I am not a contrarian by nature, however I realized that the current overwhelming doom and gloom does not match some of the current data and the practical reality of our business at Jcap Private Lending.
Below are observations worth noting :
New mortgages for purchasing homes were at a 20 year high in 2021. 2023 is projected to be lower , but to still be in the top 4 purchase years in the last 2 decades …. and the trend is more home sales in the future
In our local market, inventory is low, multiple offers are back, and some sellers are getting over asking price again.
Returning from a National conference this week, my informal survey shows home prices holding steady with the exception of San Francisco, Dallas, Houston, Florida, the ultra High – End, and Rural properties. Texas had an over- supply of new Contruction which they seem to have sold through.
The Effect of Rising rates
Commercial Real Estate takes the biggest hit, as low interest rate commercial loans mature, owners are faced with dramatically higher rates when it is time to refinance. The risk is their properties no longer
cash-flow, which could force them to dump the property. Also, the rise in treasuries forces cap rates in Commercial Properties to rise to compete as investment alternatives — this, of course, hits the value of the asset.
Residential Real Estate is affected by higher rates mostly on the supply side. Home buyers still appear to be employed with high paying jobs. The higher rates means that they now have to pay more monthly for the same house they wanted to buy last year, or they will have to choose something less expensive.
The bigger story is the Residential Real Estate Seller: They are not selling! They have a mortgage rate between 2.5 -3.5%. Rates haven’t been this low since 1953. If they move, buying their same house, their payment is higher. The result : Less supply.
Effects To Jcap Private Lending and you, our Investor
Jcap is halting commercial lending through this cycle. We have a few commercial loans in our portfolio — we are working on moving them along. On the Residential side, we continue to watch geographies to stay “equity safe”. The supply phenomenon caused by historic low rates has caused real estate owners’ equity to increase — also lowering our risk. Our average loan to value in the 1st Cast Opportunity Fund is 56% . This cycle has created a 2nd TD Opportunity to come behind low interest rate 30 yr Fixed mortgages, providing high yield at low leverages for us.
2023 continues to look like a year of opportunity for Jcap Private Lending and for you, our Investor.
Is the holiday season a good time to buy real estate?
The period between Thanksgiving and New Year is considered the holiday season in North American culture. During this time, families gather around in their households and celebrate
special occasions more than usual.
So it’s no surprise that fewer people would put their houses on the market in the last two months of the year. Therefore, the options are limited. However, there are many beneficial circumstances to be considered.
You can check the conditions
Real estate investment takes a lot of thought. Most likely you plan to live in the same house for years, therefore you need to make the choice carefully. Maintenance issues arise frequently when the house is damaged. However, during the fall and winter months, you can check how well the heating of the estate works. Here are a few things that you can inspect better during the holiday season.
The most usual issue is heat. When fall is nearing its end, it gets very chilly. Some houses have rough heating systems. Sometimes, only a part of the house can warm up while some
rooms stay cold. Therefore, its owners feel quite a lot of discomfort during cold days. You can easily check the temperature and the heating conditions if you are buying real estate during the holiday season.
Moreover, heating issues cause the house to get damaged further. Dampness and humidity will slowly rot your house from the inside. You might have to replace the doors and the
windows and repaint the whole property.
There’s also the issue of rainwater finding its way into the house. The holiday season is the rainy one, making it easy for you to inspect the durability of the property. You can examine
the rainwater pipes and the drainage.
You can benefit from financial advantages
We have already established that there is less competition when it comes to the real estate business during the holiday season, causing the prices to fall. You might find it inconvenient
that there are fewer houses to choose from, but if it’s not an issue for you, then the holiday season is the perfect time to buy real estate.
If you plan to get into the property management business and getting your house rent ready, then the lack of options shouldn’t be a deal breaker. Moreover, you will spend way less money while profiting as much as you would if you made the purchase at any other time of the year.
Not only are the prices lower due to smaller competition scales, but developer companies also like to announce discounts as presents to the customers. It’s guaranteed that at least
one prestigious housing developer will offer the buyers a price reduction. Therefore, you will be able to get your dream house for a dream price.
We should consider the fact that housing development is not the only industry with great competition, banks are also competing with each other to satisfy the customers’ interests to
the fullest. It’s likely that you don’t have thousands of dollars saved in your account at once. If you need to take a loan, chances are that several banks are offering holiday advantages.
Private lenders don’t shy away from giving customers great opportunities as well. There are companies such as JCAP, that create beneficial loan programs for the holidays.
You don’t have to rely on the hope that some banks might be generous, but mortgages fall significantly during the holiday season.
