It’s Business: People Want Short-Term Rentals

Posted on February 8, 2019 by Patrick StCin

Great News For A Short-Term or Vacation Rental Property Business

No matter where you go, if you stay overnight, you need some place to sleep and shower. For dairy inspectors in 1915, the YMCA or the bus station might have been okay, but real hotels have been the mainstay choice for years now and the RV is good for the family that spends lots of time outdoors.

However, the online vacation marketplace has made it easy for travelers to search online for all sorts of alternative places to stay. You can look for condos, cabins, homes, and apartments in locations all over the world. This trend is good news for people who own vacation homes or second houses that they want to rent out. It is great news for people who want to build a short-term or vacation rental property business.

You might think that you have to live in Myrtle Beach or Hawaii to start a vacation rental property business. But this is not true. You can start a business right in your own town, right here in Texas.

Truly, these online vacation home marketplace sites have revolutionized the short-term rental business. They are a great tool for the rental property owner. Not only do they make it easy to advertise your property as far as the web can reach, but they also allow you to receive funds from buyers securely. A few of these vacation rental marketplace sites are listed here so you can check them out for ideas:

Air BnB: https://www.airbnb.com/

Homeaway: https://www.homeaway.com/

VRBO: https://www.vrbo.com/

There are many things to consider with any investment or any time you start a new business. Most of the time, you need a loan. To get a loan on a property, you need to know what property you want and how much you need to borrow. Here are a few tips to help you get started on your short-term rental property business plan.

The Property: “A superb location”

Be inspired and look for a property that you love and consider whether it is convenient to public transportation and/or has easy parking for private cars? Look for a single-family home or for a large house that has been converted into a triplex. One good way to start is to live on one floor, rent out one floor fulltime, and rent one as a short-term vacation rental. Remember that each floor or living space will need to have a separate means of access. You can consider doing the remodeling yourself to make a large home into a triplex. Construction funds should be included in the funds you need for your business loan.

Laws: “You can’t fight City Hall”

Check the zoning laws for the local government to make sure the community does not have rules against owners renting out homes or offering rooms or floors of their house for short-term rent. Do this before you buy. As they say in the neighborhood, “You can’t fight City Hall.” Well, you can, but it will be expensive, and you will probably lose. So, check the laws before you invest.

Furniture: “Very clean and inviting with a comfortable bed”

A long-term rental can be rented without furniture, but short-term rentals need to be furnished so you will get rave reviews on the online websites and earn repeat customers. Put these items into your plan and trim them from there depending on your funds.

You will need to have a washer and dryer available. If you are choosing the triplex, one in the basement might do, but stackable ones on each floor would be a real amenity and earn you the coveted, “They thought of everything to meet our needs.”

You will need a refrigerator, dishwasher, microwave, oven, and the latest HVAC system.

For the bedroom you will need a bed or beds, bedroom furniture, sheets, blankets, pillows, comforter, end tables, lamps, dressers, flat screen TV, hangars.

For the living room you will need another flat screen TV, at least one couch, easy chairs, reading lamps, book cases, and maybe a rug.

For the kitchen, table, chairs, silverware and dinnerware, coffeemaker, and cookware.

You can great prices at antique shops and thrift stores for furniture and decorating items like mirrors, pictures, book shelves. Some of the items you need, you will probably need to buy new, like the linens and the HVAC systems.

The Welcome Package: “They were great hosts”

Put together a welcome package. This package will tell renters about what amenities are offered in the space and in the town. Include useful information about public transportation and sites of interest.

Advertise: “It was so easy to find them.”

Advertise on as many vacation home marketplace sites as possible to get your name out there, get the reservations flowing, and start receiving funds securely. It is also a good idea to build and maintain a website.

Be Available: “They were the friendliest people”

It is very important that you available for emergencies and questions and if possible to check guests in. Take calls from interested parties and be friendly.

Lowenstein_Apartment_Complex

Build from One to Many

Grow. If you love the business and are making some money, be obsessive about it. When you can afford it, buy another property and enlarge your business.

Now that you are ready with a property and a plan, I can help you with a loan program to purchase your rental property. I am happy to announce that a loan program is now available to purchase rental property for the purpose of building your short-term or vacation rental property business. We have funds available for single-family residential property, condos (warrantable only), and ocean beach front property.

I would be pleased to have you call or e-mail too.

