Jewish Exponent Real Estate : Page 4
Wynnewood $379,000 Realist States Agents weigh in on how to invest now. By Gary M. Kramer Wonderful, clean & modern in immac condition! Newer hw floors, fp, sky- lights, poss 3rd BR, att garage, neutral decor, this unit is amazing. Lower Merion schls, shopping & trains to center city close by. Only ten units in this townhome community. Call Rita Taylor 610-457-4957 LONG & FOSTER REAL ESTATE, INC. 610-225-7400 nvesting in real estate can be a tricky thing. Finding the right investment property, at the right price, and at the right time can feel like a high-cost, high-risk game of chance. And of course, there is the old real estate adage: Location, Location, Location. Yet, even in this economy, there I are investment opportunities in Philadelphia—and beyond. Realtors acknowledge that the market is for buyers now (if one can afford it) because interest Home at 10 rates are low (around five per- cent). And while they don’t have a crystal ball to tell if things have “hit bottom” yet, for folks who can hold onto a property for 3+ years, the industry consensus seems to be that there is no better time to buy. Janet Margolies, at Prudential Fox Roach in Rittenhouse Square stresses to her clients that “It is safest to invest in the best location you can afford,” and recommends “tracking previous sales in areas where homeowners are investing and staying. “Outlying areas—e.g., around Temple University—will stay on the market a little longer than a prime one,” Margolies acknowl- edges, emphasizing that when it comes to buying a property, it is critical to understand the ebb and flow of the neighborhood. “Drive around the area at var- ious hours of the day and night. See who’s coming home from work,” she advises. “South Philly, south of Washington, has a real sense of community. If you are buying to rent to college students, make sure it’s close to trans- portation, and that the area is full of young people and/or the build- ing is open to having college stu- dents living there.” With low interest rates, tax in- centives, and new construction properties having tax abatements, Margolies also recommends buy- ing/investing in new buildings where developers can sometimes offer advantages with parking and condo fees to make offers more at- Philadelphia’s Ultimate Address Celebrate the most spectacular views of Rittenhouse Square and the city’s majestic skyline while enjoying the luxuries of a five-star hotel. In a Robert A.M. Stern-designed building that weaves together the best of the new with Philadelphia’s traditional architecture. Indoor pool, fitness center, residents-only valet parking garage, 24-hour doorman, concierge, town car service, exclusive garden terrace and 10-year tax abatement. From $1.3 million. Ready for fall 2009 move-ins. 215.825.7710 s 4 March 19, 2009 10Rittenhouse.com tractive. Emilio Palo- mo, of Riteway Properties in Miami, has been in the in- dustry since 1972, and he concurs: “There has not been a better time to buy. There is excessive in- ventory at good prices.” However, he warns, in this soft market, “it’s easier to find a sec- ond home. If you are looking for an investment property, you need to be more careful. If you are looking to buy and flip a home [sell it quickly for a profit] you might be disappointed.” Some of the properties Palomo recommends include a building in downtown Miami, an area expe- riencing tremendous growth. “It’s a 200-unit [apartment building] that will stabilize before others.” He mentions another building go- ing up in the area that has 1,800 units that he is more wary about endorsing. “Going into a new building, you have to be very careful. Some properties, where 50 to 60 percent of the units are sold to investors, are closing and some are not,” he explains. I recommend new build- ings, but I am extremely careful which one you get into.” He mentions thata prestigious luxury-type waterfront property in Miami is a good buy, because prices are stable in the building. Many foreigners are investing in What are your observations on the current market? It is harder to get a mortgage than it was, but if you have good credit (in the 700s), it’s still easy to get a mortgage. What options are available to investors? It used to be that investors could put 10 percent down and then pay a small premium in the rate, but now it is costing more for an investment property than it used to. If you have great credit and are putting down 25 percent, it’s still very doable. Do you recommend investing in a property? It’s still worth doing if the prices keep coming down and you break even on an investment property. What about getting a mortgage? It depends on the person and the situation, the taxes on the property and how much folks are putting down. What kinds of deals are you seeing? I’m refinancing everyone. This week and last week my REAL ESTATE these condos at a discount, be- cause they are able to take ad- vantage of the favorable exchange rate. Such investments keep the Miami market somewhat stable. However, another condo prop- erty that will be finished in five months, Palomo says, “you can’t give away.” The reason for this is because buildings with few in- vestors are dependent