Appraisal Institute - Metro NJ Chapter’s Post

The Metro NJ Chapter's 2-Hour Fall Meeting is on Thursday, September 19, 2024 at 9:00-11:30 AM! Approved for 2 CE hours by NJ, State Appraisal Board Continental Breakfast included Where: Chubb Risk Engineering Center, 35 Columbia Rd., Branchburg, NJ Registration fee: $40/AI affiliation, $45/Non-AI Register here: https://lnkd.in/e2X_6Wzg Speakers: Andrew Lines, MAI, CRE, Cohn Reznick and Lauren Migliore, Cohn Reznick Topic 1: How connected are interest rates and multifamily cap rates? A look at multifamily cap rate trends during economic turbulence, 9:30 – 10:30 am *Historical fed rate hikes and their impact on multifamily cap rates *Cap rate trends over the past three years in each state/region *Impact of interest rates on investment and transaction activity *Disconnect between pace of changing interest rates and cap rates *Connection to real estate liquidity and buyer pools *Other macroeconomic factors including supply and demand, rent growth and vacancy, cost of operating expenses, demographic trends, and investor expectations *Trend predictions Topic 2: Solar development’s impact on adjacent residential and agricultural land values, 10:30 – 11:30 am *Solar Development has skyrocketed over the past 10 years, and with the Inflation Reduction Act, more solar fields are being proposed and constructed than ever before *This development tends to be predominate in rural and exurban areas, where the cost of land is low and agricultural land owners are excited about high land lease rates *For the last 8 years, CohnReznick has studied solar development’s impact on adjacent residential and agricultural land values, using techniques and methodology direct from Randy Bell’s Real Estate Damages textbook *CohnRznick has researched and analyzed several academic studies; called and interviewed nearly 100 assessors with solar in their counties; has developed specific studies in 17 states using paired sales analysis, before and after appreciation rate analysis and interviewed brokers who have sold real estate adjacent to operating solar farms Approved by the NJ State Board of Real Estate Appraisers for 2 CE hours Approved by the Appraisal Institute for 2 hours (10 points). 100% attendance required to get 2 CE hours. #aimetronj #continuingeducation #appraisers #realestate

Who's going to pay for this? New U.S. Department of Housing and Urban Development and US Department of Agriculture (USDA) Agricultural Research Service (ARS) rules require #multifamily housing and single-family homes to meet the 2021 IECC or ASHRAE 90.1-2019 #energycodes for federal financing. The policy aims to lower #utility costs for homeowners and #renters, but #developers are concerned about higher construction costs and potential #rent increases. Over half of surveyed multifamily developers worry these requirements will make certain projects less feasible. Being active in the California MF development space, it's hard to make any project pencil. This code doesn't help that cause. HOWEVER, problems are opportunities! When developers and builders are wondering, "Who's going to pay for all this?". Well... PearlX will. This is why we were created. As a #SolarTenant this is our solution to this industry problem. To my developer friends... do you feel this is a big concern, or not?

We recently forced our property appreciation up by nearly $1.6M in value. Here’s how… Suncrest Capital bought a portfolio of 6 properties for $17.5M. Three of those properties were master metered, which means that the previous owner was paying 100% of the water and sewer expenses. Typically, water and sewer are the largest expense of a mobile home park—accounting for anywhere between 40-60% of all operating expenses! In order to combat this expense, and provide better water services to our residents, we added state of the art wireless sub meters (metron-us.com), to each lot. By doing so, we were able to:  📊See near real-time water consumption  💰Bill back residents for their appropriate water usage  🔎Identify potential leaks that otherwise drag operating costs for a park After billing the appropriate water expenses back to residents, we were able to recoup over $9,200 in monthly water and sewer expenses—that’s more than $110k per year in added cash flow! In commercial real estate, values are determined by a multiple of net operating income, known as the capitalization rate (cap rate). With a conservative 7% cap rate on a high quality portfolio like this, a $110K increase in operating income resulted in a $1.58M boost in value for our investors. 🤑 The lesson? There is always more than what meets the eye. Strategic operational changes can drastically cut expenses and improve cash flow! What simple changes have you implemented that delivered big results? — #RealEstate #MobileHomeParks #RealEstateInvesting

HBRAME is calling on all our members to contact the members of Congress and tell them to support H.J. Res 170, a resolution that will stop the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) from adopting the 2021 International Energy Conservation Code. (IECC). The Issue A recent decision by HUD and the USDA that requires them to insure mortgages for new single-family homes only if they are built to the 2021 IECC and HUD-financed multifamily housing be built to 2021 IECC or ASHRAE 90.1-2019, is making it much harder for home builders and multifamily developers to build housing that is attainable and affordable for American families. Why it Matters According to Home Innovation Research Labs, compliance with the 2021 IECC can add $22,572 to the price of a new home, but in practice, home builders have estimated increased costs of up to $31,000. Furthermore, it can take as long as 90 years for home owners to see a payback on this investment. Now is not the time to create or support additional regulations that add more uncertainty, delays or costs to the home building process. https://lnkd.in/euftnp8e

Land valuation is a crucial tool that empowers various real estate stakeholders, including real estate agents and brokers, investors, developers, policymakers, and the public. Learn more about the process here: https://ow.ly/KzWV50SfONo