Another financial benefit of buying a house during the holiday season is that you won’t have to worry as much about taxes. In the case of buying real estate in the period of the last two
months of the year, you can avoid plenty of payments.
The jolly family season gives you a variety of opportunities and presents. You can start a brand new year in a brand new home and begin making lovely memories. You will be able to
make sure that each year your family will be warm and cozy in a comfortable house. All of that comes at a smaller price than it usually would!
Make no mistake about it: Every single part of our home is important.
However, if we ever find ourselves in a situation where we have to choose between that roof over
our heads and some other part of the house, we’ll likely go for the roof. After all, it’s the roof that
provides us the highest degree of protection from the elements. We can all imagine living in a place
without walls, but it’s simply not possible to stay anywhere without a roof.
That said, the roof’s constant battle against harsh sunlight, heavy downpours, and powerful winds
exposes it to a lot of damage over time. Eventually, you’ll have to hire a roofing contractor to fix the
roof or replace it, and if you have residential roofing insurance, getting that done should be easier.
However, hiring the right roofing contractor can get a bit tricky. You have to make sure you’re
hiring a legitimate roofer, and interviewing candidates is a step toward the right direction.
Whether you’re doing them over the phone or in person, here are six questions you need to ask
prospective roofing contractors during interviews.
1. What is your company’s full name?
You don’t want to become a victim of a roofing scam, so make sure the person you’re interviewing
is a legitimate roofer who belongs to a real roofing company, complete with contact information
and a physical address. Copies of permits and licenses would also be great.
Once you get the information, you can always research the company name on state and federal
directories, where they will appear if they are, indeed, legitimate. They will also have a website, as
well as reviews about their services on business directories and review forums, so include them in
2. Are you insured?
Considering that roofing contractors perform one of the most dangerous jobs in the world, it’s only
right to ask if they have roofer’s insurance coverage. You don’t want to be liable for any bodily
injury or property damage they might cause while doing their work. Make sure that the roofing
contractor you hire has general liability insurance as well as workers’ compensation coverage, at
the very least.
3. Can you give me customer references?
Providing customer references should not be a problem for a reliable roofing contractor. Once you
check out references the candidate offers, make sure you find out if they’ve had any issues with
their roof since, or if they would still hire that roofing contractor for future jobs.
4. Who will work on my roof?
Some roofing contractors subcontract their jobs, and that’s okay, but they must disclose that from
the get-go. You don’t want to be doing all the research on a company only to find out later that
they’re taking someone else you haven’t vetted for the job. Whether you go with such a roofing
contractor that subcontracts their jobs or not will ultimately be up to you.
5. Can you give me a detailed written estimate?
You should never rely on a verbal estimate when it comes to roofing jobs—or any contracting job,
for that matter. You need to know how much the whole thing is going to cost you, and a roofing
contractor just saying it out loud won’t cut it. All estimates must be written down so you can
compare estimates from other potential roofing contractors.
6. Do you offer a warranty for your roofing work?
Reputable roofing contractors guarantee their work, so only go for one that answers the above
question in the affirmative.
You may ask many other questions during your interviews, but the six questions listed above
should be a good enough place to start.
Rachel Porter is the content specialist for Custom Contractors Insurance, LLC, an Arizona roofing andcontractors insurance company. When not writing, she enjoys reading and mountain biking with her friends.
The success of a construction project greatly depends on the General Contractor (GC), who acts as the construction coordinator and leader. A General Contractor is responsible for ensuring that the daily tasks are properly and efficiently completed. He works on the budget and task schedules and often settles misunderstandings and problems between crew members.
A General Contractor Is also responsible for keeping the site safe and protecting the workers from accidents and dangers. Sometimes, a GC has to act as a bridge between the construction crew and other workers.
But the most important role of a General Contractor is to oversee the construction project and make sure that everything is running smoothly, tight schedules are followed, daily goals are achieved, and the project stays on budget..
If your General Contractor can follow through with all his obligations, and if he possesses the following characteristics or qualities, your project should be a success.
1. Has contractor insurance
A good General Contractor is insured with contractors insurance because he values everyone’s safety, including yours. This insurance offers protection for you and your business from accidents and injuries that can happen during work hours. Thus, it protects you from serious financial risk.
With contractor insurance, you won’t have to worry about spending for medical bills or doctor’s fees if someone is hurt or gets into an accident. The insurance will take care of the expenses for you.
2. Knows the skills and abilities of every crew member
A good General Contractor knows his crew members. He knows how to motivate them to fulfill daily goals and objectives. He knows every worker’s strongest and weakest points so that he can assign the right task to the right person.
A good General Contractor can influence his crew members’ mindset to one that is focused on optimum performance and delivery.