on having owners pay fees. He explains, “When you finish a building with Xnumber of unclosed units, you will have a maintenance prob- lem. I won’t put investors into a building where there are 1,800 units. With 20 percent not clos- ing, that’s 400 [condos] not ab- sorbed. As a result, the investors buying will compete to rent. The rental prices come down to make up payments.” That said, Palomo recom- mends Miami neighborhoods like Coral Gables, which is very stable, or Pine Crest, southwest of Coral Gables, which has large half-acre and acre lots and ex- cellent condos. Condos are also good buys in the Kendall area, where you can spend $100,000 for a one-bedroom, or South Beach, A Q&A with Eileen Marolla, Mortgage Banker, at Philadelphia Mortgage Advisors purchase and pre-approvals are picking up. The range is lower than what is was… What are your thoughts on the market conditions? I’ve never seen it this slow. Philadelphia slowed down last. Everyone else was doing poorly while we were still OK. It’s still a better market than most nationwide. We were un- dervalued for a long time. Boston is smaller, and they are slower than Philly. Any other tips for buyers? For general refinances and purchases—not for investment properties—I’m telling everyone to pay one point. If you pay one point, it can buy you up to three-quarters of a percent on your interest rate, which is very different from a year ago when it bought you a quarter of a percent. It’s changed drastically. I’ve told everyone not to pay points throughout my career and now I’m telling everyone to pay one point. www.jewishexponent.com
Realist States
Gary M. Kramer
Investing in real estate can be a tricky thing. Finding the right investment property, at the right price, and at the right time can feel like a high-cost, high-risk game of chance. And of course, there is the old real estate adage: Location, Location, Location.<br /> <br /> Yet, even in this economy, there are investment opportunities in Philadelphia—and beyond.<br /> <br /> Realtors acknowledge that the market is for buyers now (if one can afford it) because interest rates are low (around five percent).<br /> <br /> And while they don’t have a crystal ball to tell if things have “hit bottom” yet, for folks who can hold onto a property for 3+ years, the industry consensus seems to be that there is no better time to buy.<br /> <br /> Janet Margolies, at Prudential Fox Roach in Rittenhouse Square stresses to her clients that “It is safest to invest in the best location you can afford,” and recommends “tracking previous sales in areas where homeowners are investing and staying.<br /> <br /> “Outlying areas—e.g., around Temple University—will stay on the market a little longer than a prime one,” Margolies acknowledges, emphasizing that when it comes to buying a property, it is critical to understand the ebb and flow of the neighborhood.<br /> <br /> “Drive around the area at various hours of the day and night.<br /> <br /> See who’s coming home from work,” she advises. “South Philly, south of Washington, has a real sense of community. If you are buying to rent to college students, make sure it’s close to transportation, and that the area is full of young people and/or the building is open to having college students living there.” With low interest rates, tax incentives, and new construction properties having tax abatements, Margolies also recommends buying/ investing in new buildings where developers can sometimes offer advantages with parking and condo fees to make offers more attractive.<br /> <br /> Emilio Palomo, of Riteway Properties in Miami, has been in the industry since 1972, and he concurs: “There has not been a better time to buy. There is excessive inventory at good prices.” However, he warns, in this soft market, “it’s easier to find a second home. If you are looking for an investment property, you need to be more careful. If you are looking to buy and flip a home [sell it quickly for a profit] you might be disappointed.” Some of the properties Palomo recommends include a building in downtown Miami, an area experiencing tremendous growth. “It’s a 200-unit [apartment building] that will stabilize before others.” He mentions another building going up in the area that has 1,800 units that he is more wary about endorsing.<br /> <br /> “Going into a new building, you have to be very careful. Some properties, where 50 to 60 percent of the units are sold to investors, are closing and some are not,” he explains. I recommend new buildings, but I am extremely careful which one you get into.” He mentions that a prestigious luxury-type waterfront property in Miami is a good buy, because prices are stable in the building.<br /> <br /> Many foreigners are investing in these condos at a discount, because they are able to take advantage of the favorable exchange rate. Such investments keep the Miami market somewhat stable.However, another condo property that will be finished in five months, Palomo says, “you can’t give away.” The reason for this is because buildings with few investors are dependent on having owners pay fees. He explains, “When you finish a building with X number of unclosed units, you will have a maintenance problem.I won’t put investors into a building where there are 1,800 units. With 20 percent not closing, that’s 400 [condos] not absorbed.