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How Do the Middle Class Secure Real Estate Loans?

How Do the Middle Class Secure Real Estate Loans?

One of the most important events that occurs in a person’s life is owning property. Back in 2013, that aspect of the American Dream for the middle class seemed more like a pipe dream. Legislative action lead to sweeping changes in how members of the middle class could successfully secure loans. And while becoming a homeowner today isn’t as out of reach for the middle class as it once once, there can be obstacles.

When President Barack Obama first took the presidential stage, not only was the housing market in jeopardy, many in the middle class were worried about their jobs, their overall career opportunities and their lack of disposable incomes. All of these elements combined to make it increasingly difficult to be approved for a mortgage. The problem for those who already had real estate loans was they had no idea if they were going to be able to continue paying them.

To ease the fear of homelessness of the barriers of securing a loan, measures were taken to make it easier for homeowners to refinance their loans while interest rates were at their lowest and to allow qualifying and responsible borrowers to successfully secure loans. When members of the middle class were approved for mortgages, they were secure, like those with 30-year fixed rates.

In addition to aiding hopeful homeowners, changes were made so that lending institutions had easier access to a variety of borrowers, ensuring complementary pairing for everyone involved. Additional measures implemented to make it easier for the middle class to secure loans included:

  • Making refinancing easier
  • Waiving closing costs for those who refinance into shorter loans
  • Increasing refinancing eligibility to borrowers without loans secured by the government

So how have those changes made a difference for today’s middle class and housing market?

There is some good news, and some bad.

Because home prices have increased faster than the incomes used to pay for them, home affordability is still a bleak picture. That being said, compared to previous years, home loan rates are still historically low, and home prices are still undervalued. One thing to bear in mind with this information is that the definition of middle class differs from region to region. Someone considered to be part of the middle class in New York City would likely be a member of the upper class in more rural areas. What this means is that becoming a homeowner for members of the middle class is more difficult in major metropolitan areas like Los Angeles and easier in Detroit and Cleveland.

Just like back in 2013, one of the main issues is overall income. The price of earning a degree is higher than ever, which means many are left without an undergraduate or graduate degree, which means they’re unable to qualify for higher paying jobs, which means they’re unable to be approved for a loan.

While not every part of the current problem can be resolved, increasing the number of residences being constructed will most certainly help. The more homes and commercial real estate properties there are to meet a demand, the lower prices will be, and the easier it will be for the middle class to secure loans for properties they can afford. Another issue is the fact that metros aren’t building more homes, meaning those that are available are priced well out of the range of the middle class.

No matter the year, having a degree, a well-paying job and looking in the right area at the right time can all increase a person’s chances of being approved for a home loan. Members of the middle class will do well to consider their options for homes in rural areas and those surrounding metropolitan areas where new and affordable homes are being constructed.


The Atlantic


Multifamily Property A Good Option for Investors

Multifamily Property A Good Option for Investors

Multifamily properties have become hot commodities for several reasons. For one, investors are realizing that multiplexes offer reliable income. They are popular with tenants, and the price per unit is less costly than single-family homes. When an investor knows his or her target audience and is willing to creatively market to it, he or she can wind up with a very profitable property.

Location, Location, Location

As with all real estate investments, location is a major consideration when purchasing multiplexes. Investors must thoroughly research an area before buying property. The most profitable apartment complexes, duplexes, and triplexes are located near public transportation. With single-family rentals, access to buses and trains is not as crucial of a factor; however, tenants in multiplexes are more likely to rely on public transportation to get around. The most favorable properties are in walkable locations, as well, for easy access to restaurants, shopping, and other amenities.

Financing Know-How

Because the loan process to purchase a multi-unit dwelling is different from that of a single-family home, investors must learn the ins and outs of commercial real estate financing. Finance regulations vary from state to state, but some general rules of thumb include:

  • Instead of loan approval being based on a buyer’s credit and income, as with single-family homes, approval is based on a property’s profitability.
  • In some states, regulations are in place to favor multiplex investors, making it easier to obtain financing.
  • Loan limits are set higher for multiplexes than single dwellings.

