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Public Universities Turn To Private Sector To Develop Dormitories

Bryan Ives — Fri, 03 Feb 2012 01:52:00 +0000

Public universities around the country are handing over the process of building and financing on-campus dormitories to the private sector. The increase in demand for state college education, strict states budgets and the ability specialized student housing companies possess to build residence halls faster and cheaper are some of the reasons behind the change. In addition, these particular partnerships transfer some of the responsibilities of being a landlord and more importantly free capital that universities can apply to projects seen as more valuable.

Some of the universities that are already in such partnerships or are looking into the possibility include University of California, Irvine; Arizona State; Portland State; University of Kentucky; and Montclair State in New Jersey, which recently opened a two-tower complex called the Heights. Officials are calling the complex that includes 2,000 beds and a 24,000-square-foot court the largest student housing complex in New Jersey.

Private colleges and universities are not entirely sold on the idea due to the fact that most of their funding to finance student housing comes from student fees, endowments and philanthropy. Also, their housing needs tend be smaller leaving private developers less inclined to enter partnerships.

Supporters of private partnerships use potential savings as the driving force behind their argument, but savings from lower costs of construction and operation are not necessarily handed off to the students. For example, a room at the Heights at Montclair State in New Jersey is $1000 more a semester than a room in Montclair State’s other dorms. According to Edward P. St. John, an education professor at the University of Michigan and an editor of “Privatization and Public Universities,” private partnerships are often sold as a method to save but rarely result in savings.

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Landscaping Resources for Property Managers

Rob Maday — Fri, 03 Feb 2012 01:19:17 +0000

Out of the countless ways a conventional landscape can become more “green” and sustainable, we’ve compiled a list of 3 suggestions with the best ROI for property managers.

1. Install a Smart Irrigation Controller (Rebates available in most municipalities)

At a time when cutting edge technology is so prevalent in our daily lives, it makes no sense that your irrigation controller is from the Stone Age. At a minimum, your irrigation controller should be connected to a rain sensor that will shut down any programming if a set amount of precipitation collects in a small basin. Also, your controller should have a “seasonal adjust” feature that allows you to quickly reduce your set watering times by a percentage, making adjustments to your program quick and painless. If you have a larger property, upgrading to a smart controller that accesses weather data, ETo, soil moisture, and other conditions will no doubt save you water, money, and keep your plants healthier.

2. Conduct Quarterly Irrigation System Check-Ups

Odds are if sprinklers pop up or start dripping in the early morning hours, you and your landscape maintenance crew rarely see the system in action. If anything, you see evidence the system ran as you drive past and see the sidewalk and driveway wet. So take 20-30 minutes during daylight to turn on each sprinkler valve to check each head and emitter for proper functioning and alignment. There should be little to no overspray onto pavement, no geysers erupting from drip tubing, and absolutely no puddling. If you see puddling, you are applying too much water too quickly. To remedy, reduce watering times to cycle-soak intervals, replace sprinkler heads with rotary nozzles, and/or install a thick layer of tree trimmings to absorb and retain the moisture. Conduct these irrigation check-ups on quarterly intervals as a poorly maintained irrigation system will eliminate the savings of even the most state-of-the-art irrigation controller.

3. Minimize the Size and Impact of Lawn

As discussed in greater depth by others, the conventional lawn is a remnant of Landscaping 1.0. We are now well into Landscaping 2.0 and the notion that lawns should continue to be front-and-center of our properties is baseless. The percentage of time a maintenance team spends maintaining lawn is disproportionate to the value it provides. And needless to say, the time spent maintaining a lawn is not cheap. The water cost alone in warm climates is enough to make you reconsider its place in the landscape. For a quick illustration on the cost of water for a lawn compared to a drought-tolerant landscape, see the Water Usage Calculator at Landscape Resource.

However, if your lawn is to remain in its current form for practical reasons, consider implementing the following practices for increased health and reduced maintenance costs:

Grasscycling: Leave your grass clippings in place to reduce the amount of fertilizers needed to keep your lawn green.

Aeration: Using an aerator (mechanical or manual), plug holes throughout your lawn 2”-4” on center. This will alleviate soil compaction and allow moisture and nutrients to be more successfully absorbed into the root zone.

Reduce watering times: Statistics show that over 50% of people overwater their lawns by a factor of 1.5-2 times the amount needed. Try cutting back watering times by 3-5 minute increments. If you notice your lawn browning after a few reductions, bump the time up a bit and you’ve found a more accurate schedule and saved some water.

