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Recent Blog Posts
Real Estate Crowdfunding - What You Need to Know Before Investing
Commercial real estate (CRE) investment was once reserved for the elite, but changes in federal laws have opened up several methods that people can use to break into the CRE market. One such example is real estate crowdfunding. Of course, like most investment opportunities, there are potential risks that one must be aware of when participating real estate crowdfunding. Learn more in the following sections, and discover how a seasoned commercial real estate attorney can help you mitigate against the most common issues that investors may face in CRE crowdfunding.
How Crowdfunding Has Changed the Face of Commercial Real Estate
Prior to the Jumpstart Our Business Startups (JOBS) Act of 2012, investors were only able to access institutional-quality real estate through private equity funds, real estate investment trusts (REITs), or direct investment. All of these options have serious limitations. In an REIT, individuals are investing their money into a pre-constructed strategy or portfolio rather than an individual property. Private equity funds are usually cost-prohibitive, and they often lack transparency for the investor. Direct investment can allow an investor to bypass these issues, but they require ample time, money, and labor - something that many investors lack.
Planning for the Future: Real Estate Investing Could Boost Your Retirement Income
As investors near retirement, they may begin to worry that their nest egg will not be sufficient enough to sustain them. Could real estate investing help boost them over the finish line? Perhaps, but it is important that potential real estate investors understand the various investing methods, as well as the challenges and pitfalls that can accompany each one. Learn more in the following sections, including how a seasoned real estate lawyer can help you in building a successful real estate portfolio.
Why Real Estate Investing?
Real estate tends to be one of the least volatile investing markets, and it typically outperforms other asset classes. That can make it a wonderful diversification tool for the seasoned investor, especially if they are nearing retirement age. It is important to understand that real estate dips do occur and your money is not typically as liquid in the real estate market, so you must be willing and able to weather the potential storms.
Certain CRE Sectors Experience a Surge in Value, Even as Others See a Decline
Real estate prices have risen since the recession, for the most part, but many seasoned investors believe that some of the markets are losing steam. The decreased foot traffic in malls, closure of former top businesses, and 10 percent dip in the hard-hit retail sector certainly suggests as much. Yet, even as these areas experience a decline in value, some CRE sectors are experiencing a major surge. Learn more about these niche markets, and discover how a seasoned real estate attorney can help you successfully break into them to further grow and diversify your portfolio.
A Closer Look at CRE Market Trends
At the end of the recession, the Commercial Property Price Index hit an all-time low of 61.2. Since then, the index has more than doubled, and investors have been able to borrow more easily, thanks to low interest rates. Unfortunately, the broad index started to plateau in 2016, hitting and holding right around 126.9. Experts and analysts say this plateau is due, at least in part, to the rising interest rates, which are making it more expensive for investors to finance their purchase. Investor demand is also decreasing, with investors buying $175 billion in U.S. commercial real estate property in the first five months of 2018 (a 2 percent decline from last year).
Real Estate Investment: Potential Challenges and Benefits of Short-Term Rental
The short-term rental industry has grown exponentially in demand, and savvy real estate investors (along with several others) are looking for a way to profit from it. Part of the reason for this can be traced back to the projected growth of this maturing industry. Still, there are some challenges for investors who are looking to break into this young but growing market. Learn more about these challenges in the following sections, and discover how our seasoned real estate lawyers can help you break into this thriving real estate market.
Challenges in the Short-Term Rental Industry
Experts say that the short-term rental industry is not only here to stay, it is going to change the way that people look at real estate. Unfortunately, the market is still experiencing some growing pains; lawsuits - mostly from agencies like the National Apartment Association and the National Multifamly Housing Council - are cropping up all over the country. Yet, despite what some people may think, these agencies are not necessarily against short-term rentals. Instead, they simply want a cut of the profits for a property that they rightfully own, but it appears they are not certain of how to get it. So they are taking the matter to court, hoping to gain some traction there.
How Changes to Zoning and Land Use Laws Can Impact Land Development Projects
When it comes to zoning and land use laws, developers need to consider more than just the present situation. Unexpected or unplanned changes can occur - sometimes to the detriment of your project. Learn more about how changes in zoning and land use laws may impact your current or prospective land development project, and discover how our seasoned Naperville commercial real estate attorneys can help you mitigate against such issues.
When Zoning and Land Use Laws Change
Municipalities tend to have a long-term vision for the way they want their town or city developed. Typically based on a variety of factors, such as land or wildlife preservation; values, needs, and desires of the community; and earning or tourist potential, this vision is usually outlined far in advance. Of course, things change. Perhaps the population ages or the town experiences a significant and unexpected influx of young people or successful entrepreneurs. Maybe the area starts to flood or suffer from erosion, or an indigenous species become endangered. Regardless of the reason, the city must then attempt to accommodate the change. That may require alterations to their plan, or even to zoning and land use laws.
