My business partner, Rob Powell and I are in the process of creating an exciting new real estate investing blog at www.TheRealWealthBlog.com. This is one of the few blogs in the blog-o-sphere focusing on commercial real estate and we were recently named by The Real Estate Tomato one of the top ten commercial real estate blogs on the Net. (THANKS TOMATO!)
All this is not to toot our own horn. Instead, we in the process of creating new content and want to answer YOUR questions. We are currently answering any and all questions posted about real estate investing. We've done a LOT of different types of deals - Strip Shopping Centers, Apartment Buildings, Mobile Home Parks, Raw Land, Office Space, and of course - single family homes!
If you've thought about getting involved in real estate, but have had trouble cutting through the sales-jargon that so many promoters have spinning around out there, this is your chance to find out how it really works...
How can you finance your investment deals?
How much does it cost to do your marketing?
Do you need a down payment?
Do creative strategies still work?
No question is too "Beginnerish!"
Hope we can help... please pop over and just comment on any post with your question, or email us!
The Wall Street Journal recently ran a great article explaining how many stock investors were taking advantage of the depressed stock market by transferring stock shares while their values were low, thereby reducing their exposure to the 45% tax rate on gifts above $12,000, and allowing their heirs to benefit from the appreciation as the market recovers. While you're at it, it's also a great time to start thinking about how to involve your children in the growth and preservation of your real estate assets.
Many property owners dream of finding ways to incorporate their children into their real estate businesses whether it's through
Teaching young adults the value of hard work by hiring them to clean and show units after a tenant leaves
Employing an estate planning strategy to transfer wealth and save on taxes, by sharing ownership shares from your LLC, or
Off-loading some of the burdens of property management to free up more time for travel.
These can be fun issues to discuss at holiday get-togethers or at formal "Financial Summits," which my family likes to hold.
If you're beginning to consider these issues, and would like a better understanding of your property's position in the current marketplace, I'd be happy to provide a complimentary evaluation, looking at market rents, comparable sales, and economic conditions to help you come up with a strategy for your property. That way, you'll be armed with information when you sit around the table with your family, ready for the important business of preserving wealth in today's changing marketplace.
- Emily Cressey
Real Estate Agent, Specializing in Apartment Buildings in the Queen Anne/Magnolia, Capitol Hill and Beacon Hill Neighborhoods of Seattle, WA
Many of our clients are surprised to learn that despite the news on Wall Street about the troubles in the financial markets, banks are still lending on quality apartment buildings!
Little known fact: - Marcus & Millichap has an in-house financing department called Capital Corporation. We loan our own internal funds (as a mortgage banker) and also shop lenders nationwide and make loans across the country (functioning as a mortgage broker).
I talked to Glenn Gioseffi, whose office is adjacent to mine here in our downtown Seattle office. He's the Director of capital markets in Seattle and he told me that for the right property (high quality apartment buildings) there are still good loan programs available.
After WAMU's collapse, they are directing many of their loan business to us, and we get it funded.
We often get interest rates well below what Fannie Mae and Freddie Mac offer.
We go the extra mile. Glen has shopped over 20-30 lenders for many of our clients to make sure we find them a great loan to meet their needs.
Here at Marcus & Millichap and our Capital Corporation lending department, business has not stalled, stopped, or gone quiet.
If you anticipate needing financing in the near future for a purchase or refinance, make sure you give us a call to find out what we can do.
Call Glenn Gioseffi - 206-826-5700 Ext 5733 - and tell him Emily sent you!
P.S. If you're thinking about selling, this is great news - your potential buyers can still get financed!
There's still reason for a positive outlook as we watch the stock market rise and fall like a gut-wrenching roller coaster and Americans hold their breath as they lose and re-gain millions in their stock portfolios. Never have I been so glad about my own diversified real estate investments as I have been during this time of economic crisis. The Marcus & Millichap Research Department has recently released an Economic Outlook report explaining what has happened to our nation's economy, and what impact these changes are likely to have on apartment investors. Please request your copy by phone or email.