Construction Boom

Due to the increased demand for apartments, duplexes, and triplexes, construction has shown substantial growth. The multi-residential building spike is attributed to several factors. For one, young urban professionals want to live closer to the hub of a city. Millennials, who are 34-years old and younger, are opting to rent instead of buy. Also, younger baby boomers are renting more often than buying, unlike their wealthier parents, so are choosing multiplexes as their homes.

First-Time Investors

Young first-time investors are buying multi-residential properties more than single units. This is due to a variety of reasons, including availability and profitability. Many single-house investment properties have been scooped up, but for the creative and resourceful young investors, there are multiplexes available that make excellent first investments. Paydays are larger when a complex is sold, too, because the appreciation on a higher-dollar multiplex adds up more quickly than on a less expensive single dwelling.

Cash Flow Benefits

Since multi-unit housing has multiple tenants paying rent, there is better cash flow. When one tenant moves out, there are still other residents paying their rents. With a single-family rental, the loss of a tenant means the complete loss of rental income on that property until another resident moves in. Maintenance costs are reduced with multiplexes, as well, because there is only one lawn to mow, one roof to fix, and all tenants are located near each other. Because of the increased cash flow, many investors are able to afford property managers to handle maintenance tasks.

There is an upswing in investors putting their money into multi-resident properties because they’ve proven to be a great investment option. There are many benefits and few drawbacks to this great investment option.


What the 2015 Market Can Tell Us About 2016

What the 2015 Market Can Tell Us About 2016

One of the great misconceptions of the real estate market is that it is in constant fluctuation. While real estate can certainly be a volatile sector, there are ways to predict changes that may be on the horizon. The key to interpreting future happenings in the market is to look at current trends, as well as those of the recent past, and analyzing what they may be saying about where things are headed. Accurately discerning what these trends have to tell you doesn’t always require an advanced analytical skill set. In many cases, you simply need to be aware of they are; they’re underlying issues will often speak for themselves.

With that in mind, here are some of the top trends observed in the real estate sector, and what they might be saying about the future:

The market still favors the seller: Those heading out to buy homes today are often finding the lifetime of today’s average listing to be relatively short. One of the major factors that has figured into the recent lack of inventory is the fact that many millennials are looking to finally get serious about home buying. This may seem to fly in the face of the popular notion that Generation Y prefers to rent more than buy. However, as many in this group are looking to settle down and start their families, the demand for housing has increased. Plus, given that federal programs like Fannie Mae and Freddie Mac began 2015 by offering down payment options as low as 3 percent in response to the first-time home buyer segment being the lowest it had been in over 25 years, it’s no surprise that buyers seem to be flooding the market. Expect that trend to continue into the new year.

Is rent’s hold on the market slipping? For the last several years, renting has been viewed by many as a more attractive option than buying, particularly to the younger generation. Whether this was a residual effect of the housing bubble bursting, or the fact that millennials enjoy freedom, access to urban walkability, or other factors may all play a part. In the end, it may have been simply because it was cheaper to rent than to buy. However, the rise in rental demand has seemingly started to shift opinion in the opposite direction. With the prices on prime rental properties, many are now looking back to the home ownership as a more affordable alternative. With rates currently the lowest they’ve been in a few years, it’s not a stretch to assume that 2016 will bring more buyer activity.

Real estate investing is going through a dry season: As the demand for properties increases, potential investors are finding themselves having to compete with residential homebuyers for prime properties. The resultant rising prices of homes means that buying low and selling high is becoming much more difficult. As a broker, your task in 2016 may be to steer your clients looking for properties for commercial purposes in other directions when it comes to securing successful CRE investments.

Though the trends of 2015 cannot tell us definitively what will happen in 2016. Many factors will determine how the real estate market will play out. With the upcoming presidential election upon us, foreign stock markets and investors affecting the real estate landscape, and a lull in the real estate sector; it’s best to expect the best but always plan for the worst.