Mow High: For most lawns, you can set your sharp mower blade higher. This encourages a stronger, healthier grass that is less dependent on outside inputs.

About the Author
Rob Maday, ASLA, is a California-based registered landscape architect with over 10 years of experience designing responsible and unique landscapes. His professional practice, RMLA, focuses on residential, commercial, and industrial projects along the Central Coast. In 2010, he launched LandscapeResource.com, a free, community-based resource that provides inspiration and information for sustainable landscaping.

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Two California Companies Develop Their Own “REO-to-Rental” Platform

Bryan Ives — Sat, 28 Jan 2012 01:14:06 +0000

Following the announcement that the federal government will be implementing a pilot program in the first quarter to sell Fannie Mae, Freddie Mac and Federal Housing Administration REO homes in bulk to potential investors, two California companies are in the works to develop their own rental platform.

Private equity fund GI Partners will be investing $250 million in Waypoint Real Estate Group based out of Oakland, Calif. Waypoint developed a process of acquiring foreclosed homes, renovating them before leasing the properties to residents. Waypoint has been in business for three years and since opening has acquired 1000 homes in California. Over the next two years they plan on buying and leasing $1 billion in single-family rental homes.

“Our approach to buying and renovating distressed homes and leasing to residents who are committed to a path to future home ownership is a viable solution to our nation’s housing crisis,” said the managing director and co-founder of Waypoint Real Estate Group, Colin Wiel.

A propriety technology is used by Waypoint to successfully identify residential real estate markets that have a strong rental demand that could potentially benefit from their “REO-to-rental” model. “Waypoint has not only developed an effective strategy for investing in distressed single family homes, but has built a business that has a positive social and economic benefits in the communities in which they invest,” said Ric Magnusson, executive managing director of GI Partners.

Source: http://www.nationalmortgagenews.com/msn_features_reo/private-equity-firm-reo-to-rental-1028329-1.html

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How to Attract “Generation Y” Residents for Your Rental Properties

Marc Courtenay — Mon, 23 Jan 2012 20:05:33 +0000

Believe it or not, there are up to 80 million people between the ages of 16 and 29 who will be filling your vacancies in the year ahead. They are often called “Generation Y.” Also known as the “Echo Boomers”, they are the children of that other gigantic demographic, The Baby Boomers (those born between 1946 and 1964). Born between 1981 and 1995, they’re already having a huge impact on entire segments of the economy. And as the population ages, they will become the next dominant generation of Americans. So whether you call them “echo boomers,” “Generation Y” or “millennials,” they already comprise nearly a third of the U.S. population, and currently spend $180 billion a year of their own and their parents’ money. They are a force to be reckoned with and not to be ignored.

How to Attract Them to Fill Your Vacancies?

To begin with, you have to reach them on a technological level. They don’t read newspapers and aren’t likely to even read their mail. They are multi-taskers with smart phones, iPads, music downloads, and text-messaging on their Internet-connected devices. They are totally plugged-in citizens of a worldwide community. Communicate to them like their favorite smart phone and computer-tablet company does. Have you been to an Apple store lately? It’s absolutely packed with Echo Boomers! Think about it, do you know anyone between the ages of 16 and 29 that doesn’t have either an iPhone, an iPod,or an iPad?

Go to Apple’s website and see for yourself how they grab and hold the attention of this enormous generation. Watch the videos that they use to speak to the heart of their interests and how Apple motivates them. When it comes to having a place to live, this generation doesn’t mind living with their parents as long as tolerably possible. Yet at some point they want their privacy and independence. What they don’t seem to want is the responsibility or financial obligations involved in owning their own place. My own two (my daughter, a Generation Xer, and my son born in 1981) both have chosen to rent or lease their respective housing.

Forbes recently had a relevant article titled, “Housing the Echo Boomers—Next Big Real Estate Opportunity?” and it is a must-read for property managers who want to attract this age group. In the section titled, “What Will They Want?” the author emphasizes that “…most of Generation Y seem to want modest homes, the demand of which may be indicative of their young age. But it might also represent a demographic shift against large housing that is often overpriced and unnecessary.”

So if you’re using smart phone and online applications to advertise rental properties to this group, make sure you focus on affordability, easy upkeep, and the manageable size of your rentals. The Echo Boomers have been polled in recent years, and they value not only economy, but also ecology. They want to live in as green and environmentally-friendly a home as possible. If your units are energy efficient and have features that show respect for the planet, make that part of the theme for your advertisement. Appeal to their priorities and let them know that you understand what they’re looking for.