Queen Anne and Magnolia Apartments Continue to Be Safe and Attractive Investment Although Price Growth Has Stagnated and May Fall
The good news for Queen Anne and Magnolia apartment owners is that Seattle's in-city apartment sector should remain well-protected, even in the face of falling employment rates. High gas prices and short commutes will help keep rental locations close to the city in high demand. However, we likely won't see the same 8% annual rent increases we've enjoyed for the past few years and vacancies are starting to rise toward a (still low) 3% vacancy rate.
The period of euphoria that our real estate market experienced through the 2005 run-up has ground to a halt, and values have stabilized. Many savvy investors are taking advantage of this "breather" and "flight to safety" in the real estate market place to sell or refinance their buildings, and take some money off of the table. They are then poised with cash available, to take advantage of the opportunistic marketplace we are now experiencing.
Great Opportunities Available in the Marketplace to Exchange into Investment Property with More Cash Flow, Less Management, and More Appreciation
There are a lot of great buys availble locally and nationally, and your Seattle branch of Marcus & Millichap is closing deals left and right. We have hundreds of great listings right now including a Walgreens in Shoreline, government-leased Social Security Administration buildings, established mini-storage facilities, and free-standing fast food restaurants like KFC, Taco Bell, Pizza Hut, and Wendy's (by the way, inexpensive chains like these are expected to do very well in a period where families have less money available for expensive restaurant dining). We also have performing apartment buildings and a few turn-around opportunities from condo conversions that were unable to sell their units when the market shifted.
Evalute Your Property Regularly To Ensure Your Portfolio Continues to Perform At The Highest Level Possible For Years To Come
If you haven't taken the opportunity to look at your property's value lately, this would be a great time to do so. We forecast rising vacancy, stalled rents, rising cap rates and stable/falling prices. When our clients ask us when to sell, we respond, "If you're thinking about selling any time in the next five years, you should seriously consider selling now, rather than let your equity sit dead in a property with weak appreciation, while the market softens further."
Whether you plan to sell in the next five years or hold your property long term, I would be happy to talk with you about the performance of your building in today's marketplace. Re-examining rents, prices, and your return on equity is a great way to give your property a "financial check up" and make sure that your real estate portfolio continues to thrive, not just survive, during the current economic gyrations.
Warmly,
Emily Cressey
P.S. To request your complimentary Property Check-Up, or get your copy of our Economic Outlook Report, please call 206-826-5760.
At our weekly training workshop last week, our broker taught us how to set up relationships with banks now so that we'll be prepared in the event that we start to see bank repo's and foreclosures rising like they did in the early 1990's. A trend that might have previously been unthinkable in Seattle's HOT-HOT-HOT real estate market of the last 20 years.
Our firm has already begun working on short sales with a few commercial deals that went south as a result of the declining markets in the last year or so. One distressed seller owned a retail center East of the mountains, and we also have two condo conversions where the developer hasn't been able to sell the condo's, so we are listing the properties for sale and the deal will involve buying out the owners of the few units that have sold.
He's anticipating future opportunties with
Short Sales on properties where the owners are in default
Bank owned commercial properties (REO's)
Owners struggling to make payments but not yet in foreclosure
Owners concerned about their tenants not renewing their leases
Although I don't expect a lot of foreclosure activity in Seattle's commercial property marketplace, I do see opportunities lining up for buyers with the fortitude to invest during the tumult. What do they say? It's time to invest when there's blood in the streets? If there ever was such a time, that sounds like now!