Surge in Construction Owed to Millennials

Surge in Construction Owed to Millennials

The original American dream was to own a home, start a family and obtain gratifying work. While most of those elements are still the same, recent years have acted as a catalyst for change, one powered primarily by millennials. Rather than buy a single-family home, it’s now become more common to rent. The rental market in general is booming figures suggest in the annual State of the Nation’s Housing report from Harvard’s Joint Center for Housing Studies. This demand has subsequently caused developers and contractors to push construction of new apartments, marketing towards the Gen Y demographic.

During the first quarter of 2015, the homeownership rate in the U.S. dropped to roughly 64 percent, which is as low as it’s been since 1993. The overall rate of individuals aged from 35 to 44 who own homes has dropped about five percent from 1993, which is a rate that hasn’t been seen since the 1960s. What those figures means for developers is an incentive to build more, and more often, because millennials are setting their sights on condo and apartment rentals, which is vastly different from Baby Boomers who were almost exclusively interested in homeownership.

With the number of renters increasing, it also means the overall rate of vacancies across the nation has dropped approximately eight percent, which hasn’t been seen in nearly 20 years.

Chris Herbert, managing director of the Joint Center for Housing Studies states, “Perhaps the most telling indicator of the state of the nation’s housing is the drop in the home ownership [sic]  rate,” says. “This erases nearly all of the increase from the previous two decades. In fact, the number of homeowners fell for the eighth straight year, and the trend does not appear to be abating.”

According to the report, the number of new rental households has increased by 770,000 annually since 2004, the strongest 10-year period of rental growth since the late 1980s. Demand for rental housing is largely driven by Millennials, but previous generations are also contributing to the growing trend.

That strong rental demand across all age groups cut vacancy rates in 2014 to 7.6 percent, the lowest in nearly 20 years. It also saw rent increases by 3.2 percent last year – double the rate of inflation.

Continues Herbert, “Between the record level of rent burdens and the plunging homeownership rate, there is a pressing need to prioritize the nation’s housing challenges in policy debates over the coming year if the country is to make progress toward the national goal of secure, decent, and affordable housing for all.”

With builders building as quickly as possible to address the demand for residential and commercial real estate tenants, the issue of affordability will becoming a  bigger issue. Also, along with viable rental options, the need to ensure spaces that are close to jobs, shopping, and transportation will need to be considered. With the surge of construction and influx of new rental population moving into certain areas of cities, the social ecosystem is beginning to be reshaped by Gen Y representing a different idea of what the American Dream can be.


US Glass Mag


U.S. Sets Its Distressed Assets Sights on Ireland

U.S. Sets Its Distressed Assets Sights on Ireland


Rather than looking locally to boost its real estate market, Ireland has embraced American buyers to invest in Ireland’s distressed assets. Ireland has already become one of the places to be in terms of FinTech (financial technology), and foreign employees are being wooed to move to Ireland for technological employment opportunities. Perhaps in response, the commercial real estate sector is showing an increased presence to keep up with the FinTech Joneses. Some of the reasons for this include the changing cultural and economic growth of the area, and other changing factors:

Property Partners

A great number of Ireland’s top properties have been purchased by international buyers, ones who were able to scoop up distressed properties below their original evaluation. Even at such a reduced value, it’s believed that the Irish real estate market will continue to thrive for at least the next three years.

Before Ireland experienced a financial crisis, it was common for international buyers to sate their appetites for property with small office portfolios and occasional real estate investments in the form of UK assurance companies.

Changing Times

But today, the United States has been diving into the Irish market and has been snatching up distressed assets instead. Interestingly, the heightened interest in Ireland has subsequently strengthened the Sterling without much effort from England.

One of the main reasons there has been so much international interest in Ireland’s real estate market was its (now quickly dissipating) financial crisis. While an Irish property’s overall value could be substantial, a market infrastructure wasn’t in place to support an equally substantial price on that valuable property, leading to dramatic price drop. Rather than a restoration of faith in the property market coming from within, it instead came from international buyers. But these international investors’ money is allowing for a change in Ireland’s local real estate buying market.

