Real Estate Investment Strategies

real-estate-investment-strategiesFor those with excess money to invest, today, real estate can be a viable option. The market is currently not as volatile as it once was, and thus it is becoming more popular. Indeed, according to Jake Adger, a Forbes contributor and chief economist at RealtyTrac, as the recession takes a bad seat, real estate can be “a good addition to [one’s] investment portfolio. At the end of last year he pointed out that:

“Investors need to think about all aspects of real estate investment including rental income, expenses, home price appreciation, and taxes…Investors looking for rental income will look for high rental yields now and in the future.”

Steven P. Rosenthal, President and CEO of Northland Investment Corporation, is responsible for the firm’s “strategic direction.” In terms of real estate investment the company seeks to “identify value creation opportunities….acquiring real estate assets diversified by markets, sectors and lines of business—and balancing the acquisition of high quality, lower risk assets with higher yielding, valued added assets and development opportunities.”

Real estate as an investment potential definitely has its benefits. CPA Mark J. Kohler is “convinced more entrepreneurs should consider rental real estate as an important part of their portfolio.” He lists five reasons why this is the case and then concludes: “The far majority of us will never get rich overnight. It takes long-term investing and a diverse portfolio to build true wealth. Don’t forget real estate as an important part of the equation.”

For those looking at possible options for investment, in a stable economy, real estate might be a good idea.

Developers Doronin and Colombo Breaking Ground on Luxury Condos in Miami


Vladislav Doronin
Ugo Colombo and Vladislav Doronin

Vladislav Doronin, founder and chairman of Moscow-based Capital Group, is partnering with Ugo Colombo’s CMC Group Inc., to build two major projects in the downtown Brickell area of Miami, Florida.

Ugo Colombo is recognized by many as one of Miami’s most ambitious developers of high-end condos. Vladislav Doronin has established himself as an international real estate developer with a focus on superior quality and cutting edge innovation. Doronin has developed some of Moscow’s most sought-after properties, including 70 million square-feet of luxury residential space, retail footage, and mixed-use properties.

The new development which the partners are about to embark on consists of two high-rise buildings located on a triangular shaped piece of land they own jointly. The first building going up will be the “Brickell Flatiron.” It will be architecturally unique, reaching 65 stories, a 750-foot soaring structure. Within its curvaceous walls will be 550 luxury residences, 40,000 square feet of restaurant and retail space, a rooftop swimming pool, and a health/fitness center with a panoramic view of the surrounding Miami expanses.

Mr. Colombo said,

“Vladislav Doronin brings to our partnership over 20 years of proven development experience and a global perspective on real estate investment. All of his projects have been distinguished by a combination of outstanding design and flawless execution, creating environments that appeal to luxury buyers. Working with such a strong and capable partner has already been highly productive and I look forward to a long and successful relationship.”

The project is located at South Miami Avenue and Brickell Plaza, and is expected to break ground by the end of 2014. The second tower will be situated at Brickell Plaza and Eighth Street. Ground breaking there should take place sometime in 2015.

Vladislav Doronin stated,

“Ugo is simply the best in class and I am very pleased to be working with the recognized leader in Miami development. We both see tremendous opportunity in Miami and in the Brickell area particularly. We also share a commitment to innovative aesthetics and relentless attention to detail, so I am especially pleased to partner with Ugo on these exceptional new projects, with more ideas in the pipeline.”

Refinancing and Rising Interest Rates

Interest rates may be on the rise, but refinancing mortgages still seems like an attractive course of action for many home owners. According to a recent Freddie Mac study, however, interest rates are expected to rise to at least 5% by this summer.

John Young of USAA said: “The window hasn’t closed, but homeowners should analyze their mortgage situation to see if a refinance can improve the overall financial picture.”

Young’s point was further supported by Mortgage Bankers Association’s Mike Fratantoni, who added: “When market rates were at 3.5%, 90 to 95% of outstanding loans would have benefited from a refinance.” Now that mortgage rates are higher, only 25-30% of homeowners would benefit.

Some advantages to refinancing include:

-Earlier mortgage pay off, which can save the homeowner thousands of dollars in interest and build equity in your home at a faster rate.

-Additional cash flow, allowing you to pay down debt or budget for other expenses.

-Home equity access, as Diane Brooks at USAA explains: “As home values start to rise, there is some pent-up demand for a cash-out refinance to access the equity in the home for other purposes.”

Many companies, such as Doral Bank, Bank of America and TD Bank, are currently offering ideal mortgage and refinancing rates. As interest rates shift, homeowners have much to consider when planning to refinance.

Office Getaway Challenge

Marnin Michaels
Take the Company for a Special Holiday

Want to do something different with your company and turn a “fun-day” into a “fun-week”?  Check out the luxurious four-bedroom Chalet-Alpenhof in the Alpine village of Saas-Fee, owned by Marnin Michaels, a tax and international private banking expert.  Centrally located in the Swiss Alps, in summer or winter your company can benefit from a visit to Saas-Fee, sure to enjoy the challenge of many activities in the villages and mountains in the surrounding areas.