Pat St. Cin

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

In-a-Hurry Loan to Cover the Gap

Posted on January 23, 2019 by Patrick StCin

There are several reasons why a fix-n-flip investor might want to secure a fast loan to cover a gap. A gap loan, as the name implies, is a loan that bridges a span of time. It helps you gain control of a property quickly even if you are still scrambling to get all your paperwork done for a full rehabilitation loan.

A Buyer in a Hurry
At some time or other, you might face a seller in a hurry. One situation that puts a seller in a hurry is foreclosure. Many property owners in this situation are in denial so they wait until the last week or so, or even days, before the foreclosure sale to act on saving their credit. To save their credit, they must pay the bank all they owe on the mortgage right now. The house might actually be worth much more than what they owe if they have been paying on the loan a long time or put a large payment down on it. But, a foreclosure on their record will ruin their credit. So, for them, it is better to sell at a discount and survive to buy another house another day.

In this scenario, an owner in foreclosure has agreed to sell the property to you at a steep discount, but they need to close the deal quickly. You, the investor, want to buy this property and you make an offer. However, the competition is extremely stiff, and another investor is sitting in the wings waiting to obtain the property. Your offer locks up control of the property temporarily. You need to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days.

A Nonrefundable Deposit

Another reason you might need funding in a hurry is that you have stumbled upon a wholesale purchase with a tight deadline to close, perhaps 2 to 5 days. The property is ideal for your purposes and you want to make an offer. However, if you don’t get the deal closed by the deadline, you will lose the nonrefundable deposit you are required to put down and control of the property you are seeking.

Getting Control of the Property

Here is where obtaining a gap loan is useful. A gap loan allows you to purchase the property as is while you are in the process of obtaining a rehab loan. The gap loan can be secured in 2 to 3 days typically. Your strategy is to obtain control of the property through this gap loan, begin paperwork to refinance the loan immediately and eventually complete the rehab and offer the property for sale.

REI Capital Resources has funds available for fix-n-flip loans with terms up to 6 to 9 months with a minimum of 3 months.

E-mail or call for more information on minimum and maximum loan amounts, interest rates, terms, and fees for specific project. I can help you with first liens only and these loans are limited to the Austin, DFW, Houston, and San Antonio Metro areas.

Pat St.Cin

Patrick@reicapital.cash

512-213-2271

Austin, Texas

No Hammer Renting

Posted on January 17, 2019 by Patrick StCin

I was reading an article by Ryan Dezember in the wsj about house renting companies that are starting to see a benefit in buying suburban houses to rent rather than remodeling older homes in the city. The article summarized some interesting points and strategies that are worth considering.

The rationale for buying a new house to rent out arises out of evolving situations that home buyers are facing. When housing prices go up in the suburbs, young families cannot find homes at entry-level prices that they can afford. Many of them are burdened with student debt and don’t have the credit standing to buy the higher priced new homes. So, they are willing to rent to make sure their kids get to go to good schools and live in safe neighborhoods.

Steady Income

Renting houses (old ones or new ones) is a promising investment for those who want a steady income instead of a big single payoff. New single-family homes, versus older ones, can be expected to attractive to renters, stay occupied, and provide steady income.

There seems to be two ways to make this investment work: 1. Buy a new house and rent it out yourself, or (2) buy a new house, find occupants for it, and then sell them to a big housing rental company. According to the wsj article, there are quite a few rental home companies starting to look at buying rental houses in the suburbs.

Buying new has benefits:

Save on sales commissions,
Save on remodeling costs,
Charge more rent for a new home,
Outfit the house with the preferred fixtures to rent them faster, and
Save on maintenance costs for 10 years or so

Since this idea is starting to get around, getting the money quickly so you can squeeze out the competition is something that I can help you with. For rental properties, I offer loans at low interest rates, for terms of 3 to 7 years, with low closing costs, quick closings (15-20) days, and a loan that is based on the asset rather than on your personal credit record so there is less personal paperwork to do.

So, talk to a builder near you who is willing to sell cheap to clear the books at the end of the fiscal year and find occupants, and prepare for a steady income for years to come.

For a quick pre qualification application, follow this link: http://investorslendingsource.com/pre-qualification-program

I would be pleased to have you call or e-mail too.