<br /> <br /> As a result, the investors buying will compete to rent. The rental prices come down to make up payments.” That said, Palomo recommends Miami neighborhoods like Coral Gables, which is very stable, or Pine Crest, southwest of Coral Gables, which has large half-acre and acre lots and excellent condos. Condos are also good buys in the Kendall area, where you can spend $100,000 for a one-bedroom, or South Beach,<br /> Where prices are holding very, very well, and condos can sell for as high as $20 million.<br /> <br /> Laurie Phillips, also with Prudential Fox Roach in Philadelphia, admits that while it is a great time to buy, it is a terrible time to get a mortgage. “Banks are scrutinizing mortgages. They are not willing to refinance investment properties, only homes,” she cautions.<br /> <br /> Given this situation, Phillips suggests that properties with owner financing, where you don’t have a mortgage, are the most viable.<br /> <br /> If investors are looking at coops and condos, Phillips advises that co-ops often have restrictions on rental agreements. She emphasizes that investors should buy in buildings like the Ayer in Center City, where the units are mostly owner-occupied.<br /> <br /> “The building had a restriction that you could not sell after buying for two years. Out of 56 condos, only two are rentals.” Phillips avers. “There are not a lot of speculators or transients. If you are an investor there, you don’t have much competition, and you end up with high-end rentals and you can be selective.” For some new condos, Phillips expresses concern that developers and/or speculators are taking any kind of tenant, and this can be trouble for other homeowners who live there. “You end up living with a bunch of transients.<br /> <br /> It’s not what they envisioned,” she explains.<br /> <br /> If investors do rent to tenants, Phillips, who has several investment properties, recommends that “You treat tenants as if they should live the way you do. If it’s a good tenant, you don’t raise the rent. You don’t want a vacancy.” When looking at possible tenants, she suggests the best way to find out who you are renting to is to check “that they have good credit, references from former landlords, and even go as far as visiting where they live to see how they keep their home. If they have a pet, meet the pet.” Even if you do perform all possible due dilligence, she cautions that, ultimately, “It’s hard to know” if you picked the right tenant.<br /> <br /> Phillips also has a condo in Longboat Key, along the west coast of Florida. She observes that while the market is the worst she’s seen, her property is still worth more than what she paid for it seven years ago. Although the Madoff situation has hurt parts of the region (e.g., Palm Beach), she emphasizes that it’s still a prime area for buying.<br /> <br /> Mary Genovese, another realtor at Prudential Fox Roach in Philadelphia, also sells real estate in the Paradise Valley area of Arizona, where she owns a home. She says that this is a great time for buyers because there are “a tremendous amount of repossessed homes and bank sales” on the market.“If you have the cash and/or financing in place and want to invest in a second residence, you can get great buys!” she enthuses.<br /> <br /> For example, because a $600,000 property that was buyerfinanced at 100 percent a few years ago is worth only $450,000 today, people are simply walking away from their homes.Genovese talks about one in particular: “Troon North is an area with a Four Seasons resort.<br /> <br /> Driving there, you see property after property listed for bank sales. Houses selling for $1.5 million in 2007-8 are now $820,000.” Many of the homes in the Phoenix area are built from scratch, and Genovese acknowledges that building your own home costs less now than it did five years ago. “Everyone’s looking for work, and prices are being negotiated.” However, she advises, “It’s great to custom design your own home, but not as an investment.” In addition, the Phoenix area offers many choices for gated communities, where buyers have their choices for sunset views, or to be on a golf course, or away from a main road. But again, these properties make more sense as second or retirement homes than as investments.<br /> <br /> Whatever the reason to invest in real estate—whether to make extra money, or have a second home/have a property for a few years before retirement—it is important to follow the trend of each area. Philadelphia is still in good shape, compared to Florida, which ranges from stable (Miami/ South Beach) to fair (Western Florida), and Arizona, which is poor. Yet all the experts agree that there are investments out there for people who can get mortgages, or have financing in place.<br /> <br /> As for what to invest in—if you can invest—that is up to the individual. Nevertheless, there are some excellent prospects even if the market is the worst it has been for some time. Opportunity needs a door to knock on, right?<br /> <br /> Gary M. Kramer would love to be looking for a second home.