3. First-rate organizational skills
Exceptional organizational skills will help a GC plan out every detail and action needed for the construction project properly and efficiently. He pays attention to even the smallest aspect, constantly monitors progress, attends meetings, manages his crew, provides training and other opportunities for growth and improvement, and ensures that all tools and materials are ready.
A good General Contractor also knows how to anticipate and visualize what will happen in the coming days or weeks. As such, he can analyze the work that has to be completed.
4. Open to learning and improvement
A good GC is always looking for opportunities to learn, improve, and grow professionally. He shares these opportunities with his crew.
5. Knows how to maximize tools and equipment
A hardworking and efficient General Contractor knows what the best tools and equipment are for the project. He knows the importance of keeping them well-maintained. He can comfortably and confidently coordinate with his people and help them understand why choosing the best tools and equipment is essential for the project’s success.
The GC is expected to encourage workers to also properly handle every tool and equipment they use.
6. Good communication and interpersonal skills
A good General Contractor is a good communicator. He knows how to talk to and elicit a response from his crew. He:
– asks his working crew to repeat his instructions, or whatever he said to the
– listens to whoever is talking and does not interrupt
– allows working crew members to share their ideas
– knows how to control his emotions, so he does not scream, curse, or yell
A good construction foreman huddles with his crew at the start and end of every workday – onsite. These are the best times for sharing ideas, getting feedback, and addressing work-related issues.
7. Knows the importance of a safe working environment
Setting up safety rules and ensuring that workers understand them is one of the primary responsibilities of a General Contractor. He knows why each crew member should wear the proper work outfit, including safety glasses, a hard hat, and other essential equipment.
A good General Contractor regularly reminds his crew about following safety precautions, and he often conducts safety audits.
8. Good customer relations
In a construction site, the team is divided into two groups: 1) the superintendent, manager, and the working crew; and 2) the owner, project architect, and general contractor. A good General Contractor treats everyone with respect and importance. His goal is to impress and satisfy by going the extra mile.
9. Highly knowledgeable about the construction industry
Lastly, a good General Contractor knows the ins and outs of the construction industry. And he uses this knowledge to the project’s advantage.
Often, what makes a project successful is passion and dedication. If your General Contractor loves what he is doing and takes pride in the projects he does – combined with the characteristics listed above, your project is on the way to success.
While the real estate market is often regarded as one of the most consistent and lucrative investment sectorsin the U.S., it is still susceptible to periodic fluctuations. That certainly proved to be the case over the course of the COVID-19 pandemic, which fundamentally altered housing inventories and home values on a national scale. Still, the market may be changing yet again in the not-too-distant future, making it essential for investorsinvolved in the sector to keep close tabs on emergent trends.
To help forecast this dynamic climate we currently find ourselves in, the experts at JCAP Private Lending shared the following insights on the real estate market and what trends they expect to impact the industry. Check out their advice so you can start preparing for these upcoming changes now.
The practice of trading fractional shares of individual real estate assets is expected to continue growing, making it more accessible than ever for real estate investors to participate in both residential and commercial commodities. There is a plethora of new FinTech companies actively lowering the barrier to entry for investors of all experience levels and budgets to remotely invest in a wide variety of properties across the country.
Zoning & Permitting Nuances
Comprehending the ins and outs of local zoning and permitting protocol at the municipal level will be more important than ever in the coming years. Planning and zoning authorities play a significant role in the investment planning process as they essentially have the final say as to where real estate property can be built and how they can ultimately be used. Investors should be proactive and contact local planning offices directly to avoid confusion and make complying with any pertinent regulations that much easier.
Rebirth of Secondary Markets
COVID-19 prompted notable population shifts into the secondary and tertiary markets, making it readily apparent to investors that these now in-demand locations require a major facelift when it comes to updating their commercial districts, rebuilding run-down communities and implementing supportive assets to meet the uptick in buyer demand. Investors who do their research and get their feet in the door in these up-and-coming areas will be able to maximize their return on investment, so pay close attention to economic and demographic trends as they start to become apparent.
Increased Virtual Showings
According to data from the National Association of Realtors, millennials comprise approximately 40% of all potential homebuyers in the country as of 2020. The majority of these customers conducted property tours online and 90% of them reported that the quality of the images showcasing the properties was the determinant factor in which ones they chose to visit in-person and ultimately buy. Investors should focus on investing in premium quality photography as well as virtual and 3-D videos of the home and surrounding neighborhood to give buyers a true sense of what the property has to offer.