Bringing it Back Home

Domestic funds Iput and Irish Life have started to put their upgraded liquidity to good use in their local markets, and have bought up leading investments. Iput has invested heavily in logistics, retail and office properties while Irish Life has focused mostly on office commercial real estate. With these combined efforts from domestic and international buyers, Ireland now heads the pack in having the euro area’s fastest-growing economy for four consecutive years.

Reaching  out internationally to real estate buyers has also garnered some favorable responses from domestic investors. With the bump from international attention in distressed assets strengthening Ireland’s economy, local buyers’ financial situations are increasing enough to begin buying locally — further establishing the Isles as a new player in the financial space.


Irish Times



Biometric Payments — The Next Best Thing?

Biometric Payments — The Next Best Thing?

The current number of security breaches, hacks and identity thefts have left many wondering how they can better secure their financial accounts and the personal information attached to them. A new innovation called biometrics uses the human body as the main identifier, and it may just be the next best thing to come out of next generation technology.

Acuity Market Intelligence reports that biometrics is expected to protect roughly 65 percent of all mobile e-commerce transactions by the year 2020, a move that has a projected yearly revenue of almost $35 billion. The reason for this advanced tech is that even with all of the security measures on bank and credit card accounts, it’s still relatively easy for hackers and identity thieves to fake authentication measures.

Something to bear in mind with using a person’s physical features as a layer of next gen protection is that there are likely to be issues during initial implementation, which is the same for any emerging technology. Once perfected, it’s expected that biometrics will eliminate many of the problems inherent with situations where a physical credit or debit card isn’t available. Not only that, but it can also keep a consumer from needing her or his wallet at all.

In order to create a convenient and effective biometrics experience, companies have started studying the ways in which people use their voices, faces, irises and fingerprints as forms of identity verification during business transactions. Specific companies that are testing biometrics technology include Samsung, MasterCard, Alibaba and Apple. Samsung is experimenting with fingerprints, voice and iris recognition while MasterCard is testing facial recognition technology. Alibaba has put a twist on face recognition by using selfies as a form of identity verification while Apple has already made it possible to make Apple Pay purchases possible with a fingerprint scan.

Using features of the physical body to make payments isn’t without its limitations. For one thing, the images and video clips a person has on his phone can be used to authenticate a transaction. There’s also the possibility of a person’s biometric data being stolen. What’s significant about having biometric data swiped is that the owner can’t call the  bank or credit card issuer and request a new face, fingerprints or eyes. In addition to hackers and identity thieves, there’re a number of legal concerns to consider, such as who should have legal access to a consumer’s biometric data.

Even though the field of biometrics presents a great opportunity, it’s not without its obvious loopholes. While still a long way from being widely used for payments, there are elements that are slowly being implemented into everyday life and business transactions.



Pros and Cons of Buying Up Distressed Real Estate

Pros and Cons of Buying Up Distressed Real Estate

All that glitters isn’t gold, and that’s most certainly true when it comes to the real estate market. Distressed assets and properties may not be the best looking, but there can be just as much reward in them as there is risk. If there’s a distressed property in which investors are thinking of investing, they’ll do well to temper their decisions with wisdom of the advantages and disadvantages of such properties.


When buying a distressed property, there’s considerably more paperwork involved, which means there’s more time and energy involved. Investors should store up an abundance of patience if they are serious about buying up foreclosed or distressed properties.

Another downside to ramshackle properties is they are often found in less-than-desirable locations, which can negatively impact their overall value even when they are fully restored. On a related note, even when a property is fully restored, it could take several years before the market has improved enough to where buyers can make a profit on their investment, years that some might not have.

True to its name, a distressed home or commercial property demands a lot of work before it’s ready to be bought. Investors should have just as much money in their reserves as they do patience if they hope to turn distress into success.


Some of the best real estate deals to be had are those on less-than-stellar properties. Investors and hopeful homeowners with an eye for potential can find a great match in distressed homes that have the makings of fantastic properties. Rather than using a lump sum of money on a single house in good condition, that money can instead be spent on two distressed houses that have high selling potential.

