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Cost of new construction in LA County could go up $15 a Square Foot

Housing costs in Los Angels California continue to outpace demand, reducing affordable housing. In an effort to address this housing dilemma, a Los Angeles City Council committee backed a plan for a new fee on the construction of single-family homes, offices, apartments and other developments, with the funds going to pay for affordable housing. Although this fee is being touted as a solution to boost funding for low-income housing, it is my opinion that it will ultimately lead to higher housing costs and rents that will further leave behind the groups the plan was intended to help, thereby contributing to

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How do Global Real Estate Capital Markets effect the US Housing Market?

We often hear or read of reports about global capital markets, but just how do they impact the US Housing Market? As I was researching this topic, I read a report that shed some light. In its annual report, The Great Wall of Money, Cushman & Wakefield provides an in-depth analysis of the state of the Global Real Estate Capital Markets and critical insight into the 2017 landscape of commercial real estate investing trends in America. The Great Wall of Money report series tracks the amount of newly-raised capital, including debt and equity, targeting real estate at a global level

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How the 2016 U.S. Presidential Election Might Change Real Estate Finance

How the 2016 U.S. Presidential Election Might Change Real Estate Finance No matter who wins the 2016 U.S. presidential election, the history books will be stuffed full of exciting firsts. This is the first time we’ve ever had a woman as one of the major two-party candidates, and as such, if Clinton wins, she’d be America’s first female president. On the flip side, this is also the first time a candidate has owned casinos and hotels and, if he wins, Trump would be the first president in over 60 years with no experience as either governor or in Congress. While

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Class C Building

Class C Building.  True Story. I was speaking to a colleague who described a property he was underwriting as being a classy building. He went on to say that although its old, tired and needs some TLC, the cash-flow was strong. I said you’ll have to excuse me, but you first stated the building was classy, then proceeded to tell me it’s dilapidated. “Which is it”, I asked? He replied – “it’s a Class C building, NOT a ‘classy’ building”! HOW ARE BUILDINGS CATEGORIZED AND JUST WHAT IS a CLASS C BUILDING Building Classification Not all commercial real estate buildings

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Protective Equity in Trust Deed Investments

The goal of any investor is to find an investment that allows their capital to grow over the years. But an important part of that goal is in keeping their capital protected against downside risk—or the risk of default. This can be a difficult line to walk however, since higher-risk investments generally earn the most returns, and low-risk investments have conservative gains that might not accumulate as quickly as an investor would like. Hedging by Diversifying Risk In a portfolio of equities, a young investor might invest 60 percent of his or her portfolio in high-risk, high-return equities, 20 percent

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The Hair of the Matter

Hard money loans are well vetted by trust deed investment companies (TDICs) and are underwritten by both TDICs and the lenders themselves, but that doesn’t mean they are guaranteed and without risk. The risks associated with hard money loans are referred to as “hair” of the loan. Hard Money Hair Hair can consist of many things including the risk that the borrower could default on the loan, their exit strategy could fail, property values could drop, or that the property might have damage or problems undetectable by visual inspection—like mold or foundation issues. Other hairy factors could include a difficult

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Five Exit Strategies for Hard Money Borrowers

Much like any business enterprise, a borrower must have an exit plan for paying off his or her hard money loan. This plan, called an exit strategy, can consist of many different potential scenarios including an intention to sell the property, refinance the loan to pay off the trust deed investor, or to have made large enough monthly payments to self-amortize and completely pay off the principal and interest by the loan maturity. Exit Strategy 1: Sell the Property As property values rise, property improvements are completed, or certain properties become perceived as more valuable, the opportunity arises for the

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The New California Foreclosure Time Line

Understanding the Foreclosure Timeline and what takes place during each portion of the cycle. The following time-line is applicable for non-judicial California Foreclosures under a Deed of Trust. Foreclosures begin with the Trustor (borrower) not making the monthly payments to the Beneficiary (Lender), the first missed payment is technical default, but in practical terms, most Beneficiaries do not begin the process until the third payment is missed. If the Beneficiary cannot resolve the defaulted payment amount with the Trustor through Forbearance or other Loss Mitigation measures, the Beneficiary will instruct the Trustee (a holder of property on behalf of a

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