Sources of Capital in Commerical Property Markets
Capial in commerical property markets is provided by investors who are seeking investment returns rather than personal use of the properties. The types of areas that are common within this sector include individuals, pension funds, life insurance companies, commerical banks, and investment companies.
Life insurance companies are attracted to them because the assets are durable, long-lived, and provide an acceptabel expected rate of return. The way that they invest in commercial property types is by purchasing properties directly and also by providing mortgage funds to borrowers seeking to purchase properties.
http://nreionline.com/finance/news/life_insurance_storm_0705/
This site talks about the losses on real estate loans held by life insurance companies. The performance seems to have improved over time and explains how insurers have mitigated their troubled mortgages.
http://nreionline.com/finance/news/life_insurance_storm_0705/
This is an example of a significant provider for commercial properties and notes that it has been doing this for much of its entire history. This company has proved to have the ability to react to changing market conditions and keep up with its reputation over time.
Saturday, November 3, 2012
Overview of Real Estate Finance
An area that we have seen recently in our economy is the issue of foreclosures. This is the process of seizing control of the collateral for a loan and using the proceeds from its sale to satisfy a defaulted debt. There are different types of foreclosures and these include judicial foreclosures, nonjudicial foreclosures, and a strict foreclosure. In some states, they have made the foreclosure process more simple through the process of a deed of trust or land contract.
http://www.all-foreclosure.com/help/judicial.htm
The key differences in judicial and nonjudicial foreclosures are explained here, the main being with court intervention in judicial foreclosures and non court intervention with nonjudicial.
http://www.youtube.com/watch?v=fB3LlhUSSgw
As we find out here, strict foreclosures are an instance that only a small number of states allow. In this type of foreclosure, it typically only occurs when the debt amount is greater than the value of the property.
http://www.all-foreclosure.com/help/judicial.htm
The key differences in judicial and nonjudicial foreclosures are explained here, the main being with court intervention in judicial foreclosures and non court intervention with nonjudicial.
http://www.youtube.com/watch?v=fB3LlhUSSgw
As we find out here, strict foreclosures are an instance that only a small number of states allow. In this type of foreclosure, it typically only occurs when the debt amount is greater than the value of the property.
Overview of a Real Estate Appraisal 11/3/2012
What is an appraisal? The process is a systematic prodecure employed to arrive at an estimate of value and convey that estimate to the appraisal user. The most common purpose of an appraisal however, is to estimate market value. To arrive at the estimate of the value, these steps involved are:
-Definition of the problem; the appraiser and the client must be in accordance to; the type of value to be estimated, property involved, specific property rights being appraised, use of the appraisal, and effective date of the appraisal.
-Data selection and collection
-Highest and best use analysis; legally permissible, physically possible, financially feasible, and maximally productive.
-Application of the three approaches to value; sales comparison, cost, and income.
-Reconciliation of value indications into a final value estimate
-Report a defined value
http://www.startremodeling.com/home_appraisal.htm
This site explains what a home appraisal is and typically what is looked at when appraising the property.
http://www.youtube.com/watch?v=UzpU9TG1--4
This video tells us the key reasons for an appraisal and also that there is a difference between an appraisal and an inspection, but it is important to have both.
-Definition of the problem; the appraiser and the client must be in accordance to; the type of value to be estimated, property involved, specific property rights being appraised, use of the appraisal, and effective date of the appraisal.
-Data selection and collection
-Highest and best use analysis; legally permissible, physically possible, financially feasible, and maximally productive.
-Application of the three approaches to value; sales comparison, cost, and income.
-Reconciliation of value indications into a final value estimate
-Report a defined value
http://www.startremodeling.com/home_appraisal.htm
This site explains what a home appraisal is and typically what is looked at when appraising the property.
http://www.youtube.com/watch?v=UzpU9TG1--4
This video tells us the key reasons for an appraisal and also that there is a difference between an appraisal and an inspection, but it is important to have both.