Pat St. Cin

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

Photo by Pixabay on Pexels.com

A Cursive Business

Posted on January 14, 2019 by Patrick StCin

I’m not exactly sure when they took cursive writing out of the elementary school curriculum, but it truly was a loss. So many grandparents were in for a shock when their grandkids could not read their birthday cards, and with the passage of time, even the parents of the children cannot read the cards to them.

Well thankfully, cursive hand writing is making a comeback according to a blog on Medium by Jon Marcus. It is being required once again in elementary schools in North Carolina and Arizona, and he tells us about the Sip & Script, a 3-year old company that organizes a 90-min class near Harvard University where an assortment of people 20 to 50 years old gather to sip flavored water and practice their penmanship.

When I read this blog, I thought “What a novel idea for a business.” The Sip and Script is an example of the type of small business that might move into a newly remodeled office building, one of those former utility buildings or warehouses that have been remodeled and turned into retail or office rental space.

I know a banker and his partner who recently purchased and remodeled a building that was once a doctor’s office. They turned the space into 7 small suites, a conference room and a kitchenette. They advertised for occupants with an ad looking for entrepreneurs with ideas for a business who needed some space in which to grow and offered seed loans for the startups. His motive is multifaceted, to rebuild the downtown business section of the town he lives in and to put some of his money to work for his community. Like all good investors, the partners are also interested in putting their money to work to make more money.

Their building is now fully occupied by a not-for-profit, a small publisher, a community newspaper, a pair of accountants, and a therapeutic masseuse. As the businesses move in and get underway, they will pay rent and enliven an unused downtown building and eventually be attractive to investors interested in buying office space as rental property.

Like so many entrepreneurs, the owners of the Sip and Script cursive writing business saw a need and put their skills to use fulfilling that need. That is what it takes to thrive.

As for cursive writing — it takes practice.

Drop me a line if you are interested in investing in a commercial fix-n-flip project in business rental space. Perhaps you are the one that wants to loan the money or maybe you have a building in mind that you want to remodel and need cash for that purpose. Either way, I can be reached at

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

To read more about the cursive revival visit Marcus’ blog at https://medium.com/

BE AWARE: Part 2

Posted on January 8, 2019 by Patrick StCin

What does a Horny Toad Have to Do with It?

In Part I of Be Aware, I discussed performing a due diligence assessment with regards to past and present environmental hazards in the vicinity of the property you may be considering. In this part, I want to point out another aspect of the due diligence research you do that revolves around the plants, animals, and habitats that may be on or near the property you are considering making a loan on, developing, or remodeling. The animals and plants that inhabit that property need to be accounted for, not only because we value them, but because their presence may affect the dollars we need to spend on a project. As I have said before, hard money loans are offered based on the value of the property. So, you want to look carefully at anything that affects the property value now and in the future.

In Texas

As a landowner, you will be obliged by law to work around habitat or vegetative species that are considered endangered. According to the Texas Parks and Wildlife website, endangered species are plants or animals that will likely become extinct within the foreseeable future. Threatened means that a species may become endangered within the foreseeable future.

In Texas, plants or animals may be protected under the authority of state law and/or under the Federal Endangered Species Act. Examples of federally listed species in north Texas are the black-capped vireo, golden-cheeked warbler, and the Texas poppy mallow. Some of the state listed species are the Texas horned lizard (horny toad) and the Texas kangaroo rat.

The Texas list deals only with the status of the species within the borders of Texas. The Federal listing means that an animal is in trouble throughout its entire range which may cover several different states. Federal law not only protects the individual animal, but also protects its habitat. While TPWD enforces regulations pertaining to state listed species, the U.S. Fish and Wildlife Service enforces regulations pertaining to federally listed species under the Endangered Species Act.

Real Estate as Habitat

In the business of real estate, habitat is the concern. Loss and/or fragmentation of habitat is the number one cause for species declines in Texas. For example, the black-footed ferret is one of the rarest mammals in North America, yet it inhabited prairie dog towns in North Texas as recently as 1963. While prairie dog towns still exist, they are too small and too few in number to support a population of ferrets.

To sum it up, just as you would review the local area of your planned real estate transaction for hazardous concerns that will affect the property, you need to research the animals and plants that live on the property and their habitats that might be nearby.

Don’t forget to look for wetlands and ponds when you walk around the property or when you look at the topographical maps. Working around wetland and rivers requires special permits and special protective construction measures that need to be worked into the cost of the construction or remodeling projects.

