1. Loopnet.com - Loopnet is probably the largest and most well-known commercial real estate listing site. They claim to have over 630,000 active commercial real estate listings on their website. It costs $24.95 a month for visitors to have access to all of the property listings. The free membership for visitors allows full search capability, however, only a limited number of results are shown.
2. Realup.com - Realup is brand new to the market and officially launched on May 17, 2009. It appears that all of the memberships for both buyers and sellers are free. The website says that “our property listings are charged based on a pay-per-results pricing model, setting us apart from our competitors and providing the greatest value to our partners and clients.” So, they are basically charging for the traffic or leads that your listing generates. This sounds good in principle but from my experience the technology for these “pay for the lead” type of systems is usually too weak to determine what a valuable lead is.
3. Costar.com - Costar offers the ability to search for all commercial property types. Basic listings are free for real estate professionals and property owners. It costs $24.95 a month for visitors to have access to all of the property listings. The free membership for visitors allows full search capability, however, only a limited number of results are shown. They offer information on “space available for lease, comparable sales information, tenant information, properties for sale, property information for clients’ web sites, industry professional directory, analytic information, data integration, property advertising and industry news–throughout the United States as well as in the United Kingdom and France.”
4. Lead-Trac.com - Lead Trac is designed to give investors and commercial real estate professionals access to following data about commercial real estate: property data, owner data, phone numbers. They also offer direct mailing and marketing tools within the website. Pricing starts at $69/user/county/month.  In addition to the monthly plans, they have an unlimited access plan that they sell on a per county basis.  This plan ranges from $1500 to $3000 per county per year.
5. CIMLS.com - What makes CIMLS different than many other similar sites is the fact that visitors can search listings for free while realtors and property owners can also post their listings for free. Realtors and property owners have the option to upgrade to a Gold account for added exposure. The Gold account costs $14.00 a month for the first month and $20.00 a month for every month thereafter.

Photo Credit: quinet

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Tags: buy commercial real esate, commercial real estate sellers, commercial real estate website, Loopnet, marketing, national association of realtors, real estate, search commercial real estate

Home sales in many markets are dominated by bank REOs, or Real Estate Owned as foreclosures are called after they have gone back to the bank. Generally these REOs will sell below market and can be a great deal for the buyer. However in areas that have an overabundance of REOs they do not sell below the market, they are the market.

Las Vegas

On the surface it may appear that the Las Vegas market is going to lead the housing market out of the doldrums. Looking strictly at the numbers you will see that April home sales were up 78.3% from April of 2008 (article). The median price has dropped to $141,720, a 39.9% reduction from a year ago. Figures for inventory, days on market, and days of supply have dropped as well. These are all good things, right?

Not so fast, it depends on which side of the transaction you are on. For buyers these numbers are awesome. Homes in Las Vegas are more affordable than they’ve been in a very long time. First-time homebuyers can take advantage of an $8,000 tax credit to make it even more affordable. For buyers it’s all good.

Which leaves the sellers. REOs absolutely dominate the Las Vegas market and there are a large number of short-sales as well. In a normal market these distress sales would be an aberration and not a major factor in real estate prices. However, distress sales in Las Vegas counted for a whopping 86% of all closings in April. In a normal market an appraiser can overlook distress transactions when compiling comparable sales. When 86% of closings (article) are distress sales, they become the comps and there isn’t much that you can do about it.

Hobson’s Choice

A seller is now left with the choice of pricing a property low enough to compete with the REOs or not selling it at all. Indeed, many homes have been pulled off the market as sellers wait for prices to improve. Many sellers can’t lower prices to compete because they owe too much on the house. A recent report shows that an astounding 67% of Las Vegas homeowners owe more than the house is worth (article). Their options are to sit tight, try for a short-sale, or lose the home to foreclosure. Ouch!

New homebuilders are facing the same pricing pressure. However, they have overhead and holding costs to deal with as well. They have reacted to this by limiting the number of new homes to a bare minimum and greatly reducing prices on homes that are at or near completion. Some Las Vegas builders have actually reduced prices to a point that is below their cost in an effort to finish projects even if it means taking a loss. The positive point here is that a reduction in the supply of new homes will lead to an increase in sales of existing homes.

In their attempt to alleviate the foreclosure problem the Government created programs to help struggling homeowners. Unfortunately these programs may only prolong the agony. One program, Fannie Mae’s Home Saver, has experienced a re-default rate of 70% (article). Not exactly a promising statistic and it shows that this mess is going to be with us for quite some time.

The bottom line is that this is a terrible time to be a retail seller. If you are an investor who is looking to buy for cash flow, it’s a great time. If you’re an investor who is looking to buy cheap rehab properties and flip them at low prices, it’s not such a bad time. If you are someone who absolutely must sell, good luck because you are going to need it.

