiy Bogolyubov, who bought a £60m 10-bedroom villa nearby.

The Beauchamp Estates report highlights the fact that despite being larger than neighboring areas Mayfair and Knightsbridge, the 200-acre Belgravia historically saw less new development.

It is also cheaper than its surrounding areas: according to Beauchamp Estates, the entry threshold for prime property in East Belgravia is £5.4m, compared to £5.8m in Chelsea, £8.2m in Mayfair and £12m in Knightsbridge.

The report lists eight live developments in East Belgravia, including the £500m Peninsula London Hotel, which will provide between 24 and 28 apartments and penthouses; a luxury scheme at 6-7 Grosvenor Place, planned for either a VIP club or a lavish house; and a new development opportunity at Headfort Place, currently up for sale for £6.5m.

The latter has planning permission for a new 3,800-square-foot six-storey luxury townhouse designed by Adam Architecture.

Follow me on Twitter or LinkedIn. Check out my website.

I am a business reporter focusing on real estate, retail and technology. I am currently Chief Investigative Reporter at Property Week, where I lead the magazine’s investigations unit. I have been nominated as Best Print Writer at the BSME Awards in 2019 and 2018 and as Best Journalist – Infrastructure, Development and Construction at the British Journalism Awards in 2017. Prior to that, I worked as a freelance for a number of publications across the U.K., France and Italy including The Bureau of Investigative Journalism and La Repubblica. I hold an MA in Investigative Journalism from City University of London and an MA in French literature from Ca’ Foscari University of Venice.

Source: The £1.3 Billion Splash Out In London’s Billionaire Strip

Redfin Reports Better-Than-Expected Earnings As Real Estate Tech Startups Seize Momentum

Better-than-expected second-quarter earnings lifted shares of discount real estate brokerage Redfin in after-hours trading Thursday.

Revenue for the quarter was $197.8 million, up 39% from a year ago, while the company reported a net loss of $12.6 million, compared with income of $3.2 million in the second quarter of 2018. Net loss per share was $0.14. All measures were better than analyst estimates.

“The second quarter is a turning point for our company,” CEO Glenn Kelman said in a statement, pointing to expansion of the company’s mortgage business and “instant-offers,” Redfin’s on-demand home-buying service. “The years of work we’ve invested in each of these businesses are now positioning us to be the first to deliver a complete solution at a national scale for people moving from one home to the next.”

Since 2006, the Seattle-based company has expanded to 90 markets, selling more than 170,000 homes worth upwards of $85 billion with a promise of lower transaction costs. Redfin pegs its market share at 0.94%.

But progress on its loftier goal—to make the whole residential real estate process more consumer friendly through tech—has been slow. Most U.S. housing is bought and sold the same way it has been for decades. Thursday’s better-than-expected report comes as a number of real estate companies new and old are announcing new digital-first services they also claim will remove friction.

The startup Opendoor said earlier Thursday that buyers can now use its app to browse, book self-guided tours and submit bids on any home for sale in Dallas-Fort Worth, Phoenix and Raleigh-Durham. Opendoor’s primary business so far is high-tech home-flipping. Homeowners sell their homes to the company online, and then Opendoor spruces up the place and tries to quickly resell it. Zillow believes a similar model will make up the majority of its business within five years.

Compass, a direct Redfin competitor in pairing human agents with homegrown software, on Tuesday announced it had raised a $370 million round of funding at a $6.4 billion valuation. (Redfin’s market cap is about $1.6 billion.) Last week, Realogy—parent company for brokerage brands including Coldwell Banker, Century 21 and Sotheby’s International Realty—announced a partnership with Amazon to connect home buyers with agents.

It is not yet clear whether Redfin will come out ahead when, and if, technology manages to really change the makeup of the residential real estate market. Shares have gained 27% so far this year, although the closing price of $17.72 on Thursday was down from a 2019 peak of $23.45.

For the third quarter, Redfin is forecasting revenue between $223 million and $233 million, which would equal year-over-year growth of between 59% and 66%. Net income is expected in the range of $3.4 million to $6.4 million.

