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.
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