What do you think a stimulus is? It’s spending - that’s the whole point! - Barack Obama

Tags: foreclosure, Foreclosures, las vegas real estate

Many apartment buildings are now facing foreclosure because of falling prices, stricter underwriting guidelines and 5 year mortgages becoming due. For the astute buyer of apartment buildings these apartment building foreclosures could represent an investment windfall.

As a glaring symbol of the burst bubble in national residential real estate prices, the National Association of Realtors announced recently that a full 63% of homeowners in Las Vegas are now “underwater” in their mortgages. This simply means that they owe more than their property is currently worth. For many of these people, it simply makes no economic sense to continue paying for their mortgages when the underlying asset is no longer worth what they owe. This situation will probably lead to further foreclosures and further declines in real estate prices. As all eyes are currently watching the steep decline in residential real estate prices and rising foreclosures, the commercial side of real estate has hardly begun to realize the problems that may be looming on the horizon for many apartment building owners.

Homeowners in Las Vegas, for example, who are able to continue paying their mortgages may decide to hold on to their property for a few years and hope that real estate prices recover. They are able to make this decision because, presumably, they have 30 year mortgages. In contrast to residential mortgage holders, many investors in commercial real estate are holding on to 5 year mortgages. This means that they will be forced to refinance their properties when the notes become due and it couldn’t be happening at a worse time. Many apartment buildings rose in value right along side residential real estate prices and too many of these owners paid too much for their properties because they figured that as long as they were seeing a net profit every year from their rent collection then they had nothing to worry about.

Market Conditions Lead to Great Opportunity in Apartment Market

During the real estate investing frenzy apartment building buyers didn’t take into account the possibility that real estate prices would drop so precipitously is such a short period of time. Now, many apartment building owners are facing a dire situation. For example, let’s assume an apartment building investor purchased an apartment building in 2005 for 1 million dollars. He came out of pocket for $200,000 and he financed the purchase with a 5 year balloon note that becomes due on January 1, 2010. He financed 80% of the purchase price. In the last years, however, the market price of his apartment building has dropped 20%. It is now appraised by the bank as being worth $800,000. Unfortunately, when he goes to the bank to get a loan, the loan officer tells him that the bank has changed their underwriting guidelines and they are now only willing to finance 70% of the appraised value of the property. Now, he is only able to finance $560,000. The problem is that he still owes just around $800,000 on the property. The difference between $800,000 and $560,000 is $240,000. Unless the apartment building owner can come out of pocket to pay this additional $240,000 to the bank then he will eventually be forced into foreclosure. It is safe to assume that many apartment building owners will make the same choice that thousands of home owners have, to walk away from the mortgage and the property, chalking it off as a lesson learned.

For the first time buyer of apartment buildings, this could be a windfall in the making. There could be thousands of properties, in good condition, appearing on the market at rock bottom prices.

Tags: apartment building foreclosues, apartment building investing, apartment foreclosures, buy apartment buiding foreclosues, how to buy apartment building foreclosures, how tobuy apartment building, invest in apartment foreclsoures

It has become common for builders and real estate agents to require a pre-qualification or pre-approval from a lender prior to working with them on the purchase of a home. This is done so that the builder or agent doesn’t spend a lot of time with someone who will not be able to get a loan. It also helps the potential buyer by letting them know home much home they can afford at the beginning of the buying process.

Pre-qualification and pre-approval are not the same thing.  A pre-qualification is just a quick snapshot of the potential buyer’s position based on income and credit. It merely tells them how much money they might be able to borrow based on the information that they provide. A pre-approval is different in that it goes much further. The lender will generally go through the verification process. In addition to checking credit they will verify income and employment and perform other parts of the underwriting process. A pre-approval is the lender’s way of saying that if the property appraises at a value that meets their criteria of loan-to-value and the buyer makes the required down payment, the loan is approved.

Not So Fast

The collapse of the real estate market and price drops in many areas have caused lenders to decline loans for many buyers who had been pre-approved. This has caused problems for both buyers and sellers. A buyer finds a home that they like and puts a deposit down and the seller is happy to have found a buyer. Both are surprised when the bank denies the very loan that they had pre-approved because of changes in the real estate market.

In Las Vegas there has been an epidemic of this happening in the high-rise condo market. Buyers who had been pre-approved had placed many of these luxury condos under contract. However, in the time between contract and the completion of construction real estate prices had plummeted and the lenders refused to honor the commitment. The developers have been left holding the bag on many completed units. Buyers who had arranged their own financing rather than use loans arranged through the builder have lost substantial deposits in many cases because they were unwilling or unable to complete the purchase. This situation has forced many of the projects into bankruptcy or left them teetering on the brink of insolvency.