A County by County List

Visit the Texas Parks and Wildlife website for a county by county list of endangered and protected species in the area you are planning to work in. Each county’s list can be downloaded onto an Excel Spreadsheet. See https://tpwd.texas.gov/gis/rtest

wildlife_districts_148

The Texas Parks and Wildlife Department also offers private landowner tools for things like habitat conservation plans, safe harbor agreements, candidate conservation agreements, and landowner incentive programs at

https://tpwd.texas.gov/huntwild/wild/wildlife_diversity/nongame/listed-species/landowner-tools.phtml

Remember. I’m not giving legal advice, just pointing out areas you should research before you buy a property or loan money and put your name on a deed. Be sure to be aware of the physical reality of the property itself. Look at it in real life and on the internet.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References

Texas Parks and Wildlife website at https://tpwd.texas.gov/

Photo Ben Goodwyn [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/) or CC BY 2.5 (https://creativecommons.org/licenses/by/2.5)%5D, from Wikimedia Commons

Cold Storage 101 or −101°

Posted on December 22, 2018 by Patrick StCin

Looking into the future, where should you put your money or your efforts if you are looking for a commercial real estate project that can offer decent returns. Perhaps you should think about one of the things we Americans, and people and animals everywhere, really need, food. According to Esther Fung, WSJ, the best performing real estate investment trusts this year are in the area of food storage —cold food storage.

Right now, according to Rick Romano, head of PGIM’s global real estate securities, “cold storage is about as defensive an investment strategy as it gets.” American Realty Trust, the only publicly traded cold storage real estate investment trust, has risen 50% since the start of the year.

He also says that only 2% of groceries are bought online, but as people work longer hours and avoid long commutes and extra trips to the grocery store, that number could rise. If it goes up to 5% or 10%, he suggests, there will be a continued demand for cold storage facilities in densely populated urban areas.

Cost of Building or Remodeling for Cold Storage

Cold storage might be a very good investment for an investor interested in commercial real estate construction or a commercial fix-and-flip project.

I know there are cold storage facilities operating near me, near the train warehouse area, because I have a friend who went to work there and in a cold storage facility, even the office space is a cool 40°.

According to Joshua Everage at A-N-C- cold storage, investment management firm JLL says the “cost of building a new cold storage facility is $150 to $170 per square foot, compared to $50 to $60 dollars a square foot for regular warehouse construction. Most cold storage facilities are new builds, but you can expand or upgrade existing warehouse space at a cost of $60.00 to $70.00 a square foot. That is about 40% of the cost of building a new facility from the ground up. ”

−Everage also says that when you are looking at costs, consider the usual items, like location, but also the unique requirements of a cold storage facility, the freezing equipment. Do you need a unit that can flash freeze product like fish, or a chiller? There is a difference in cost. Also consider the height of the docks, the height of the building itself, exterior and interior wall finishes, and plumbing requirements. For a free cold storage construction guide, visit http://www.anccold.com/blog/cold-storage-construction-cost and download a guide.

For help coming up with a lender or someone willing to tackle the project, call me. I’m based in Austin, but I can meet you where you are at, in Dallas, Houston, or San Antonio.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References:

Everage, J. 2017. Cold Storage Construction Cost Per Square Foot. Blog, at http://www.anccold.com/blog

Fung, E. WSJ, December 2018, Real-Estate Stocks Beating S&P 500 for First Time Since 2015. https://www.wsj.com/articles/real-estate-stocks-beating-s-p-500-for-first-time-since-2015-11545134402

Doing the Math: Purchase, Rehab, Refinance, Cash Out

Posted on December 17, 2018 by Patrick StCin

The markets have been extremely volatile lately and they say the anxiety meter has shot up to screaming level. However, according to Caleb Silver, Editor-in-Chief, Investopedia is not predicting a major market decline. And, whether the market is up or down, I am here to help you find ways to put your money into other types of ventures, like fix-n-flip real estate projects big or small. It works like this:

You Purchase
You Rehab
You Refinance
You Cash Out

Silver also says in his daily e-mail that “Seasoned investors have learned to moderate their expectations and build their portfolios to endure all kinds of markets. It takes discipline and a lot of learning to do that well, and even the best of them still get their faces ripped off now and again (a technical expression for suffering massive losses). Still, having unreasonable expectations is the first step to setting yourself up for disappointment.”