Imagine getting a good deal on a property and having to pay sky-high interest rates when it’s time to finance. Distressed real estate often comes with low interest rates, which can make monthly mortgage payments equally low. The money investors and homeowners save on the overall cost of the property and interest rates can be used to restore the home and make it habitable as well as profitable.

Time is both an advantage and a disadvantage. While it’s true that it might take a few (or several) years for the market to reach a level where an investor is ready to sell, that time can be used to ensure everything about the home is in the best condition possible, which positively impacts its overall value when it’s time to sell. One investor may not have the financial resources, patience or time another investor has, which can result in a hurried restoration done in anticipation of a quickly rising market. Impatience can lead to missed steps and missed profits as well.

Real estate professionals who aren’t afraid of a lot of hard work can be well pleased in their decision to buy a distressed property. That being said, there’s truly no way to predict the whims of the market or those of future buyers. These properties can be a coin toss and toe the line between profit and loss.







In Real Estate, Green Still Matters

In Real Estate, Green Still Matters

The global real estate market has definitely seen an increase towards the greener end of the spectrum in recent years. Due to the effect that our collective environmental footprint has on the world around us, architects, builders, and consumers have placed an added emphasis on sustainability when it comes to real estate developments and investments. This inevitably leads to the question of whether or not going green with your real estate portfolio is a good option for you.

The benefits of incorporating a greater environmental awareness into your own personal lifestyle are difficult to dispute. For years, we have been hearing about the financial rewards of managing energy costs. These have been manifested through lower utility costs and tax credits. Yet, do potential tenants care enough about such benefits to make them worth incorporating greener amenities into their residential and commercial properties?

Recent research seems to indicate that they do. A joint study commissioned by the University of California at Berkeley and the Netherland’s Maastricht University compared the rental and sales rate premiums of LEED (Leadership in Energy Efficiency Design) and Energy Star-certified buildings to standard properties across the U.S. Their findings showed the following advantages in favor of the greener structures:

  • A 3 percent rental rate premium
  • An 8 percent effective rental rate premium
  • A 13 percent sales premium

Given the apparent advantages that green properties offer, the challenge then becomes finding cost-effective methods to incorporate green technologies into your new developments, and retrofitting your current properties with them. When it comes to new builds, many states have already enacted regulations that require the initial installation of more efficient home and office energy systems. Finding a capable green builder in your area may come at a higher cost, but can be recouped in sale or leasing costs, or through tax credits and savings.

For your existing properties, the extra expense of retrofitting is one that most researchers have found can be offset on its own. The website has shown that simple updates such as installing more energy-efficient windows and doors, sealing air leaks, and adding extra insulation tend to pay for themselves through energy savings in as little as 2.5 years. Factor in added appeal of offering a green property for sale or rent to other environmentally conscious investors, and you can see how much such an investment can pay off.  

The motives behind your move to a greener focus on your current and potential real estate holdings notwithstanding, being more eco-friendly with your home and/or office building offers the satisfaction of knowing that you’re doing your part. If you’re like a growing number of people whose environmental consciousness also influences how they utilize their bank accounts, not to worry: all signs seem to point to going green producing much more green for you.  

Why Huge Investors Are Betting on Virtual Reality

Why Huge Investors Are Betting on Virtual Reality

Virtual reality may be dropping the virtual part very soon. As more and more media companies are investing in the tech, it is becoming a reality. Cable giants like Comcast and Time Warner have joined the first round as investors for NextVR, a company considered a real leader in virtual reality broadcast technology. The first round of $30.5 million, led by firm Formation 8, will create a powerhouse partnership that will aid in expanding the VR reality into programs ranging from pro sports to award shows. Founder of Formation 8, Brian Koo, the tech advisor and board observer to Oculus pre-sale to Facebook, will be on the board of NextVR’s board of directors. A list that includes Oculus, the platform will be compatible with other major head-mounted displays like Samsung, HTC, etc.

One of the owners of the Golden State Warriors, Peter Guber and RSE Ventures; a venture firm associated with the Miami Dolphins; and Dick Clark Productions, a production company that produces award shows like the American Music Awards, and New Year’s Rockin’ Eve, are among the first round of investors.