This massive generational group is rediscovering the joys of marriage, partnering and raising a family. Again, reach them through their technologies and stress that your rental housing is close to work, school and their kind of social areas. Accentuate the point that housing which is centrally located will save them money so that they can afford other things in the area and be closer to where they work or can find additional employment.

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Investors Favor City Apartments Over Suburban Communities

Bryan Ives — Thu, 19 Jan 2012 20:03:24 +0000

Apartment building sales continue to remain strong, but in some areas investors are opting to invest in properties in cities rather than the suburbs. Two deals in the Boston area serve as a prime example.

According to Simon Butler, an executive director at Cushman & Wakefield, a 1,020- unit apartment complex with over 90% occupancy in the suburb Framingham, Mass. sold for $128 million, just below what it sold for in 2007 at $130 million. Charleston, S.C.-based Greystar Real Estate Partners acquired the property from JPI of Irving, Texas.

On the other hand, a 232-unit Cambridge, Mass., apartment property recently sold for $64.9 million, above the $55.8 million price it traded for back in 2006, according to Real Capital Analytics.

“You get stronger pricing in the city because there’s a perception that there will be stronger rent growth,” says Butler. Butler represented sellers in both transactions and the sellers renovated both properties. According to Dan Fasulo, managing director at Real Capital, some of the higher prices are found in urban areas while property value recovery in suburbs continue to experience slower growth.

Source: http://online.wsj.com/article/SB10001424052970203436904577153191559355760.html

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Top Reasons To Be Optimistic About Real Estate Market In 2012

Aaron Bosshardt — Mon, 16 Jan 2012 20:11:41 +0000

As we close the books on 2011, we can say it was better year than 2010 for activity in real estate. Prices continued to drift lower for us, primarily brought down by distressed sales. Every agent I have has positive feelings about the year 2012. What’s even more shocking is that bank executives I have been talking to are positive for the first time since 2008. If you are a looking to perfectly time a long-term purchase of real estate, then this might well be the year to do it. Let’s get right to the nuts and bolts of why I believe 2012 is going to be remembered as a great year to buy real estate.

Top 10 reasons why you should be optimistic about the real estate market in 2012.

According to Case Shiller in 2012, 372 of the 384 real estate markets they track are projected to have housing prices appreciate, while only 12 markets are expected to see prices decline.

In markets that have had the largest price drops, those markets now have the most significant increases in affordability. For us in Florida, Miami is most notable where the ratio of mortgage payment to family income has dropped from its height of 59% in 2007 to 19% today. That means people are paying 1/3 of what they did just four years ago to own their homes.

Apartment move outs to buy homes are escalating. Currently, measured at a six-quarter high of 13.5% by Zelman and Associates. That means that 13 out of every 100 renters moving out of apartments are doing so to buy a new home.

Low prices combined with historically low interest rates make 2012 a once-in-a-generation opportunity to buy real estate and build wealth. Look for this trend to continue only through 2012.

Wall Street wants in! That’s right. Hedge fund managers are trying to figure out how to capitalize on the opportunities in the single family home market. There is some irony here. Wall Street is trying to occupy us. You should know that they are going to do it, charge some fees, and then ask your fund manager to buy in with your money. Why not cut out at least two middlemen?

This month’s headline from Credit Suisse monthly survey of real estate agents is a telling sign of things to come. “Affordability Slowly Pulls Wary Buyers back!”

2012 is when CNBC’s Jim Kramer originally forecasted the housing crisis to end. I know he has revised this but the two things you need to remember are that Wall Street generally worries more about new home starts and builder stocks then the existing housing market. Then just remember what your old SAT test prep instructor preached, “Always stick with your first answer!”

According to local mortgage guru Mike Jones at Alarion Mortgage, “Rates look to continue to decline as the fed works to reduce rate in the commercial backed securities(CMBS) market as part of QE3.” Can rates drop below 4%? It’s possible. While I’m not qualified to say there is a bubble that is going to burst, it sure looks like irrational behavior is driving long-term rates that low. That’s behavior that real estate buyers should capitalize on with long-term fixed rates.

Job Growth looks strong as retailers and small business entrepreneurs now lean from the recession look to take on new locations and bring new jobs into our communities.

Of course ultimately you have heard it over and over that real estate markets are local. So for us in Gainesville, FL, 2012 forecasts look good!

Home prices: Your local forecast 384 markets tracked

Median home prices are expected to fall another 3.6% by the end of June, 2012. See how your market is expected to fare.