Ah yes, setting yourself up for disappointment: I remember Christmas mornings when I was a child as a time of too much expectation. By the time Christmas morning came around, my expectations were sky high and no matter what great present my parents or Santa Claus brought me, I was going to be disappointed because nothing could live up to the fantasy in my head. So, the day was never as much fun as it should have been.

I’d say that Silver (good name for an investment geek) is trying to warn us . He says that Vanguard (a massive money manager) recently surveyed its customers and found that their expectations were way off from its own market predictions. Vanguard found that the average retail investor expects stock to return more than 10% a year on average and people with their money in pension funds expect 7.5% average annual returns. Unfortunately, Vanguard expects a 4.6% return on stocks.

So put in your time studying so that you can put your money to good use making more money for you. Think about your options and don’t freak out. As Silver says, “When the Anxiety Index picks up, volatility tends to follow.” But as Friday’s Investopedia headline read “REMAIN RATIONAL.” (see investopedia.com)

Here is a rational option to study:

Purchase, Rehab, Refinance, and Cash Out of a Multi-Family Building

Loan Requirements

Min 5 units
Loan Amounts – $250,000 – $5,000,000
Interest Only – 2yr Term
1st Lien Position Only
No Prepayment Penalties
Up to 80% for Purchase and Rehab
Up to 70% for Refinance and Rehab
55% for Cash Out

Borrower

Min FICO 670
Full Recourse
DSCR / Occupancy – No requirements while being rehabbed
Min Liquidity of 9mo of debt service + 20% of rehab budget

Appraisal Requirements

All loans require a full appraisal with internal property pictures and dated within 120 days of loan origination.

Lending Areas

All major metro areas and small market areas nationwide. Non-lending areas include rural and high-risk areas.

Patrick@InvestorsLendingSource.com

512-213-2271

Museums and Investment

Posted on December 17, 2018 by Patrick StCin

The Guggenheim Effect

When you are buying a house to fix up or lending money for that fix-n-flip project you hope to profit from, the value the property has now and will have after the renovation is complete is what you are focusing on. You will be thinking about neighborhood and what makes a neighborhood a good place to live. These days, according to Alina Dizik of the WSJ, you should look around for a nearby museum.

Museums are revitalizing neighborhoods all over the world. The neighborhood revitalizing phenomenon of a museum is called the Guggenheim Effect. According to the Economist and the WSJ the Guggenheim Effect is the phenomenal revitalization of an industrial town that was dying, Bilbao in Spain in this instance, into a “sleek tourist destination” by the construction of a museum (Economist).

Walkability, and Safety, Interesting Things to Do

According to research done by Stephen Sheppard, an economics professor at Williams College in Massachusetts, “property values of homes near museums rise between 20% and 50% over the course of five years (WSJ ). ” Homebuyers, according to Dizik, are drawn to a museum building’s bold architecture, its rotating exhibits, “its guest lectures, and attractive indoor and outdoor common areas.” Some are looking for safety and amenities in one place. Entertainment and restaurants that you can walk to are also big draws.

There are museum districts in several towns in Texas. Look around your town and see if a museum is raising property values near you. This may be where you want to invest next.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

Mercedes-Benz Museum in Stuttgart, Germany, during blue hour. Julian Herzog [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 4.0

Austin Museums

In Austin, the museum district is more of a museum partnership and there are many museums in the downtown. There is a plan here to connect the walking and biking trails into a big loop of urban trails that will extend 30 miles, traversing the city from Lady Bird lake to Walnut Creek Metropolitan Park, creating a safe walkable and bikeable commute route through downtown. So living near or on that route may be attractive. http://www.austinmuseums.org/

Mexic Arte Museum, 419 Congress Ave

The Blanton Museum of Art, University of Texas Campus

The Harry Ransom Center, 300 W. 21^st street, University of Texas Campus

Mondo Gallery, 4115 Guadalupe St

Bob Bullock Texas State History Museum

Yard Dog Art Gallery, 1510 S. Congress Ave.

Arthouse at the Jones Center, 700 Congress Ave.

Houston Museums

There is one in Houston and it boasts 4 walkable zones, 19 museums, and over 2,300 residents according to http://houmuse.org/. Homes in the museum district sell faster than average compared to other neighborhoods in Houston. Realtor.com The neighborhoods and surrounding area are a mix of historic homes with character and charm, to modern townhomes, and high rises.