There will likely be a significant uptick in the nationwide implementation of mixed-used zoning. Taking an adaptive approach like repurposing former hotel buildings into multifamily rental units or transforming parking areas into self-storage will be an increasingly common strategy. These repositioned and modified preexisting real estate assets will be a sizeable value-add when it comes to revitalizing communities and creating new investment options for investors seeking to diversify their portfolios.
Funding for the Future
As much as the real estate industry is changing, there is one thing that will always be constant: the need for fast and efficient funding. The experts at Jcap Private Lending understand the unique challenges and dynamic nature associated with real estate investing and pride themselves in crafting creative and effective financial solutions that are individually tailored to fit your specific needs and objectives. Contact Jcap Private Lendingtoday to learn more about how we can help you get started on building your investment property portfolio.
“I’m looking to buy a rental property, but the numbers in my local market aren’t viable.” It’s an all-too-common conundrum for many aspiring real estate investors. For example, affordability and projected returns on rental units in urban metro areas along the coast are typically less than ideal, even though many would-be rental investors reside in these communities. Luckily, thanks to technology, it’s now easier than ever to purchase and manage rental properties on a remote basis. Yet the conveniences of the modern real estate industry raise yet another question: With so many options, where should you invest? Although there’s no perfect area to invest in, you can weigh potential markets by their economic and demographic dynamics. To help get you started on your rental property investment journey, the experts at Jcap Private Lending have crunched the numbers for you to identify the following markets that are promising locations for successful rental property investments.
Identifying Ideal Markets
Before we delve into the specific markets that are primed for rental property growth, let’s touch on what market aspects you should pay particular attention to in order to evaluate investment potential. Always keep in mind that rental properties should be thought of as a long-term investment. They are not like short-term approaches such as fix-and-flip projects, and thus investors need to take a long-view approach when contemplating a city’s viability. Here are some key metrics you can use to determine the potential strength of a given market:
- Home Value Index: The median home valuation is tied to affordability. Think about it: if you can’t afford a $350,000 down payment on a $1.5 million rental property in the Bay Area, then there’s no point in even considering that market. You can use online resources like Zillow’s Home Value Index to zero-in on markets that fit your budget
- Year-over-Year Home Price Increase: This is the percentage historical growth of home values annually for a given timeframe
- Forecasted One-Year Home Price Increase: This is the anticipated rise in home values over the next 12 months
- Unemployment Rate: As an indicator of economic performance, the unemployment rate provides an insight into whether homebuyers in the area can afford homes. Additionally, a booming local economy draws more residents, thereby increasing population growth and housing demand
- Average Age: Generally speaking, the younger the population is, the better the long-term economic stability and population growth rates are
- Job Growth Rate: This is the percentage increase in all jobs in a given area over a year’s time, which is directly correlated with real estate demand
Based on these metrics, here are some promising real estate markets to consider investing in a rental property.
The Orlando economy is simply booming and experienced a 3.46% increase in the number of jobs year over year. Similarly, both the population and average rental income are trending upwards as well—all indicators that an investment property will do well in this market for the foreseeable future. Ideally located along Florida’s central Sun Belt community, Orlando is the epicenter of a world-renowned tourist industry, a popular destination for relocating retirees and offers plenty of employment options for younger generations. There are plenty of affordable rental homes on the market, and with the projected one-year home price growth in the area sitting at a healthy 3.4%, your rental asset will quickly appreciate, thereby optimizing your overall return.
A key component of the area’s famed “Research Triangle” named after the trifecta of world-class universities, Charlotte boasts enviable job and population expansion—a trend fueled by the entrepreneurial dynamics of the local economy, with CNBC listing it amongst its top cities in the entire country to start a company in last year. With the population growing at an astounding 21.3% over the past decade and the fact that the majority of these new residents are well-paid professionals willing to pay premium rent installments for the right flexible housing option, it’s easy to see the appeal of Charlotte from a rental investor’s perspective. Now is the time to get involved in the market. With home values quickly rising, investors should make their move now before being priced out of this red-hot market so they can take advantage of what all signs suggest will be continued growth and expansion for years to come.
The Houston metropolitan area weighs in as the fifth largest in the entire nation with more than 7 million residents—and it’s still growing to the tune of double the national average. Houston is regarded as a business-friendly hub, which fuels its outstanding employment and economic performance. The city plays host to 53 corporations listed on the Fortune 1000 list, trailing only New York and Chicago in terms of concentrated economic power. What’s even better for investors is that despite Houston’s great economy and population growth, real estate is still affordable compared to other major urban markets—making it a great option for new investors to break into this promising market.
If you are in need of a rental loan, Jcap Private Lending is your go to lender! We constantly fund rental loans across the country and are here to guide you through the process.