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I am a staff writer covering real estate. Come for the outrageous homes, stay for the insights on what gets built and why. Previously I wrote about the future of money including fintech, Millennials and the economy at large, as well as news from the markets.I graduated from the University of Pennsylvania where I majored in English and minored in art history but mostly worked at the student newspaper – The Daily Pennsylvanian. You can follow me on Twitter @SamSharf and email me at ssharf@forbes.com.

Source: Redfin Reports Better-Than-Expected Earnings As Real Estate Tech Startups Seize Momentum

Foreign Investment In U.S. Real Estate Plunges

The U.S. housing market has hit another stumbling block, as purchases of homes by foreign buyers dropped a dramatic 36%, according to a report by the National Association of Realtors.

The data comes from an annual survey of residential purchases from international buyers, which found that foreign buyers, led by the Chinese, purchased existing properties with a total value of $77.9 billion from April 2018 through March 2019, compared to properties totaling $121 billion in the preceding 12 months.

Investors from China exited the market most dramatically, with purchases falling 56% to an estimated $13.4 billion worth of residential property.

There are many reasons for the plunge, including less economic growth abroad — growth slowed to 3.6% in 2018 and is on track to slow to 3.3% in 2019 — tighter controls on outside investment by the Chinese government, a stronger U.S. dollar and a low inventory of homes for sale, according to Lawrence Yun, NAR’s chief economist and fellow Forbes.com contributor, who called the magnitude of the decline “quite striking, implying less confidence in owning a property in the U.S.”

Most foreign purchases were in Florida, followed by California, Texas, Arizona, North Carolina and Illinois.

While this is bad news for the overall U.S. market, it won’t make a crucial dent in the New York market, as foreign investment hasn’t been part of the market for some time, those in the industry say.

Leonard Steinberg, a broker in New York City with Compass, referred to the recent high-profile Manhattan purchases billionaire hedge-fund manager Ken Griffin, who closed on a $233 million penthouse earlier this year, and Amazon founder Jeff Bezos, who recently bought three condos for a combined $80 million.

“The reality of it is the Chinese billionaire or Russian oligarch were a small fraction of the market,” Steinberg says. “Your best foreign buyers are American buyers—just from other parts of the country.”

Svetlana Choi, a broker with Warburg Realty, said there is still foreign investment in New York, just not for ultra-luxury properties.

“While there are still Chinese investing, they would prefer to invest in an apartment building in Flushing that can bring a far larger return, than an empty super expensive apartment in New York City,” Choi says.

Noemi Bitterman, also of Warburg Realty, notes that as the market continues to decline, more investors may come through.

“My feeling is that now is definitely a time to buy because current prices reflect fair market value and not inflated prices as we saw six to 12 months ago,” Bitterman says. “The market has adjusted and prices are where they should be.”

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I’ve been working as a journalist in the New York metro area for more than a decade and have developed a specialization in luxury real estate

Source: Foreign Investment In U.S. Real Estate Plunges

Asking $45 Million, Billionaire Steve Cohen’s Other Manhattan Condo Is Also For Sale

Views

In the competition for vertical space, the windows won this round. Artwork will have to be happy with the other condo billionaires Steve and Alexandra Cohen have on the market. (Steve Cohen made his fortune via the hedge fund route with Forbes estimating his net worth at $12.8 billion, landing him at No. 101 on the Forbes‘ Billionaires list.) That West Village condo is asking $33.5 million and, as the photos show, is designed to house their impressive collection with works by Willem de Kooning, Jeff Koons, Jasper Johns, Picasso and Andy Warhol. This Midtown condo, on the other hand, forgoes white wall space in favor of sunlight. This four-bedroom duplex in the One Beacon building is asking $45 million, after a few price reductions down from $115 million back in 2013.