Said Brad Allen, Executive Chairman of NextVR, “This first-class group of investors is a major validation of our virtual reality technology platform.”

The inviting thing about NextVR to investors is that it has already provided streaming for major events in virtual reality: CNN’s VR partner for streaming the first Democratic debate, Turner Sport’s VR broadcast of an NBA game between the Golden State Warriors and the New Orleans Pelicans. To first round investors, NextVR is about to go huge.

“NextVR is at the forefront of a transformative technology that is revolutionizing how live-action content will be consumed,” said Managing Director, Time Warner Investments, Scott Levine.

An interesting byproduct of high-tech advances is it will require production setup to adjust. Companies that best give audiences the best virtual reality experience will obviously come out ahead. With live virtual reality, there is no cutting room floor, and no time for edits.

“Consumers and professionals need to learn a new way of shooting. […] With virtual reality, that all goes out the door. Where do you put the lighting? You can’t, because it will be in the scene,” research firm Gartner’s Brian Blau, research director for personal technologies told Fortune in an interview.

“For virtual reality to really start taking off – and we expect it will in 2016 – there must be great content delivered through great technology,” said Koo. “Experiencing an NBA game in virtual reality is like sitting in floor seats at center court. You feel as if you are there.”

Soon, the phrase “wish you were here” may become obsolete as anyone can be anywhere in real time, anytime.


The Reality of Fantasy Sports Betting

The Reality of Fantasy Sports Betting

A cease-and-desist order was issued by the New York State attorney general recently which ordered two fantasy sports giants to stop accepting “illegal” gambling bets under New York state law. Eric T. Schneiderman’s move against DraftKings and FanDuel has made him enemy number one of the multibillion-dollar industry that has acquired diehard fans and professional sports partnerships.

Says Schneiderman, “It is clear that DraftKings & FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.” The attorney general’s office and The National Council on Problem Gambling have said that it has received reports of “severe gambling problems” in some people who play daily fantasy sports.

Both companies have pushed back claiming that they are protected under a 2006 federal law that exempted fantasy sports from a prohibition against processing online betting.

DraftKings offered a statement through Sabrina Macias saying, “We’re disappointed he hasn’t taken the time to meet with us or ask any questions about our business model before his opinion.” According to Macias, there are more than 500,000 daily fantasy sports users in New York State.

FanDuel released its own statement of denunciation claiming that fantasy sports is not betting, it takes skill and careful planning, “Fantasy sports is a game of skill and legal under New York state law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country.”

Mr. Schneiderman began investigating the fantasy sites after a DraftKings employee accidentally leaked internal betting data then won $350,000 on FanDuel that same week. Findings to this end have drawn comparisons to insider trading — which has put a microscope on professional sports league senior management as well as the gambling sites.

New York is one of the growing number of states ruling that fantasy sports should be considered illegal gambling. Nevada recently mandated that daily fantasy sports fantasy companies cease operations until they have secured gaming licenses. A Florida grand jury has subpoenaed records of the fantasy sports trade group, the United States attorney in Manhattan has begun an investigation, and the Boston division of the FBI, where DraftKings’ are headquartered, has begun questioning fantasy sports players. With all this bad news on the rise, DraftKings and FanDuel will stand to lose millions of dollars, though they will save millions in advertising space bought by them during the NFL season. Each company has been known to spend upwards of $100 million for television ad campaigns. 

In 2014, FanDuel claimed it was signing up to 30,000 players a day, and nearly every N.F.L. team has a sponsorship deal with either or fantasy sports sites. Iconic NFL owners, Jerry Jones of the Dallas Cowboys and Robert K. Kraft of the New England Patriots, even have equity stakes in the companies.

DraftKings & FanDuel demands that they bar employees from playing on their own sites, but there doesn’t appear to be much oversight to ensure they don’t. Both sites operate without the equivalent of a Securities and Exchange Commission or any other policing or regulatory organization.

With so many powerful players involved with fantasy sports’ success, it will be interesting to see how the fantasy sports field will appear in the upcoming months.  

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Fantasy football – Get Sports Info