Gainesville, FL Metropolitan Statistical Area
Forecast Change: 2nd Quarter, 2011 – 2nd Quarter, 2012 = -5.6%
Forecast Change: 2nd Quarter, 2012 – 2nd Quarter, 2013 = +1.9%

Market Fundamentals
Median Family Income (2010) = $53,100
Median Home Price (2nd Quarter 2011) = $155,000
Change in Home Prices: 2nd Quarter, 2010 – 2nd Quarter, 2011 = -10.5%
Worst 1-Year Home Price Change (From 1980-2011) = 1st Quarter, 2007 (-12.3%)

Forecasts as of October, 2011, courtesy of Fiserv

Quick Bio:
Aaron Bosshardt, CPM is the President of Bosshardt Property Management, LLC and Bosshardt Realty Services, LLC. He has been a NARPM member since 2001 and currently serves on the National Governmental Affairs Committee as well as the Florida State Chapter’s governance committee. Bosshardt Property Management manages single family residential homes, apartment communities, condo and homeowner associations, office space and retail centers.

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NeighborWorks America Invests $1.3 Billion into Rental Homes

Bryan Ives — Fri, 13 Jan 2012 19:58:51 +0000

NeighborWorks America invested over $1.3 billion in rental housing over the course of its fiscal year ending Sept. 30th. The organization consists of 235 independent nonprofit organizations and owns or manages 90,000 rental homes. CEO Eileen Fitzgerald plans to build out the portfolio to exceed 100,000 rental homes through 2013.

“Government housing budgets at all levels are under stress and the competition for capital priced at rates that make housing accessible for working families, while improved from a year ago, is still a factor in creating quality affordable rental homes for families with modest incomes,” Fitzgerald said. NeighborWorks source of money came from multiple sources, some of which include Community Housing Capital, Calvert Foundation, and S.H Cowell Foundation.

Buying and managing rental properties is something the White House and Federal Housing Finance Agency recently began working on. They plan to sell large amounts of government-owned, repossessed homes in bulk to potential investors who would possibly rent them out and manage them. This recent development has sparked a few firms to build out property management divisions. In August, TenantAccess launched PropertyAccess in order to sell investors management, billing and reporting systems. In September, Green River Capital, an asset management firm that deals with REO for Freddie Mac, also started a rental program.

Challenges remain for potential investors in their ability to gather enough money to meet the supply. According to NeighborWorks, they will continue reaching out to “social investors” to add to its portfolio even as underwriting standards remain strict and borrowing costs rise.

Source: http://www.housingwire.com/2012/01/12/neighborworks-invests-1-3-billion-into-rental-homes

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What Property Managers Need to Know Now About the Real Estate Market

Marc Courtenay — Fri, 30 Dec 2011 16:00:31 +0000

If you ask 5 different realtors in your area how the real estate market is fairing, you’re likely to get 5 different responses. The reason for this is that there is a great deal of confusion and uncertainty right now. How many homes are in foreclosure or about to go into foreclosure seems to be a well-guarded secret. Add to that the growing number of homes that have been taken off the market and are being rented for the time being and you can see why the accurate supply figures on unsold homes is skewed.

Key Factors to Keep Your Eye On

First, it’s the challenge of borrowing money, a.k.a. qualifying for a mortgage. The standards for qualifying are stricter than they’ve been for many years, and only those with top credit scores are able to qualify for the lowest rates. Interest rates would be the next key factor going forward. Real estate interest rates are important, not just because of the debt service one pays. They’re also critical because all value in real estate is determined by capitalization rates. If interest rates increase, cap rates increase. This would be devastating to values. Many analysts think the risk of rising interest rates far outweighs any reward present in today’s market. Unless an owner can qualify for a very reasonable, fixed longer-term rate, it may be difficult to charge enough rent to service the debt and the operating costs of the rental unit. Sure enough, operating expenses are the next key factor to focus on. We’ve already witnessed expenses increase for every product type, in all areas. That’s how inflation will continue to have a major impact on the value of real estate. In fact it already has, and if inflation suddenly increases it will impact wages, cost of materials and other operating expenses.

Next, be aware of the kind of prospective renters that are out there looking for a place to live. There are more extremes appearing. There are some extremely qualified people who have lost their homes due to the “upside down” valuation implosion on their homes. There are also a growing number of unemployed and under-employed people who are having to lower their standard of living while at the same time having to move to less expensive rental housing. Many new apartment complexes are in the process of being built. I’m told anecdotally that rarely have many areas seen as many apartment units planned as are now on the drawing board. In Denver for instance, there are at least 14,000 units planned or under construction. This will all be financed through Fannie Mae, Freddie Mae, or HUD. In addition, the rents that are needed for these new multifamily units are high and going higher. This is due to the increasing construction costs.