All the residences at One Beacon begin on the 32nd floor, rising up to the 55th floor where this 9,000-square-foot penthouse resides. There are five other condos for sale in the building, ranging from a $26 million three-bed, five-bath to a $7 million two-bed, two-bath. There are also three units for rent, including one of the penthouses asking $60,000 per month.

The unit the Cohens have listed is designed by architect Charles Gwathmey, which you can see in the symmetry that shows up when mullions match the same proportions as the wall of bookshelves and industrial necessities such as stone columns and steel beams become a seamless part of the design.

The second-floor office seen below has one of the best vantage points in the unit.

Office

Office

Douglas Elliman

The double height living room gives you a good idea of how the industrial pieces become part of the design.

Height

Height

Douglas Elliman

The kitchen relies on sleek stainless steel and those countertops are made of honed black absolute granite (it’s hard to see in the photo). The breakfast table uses the same design trick as the dining room where it has a ceiling inset to add some definition to the space.

Kitchen

Kitchen

Douglas Elliman

Here’s a close-up of the dining room with that oval inset in the ceiling which makes the wide open space have slightly more defined presence.

Dining Room

Dining Room

Douglas Elliman

The master bedroom is a large but simple affair, with corner views unobstructed by anything for miles.

Bedroom

Bedroom

Douglas Elliman

Here’s one of the cozier seating areas, with the a clock set in the ceiling.

Sitting area

Sitting area

Douglas Elliman

The unit also comes with a back-up generator system for computers and security system. Building amenities include a fitness center, barre exercise room, massage room, children’s playroom, communal kitchen. The listing agent Richard J. Steinberg with Douglas Elliman has the full information here.

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I’m a third generation real estate pro who has lived and breathed this subject ever since I started working in my family’s construction business at a young age.

Source: Asking $45 Million, Billionaire Steve Cohen’s Other Manhattan Condo Is Also For Sale

This Ex-Goldman Trader And His $800 Million Startup Hope You’ll Pay Extra For Real Estate That Aces A ‘Wellness’ Test

Paul Scialla of Delos

Wellness” is one of those extremely broad words that mean everything and nothing. To its adherents, it signifies more than “health,” which is dismissed as merely the absence of illness. Wellness has become a giant industry, or at least a very flexible marketing term. In the grossly inflated view of one industry group, wellness is a $4 trillion global business. Gym memberships and organic produce can be considered part of the trend. But so can incense, DNA tests and sleep aids. So why not “well” buildings?

“If you believe in the wellness trend, why wouldn’t you apply it to the largest asset class there is?” asks Paul Scialla, the 45-year-old former Goldman Sachs partner and founder of Delos, a New York City-based startup. “That seems to be the way to extract the most value from it.”

Scialla is selling a “Well” building certification that real estate developers, employers and hotel and resort operators can display in their lobbies and use in their marketing materials. Modeled after the well-known LEED green building standard, which is administered by a nonprofit, Scialla’s project differs in one key aspect: Delos is very much a for-profit company. Over the last five years, he has raised $237 million at a valuation, most recently, of $800 million.

Backers include Bill Gates’ personal investment office and Jeff Vinik, the former manager of the Fidelity Magellan fund. The New Age celebrity doctor Dee­pak Chopra sits on Delos’ board, as does actor ­Leonardo DiCaprio. Scialla even persuaded Rick Fedrizzi, a creator of LEED, to put off retirement to run the International Well Building Institute, the part of Delos’ business that evaluates buildings.

Interior photos of Delos' New York headquarters.

Scialla hopes that his customers will be as eager to pay for Well as property owners have been to embrace LEED, which has certified 76,800 projects since its inception in 2000. LEED ­charges $13,000 to evaluate a new 100,000-square-foot property. In a recent study, a third of building owners said that going green added more than 10% to their properties’ value.

It’s too soon to say whether a Well certification gives the same boost. But developers are desperate for anything that might allow them to charge a ­premium for cookie-cutter condos, offices and standard-issue hotel rooms. In a city flooded with indistinguishable accommodations, the MGM Grand in Las Vegas bills 20% more for 500 rooms kitted out with Delos-approved “Stay Well” products.