According to Marcus & Millichap's research, the retail and office sectors are likely to be the hardest hit by the economic downturn the nation is experiencing. With less capital available, businesses are not expanding, and consumers are spending less, leading to falling business revenues. Combined with all the building that has been going on in the last few years (leading to new inventory available to lease), we are expecting to see:
Higher Vacancy Rates
Lower Rent Rates
Slower Lease-Up periods
Higher Cap Rates
For those with cash, this represents a great buying opportunity. For those without cash, lenders are still lending money if you have a big enough down payment and clean credit. Loans are still going through and deals are getting done every day. However, cash creates additional negotiating leverage in this time of financial uncertainty.
We Call it an "Opportunistic" Market
This may very well be the buying opportunity that many investors have been waiting for in the white-hot Seattle market that has seen cap rates in the 3- to 4- cap range in recent years. 5- and 6- cap properties are now widely available and buyers are working off of ACTUAL property performance figures, rather than pro-formas, meaning there is less speculation driving up the prices.
We are projecting soft prices in the Seattle commercial market for the next several years. If you have been thinking about buying an apartment building, office or retail space, this may be your perfect opportunity.
Call me to find out what we have available!
Emily Cressey
*********
As real estate agent and investor, I understand the needs of all parties involved in the transaction. Call me if you need help, buying or selling a commercial property in Queen Anne, Magnolia, Capitol Hill, Beacon Hill, or the greater Seattle/Tacoma area.
If you need help sorting through the current financial market turmoil to determine your next investment move, give me a call - 206-826-5700.
Are you Earning What You Thought On Your Seattle Investment Property?
I was stunned earlier this week to find that the average "Return On Equity" after taxes for the clients whose apartment buildings we have the opportuntiy to evaluate, was only 4% .
We probably all agree that 4% is a pretty low rate of return to be earning on an asset as challenging to invest in as real estate. When we look at the projected rate of return for vehicles much safer (savings accounts, CD's, money market accounts) and easier to invest in (stocks, bonds, REITs, and mutual funds), earning a 4% rate of return could really make you wonder if you were doing something wrong by holding real property. Especially if you started seeing your property values began to fall, as they are now doing, even in Seattle.
Seattle Apartment Buildings are Starting To Lose Value
Even historically sterling neighborhoods like Queen Anne, Magnolia, Beacon Hill, Capitol Hill, Greenlake, and other close-to-the-city areas are starting to see cap rates creeping up and properties becoming harder to sell as brokers have to drop listing prices to keep up with the falling market.
Is My Real Estate Investment A Big Mistake?
When you remember that real estate is illiquid, cyclical, can take time and money to manage, and doesn't provide an easy way to keep track of your investment returns, you may began to ask yourself if it wouldn't all be a little easier to just cash in the building and buy a nice easy municipal bond.
Well, be careful at what you're looking at. ROE only tells you part of the story.
Make Sure You Are Tracking Your Results and Looking at the Right Financial Indicators
The way we calculate it at my firm, the "ROE" or "Return On Equity" figure gives us only the CASH return the owner is earning on his equity. It includes cash flow from rents, laundry, vending and other income sources, but, importantly, this figure does not include a number of other important indicators such as debt paydown, tax savings, and most importantly, appreciation. When we evaluate property for clients, we include projections which incorporate these numbers as well.
You see, appreciation is the real wealth building powerhouse when it comes to investing in real estate. Especially in Seattle, where we've enjoyed rates of return on our real estate in the 10-20% range in more than our fair share of years.
That high anticipated appreciation is, in fact, the reason that people are willing to buy apartment buildings here with 4-5 cap rates (they're rising now, as property values fall...) for which they have to make a 50% down payment to qualify for a mortgage.
A Good Return After All
When taken together, these four real estate profit centers (cash flow, appreciation, tax savings, and debt pay down) comprise the real reason we invest in real estate. According to Lisa Vander, author of "The Real Guide To Making Millions Through Real Estate," these four sources combined should give us a 20-30% annual return on our investment portfolio.
And THAT, my friends, is the real reason we invest in real estate.
Seattle Area Real Estate Valuation - How to Get Yours!