Mobile home parks are one of the most tax efficient investments you can make. This is in large due to the fact that mobile home parks benefit from accelerated depreciation schedules when compared to other asset classes. Most commercial real estate owners enjoy the fact that multifamily buildings can be depreciated on a 27.5-year schedule when compared to commercial’s 39-year schedule. However, many don’t know that many elements of mobile home parks can be depreciated on a 15 -year schedule. This is because, unlike multifamily and commercial, a majority of mobile home park value comes from land improvements. These land improvements include things such as roads, utility infrastructure, and park design. Consequently, this is just one of the many reasons why we feel that mobile home parks are one of the best investments available today. To learn more about our current mobile home park investment opportunities, click here: https://rebrand.ly/3lq0pag

No matter how you look at it, SoCal is falling behind Texas housing production. After looking at the number of permitted units per 10,000 people in Texas vs. Southern California, the 2023 Casden Report took a different approach to the numbers. Instead of a per capita view, what if we look at the raw numbers? Perhaps viewing the total production of single-family and multifamily units would show SoCal indeed produces a lot, but with such a high population, it struggles to keep up. Unfortunately, Chase McNeill pulled an additional graph from the report showing the hypothesis didn’t prove as true as we might hope. What’s the forecast for the next two years of Southern California multifamily production? Find out on November 7th at the annual Casden Multifamily Forecast Conference. Link in the comments to learn more. 👇 #data #housing #multifamily #socalrealestate #realestate

Mobile home parks are one of the most tax efficient investments you can make. This is largely due to the fact that mobile home parks benefit from accelerated depreciation schedules when compared to other asset classes. Most commercial real estate owners enjoy the fact that multifamily buildings can be depreciated on a 27.5-year schedule when compared to commercial’s 39-year schedule. However, many don’t know that many elements of mobile home parks can be depreciated on a 15 -year schedule. This is because, unlike multifamily and commercial, a majority of mobile home park value comes from land improvements. These land improvements include things such as roads, utility infrastructure, and park design. Consequently, this is just one of the many reasons why we feel that mobile home parks are one of the best investments available today. To learn more about our current mobile home park investment opportunities, click here: https://rebrand.ly/szv518h

GUARANTEED Cash Flow From Day One with 14-16% Annualized Returns Join an exclusive investor webinar highlighting a remarkable preferred equity opportunity offering guaranteed cash flow from day one with annualized returns of 14% to 16%, based on your investment amount! This gorgeous 240-unit Class A apartment community is nearing construction completion and the lease-up period is underway. Despite being so close to the finish line, the significant increase in interest rates since the start of the project resulted in much higher construction loan costs. As a result, we are raising short-term Preferred Equity, which will be used primarily for working capital during the lease-up and stabilization period of this highly desirable new apartment community. Here are the top 5 reasons we truly believe this could be one of our lowest risk offers yet: ✨More Secure Than Limited Partner Equity: Preferred Equity takes precedence over approximately $16.5M of invested equity, ensuring priority for both equity and cash flow distributions. ✨Short-Term Investment Timeframe: 2-year investment timeline with high annualized interest returns. ✨Guaranteed Day One Cashflow: Pref Equity ensures quarterly cash flow commences immediately and takes precedence over standard equity. ✨Located in a High Growth Market: Maricopa County is the fastest growing county in the U.S. and Phoenix-Mesa was ranked #2 best multifamily market in 2024 by Berkadia. ✨Brand New Class A Apartment Community: The property is a highly desirable Class A asset in a great location near amenities Reserve Your Spot Here 👇 https://lnkd.in/g6k-t4pu

Appraisers have been getting a bad rap lately based on false narratives. Time for a little positive news. I received a little bit of publicity yesterday thanks to Bryan Horwath and KTNV Channel 13 Action News and would like to share. My students at University of Nevada-Las Vegas will probably cringe at this post as I make sure to bring up solar throughout the semester. For YEARS, I've advocated for the proper valuation of PV (photovoltaic) solar in the Las Vegas valley by both real estate agents and appraisers via free lunch 'n learns to multiple brokerages sponsored by Robco Electric, with the "meat and potatoes" of solar presented by Krystal Hosmer. I provide guidance in at least one call a month from an upset real estate agent or homeowner whose deal goes south due to valuation issues. I'm not a residential appraiser (and don't make a dime on those calls), but I understand PV solar valuation as I own a good-sized system on my house (13.86 kW) and have completed the requirements of the Appraisal Institute's Professional Development Program for the Valuation of Sustainable Buildings (both Residential and Commercial). Once you understand PV solar and how it's purchased/acquired, it's really not that difficult. But you have to want to understand it, and too often owned solar value is ignored in the listing price, which makes it difficult for appraisers to extract value. There is a huge difference between owned PV solar and a "leased" or PPA (Power Purchase Agreement) system. It's not as simple as a "paired sales adjustment" because that would assume that all systems are the same size. I have no issue in helping agents, owners or lenders understand how to value their PV systems. Please reach out if you have questions, whether residential or commercial. I'm not selling solar here... I just want it valued correctly. The full story is here https://lnkd.in/g8vkWrSp. The intro to the segment wasn't included in the story, so I posted it below. #RealEstateAdvice #GivingBack #PayItForward #Education #Finance Nevada Chapter Appraisal Institute The CCIM Institute Southern Nevada CCIM Chapter International Right of Way Association IRWA Chapter 44 UNLV Lee Business School UNLV Real Estate & Business Society UNLV REBS UNLV Lied Center for Real Estate SIOR Global SIOR Southern Nevada Chapter