Turning It Up A Notch

It’s bad enough when this happens to an individual who is trying  to

Image via Wikipedia

purchase a home. It’s even more problematic when it happens to a companythat is building a $3.1 billion resort. Fontainebleau Las Vegas had secured commitments from multiple lenders on the $800 million in financing that was needed to see the project through. Unfortunately the lenders decided to pull the plug on the project just as it is nearing completion. The lenders include some of the biggest names in the industry such as Bank of America, JP Morgan Chase, Deutsche Bank, Royal Bank of Scotland and Barclays Bank. At stake are 3,300 construction jobs and over 6,000 jobs when the 3,815 room resort opens in October of this year. The developer has filed a lawsuit (article) in an effort to get the lenders to honor their agreement.

This is just the latest blow to Las Vegas. The area had been rocked by the stoppage of the $4.8 billion Echelon Place and problems with the $8.7 billion City Center project. The area is one of the hardest hit by the recession with unemployment over 10% and at or near the top of the nationwide foreclosure rankings. Just as area residents are wondering “what else could go wrong” something does.

Tags: city center, Echelon Place, Fontainebleau Las Vegas, real estate

Secretary of Housing and Urban Development Sean Donovan was on Bloomberg this morning discussing the state of housing and the Obama Making Home Affordable Plan. There are some signs that the program is starting to work.”I think we have a good balance of carrots and sticks” said Donovan when asked about banks and servicers working together to modify mortgages for homeowners unable to make mortgage payments. Time will tell if indeed the plan is working. I can tell you that here in Arizona, one of the hardest hit areas, the numbers are starting to be not as dismal. Mark Tait, a principal in NXT Generation Real Estate shared some interesting numbers with me last week:

In the greater Phoenix Metro area:

• Year over year closing are up almost 4000 units.
• Inventory has dropped almost 9000 units since December, 2008.

“As a man on the street, I can tell you multiple offers are back and most REO properties.” said Tait, “$200k and below are going out at FULL PRICE.” Now does this mean that we have a bottom in housing? No, I don’t think we have hit bottom in terms of values yet, what I can say though is that activity is returning to the market–and that is the first step on a long road to stability.

Tags: housing, mortgage, real-estate-owned, residential, United States Secretary of Housing and Urban Development

Existing home sales rose 5.1%  in Feburary to a stronger than expected pace of 4.72 million units.  This is the latest in a series of tiny whispers or as Larry Kudlow calls them “mustard seeds”  that we may indeed be in a bottoming process. The other signs include:

• Homebuilders are breaking ground on new homes again
• First-time jobless claims are falling
• Inflation is present and, therefore, deflation is not

This is great news for a real estate market that has really seen nothing but gloom and doom for the past 2 years. It also confirms my suspicion which I wrote about in another post  that we are seeing meaningful signs of a bottom in housing.

Should the economy continue trend stronger through the summer, it will likely fuel stock market gains, drawing cash away from mortgage bonds. This would lead mortgage rates higher — perhaps for good.

Today’s levels are artificially low, after all, supported by government intervention more than economic fundamentals. After the Fed’s Wednesday afternoon announcement, rates fell to all-time lows before recovering sharply into the weekend on economic optimism and fears of inflation.

With mortgage rates still below 5%, and prices still down 15% from a year ago, it is starting to look like this may fast becoming one of those rare “windows of opportunity” to buy a new home in a great school district at a phenomenal price.  Homebuyers with good credit, a steady job and a little down payement money should have no trouble qualifying for a mortgage.

(Image courtesy of: Arizona Mortgage News)

After a strong start Monday and Tuesday, mortgage markets suffered alongside stock markets in the latter half of last week, leaving mortgage rates higher on the week overall.  Market losses were especially steep Friday and mortgage rates headed into the long weekend on a strong uptick.  Regardless, the reasons that mortgage rates rose last week are ancient history, in most respects.  Today, the new presidential administration begins and economic expectations reset. Mortgage bond traders are now looking at Capitol Hill and wondering what the pending stimulus package will look like, and how many dollars will it include.  This is an important time for home buyers and rate shoppers, too, because stimulus is generally believed to be harmful to mortgage markets. This is for two reasons:

1. Stimulus draws money to the stock market from the bond market, pressuring bond prices down and, therefore, mortgage rates up.
2. Stimulus requires the “printing of money” which devalues the U.S. Dollar and everything denominated in it. This includes mortgage bonds and rates respond by rising.

In other words, as the scope of the stimulus package increases, it becomes more likely that mortgage rates will rise in 2009.  Aside from Beltway Politics and commentary, there isn’t much to impact mortgage markets this week. We’ll see the latest earnings from a handful of financial firms and tech bellwethers including Google, Microsoft and IBM. And, on Thursday, we’ll be treated to some housing data from December.  But, with expectations set so terribly low for everything economic, markets will likely shrug off any data that doesn’t scream that the recession is over. Instead, be on alert to lock a rate. In a changing political environment, mortgage rates can move quickly and it’s best to be prepared.