Take one of the climbing routes via the ladders, hooks, cable walkways and more at Saas-Fee.  Choose between the Mittaghorn (“fairly difficult”) route, Jägihorn (“moderately difficult”) route plus many others of all kinds of levels.  Treat your staff to the Saas Valley 7-day hiking pass that gives you access to all the Saas Valley cableways, Gspon mountain path, Postbus and a whole selection of other great hikes.  The Saas Valley Excursion Pass (available from June to October) also offers access to “all cableways in Saas Valley and the Metro Alpin, the Postbus from Stalden-Saas to Saas-Fee and Mattmark, the Gspon mountain path (transport by postbus and cableway), admission to the Saas Museum and Bakery Museum, to the covered swimming pool at the Bielen Leisure Centre and the mini-golf courses in Saas-Fee and Saas-Almagell, guided tours through the Mattmark power station (Tuesdays), and one ride at the Feeblitz toboggan/bob-sleigh run.”

Then there is Maine.  That’s a great place to visit vis-à-vis fun hiking and getting your staff to move.  Maine offers a wide variety of opportunities for foot travel, scenic day hiking destinations including Baxter State Park, Acadia National Park, White Mountain National Forest and more.

The 2,184 mile-long Appalachian Trail public footpath, the Colville National Forest, Gifford Pinchot National Forest are also other great options. There are plenty of office getaway challenges that enable one to see the beauty of the country and walk its trails. So consider a special way to say thank you to your staff: a great vacation to the great outdoors.

U.S. Housing Business Looking Up

John Paulson has a solid history investing in the construction industry. Slow but steady increases in the market have pushed Paulson & Co. to support William Lyon Homes, a homebuilding company based in Newport Beach, CA. The company raised $217.5 million with its initial public offering earlier this month.

Despite hitting rough times in previous years, William Lyon’s sales jumped by over a third last year to $76.4 million. Last November, Paulson & Co. invested $30 million in the company. The firm now owns 21% of the stock as well as 10% of the voting power.

The recent investment indicates that Paulson may be shifting his focus back to the housing industry as the market improves. Prices of new homes are on the rise, and have increased by 11% since this time last year. According to the Financial Post, a Brooklyn townhouse on sale for $950,000 attracted over 300 visitors. While many investors and entrepreneurs are placing their bets with homebuilders, others are approaching the market from other angles.

Bill Smead of Smead Capital Management, for example, explained that he bought shares in Home Depot because it sells home construction equipment, and also invested in banks with inventories of foreclosed homes, like Bank of America, Wells Fargo and JP Morgan.

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Growth in the REIT Sector

Interesting news from the New York Real Estate world recently:

United Realty is also raising a targeted $1.3 billion non-traded real estate investment trust, according to filing with the U.S. Securities and Exchange Commission. Jacob Frydman declined to discuss the REIT. The SEC filing, however, stated that United Realty Trust will focus on acquisitions on the East Coast and other markets that will benefit from demographic changes. It will seek acquisitions in the office, industrial, retail and hospitality sectors as well as single-tenant and multifamily properties. About 20% of its investments will be in real estate loans and securities.

We’ll be watching this new endeavor with interest.

New Hires and Energy with Transcendent Investments Management

Transcendent Investments Management, led by Jordan Kavana, is continually growing and finding new ways to build their company. Opening in 2008, they have built on their reputation to evolve and increase their investments dramatically.

As part of their growth, they have recently brought new energy and expertise into the company. Six months ago, Transcendent Investments Management hired a CFO who comes to them from the real estate fund industry. He also has public accounting and auditing backgrounds. As of October 15th, they hired a Director of National Residential Acquisitions.

Similarly, starting on November 1st, Transcendent Investments Management will have a Vice President of Operations and Finance. This new hire comes to TIM with Jordan Kavana from the corporate world. He has experience bridging government and private sector work and will certainly be an asset to TIM’s growth.

New York Real Estate On the Rise

Brokerage Brown Harris Stevens and Halstead Property LLC recently reported that New York real estate sales rose by 1 per cent, while the medium price sank 4 per cent to around $850,000.

Sofia Song, vice president of broker listing compiler, said “The market is bipolar. You have the luxury market driven by foreign demand, with foreigners finding Manhattan to be a relative bargain. On the other hand, you have entry-level demand with domestic buyers trying to take advantage of the record-low interest rates.”

The SFC and Seth Fischer: Hong Kong

For investors and asset management firms in Hong Kong, the activities of the country’s Securities and Futures Commission (SFC) is important.  Thus the recent announcement by the SFC on June 25, 2010 should be of note to individuals like He-Xin, Seth Fischer and the Scott Fitzgerald Group.  It will be applying the Codes on Takeovers and Mergers and Share Repurchases (Codes) to SFC-authorised real estate investment trusts (REITs).  Already, most of the proposals from the beginning of the year have been adopted.  According to CEO at SFC, Martin Wheatley, this marks a huge step in determining a regulatory framework to protect investors’ interests more.  It also facilitates the further development of Hong Kong’s REIT market.