Archive for the ‘Uncategorized’ Category

How to Avoid Being a Victim of a Craigs List Scam

Wednesday, February 20th, 2013

Legacy Real Estate advertises many apartments and houses on the Craigs List website.  It’s a popular site for many renters to find a new home.  However, before you begin shopping for a new home, here are a few tips to avoid being the victim of a scam.
 
1. If it looks too good to be true, it probably is. 
Beware of anything that is too low priced; this is often a red flag.  Does the price of this rental seem to be at the market rent?  If the rent is far lower than other things of similar size, age, and condition, proceed carefully.
 
2. Review the Ad and the Reply
Does the ad have proper grammar? Advertisements with poor grammar can be a red flag that it may be a scam.  What is the email address of the person you emailed, and the person you got the reply from? Do they match? If the ad says it’s by a company, does the email address match that information?
 
2. Office space, businss cards, websites
Property managers, leasing companies, and real estate firms will have business cards, a physical office, and a website. We must disclose on our ads that you are calling a leasing company, so our advertisements will say “Legacy Real Estate.”  Again, make sure all information matches what you are being told verbally. 
 
3. Ask to see the leasing agent’s license and ID.
Residential leasing agents, property managers, and brokers associates may be showing property to rent, as well as owners.  Anyone who does not own the property should be licensed with the SD Real Estate Commission.  Ask to see their license and ID.  You can even verifiy that they are licensed at http://dlr.sd.gov/bdcomm/realestate/roster.aspx
 
4. You can confirm who owns the property
Anyone can call the county’s register of deeds office and confirm who the registered owner of a property is; this is public information.  If someone claims to own the property you are looking at renting, do not be afraid to write their name down, and call to verify this information.
 
5. Requests for money order or cashiers check in the mail
Many scammers ask you to send a money order or cashiers check to a mailing address out of state or even out of the country.  Don’t be afraid to say no. Legitimate individuals and companies will readily give you their business address, so you can drop off your payment in person.  Get a receipt that clearly says what you paid, and keep your money order receipts for your records.
 
6. Make sure you see inside the house or apartment
Scammers may know a house is vacant, meet you outside, and claim they forgot the key, but encourage you to make a deposit right now anyway. These people will try to make an emotional appeal to you (act now, or you will lose this great opportuity!).  They may say they have more appointments to show it, so if you want to rent it, you need to act immediately, but if they cannot take you inside the house or apartment, this is another red flag.  Other scammers claim they are missionairies, so cannot meet you, but ask you to send money. Again, this is a red flag.
 
Unfortunately, there are people out there who will try to take advantage of people. Legacy wants you to be a savvy consumer, from no matter who you rent. We are all looking for a deal, but if it looks too good to be true, it probably is.

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Cooperation is Key to fighting bed bugs

Tuesday, May 31st, 2011

Bed bug issues are becoming more and more common and no one, regardless of income, location or any other factor is immune from exposure and potentially spreading these pesky bugs.

Bed bugs have even been an issue at high end hotels and retail clothing stores in some cities. Experts say the pests are not picky and can take up residence anywhere there are warm bodies.  The resurgence of bed bugs is suspected to be caused by more international and domestic travel, lack of knowledge to prevent infestation, increased resistance to pesticides and ineffective control strategies. 

Bed bugs are not known to spread disease but their presence is unwelcome and does cause difficult challenges and distress to many people.  While it is difficult to determine who may have transported bed bugs on to a property, it is important that everyone work together to eliminate the problem quickly before the pests can spread.

The good news is there are ways to control bed bugs.  This is a cooperative effort.

Building Owners/Managers and tenants need to work together to solve this problem. There are 3 things tenants can do to help:

  1.  Report suspicions of bedbugs promptly, if there isn’t currently a problem but tenants later discover there is one, notify the building owner/manager in writing immediately.
  2. Please make sure your apartment is as CLEAN and picked up as possible. This will help building owners/managers to more effectively treat any problems.
  3. Comply with the treatment. The exterminator will leave instructions on how to proceed after and between sprayings.

Most property managers and owners strongly discourage acquiring second hand furnishings; especially mattresses and bedding if tenants cannot 100% guarantee that the item does not carry the bugs. (If owners don’t spray their items, there is no way to guarantee items are not infested.)

And never pick up upholstered furniture or mattresses from a curb or trash dumpster. Most people are throwing these items out for a reason.

Laws and requirements vary from state to state and city to city. If building tenants or building owners/managers have questions contact local agencies for specific information.

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Spring Fever: How to handle the rush

Monday, May 9th, 2011

It seems that as each new spring season rolls around so do the tenants looking for rentals, almost as if synchronized with the sun’s rotation.  With new tenants also come new challenges and owners need to make sure their property management teams are ready for the big rush.  Below you will see some of obstacles that we work to overcome.