Now, for a shameless plug. One of the most important services we offer for our clients at Marcus and Millichap is a real estate analysis. We offer these consultations free of charge, kind of like an "annual check-up" for your property, to help you better understand your property's performance and whether you are meeting your investment goals.
There is no cost to our clients for these services and, since it takes about 30-40 hours of work to analyze one building, the reports and data we provide are very comprehensive and useful.
Since on average it makes sense to sell a property after about 7 years of ownership, it can make sense to review your apartment building's performance regularly, even if you've bought it relatively recently.
If you would like us to take a look at your books and records to compare your property's performance to your investment goals, we would be pleased to do so. Give me a call and I will put you in touch with our best experts, whether your building is an apartment building, commercial building, office building, mini-storage or warehouse! Each of our agents specializes in a geographic area and property type. Talking to someone who knows the market will help you get the best numbers.
I hope you'll call and make sure your investment property is in good health in these turbulent times!
My firm, Marcus and Millichap, hosted a nationwide webcast last week to discuss the outlook for the retail sector for the next year or so.
It was a great time to get more information, especially in the wake of the Lehman Brothers meltdown, AIG failure and Merrill Lynch buyout.
The takeaway message was that there are still buyers out there, but they are taking refuge in quality buildings. No more the high prices or eager interest in sub-par properties with marginal locations or mom-and-pop tenants. Even a lease with Walgreens, which was once the golden standard of tenants, is not enough to keep a building from seeing its cap rates rise.
Prices are going down, and many buyers with cash available are demanding particularly good deals in order to warrant the risk involved in buying into a down market.
However, we are telling our apartment building owners to assess their needs when considering a sale of their building. It's never fun to sell into a down market, but if you anticipate getting out of the building any time within the next five years, now might be the ideal time to make your move, sell the building and use your cash to get into a property at a great price.
I am so excited to be a commercial agent at Marcus & Millichap. What I was told about the training process is correct! They provide their new agents a LOT of training and support and our in-house resources help us serve our clients better than the competition.
Here's what I've been up to in the "jump in and learn to swim" first few weeks:
Choosing a Specialty: Property Type - Apartment Buildings, Location - Downtown Seattle
Now that I'm two weeks into my position as a New Agent with Marcus & Millichap I am deep into training. One of the first things we do is to select a farm area. Mine includes the Queen Anne and Magnolia neighborhoods in Seattle, as well as the "Downtown Hills" - Capitol Hill and Beacon Hill.
You Live and Die By Your Database
The most important thing I've learned so far is that it's vital to have a database that's large enough that you'll have good transaction volume and can get a piece of the action with the property sales going on. But the database has to be small enough that you can really get to know the properties and people that you'll be working with, so you can legitimately say you're an expert.
So far, I've downloaded from the title company about 1700 property records for apartment buildings in this area. Now my job is to go through the records and update them with the owners' phone numbers and a picture of the property.
Become an Expert in a Small Area
As I build my database, I am also becoming an expert in my market area. Unlike many firms whose agents are generalists working on retail, office, apartments and warehouses all over town, Marcus & Millichap requires its agents to specialize in a property type and within limited neighborhoods.
I'll need to know all the details such as CAP Rates, GRM, Market Volume and Velocity in order to serve my clients well and and help them price their properly effectively. As I have learned in training, this will attract more qualified buyers thus helping the seller achieve his desired sale quickly and for as high a price as possible.
Special Training Helps Us Work Effectively With Our Clients
In November I'll go to a group training in California with new agents from across the country. Then I'll be cleared to start calling property owners in my neighborhoods and developing relationships with them.
The goal is always to get the owners the information they need to make the best decisions possible for their property strategy, whether that means buy, hold or sell. We focus on a consultative approach and building a long term relationship.
Coming Soon
Soon I'll start to be able to share more information about the neighborhoods I am visiting and make this blog a valuable resoure for my future apartment owner clients.