Museum of Fine Arts Houston Expansion

Moody Center for the Arts at Rice University

The Houston Center for Contemporary Craft

Czech Center Museum

Buffalo Soldiers National Museum

Lawndale Arts Center

Houston Museum of African American Culture

Children’s Museum of Houston

Houston Museum of Natural Science

Dallas Museums

In Dallas, the museum district is the Arts District downtown. It is a cultural hub of music, art, and theatre. The Dallas Arts District is bordered by St. Paul Street and Ross Avenue as well as major throughways Woodall Rodgers Freeway and Central Expressway. http://www.dallasartsdistrict.org/

Dallas Museum of Art

Modern Art Museum of Fort Worth

Nasher Sculpture Center,

Perot Museum of Nature and Science

Kimbrel Art Museum

Dallas Contemporary

Meadows Museum

San Antonio Museums

In San Antonio, a river walk extension completed in 2009 is called the Museum Reach. It extends past the zoo, the Japanese Tea Gardens, Brackenridge Park, the Pearl District, and three of San Antonio’s museums, all listed below. https://www.thesanantonioriverwalk.com/explore/museum-reach

The Do Seum, San Antonio’s Museum for Kids, 2800 Broadway

The Witte Museum, 3801 Broadway

San Antonio Museum of Art, 200 West Jones Avenue

What do all these neighborhoods have in common, interesting things to do, walkability, and safety.

References

Dizik, Alina, To Discover an up-and-Coming Neighborhood, Look for a Museum, The Wall Street Journal, November 25^,2018

The Economist, The Guggenheim Effect, Can other cities imitate Bilbao’s cultural-tourism success? August 18, 2018

How to Stay Afloat Buying a Mall

Posted on December 11, 2018 by Patrick StCin

Mispriced and Overly Negative

As online shopping puts brick and mortar retail stores into a tight spot, causing retailers to downsize or go out of business, some might think that buying a mall or a shopping center is not such a great idea. However, not all malls are in difficulty and according to WSJ writer Esther Fung, some private investors see the market as “mispriced” and “overly negative” on mall assets, “creating a buying opportunity.”

In August Fung reported that CBRE Global Investors was buying stakes in three malls from Brookfield Property Partners, which will retain an interest. Brookfield Properties Retail Group is an American real estate investment trust headquartered in Chicago and a subsidiary of Brookfield Property Partners. Its portfolio, according to its website https://www.brookfieldpropertiesretail.com/ includes 162 retail properties in the United States, comprising 146,000,000 feet of gross leasable area. The_parking_deck_at_The_Parks_At_Arlington

The Parks Mall, Arlington, TX by Smarty9108 [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)%5D, from Wikimedia Commons

The Parks Mall in Arlington

One of those retail properties is The Parks Mall in Arlington, Texas. The Parks Mall opened in 1988 at 3811 Cooper Street and Interstate 20 in South Arlington, between Fort Worth and Dallas (Wikipedia). According to the Brookfield Properties website, The Parks Mall is in a” highly visible location,” in the “heart of a growing market,” and hosts 22 million visitors annually.

It is clear that despite competition from online shopping, retail sales have continued to grow. Esther Fung’s WSJ article quotes a research note by Green Street Advisors, a real-estate research firm, “The spur in consumer spending has driven better-than-expected tenant sales (not just online), which should continue through 2018.”

Malls for the Future

This WSJ article has spurred me to do a little research and think about what might make a mall continue to be a profitable investment in the future. So I looked at https://www.theparksmallarlington.com/ to get some ideas about what The Parks Mall is doing to survive and thrive as a commercial entity in the future. Its strategies include:

Make the mall a community with opportunities for parties and skating.
Expand out of shopping into fun experiences, “learning, playing, and exploring” with activities like Camp Gladiator Fitness Camp that meets in the upper level parking garage.
Create Santa’s Toy Factory, where you can test and design online toys in Santa’s Workshop on Level 1 in Center Court.
Offer picture taking opportunities with special days like
- Ugly Sweater Days, November 16 through December 13,
- Holiday Pajama night, that special night when you dress up your whole family in their favorite holiday pajamas and come down to the Mall for pictures, November 30 -December 6.
- Grandparent Day, November 29^th; and
- Pet Night every Monday from 5-8 pm.