Reports from around the country are telling us that the housing market under $250,000 is active and apparently stabilizing. However, the more expensive “jumbo loan” home market is deteriorating steadily. As you know, the GSEs (Government Sponsored Enterprise) and HUD doesn’t finance homes over $417,000 in most of the country. That’s why if a home buyer requires a loan over that amount, it’s very likely that they’ll have to come up with the money themselves for 20-25% of the price of the house. So, a borrower looking to finance a home with a price of $500,000 will likely have to write a check for at least $100,000 to get the loan. In this day and age of volatility and negative savings, there aren’t many borrowers who can do that. As a result, the jumbo markets are severely impacted.

The Bottom Line

Efforts are under way by lenders and the GSEs to organize rental programs for single-family homes becoming available due to foreclosures. Once available, a rental home has far more appeal to a resident than an apartment. This is especially true for prospective renters who formerly were home owners. That’s why the houses usually rent faster than apartments in many areas of the country. This is an anomaly we should watch carefully. When one considers this reality and the other risk factors confronting real estate, investors are seeing that building new apartments could be a risky proposition in these times. We are most likely at least another year away from the bottom of this housing price slump. The price of houses in your area may not drop much further, but their recovery may be at least 5 to 10 years away. Rents are not going up in all areas, but operating expenses are. Know what the trends are in your areas of operation and know them accurately.

Property managers need to streamline the application and screening process of filling vacancies. Finding good renters in this economy is becoming a numbers game. The better you know the condition of the housing market in your area, and the more potential renters you can reach and process, the more you’ll succeed.

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Most Expensive Manhattan Apartment rents for 165,000 a month

Bryan Ives — Mon, 19 Dec 2011 22:01:38 +0000

After two years of renovation, one of Manhattan’s most expensive rental apartments foxtrotted its way onto the market. The $165,000 a month Astor Suite, located in New York’s renowned Plaza Hotel once hosted American presidents, foreign royalty and the ultra wealthy. The cost of rent per month is more than the average American household earns in three years. With 4 bedrooms, 6 baths, and 5,087sqft, the annual rent comes to about 1.98 million dollars.

The luxurious residence once was the home of New York bluebloods the Vanderbilts and Astors, later becoming the hotel’s presidential suite. Beautiful hand crafted decorations; exquisite works of art and the finest furniture are found throughout the apartment that conveniently faces Central Park and Fifth Avenue. The famous designer Steven Gambreil scouted Europe’s luxury estates searching for inspiration as he led the renovation process for owner Jurgen Friedrich. “The owner spent millions on furnishings and art,” says the Prudential Douglas Elliman listing agent, Melanie Lazenby.

Source and Slideshow! http://money.cnn.com/galleries/2011/real_estate/1112/gallery.Manhattan-s-most-expensive-rental/index.html

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Bank of America looking into a Foreclosure Rental Program

Bryan Ives — Tue, 13 Dec 2011 19:11:16 +0000

A new rental program where a home is rented back to the borrower after foreclosure has caught the interest of Bank of America. “We are talking with investors that would come in and buy these houses and would lease them back to who would now be the new tenant” says Ron Surzeneggar, leader of the bank’s legacy asset servicing division.

BofA put together a division back in February specifically designed to manage the servicing for delinquent mortgages, loans no longer being written, and to work through outstanding representation and warranty claims. They have more than 35,000 employees analyzing 1.1 million loans that are 60 days delinquent or worse. The Federal Housing Finance Agency is also working with Fannie Mae and Freddie Mac in developing an REO rental program. The agency received more than 4,000 ideas on how to create and implement a plan.

According to Sturzeneggar, the basic idea within some of the programs they are looking into involves catching someone before the REO process and presenting them with a deed-for-lease. “We’re still going to sell the property. You will no longer be the owner. But you can be a tenant now in that same property and save you from moving on,” says Sturzeneggar. He also stresses the point that the bank, given reasonable bids, would still sell the REO as before but given the tremendous amount inventory in some areas the properties could sit for years.

Source: http://www.housingwire.com/2011/12/09/bofa-developing-foreclosure-rental-programs-to-deal-with-distressed-properties?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29&utm_content=Google+Reader

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