The way I got started investing
in real estate was by taking some great training from a company called Mentor Financial Group, LLC.
However, I quickly found that reading about something and
DOING IT are very different things. In order to get started
investing in commercial real estate, I wanted more than just training
or "book knowledge," I wanted to work with a group of people who were
already out there in the field.
I ended up buying my first commercial property, a single-tenant office space in El Paso, TX,
with two other gentlemen. One, Rob Powell, had started investing
in houses when I had, and after buying about 40 investment homes, moved
on to work with his father in law, owning and managing a strip shopping
center - also in Texas. The other, Roger Maupin, had been a real
estate broker, investor and landlord for 15 years and also ran his own
electrical contracting business. They both had great
experiences to draw upon.
Together we formed a company, Grassland
Investments, LLC, and begain buying raw land, apartments,
office space, and strip centers.
My desire to be a commercial real estate agent here in Seattle came
from my experience working with these great investors and acquiring and
managing my own investment portfolio. I wanted to find
another way to capitalize on my understanding and love for
real estate, and with Marcus and Millichap, I have.
In my work as a commercial broker, I like to think I am carrying the
mission of Grassland Investments, LLC - Doing more,
together, for the benefit of all. - into a new
venue.
Whether you have been investing with partners, or are considering
working with someone else for the first time, I would encourage you to
consider the following questions.
Some Things To Consider, When Forming An Investing Partnership
What does your potential partner bring to the table
(skills, contacts, financing, experience, etc.) that you lack?
How does this person treat other people (Family,
Waitresses, Boss, Employees, etc.) and what does this tell you about
him?
What is his financial track record? Has he been
through bankruptcy? What is his credit like?
Does he have integrity, does he keep his committments?
At the end of the day, what is his committment level to the
partnership? When things go wrong - will he make personal
sacrifices to keep the business afloat, or will he cut ties to save
himself?
Do you share common goals? How long do you plan
to invest together? How much money is he looking to make?
There are many more... it can be helpful to work through just one deal
first, on a one-off basis, to see how you work together, before
committing to a long-term relationship. Then you'll go
through the process of forming an entity and creating an operating
agreement. This is a great opportunity to hammer out your
strategy.
The key to success for my investing company, Grassland Investments, is
to be fluid, and have a level of committment and respect that involves
always striving to put others needs before our own.
If you would like more information
about our investment strategies, the opportunity to be a cash or credit investor
in one of our next projects, or to invite one of us to speak to your group,
please visit our website: www.TheRealWealthCompany.com.
Emily Cressey
Commercial Real Estate Agent
Seattle, WA
Contact Emily J. Cressey, a commercial sales agent in Seattle, Washington at 877-762-7332 to list your commercial property for sale or to purchase a property in Seattle, Bellevue, Everett, Marysville, Renton, Redmond, Kirkland, Des Moines, Issaquah, Tacoma, or the rest of Snohomish County, King County, or Pierce County, Washington. I am accepting referrals.
Call me today at Toll Free 877-Snap-Deal (877-762-7332). Contact me by email if you prefer by clicking on email me on the right side of this page under my profile.
To view all the Seattle, Washington Commercial Property for Sale, call me today.
Real Estate Investor Clubs and public speaking events that target your potential clients can be a great way to build a devoted following who have a relationship with you, view you as an expert, and are willing to spend money based on your recommendations.
Read On For More Tips About How You Can Start a Real Estate Investment Club in Your Area...
I was at a Bill Bronchick information marketing seminar last year (for those that don't know, he's a real estate attorney, real estate trainer, and real estate investor) and he said the single best thing he had ever done to drive his business was to start an investment club.
I think he has close to 1,000 members in his Denver-based real estate investors club (CAREI) and he has several profit centers there.
Bill gets leads from his club for all his business activities:
Investors come to him to do their real estate closings and review their contracts,
New investors partner with him on deals or bring him leads when they're in over their heads, and
When speakers come and speak/sell at his club, he gets 50% of the sales revenue.