Photo by Studio 7042 on Pexels.com

Offer Food. Food and more Food. Although you can have food delivered and eat just about anything in front of your computer screen, eating out is still a treat and cannot be done online. The Parks Mall offers Share, Sip, and Dip with snacks, coffee, and full meals to indulge in.
Offer care of your person with hair and skin boutiques. You can’t get that personal care for your nails, hair, and skin online.
Keep the movie theatre hopping with snacks, drinks, and the latest films.

Whether you are looking at a large mall or small neighborhood mall, malls still have a role in American community life; and with imagination and marketing, they might just be a low-priced buy for investors interested in remodeling and re-enlivening commercial property in the downtown or suburbs.

References

Fung, Esther. CBRE Global Investors Buys Stake in Three GGP Malls. The Wall Street Journal, August 27, 2018. Accessed November 27, 2018.

Wikipedia. The Parks Mall at Arlington. Available online at https://en.wikipedia.org/wiki/The_Parks_Mall_at_Arlington. Accessed November 27, 2018.

Brookfield Properties. website https://www.brookfieldpropertiesretail.com/en.html. Accessed November 27, 2018.

How to Use a Hard Money Loan to Get Your Real Estate Property Ready to Sell

Posted on December 4, 2018 by Patrick StCin

How Much Money Do You Need?

There are some basic things you need to know before you can get a hard money loan. First, you need to know how much you need to borrow and how much collateral you have. You begin by finding out how much your real property (house or apartment complex) is worth as is.¹ Note the words “as is.” You can get this information from a real estate appraiser. Then you ask them to make a second estimate about how much more the property will be worth if obvious repairs are made.

Next, get a remodeling contractor to give you a bid on the repairs and a plan or time frame the repairs will take. You might want to get several bids and choose the one that looks best to you.

How Much Collateral Do You Have?

Second, find out how much you owe on the property. The difference between the amount you owe and the appraised value of the property is your equity. It is the equity that will determine how much the lender will lend you.² Compare the amount of the cost of the repairs to your equity after the repair is make. If your equity is larger than the repairs, you might be able to make a profit after paying off the loan.

The amount of money you need to borrow is the amount the repairs will cost plus a cushion of maybe 15 percent. The amount of collateral you can offer the lender is the equity in the real property. If the equity value of the real property is larger than the amount it will take to fix the property up, you have collateral to get a hard money loan.

Who Are the Lenders?

Hard money loans are typically issued by private investors (individuals or groups) lending their own money to borrowers with real property. The real property is their protection for making the loan and will be taken if the loan is not repaid. The primary basis for making a hard money loan is the liquidation value of the collateral backing the note.³ While the bank on the street corner will check basically everything before issuing a loan, including your credit scores, your income, the stability of your income, any missed payments, the amount of outstanding credit you have, and how the internal revenue service feels about you, the hard money lender will be are more interested in the value of your collateral than in your credit history. The hard money lender will determine the value of the property by getting an independent appraisal.

How Much Will It Cost Me?

Interest rates on a hard money loan will start at about 7.7 percent.¹ The rate will depend on several things, including the liquidity of the asset. If the house you are repairing is in a bad neighborhood, it might be hard to sell even after it is remodeled and thus the interest rate on the loan will be higher. Broker fees also apply if a broker helped you find the funding source.

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The broker offers personal service to the borrower and administrative service to the lender. They give advice, do the paperwork, and make the phone calls involved in the transaction. They will also have the day-to-day experience and contacts to find the best rates for you. They then pass on the completed application to the lender.

Summary

In summary, if you are in a bad credit situation, have equity in real property you own, anticipate a project that will not take too long, and need money quickly, the hard money loan is probably for you.

If you find a deal, give me a call for a quick closing fix-n-flip rehabilitation loan. You can e-mail too.

Patrick@InvestorsLendingSource.com

Austin, Texas

512-213-2271

References

1. Hard Money Loans: A Complete Guide. California Hard Money Direct. Available at https://californiahardmoneydirect.net/2017/04/21/hard-money-loans-guide/. Retrieved November 2018.

2. Justine Pritchard, Hard Money Basics, How Hard Money Loans Work. Available online at https://www.thebalance.com/hard-money-basics-315413. Updated October 31, 2018. Accessed November 2018.

3. Wikipedia. Hard Money Loan. Available online at https://en.wikipedia.org/wiki/Hard_money_loan/. Accessed November 16, 2018.