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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (43540)	10/23/2005 12:25:48 AM
From: freechina	Read Replies (1) \| Respond to of 306849

Guess the next wave is tenant-in-common mortgages globest.com GlobeSt.com: Of course the good news going in is the bad news going out. Macfarlan: I've told our teams not to plan on getting out but plan on holding the assets long term, 10 or 15 years. Our investment horizon is typically five to seven years, but if we're buying these assets and there's solid cash flow and solid tenancy, that's our safety mechanism, and we don't have to sell. That being said, we believe that there will be good growth opportunities and more buying pressure moving to these smaller markets, so they will provide better exit opportunities as the larger markets force cap rates under seven or even under six. Especially in today's environment, if you look at the whole real estate market as core investing, value investing or alternative investing, core is seeking 6% to 8% cumulative return, value is 14% to 15% and opportunity is 20%. We're playing in value and alternative space. We don't believe there's a real opportunity for core right now. There's a lot of risk when you buy an office, industrial or retail building with a sub-six cap. There's no margin for our investors. If someone tries to sell you core right now, be careful because there's so much global pressure to invest in that space that you really have to overpay. GlobeSt.com: Those playing in core say that's just not true. Look at the downstream and the upside. Macfarlan: And there's some validity to that. There's still risk in real estate with a six cap and national credit tenants. I'd just buy the bonds if I were them. Flipping in investment grade commercial real estate seems to be as common as residential house flipping this year. 1031commercialproperties.com news.morningstar.com Here is a recent article on UpReits - 1031-721 exchanges into UNITS of Reits. I have received conflicting information from some comapanies on this. The reits I have talked too are only interested in this if you have a 3 million dollar investment plus - above what I am going to be exchanging. I have seen in some TIC deals after fees and all expenses you pay 20% to enter their deal! My capital gains would only be 15%. So I am limited to TIC investments or 1031 into residential real estate - something this thread feels is very overvalued - I would welcome any discussion for where good 1031 investments would be. Most of the TIC deals I have been looking over have interest only loans in the deals - the sponsors assure me that them being "non recourse" loans is the more important issue - not that they are 10 year interest only loans - so much for paying down principal. My developer friends tell me interest only loans were designed for developers for short term capital needs - using the product in this way is truly "creative" financing. omni1031.com Here you will find where 2005 TIC industry projections of capital inflows were "very" POSITIVE but in reality was about 1/2 of projections - still a lot of captial is inflowing - the shift seems to be away from multi family to healthcare and hospitality - I have found healthcare - nursing home type real estate to have up to 20% cap rates. Much better than the 5-6% core rates on most multi tenant retail. But finding few TIC healthcare real estate opportunities and again I am limited because most of the deals not using TIC seems to need 2-3 million plus - more than I am exchanging. nestegginvesting.com Here is a good website going deeper into some issues regargding 721's and 1031's. sciproperties.com Another company that is one of the larger 1031 types. I have read articles comparing them to the "syndicates" a few decades back. Does anyone here remember the "syndicates" Currently I have a Sponsor talking about investing in marina dock storage in fl and self storage in ca. Florida hurricanes and insurance rates concern me but the sponsor assures me these metal storage buildings can wether hurricanes. They say the air conditioned self storage places are great - people have so much junk to store and some are putting wine into these AC self storage places. If we are enterting into recession - how will retirees in fla be able to buy boats and store them? I had looked at some condo properties - I talked to the developers at some of them - they are building the projects now - their PVC pipe prices tripled from about 50 cents to 1.50 after katrina and they had not hedged certain things - they are having financial problems with their condo projects because of this.