A Delos evaluation for a 100,000-square-foot space costs some $20,000. When the Manhattan construction firm Structure Tone moved from leafy Greenwich Village to congested 34th Street, Robert Leon, who oversees sustainability at the company, thought reluctant staffers would appreciate a Well certification for the new space. Clients also like that the firm is ahead of the wellness-trend curve. “We want to be able to say we did it first,” he says. In 2017, Structure Tone spent $90,000 to get its Well certification and make the office upgrades required by Delos.

Scialla, raised by immigrants from Italy and Holland in suburban Plainfield, New Jersey, got the idea for Delos in 2009 when he was a newly minted partner at Goldman Sachs. A passing interest in sustainability led him to wonder why so much was made of how buildings affected the planet, rather than how they affected people. It didn’t take his undergraduate finance degree from New York University for him to see the potential in the wellness trend.

Paul Scialla of Delos in front of a large display.

The idea seemed so obvious that he spent a few years poking at it on nights and weekends to be certain no one had beaten him to it. He found decades of research linking buildings to health, but no one trying to build a brand around it. “I couldn’t find the ­bogeyman,” he says.

He named his nascent project after the Greek island of Delos, where, according to myth, the god Apollo was born and, he says, its inhabitants lived forever. By 2013, Paul and his twin brother, Peter, also a partner at Goldman, left the bank to focus on Delos full-time. (Peter is president and chief operating officer.) Both brothers invested in the venture (they won’t say how much). That December, Delos scored its first $24 million in outside funding.

Delos’ certification business has ramped up slowly, but 2018 was a big year. It has now handled 1,555 projects totaling 314 million square feet in 48 countries. Forbes estimates that revenue came to $20 million last year. The firm has 170 employees.

The office certification process starts with Delos assigning a concierge, who guides the customer through the more than 200 elements Delos uses to evaluate a space, including the proximity of workstations to windows, easy access to drinking water and the size of the plates in the cafeteria (10 inches or smaller discourages overeating). Then an independent reviewer comes in with a suitcase full of sensors that measure air, water and sound quality.

Scialla says wellness is a “gigantic” market and he’s not concerned about competition from Fitwel, a building wellness certification service launched in 2017 by the Centers for Disease Control & Prevention and the General Services Administration. A nonprofit, the Center for Active Design, operates the service. Fitwel isn’t as comprehensive as Well but costs a lot less. Its customers pay $8,000 for a project of up to one million square feet. Tishman Speyer, whose properties include Rockefeller Center in New York, is using Fit­wel to certify its global portfolio by the end of this year.

Looking ahead, Scialla has his sights on other revenue streams, including smart homes. For a price starting at $3,500, homeowners can buy a Delos app called Darwin that gives them wellness readings that include air and water quality. Simonds, an Australian homebuilder, is installing the system in 1,000 new houses this year, and KB Home is testing it in California. Insurance companies could use Delos’ environmental data to make smarter health-coverage decisions, he says, cutting premiums for customers who live in wellness-outfitted homes. When pressed for details, he admits it’s just a concept. “I’d like people to look back 20 years from now and think, ‘Remember when we didn’t consider the human condition when designing and building these spaces that we’re spending 90% of our lives in?’ ” he says. “How did that get missed?”

I am a staff writer covering real estate. Come for the outrageous homes, stay for the insights on what gets built and why.

Source: This Ex-Goldman Trader And His $800 Million Startup Hope You’ll Pay Extra For Real Estate That Aces A ‘Wellness’ Test

NYC’s Housing-Market Weakness Spreads From Manhattan To The Outer Boroughs — peoples trust toronto

Throughout vast swaths of New York City, members of the city’s vast middle class work force can barely afford even a modest apartment. Yet for years after the post-crisis housing market recovery began, that reality did little to slow down the rise in home valuations as foreign capital and rock bottom interest rates fueled a […]

via NYC’s Housing-Market Weakness Spreads From Manhattan To The Outer Boroughs — peoples trust toronto

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