Making money in real estate is one thing. Generating REPEATABLE real estate profits month after month after month, is another and there are 5 key steps to get you there. My friend, Greg Clement outlines the 5 Step system that you can follow to create repeatable and long term profits in your real estate business [...]
This is just for fun. Saw this story about a property developer who has been searching for years for a massive boulder to build his dream home around. Not next to, not on top of, but around. The boulder juts up right into the house.
The slideshow of the finished house and story are worth a look.
The FDIC is a major player in the real estate business these days – and getting bigger all the time.
With every failed bank they take over, the FDIC often finds itself owning foreclosed real estate as well. Developments that are half finished or awash in legal battles fill their expanding portfolio. And the FDIC is having a hard time unloading these properties onto the market.
Developing land is a complicated process – a culmination of decisions and actions that eventually lead to a finished product. Developers, engineers, architects, and builders make countless choices over the life of a project and to try and take over midway through is not easy.
Certainly you would want a considerable discount on price in that situation. And as this WSJ article suggests, that is giving the FDIC fits.
The largest real estate investment trust (reit) in the United Kingdom is announcing better than expected financial numbers this week, with strong talk of even better numbers coming in right now (the present quarter.)
We weren’t seeing announcements like this a year ago. Granted the positive news is more along the lines of “It isn’t as bad as we expected” there is still some actual demand growth happening.
Property Development Source will keep bringing you news good and bad to help you guage what is the state of the real estate development market worldwide.
Here is a great article, regulators complicit in slow recovery, on how trying to keep the real estate crisis from getting worse is only prolonging the agony.
The article highlight how actions taken to “protect the real estate consumer” also creates a reaction of stifling the commercial real estate owner and preventing market forces from cleaning up the mess.
I have been noticing promising news and talk in various parts of the country about apartments and rental rates. Many expected apartments to be doing extremely well at this point in the downturn, but transitions take time. Even apartments saw vacancy rises in the early stages of the recession, but the grapevine is spouting a different story these days.
Many developers are actively hunting for apartment land these days. The time table for completing a real estate development project along with the changes in the apartment market is sending a loud signal to take action now.
Proof: Here is a link to a development company that is moving forward on their apartment plans while holding off on other aspects of the development.
One of the most difficult parts of successful real estate development is projecting out demand for your project when it finally comes to market.
Apartment developers are doing that analysis right now and they are seeing enough positives to take action.
Government employees in land development, zoning, planning, building and pretty much every other department you as a land developer need to get approvals from have a tremendous amount of power. They can deny a permit, delay it, or make the requirements of receiving that permit so expensive or so impossible that it makes a project not worth doing.
I have even been involved with situations where two agencies refuse to issue us permits until they see proof that we have already obtained permits from the other agency.
In other words, the building department will not issue you a building permit until you provide proof that the water department has issued you a water permit. But the water department has stated they will not issue you your water permit until you provide proof that you have been issued a building permit.
It can be a “hair pulling out” gauntlet of inefficiency at times.
Many agencies have goals of how fast they should process a permit. But during the boom times, when agencies were swamped with applications, we watched as these goals quickly went out the window and processing times got longer and longer. A permit that in 2003 took a month to get, at the end of 2006 took 3 to 6 months to receive.
Part of that is understandable, but what is remarkable is how little processing times have improved since the bust. Even though the workload is drastically reduced, the time to complete it has not followed suit.
Parkinson’s Law states that “Work expands to fill the time available for its completion.” That appears to be what is happening today. Rather than reducing the time to process permits, government employees are filling that time with more work (i.e. more comments for plan reviews, more nit-picky requirements, more requests outside their authority.)
The impact of this is added expense to the land developer. Engineers, Architects, Surveyors, and Attorneys are the ones handling these extra comments, requirements, and requests, and they are turning around and billing that extra work to you!
You now have a situation where your land development team is taking just as long to get a project permitted as if it was 2006, but they are doing a lot more work on that permit than they normally would.
As a land developer you need to be aware of this change, and make sure your cost and time projections account for it.
It has been a while since the famous Kelo eminent domain case was handed down from the Supreme Court – basically giving government Carte Blanche to use private property in any way they see fit.
If you have read Property Development Source for a while you will know that I feel the use of eminent domain to transfer private property from one private entity to another ultimately hurts real estate values and creates instability and uncertainty in the marketplace. All bad for land investors and land developers.
Those in favor of eminent domain in these cases often argue that job creation and economic growth are more important than protecting individual property rights. (In fact the City of New London and the New London Development Company used these exact arguments in the Kelo case.)
No doubt the justices on the Supreme Court were hoping that New London Development Companies delivery on these promises would serve as a shining example of why they ruled in favor of New London and far reaching government eminent domain.
But as an article in the NY Daily News points out, the exact opposite as happened. After bulldozing all the homes and leaving an expanse of empty dirt, nothing else has happened. No new homes, no new jobs, no improvement to the economy.
In fact, it is clear today that the City of New London has actually made the economy worse by their use of eminent domain.
One wonders if the Supreme Court would still rule the same way today.