What's more, as a trainer and consultant himself, he can sell his own products and services to the group directly.
But How Can You Capture More Market Share?
What can you learn from this example? Maybe nothing, maybe everything.
Although organizing a special-interest club takes some work, you don't have to start with a huge group to be effective. Even having a small meeting of qualified people in your home or office conference room, a local hotel meeting room, or in the back of the Sizzler, you can effectively build your status as an expert and gain a following.
I know a mortgage broker who gets 30-50 people a week at her "Rich Dad" Cash-Flow-Game Meetings. When each person arrives, she captures their contact information with a sign-in sheet. She teaches a little lesson for 15 minutes at the beginning, then gets out the cash flow boards and lets everyone play. Meanwhile, she circulates and introduces herself to everyone. At the end, she does another little commercial for her business, and hands out a few door prizes.
This is a great example of doing something small, fast and low-cost (it takes place in her firm's conference room after hours) that generates a big following. She has cooperating real estate agents helping her market the event, and they get to come and schmooze as well.
Target Your Niche Market and Partner with Other Professionals
If you're not working with investors, you could extrapolate on this idea to target your audience better. We all know about the first-time-home-buyer free events, but what could you do to be more creative while still finding a ready-to-work-with-you audience?
One important task is to find people who are ready to do a transaction. A great way to do this is by providing a value-added service to another professional.
Here are some ideas:
Co-host an event with a mortgage broker for clients who are buying/financing a new home but haven't sold their old property yet.
Work with local attorneys: Eight things you need to do to get top dollar for your inherited property. The price of divorce: When Your House is NOT a Blessing. Understanding Foreclosures and Bankruptcy - How To Get Out of Debt Quickly When You Can't Afford The House.
Partner with a Moving Company - How To Time Your Move With Your New Job and New Home Purchase.
Speak with local firms Human Resources Departments - do a "Lunch and Learn" event where you talk about all the issues involved with relocation.
One of the keys to partnering with another professional is to share in their list of contacts. You bring your contacts, they bring theirs. You each get to cross-market to the other's list, and you are providing an extra value to each other's clients.
Use Your Marketing Savvy
How can you get the word out about your real estate club or speaking events?
Many newspapers will advertise your meeting for free in their Events or Announcements section,
You can also put flyers up in local businesses,
Advertise online on your website, blog or with Google Adwords. Ask if you can post a link on other people's sites, or ask them to send out an email to their contact list for you.
Call and invite prospects to attend personally
Or be a guest speaker and speak to other similar groups to build your following
Be sure to capture the names and email addresses of everyone in your audience so that you can update them easily about upcoming meetings and topics of discussion as well as featured guests!
If you are willing to start small, commit to regular meetings, provide value to everyone who attends, and market aggressively to increase attendance, you, too can build a special interest club focused on real estate investing, or any other topic, that can eventually become a profitable part of your business plan.
Emily Cressey Commercial Real Estate Agent Seattle, WA
Contact Emily J. Cressey, a commercial sales agent in Seattle, Washington at 877-762-7332 to list your commercial property for sale or to purchase a property in Seattle, Bellevue, Everett, Marysville, Renton, Redmond, Kirkland, Des Moines, Issaquah, Tacoma, or the rest of Snohomish County, King County, or Pierce County, Washington. I am accepting referrals.
Call me today at Toll Free877-Snap-Deal(877-762-7332). Contact me by email if you prefer by clicking on email me on the right side of this page under my profile.
To view all the Seattle, Washington Commercial Property for Sale, call me today.
Best Real Estate Agent in Shoreline and Lake Forest Park, Washington.
Whether you are looking to sell your house, condo or townhome in North Seattle, find out what your investment property is worth, or identify your next property, I am happy to help.
Call me so we can create and implment a real estate strategy to meet your goals.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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