Risk and Return
Thursday, February 13
Like all investments, real estate involves risks – and the expected returns on investment usually vary commensurately with the riskiness of a particular project. We’ve discussed elsewhere some of the due diligence needed to analyze risks associated with different property types. Here, we r...
Valuation Methods and Appraisals
Tuesday, February 11
Because each real estate property is different, determinations of value (outside of an actual sale) can be difficult. Appraisers and other professionals generally estimate property values utilizing three approaches: market data, cost, and income. Property valuation is an art, not a scienc...
Real Estate “Crowdlending” – A Better Way For Some Property Loans
Tuesday, January 28
Credit markets are continually evolving. The peer-to-peer lending businesses like LendingClub and Prosper, which sprang up to better service certain consumer credit markets, showed that profitable financial sub-markets (like credit card re-finance) still exist. Real estate credit markets ...
Additional Capital Contributions --- They Want More?
Tuesday, January 21
It’s not common, but sometimes a sponsoring real estate company that has earlier purchased a property with investor money realizes, after operating the property for some time, that more money will be needed -- perhaps the planned renovations went over budget, or an environmental issue arose th...
Investing In Real Estate Through Crowdfunding
Monday, January 13
Crowdfunding is one of the new buzz words to hit the financial services industry and it is now being applied to real estate. Through crowdfunding, investors can pool money together and buy shares of real property like apartment buildings, office buildings and retail centers. Rather than buying...
What the Heck is a Cap Rate?
Thursday, January 09
There are two major techniques for measuring rates of return or valuations from real estate investments; ratios, which are simple arithmetic computations, and yields, which discount future income to account for the time value of money. We’ve earlier discussed how loan-to-value ratios can help...