Mediating or Negotiating a Landlord-Tenant Dispute - What Every Tenant Should Know
Living under the roof of another person can require a lot of compromises - but what can you do if compromise fails, or if your landlord refuses to hear your side of thing? Tenants often assume that a lawsuit is the answer, but this method is usually both complex and expensive. Thankfully, there are other tools and resources that tenants can use to resolve issues with their landlords. Learn more about them in the following sections, and discover how a seasoned Naperville real estate lawyer can help you resolve your landlord-tenant dispute.
Negotiating a Settlement with Your Landlord
Many landlord-tenant issues can be resolved through a negotiation - a process in which parties compromise to reach a suitable resolution. You can do this with or without a mediator (an unbiased third-party that can help you and your landlord reach a suitable agreement). To increase your chances of success in the process, try a few of these helpful hints:
CRE Partnerships - Avoiding Some of the Most Common Partnership Killers
Partnerships in the commercial real estate (CRE) industry can either make or break your business. Most savvy investors understand this, but they may not fully understand what factors may lead them to a path of success. Learn more in the following sections, including how the assistance of a seasoned commercial real estate lawyer can help improve your chances of growing a healthy and profitable business now, and in the years to come.
Partnerships that are born out of financial convenience (i.e. because you lack capital or cannot afford to hire someone for the job) are rarely profitable. That is partly because only one person is bringing in the money, but there are other issues that can cause these partnerships to fail as well. For example, if you partner with someone who does not have the business sense to keep up, you may find yourself doing all the hard work with very little payback. You could also find yourself liable for the mistakes they make along the way. Alternatively, if you partner has capital but you have all the ideas, you risk them stealing your ideas and profiting from them on their own. Avoid such matters by ensuring you only partner with someone who can bring more than money to the table, and always ensure you have a contract that clearly outlines the duties and responsibilities of each party.
House-Flipping at a 10-Year High - Could It Be Right for You?
House-flipping, defined as a house that is bought, revamped, and then sold within a 12-month period, is now sitting at a 10-year high. Experts say popular television shows are at least partially responsible for this hike. Unfortunately, such shows do not give an accurate portrayal of the industry and the challenges that house-flippers may face during the house-flipping process. Educate yourself on the process, and discover how a seasoned real estate lawyer may be able to help mitigate the risks and potential issues you may deal with along the way.
The Pros and Cons of House-Flipping
Under the right circumstances, house-flipping can be a lucrative market. Unfortunately, all the professionals that are needed to complete the process - real estate agents and brokers, builders, construction crews, etc - cut into your bottom line. You can increase your profits by learning more about the industry and expanding your knowledge (i.e. becoming a real estate agent), but one cannot realistically handle all aspects of their deals.
Tariffs Already Affecting Prices in the CRE Market
There is only one true constant in the commercial real estate market: prices change and fluctuate on a regular basis. Unfortunately, those changes in the market can dramatically affect the success of a project. Consider those who are currently under contract and facing price hikes from the recently imposed tariffs; many are starting to realize that they cannot complete their projects within their proposed budgets, so they may be forced to either abandon their ventures or hope that the losses can be made up elsewhere. However, there are some benefits to the tariffs for existing real estate developers, and those that are facing challenges because of the tariffs can mitigate the issues. Learn more, including how a skilled real estate attorney can help.
Tariffs and New Project Budgets
International Investment in the U.S. CRE Market - What Does It Mean for Local Investors?
According to data from the National Association of Realtors (NAR), nearly one-fifth of realtors closed a sale with an international client in the year 2017. Moreover, a total of 35 percent of realtors stated that they have seen an increase in the number of international clients over the past five years. What does all this mean for local commercial real estate investors, and how can you ensure future growth of your real estate portfolio? The following information explains.
Foreign Investing - Good or Bad for Local Investors?
At first glance, it might appear that foreign investments are negatively impacting local investors, but that is not necessarily the case. Market trends showed an acceleration for the last quarter, with a 9.1 percent increase in sales volume. Granted, investors are still concerned over the shortages of available inventory, and wide pricing gaps between buyers and sellers are still an issue. Yet, when one considers that cap rates closed at 10 basis points higher than 2016, it becomes clear that the CRE market is still growing and expanding. In short, the uptick in foreign investment may mean more competition in the CRE industry, but the savvy investor could potentially use this influx to his or her advantage.
1730 Park Street, Suite 117, Naperville, IL 60563
630-778-3818