1)      Hot Leads, and LOTS of them! – Employees that have worked through this season in the past will come to expect to be VERY busy during this time of year.  Newer employees may become overwhelmed more easily.  Having great procedures and support staff are critical to the success of these employees.  I would also suggest having weekly face to face meetings as well as tracking tools to help everyone stay on task.  Communication is KEY!

2)      Ring, ring, ring! – The phones seem to ring off the hook this time of year. Leasing agents are usually out and about doing showings and some customers may become frustrated by not being able to speak with them.  It is a great idea to have someone in the office that is also a licensed agent to field calls and answer minor questions.

3)      Ready, set, GO! – Properties fill up fast this time of year.  Sometimes by the time an appointment has been set to view a property it has already been secured by another party. This discourages some potential tenants and makes them want to give up the race. With a little encouragement and a LOT of great customer service a property will be found for them.  Reassure the clients of this and follow up, follow up, follow up to secure a lease and help them come in first for the property of their dreams!  

Sometimes the workload is overwhelming but in the long run it is very worth it.  Leasing agents have a chance to catch up on their commissions from the long winter, admin and support staff are tasked with coming up with new ways to organize, marketing people learn new ways to track and pinpoint referral sources.  When everyone is busy and working hard for a common goal, camaraderie and teamwork is not hard not to catch on to.  Overall attitudes and morale become increasingly more positive which increases productivity.  Now if we could just keep spring here all year long!

Kara Kayser works as the Marketing Assistant for Legacy Real Estate.  She is responsible for assisting in the  coordination of marketing efforts designed around growing commercial and residential real estate sales.  Her expertise lies in social media and web marketing.  Kara has a Bachelor’s degree in Business Administration from Augustana College and comes to Legacy with a varied background of experiences which include human resources, recruiting, sales, marketing, customer service and accounting.  You can reach Kara at kkayser@legacysiouxfalls.com.

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Prospects for Multifamily Sector Improve Greatly

Wednesday, February 2nd, 2011

Dec 6, 2010 9:26 AM, David J. Lynn, Ph.D., Contributing Columnist

Link to full article

A sharp increase in transaction activity for multifamily properties over the past year is indicative of strong investor interest in the sector, buoyed by improving fundamentals and demographic trends, which should support an increase in rental demand over the next few years.

The multifamily sector is showing signs of a firmly rooted recovery. According to Reis, net absorption in the third quarter surged by 94,000 units, dropping the national vacancy rate from 7.8% to 7.1%, one of the largest quarterly drops on record. Nearly 22,000 new apartment units were delivered to the market.

Rents increased for the second quarter in a row. Asking and effective rents increased by 0.5% and 0.6% respectively in the third quarter over the previous quarter, roughly matching the gains in the second quarter.

Strong demographics

A robust cohort of 70 million potential renters born between 1982 and 1995, the so-called echo boomers, is expected to lead the demand for apartment units over the next few years. It is estimated that population of renters ages 20 to 34 will expand by approximately 3.2 million between 2010 and 2012 [Exhibit 1].

Because of the Great Recession, record-high unemployment among workers under 35 years old has pushed many echo boomers to double up with friends or move back with their families. Household formation dropped to approximately 500,000 per year in 2008 and 2009, well below the long-term average of 1.2 million. This pent-up demand is returning to the market as the economy recovers.

Limited supply pipeline

Due to a combination of declining property values, falling rents and difficulty in obtaining financing, developers have been forced to scale back pipelines and postpone construction projects. As a result, apartment permits and construction starts have remained low over the past 18 months.

Industry experts project that approximately 99,000 new apartment units will be delivered in 2010, well below the long-term average of 146,000 units. However, as apartment capitalization rates compressed over the past six months, the development spread (development yield minus the cap rate) has once again become positive.

Combined with more readily available financing for the apartment sector relative to other property types, this cap-rate compression has led to increased interest in new development, especially in supply-constrained markets.

Favorable capital market conditions

Government-sponsored enterprises (GSEs) including Freddie Mac, Fannie Mae, and the U.S. Department of Housing and Urban Development (HUD), have dominated the multifamily financing market. They collectively financed over 80% of all multifamily financing in 2008 and 64% in 2009, according to Federal Housing Finance Agency.

Currently, the GSEs continue to provide attractive fixed-rate financing to the multifamily sector. Loan-to-values typically range from 70% to 80% for a term of seven to 10 years. Debt-service coverage ratios run from 1.25 to 1.35, and the interest rate ranges from 180 to 220 basis points over the 10-year Treasury yield. On average, apartment mortgages are approximately 120 to 150 basis points lower than those of other core property types.

Although GSEs remain the go-to sources for apartment financing, balance sheet lenders are becoming more aggressive and competitive to GSEs, particularly life insurers.

Housing crisis a lift for rentals

Consumer attitudes about homeownership have changed over the past few years. According to a recent survey conducted by Fannie Mae, although most Americans still prefer owning a home instead of renting, nearly 25% of renters say they will wait longer than they previously planned to buy a home.