Overview of a Real Estate Appraiser 11/3/2012
Up until recently, there were not any specific licenses required to perform appraisals. This changed with the FIRREA, Financial Institutions Reform, Recovery, and Enforcement Act. Under this act, the Appraisal Qualifications Board established minimum education and experience guidelines that states must use to issue appraisal licenses and certifications. The Uniform Standards of Professional Appraisal Practice is what is typically required by many states for all appraisals. Getting an appraiser licence and certification can range from having to complete between 75-300 hours of classroom instruction, the least being for a trainee appraiser and the most for a certified general appraiser.
http://www.bls.gov/ooh/business-and-financial/appraisers-and-assessors-of-real-estate.htm#tab-4
This site goes into detail about not only the licenses and certifications you need, but the education and training required as well. It also points out that these will vary from state to state. The amount of education required is dependant upon which level of appraising you are wanting to get involved with.
http://www.youtube.com/watch?v=G5hmDXDBeVw
John Saunders, from The Real Estate Academy, briefly describes the main areas needed to become a real estate appraiser; acquire the education, gain experience, and pass the state licencing exam. He notes that for it to be rewarding, the process will not be an easy one and that it usually takes about a year to satisfy all the requirements.
http://www.bls.gov/ooh/business-and-financial/appraisers-and-assessors-of-real-estate.htm#tab-4
This site goes into detail about not only the licenses and certifications you need, but the education and training required as well. It also points out that these will vary from state to state. The amount of education required is dependant upon which level of appraising you are wanting to get involved with.
http://www.youtube.com/watch?v=G5hmDXDBeVw
John Saunders, from The Real Estate Academy, briefly describes the main areas needed to become a real estate appraiser; acquire the education, gain experience, and pass the state licencing exam. He notes that for it to be rewarding, the process will not be an easy one and that it usually takes about a year to satisfy all the requirements.
Thursday, September 13, 2012
Public Restrictions on Ownership 9/13/12
Public restrictions are created by the Government. Such restrictions include: Taxation, eminent domain, police power, and escheat.
It makes perfect sense that the amount of tax you will pay is based on a percent of the value of the property. What I didn't know was that there were lower tax burdens for people such as the elderly or disabled. http://cms.oregon.gov/dor/ptd/docs/310-676.pdf
This is a document explaining the exemptions available to disabled verterans and what qualifies you for these exemptions. One point in this document that I found interesting was that the exemption will increase by 3 percent each year, and it applies not only to the home itsself, but also to their personal property.
The government is able to acquire properties for public use using just compensation and inverse condemnation.
An example of just compensation that majority of people recognize quickly is the new Cowboys Stadium in Arlington, Texas. http://www.wfaa.com/news/local/64582162.html This is an iconic feature to Arlington and of course it didn't happen without some families resisting. If I were put in this type of situation, it would be hard for me to give my home up also. I think this is an area that could be a little bit controversial since people are being forced to move whether they want to or not.
Inverse condemnation is another instance in which money could be received. http://www.opposingviews.com/i/politics/17-million-judgment-tossed-texas-oil-case
This is a case that occurred in Houston, Texas due to oil drilling. These people felt that their property had been damaged because of it and were looking to be reimbursed. It wasn't looking like it was going to hold up in their favor at first, but once the Supreme Court got a chance to review it, things turned around for the better.
It makes perfect sense that the amount of tax you will pay is based on a percent of the value of the property. What I didn't know was that there were lower tax burdens for people such as the elderly or disabled. http://cms.oregon.gov/dor/ptd/docs/310-676.pdf
This is a document explaining the exemptions available to disabled verterans and what qualifies you for these exemptions. One point in this document that I found interesting was that the exemption will increase by 3 percent each year, and it applies not only to the home itsself, but also to their personal property.
The government is able to acquire properties for public use using just compensation and inverse condemnation.
Inverse condemnation is another instance in which money could be received. http://www.opposingviews.com/i/politics/17-million-judgment-tossed-texas-oil-case
This is a case that occurred in Houston, Texas due to oil drilling. These people felt that their property had been damaged because of it and were looking to be reimbursed. It wasn't looking like it was going to hold up in their favor at first, but once the Supreme Court got a chance to review it, things turned around for the better.