Furthermore, nearly 80% of renters surveyed believe that renting has been a positive experience for them and their families. Indeed, the homeownership rate steadily declined from 69% in the third quarter of 2006 to 66.9% in the third quarter of 2010, translating into approximately 2.3 million potential new household renters [Exhibit 2].

In our opinion, homeownership could continue to trend toward its long-term average of 65% over the next 12 to 18 months. Rental properties should continue to benefit from this trend.

Market outlook

The apartment sector is benefiting from pent-up demand, declining homeownership, and a limited supply pipeline. Rental demand is highly correlated to job growth.

Year-to-date through October 2010, the U.S. economy has added a total 874,000 new jobs and the labor market is projected to recover by 2014, according to Moody’s Economy.com.

We expect the national average vacancy rate to decline through at least 2013 as demand substantially outpaces supply. After falling by 2.9% in 2009, we believe that effective rents will increase from 2011-2014.

Risk considerations

Despite several positive signs supporting the U.S. apartment fundamentals over the next few years, we have identified a few risk factors that pose potential threats to the recovery of the apartment sector.

• Rental demand is highly correlated with job growth. A potential double-dip recession with significant additional job losses would weaken apartment fundamentals and derail the recovery.

• A fragile economy would keep home prices down and interest rates low, pushing up housing affordability and keeping single-family homes and condos an attractive alternative to rental apartments.

• Markets such as Las Vegas, Phoenix, parts of California, and Florida that have been stung by the housing market downturn are expected to take longer to recover because of excess supply.

• The GSEs have been critical in providing attractive financing. Any significant restructuring in the near future could reduce the availability and increase the cost of debt financing.

• Rising interest rates would inevitably put upward pressure on cap rates. Some of today’s apartment acquisitions are underwritten with very low going-in cap rates and aggressive growth assumptions for net operating income.

If interest rates rise significantly over the next few years, asset values and projected investment returns could be negatively affected as a result.

David Lynn is a managing director, generalist portfolio manager and head of investment strategy for ING Clarion Partners in New York.

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What is CIP?

Wednesday, January 12th, 2011

http://www.bls.gov/cpi/

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How to Increase Cash Flow

Tuesday, October 19th, 2010

Sale-Leasebacks Get Clients Back on Track

Taken from Scotsman Guide August 2010

 By Sidney Domb, President, CEO and director United Trust Fund

Selling and the leasing back property may increase a business’s cash flow

 With banks searching for new ways to generate revenue and increase capital, many companies that own their own real estate are discovering the value of sale-leaseback transactions. These transactions are structured to unlock the equity a company has in its real estate and to convert that equity into cash. This involves selling the institution’s headquarters or branch offices and simultaneously leasing them back long-term. Many property-owners are recognizing the tax benefits and other advantages of these transactions. Commercial mortgage brokers can advise clients on the benefits and help them find sale-lease-back providers. In general, by selling and simultaneously leasing back its property, a company can lower its operating costs and use that money to increase its cash flow. Benefits of sale-leaseback transactions include the following: *Favorable impact on earnings. A sale-leaseback transaction converts non-current fixed assets such as real estate into current liquid assets – i.e., cash. It can generate a gain on the sale when properties’ market or appraised values are more than the depreciated book value. Property-owners often can improve their earnings by reinvesting the cash at a greater rate, retiring high-cost debt, funding mergers and acquisitions, expanding operations, or taking advantage of special investment opportunities.

*Regulatory compliance. The cash a business receives from a sale-leaseback transaction can help it improve its primary and total capital-to-assets ratios. The profit on a sale-leaseback transaction from depreciated value to current appraised value can increase a company’s net worth.

*Total facility control. Simultaneously with the sale, the company leases back the property for an initial lease term – typically, 15 years with five five-year options. In effect, this gives the company control of its real estate for at least 40 years. This would be identical to ownership for the property’s normal useful life.

 *Off-balance-sheet financing. By carefully structuring an operating lease, the transaction would not require capitalization under Financial Accounting Standards Board 13 criteria. In turn, this allows off-balance-sheet treatment, which in effect would have a more favorable impact on the company’s earnings and improve its financial ratios.

*Low cost of money. A sale-leaseback transaction can be a quick, economical way to raise capital, compared to the process of originating a new stock issue. Issuing new stock may result in an ownership dilution at unfavorable prices or with unwanted investors. The leaseback is a low-cost technique that avoids these consequences. As a rule, a sale-leaseback transaction should provide capital at an effective cost of 100 to 150 basis points less than that of long-term mortgage financing or the long-term conventional debt market. It should have not restricted covenants and no principal repayment after all lease payments.

 *Recapture of all costs. In a typical sale-leaseback transaction, the company would recapture all costs relating to the property’s current market value, including legal fees, surveys, architectural, engineering, title, and any other closing costs or property-related fees. This contrasts to conventional long-term mortgage financing, which is usually restricted to 75 percent of the current market value.

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Where the Jobs Are – Lincoln County, SD

Thursday, July 15th, 2010

Click to read entire article from CNN Money

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