Private Restrictions on Ownership 9/13/12
Private restrictions on real estate ownership includes: covenants/conditions/restrictions, liens, easements, profit a prendre, adverse possession, and encroachments.
One topic that I found interesting was dealing with Specific Liens on foreclosures.
I had no idea that people could get foreclosed homes so cheap, and that they were auctioned off at the county courthouse. Once I discovered that the money made at the auction was made to settle the debt from that home, then it made much more sense why they went so cheap.
http://www.auction.com/Texas/All-auctions.html?s_kwcid=TC|25062|foreclosure%20listings||S|b|13678609569&gclid=CKzz_caxsbICFWRgTAodzxgAzg
Its amazing to see just how many houses have been foreclosed on. With sites like this one above, its so simple to find several houses that have been victims within your area. I'm still in shock at some of the starting bids being asked on some really nice homes, but if people can't afford the payments to live in a house, then it makes sense to foreclose even though its an awful situation for any person to be put in.
Another area that I took interest to was adverse possession. It never occurred to me that someone could acquire the title to land if they have possessed it for a given period of time. http://www.youtube.com/watch?feature=endscreen&NR=1&v=MVr6n80zsk4
It would never cross my mind to move in to a vacant home like this family did. For other real estate owners surrounding homes like this one, I would be upset like most people since these "squatters" didn't earn the house by making any payments. I don't believe its fair in any situation.
One topic that I found interesting was dealing with Specific Liens on foreclosures.
I had no idea that people could get foreclosed homes so cheap, and that they were auctioned off at the county courthouse. Once I discovered that the money made at the auction was made to settle the debt from that home, then it made much more sense why they went so cheap.
http://www.auction.com/Texas/All-auctions.html?s_kwcid=TC|25062|foreclosure%20listings||S|b|13678609569&gclid=CKzz_caxsbICFWRgTAodzxgAzg
Its amazing to see just how many houses have been foreclosed on. With sites like this one above, its so simple to find several houses that have been victims within your area. I'm still in shock at some of the starting bids being asked on some really nice homes, but if people can't afford the payments to live in a house, then it makes sense to foreclose even though its an awful situation for any person to be put in.
Another area that I took interest to was adverse possession. It never occurred to me that someone could acquire the title to land if they have possessed it for a given period of time. http://www.youtube.com/watch?feature=endscreen&NR=1&v=MVr6n80zsk4
It would never cross my mind to move in to a vacant home like this family did. For other real estate owners surrounding homes like this one, I would be upset like most people since these "squatters" didn't earn the house by making any payments. I don't believe its fair in any situation.
Tuesday, September 11, 2012
Property Rights and Legal Descriptions 9/11/12
There are several different aspects that fall under property rights. When you have real property, your rights will be stated in the lease. Not only are there rights to the land its self, but there are also air, mineral, and water rights to consider as well, which may or may not be the same owner of the land. Real property will also have estates in land, freehold and leasehold. Actual ownership falls under freehold estates. When property is owned by another person and you have the right to use and possess it, this is the leasehold estate.
http://www.foxbusiness.com/personal-finance/2012/08/24/how-will-fracking-affect-your-property-value-and-mortgage/
This article describes some of the obstacles that you could face when dealing with mineral rights. Unfortunately for some people, the extraction of these minerals was causing damange to certain properties and decreasing their values. Compensation is an option when dealing with cases like these.
Legal descriptions are what will describe all of the specific boundaries of your property. Without these, nobody would have clear understanding of where exactly their property began and ended.
http://homebuying.about.com/od/glossaryl/g/Legal-Description.htm
This site gives a brief description on what legal descriptions are.
http://www.foxbusiness.com/personal-finance/2012/08/24/how-will-fracking-affect-your-property-value-and-mortgage/
This article describes some of the obstacles that you could face when dealing with mineral rights. Unfortunately for some people, the extraction of these minerals was causing damange to certain properties and decreasing their values. Compensation is an option when dealing with cases like these.
Legal descriptions are what will describe all of the specific boundaries of your property. Without these, nobody would have clear understanding of where exactly their property began and ended.
http://homebuying.about.com/od/glossaryl/g/Legal-Description.htm
This site gives a brief description on what legal descriptions are.
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