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Tuesday, June 12, 2007

Tax relief may work against real estate vultures

Tax relief may work against real estate vultures

mhaggman@MiamiHerald.com

For two years Magdiel Guillemi watched the condominium towers go up across South Florida and waited for his chance to buy in. Now the 25-year-old aluminum company executive thinks his time has arrived.

With the housing market stuck in slow motion, more and more condos nearing completion, and many jittery preconstruction buyers wanting out as closing day approaches, Guillemi's betting he'll be able to buy at steep discounts. Then he hopes to sell for a profit, just as flippers did when the market was on the way up a few years ago.

Call it the contrarian view of real estate investing. While the market appears stone-cold to many individual buyers and sellers, others -- the so-called vulture investors -- see opportunity.

Guillemi says he's already finding bargains but he wants to act fast: The Florida Legislature starts a special session this week to consider lowering property taxes -- a move he thinks could spur renewed buying activity and endanger the low-cost deals he's scouting.

''If they cut taxes that will motivate individual buyers,'' said Guillemi, who plans to start buying in the next few weeks. ``And I want to get in before they do. I don't want to be left with the crumbs.''

Large investor groups and hedge funds are also scouring the region for bulk deals at bargain prices.

At the height of the 2001-2005 housing boom, it seemed everyone was getting into real estate, hoping for fat profits. But a separate class of speculators sat out during those frenetic days, betting the market would be bid to unsustainable heights yet still hold long-term value.

Their gambit: Buy on the dip and ride the market up.

The question for these investors is when to buy. Many observers say the market hasn't yet hit bottom, others say the time is right.

But for the vulture investors, who have pooled cash and waited for their big chance to score from a market correction, this week's special session brings a twist. It's spurring some like Guillemi to accelerate their plans and others are hoping legislators don't accomplish much.

Peter Zalewski, a former journalist who a year ago started condovultures.com -- a company that helps buyers find bargains in a downturn, said he fears decisive action in Tallahassee will provide a jolt that could potentially undermine his plans.

''There is an urgency that is being created by the legislative issue,'' Zalewski said. ``If they resolve the property tax issue, the market will get some medical attention. We don't want that, we want to bleed out the market some more.''

Of course, few will feel badly if vulture investors' prospects evaporate. Home builders, brokers and many homeowners hope Zalewski's thinking that a cut in property taxes will give the region's anemic housing market a shot in the arm is right. The Latin Builders Association and Builders Association of South Florida are both pressuring leaders in Tallahassee for sharp cuts.

But not everyone is convinced a property tax cut in Tallahassee will cure the housing markets ills. Among the other issues the market must work through are:

• A giant oversupply of homes: more than 76,000 were listed for sale in April in Broward and Miami-Dade counties compared to some 50,000 a year ago. Over the next 18 months about 20,000 new condo units are expected to come onto the market in Miami-Dade County alone, possibly spiking unsold inventory as those units are put back on the market for resale.

• Insurance rates have not come down. Condo associations and individual homeowners are still grappling with hefty premiums.

BIG BUYERS

Analyst Jack McCabe, who is advising large vulture investors on bulk deals, said big investment groups aren't as worried about tax rates as individuals -- saying such costs can be spread out across big buyers' portfolios.

Last week McCabe announced the completion of the first market-corrected deal he's worked on since the slowdown began. While short on specifics, McCabe said a multibillion-dollar private investment fund bought a substantial block of newly built condominiums from a publicly-held home builder in Florida. His investor client, he said, was chosen because of its ``ability to close quickly in an all-cash transaction, noncontingent on financing.''

Currently, he said the market is too sick to recover from a tax reduction alone. A big property tax cut may reignite buying now, he said, but would effectively create a false bottom.

''Meaningful reduction will slow down the correction cycle but the correction is still inevitable,'' said the Deerfield Beach analyst, who has warned for some time about too much construction going up too fast. ''The market is so sick it will take a while to cure this,'' he said. ``This is not a head cold, it is more like pneumonia.''

But such doomsayers also believe the market is poised for brighter days ahead. McCabe says that barring calamitous hurricanes, the market will have righted itself by 2010 -- just as the first baby boomers turn 65.

''No one is more bullish on Florida long-term than me,'' McCabe said.

It's such thinking that prompted corporate raider Carl Icahn to announce last week that he would continue efforts to buy Bonita Springs-based WCI Communities. And Zalewski spent last week showing property in South Florida and Central Florida to two investor groups, one from Michigan and another from Colorado.

DEEP DISCOUNT

Guillemi, meanwhile, is focusing on a unit at the Brickell on the River condo in Miami. He said the owner bought it for $341,000 and is trying to sell for $280,000.

''The seller has two other properties under foreclosure and is having trouble making mortgage payments,'' said Guillemi, operations director of FDS Aluminum in Pompano Beach. ``I'm trying to pick it up for $260,000.''

So with an eye on the special session in Tallahassee, he's ready to move now. ''With tax reform you will have two things pushing people into the market: lower prices and lower taxes,'' Guillemi said. ``I'm not going to wait. Of course, you have to be smart about it. There is a lot out there and you can't get married to the first girl you see.''

 
Posted at 2:41:31 PM
 
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Updated: Friday, July 20, 2018


5 Tips for Staging Your Home

If yoursquo;re in a tough sellerrsquo;s market or just looking to get top dollar for your home, you want to do any little thing you can to make your house stand out in a potential buyerrsquo;s mind. Staging is one of those things that can make the difference between a sold sign and a house that lingers on the market.

The National Association of Realtors suggests that staging has a real impact on home sales. In fact, a majority of realtors report that staging increases the sales price of a home anywhere between 1 and 10 percent. However, the real impact of staging seems to be how quickly a home is sold, with 39 percent of Realtors stating that it greatly decreases the time spent on the market. Buyersrsquo; agents confirm the positive impact of staging, stating that 77 percent of buyers were better able to picture a home as their own when it was staged.

Of course, there is an art to staging a home, and a poorly staged home can have a negative impact on a potential sale. Here are five tips for staging your house that will have you putting up that ldquo;SOLDrdquo; sign in no time.

1. Declutter and Clean

Before thinking about decorations or furniture placement, the No. 1 suggestion of realtors is to declutter and deep clean. Clear countertops and other surfaces, and pack away anything that is not essential. Your goal is to remove anything that will distract buyers from seeing the positive aspects of your house, which is why realtors often suggest removing family photos and overly personalized decorations like your giant bobble head collection. Remember, decluttering includes removing excess furniture, which help make your rooms feel bigger.

2. Group Furniture

Once yoursquo;ve removed furniture that is unnecessary or too large for the space, group furniture into conversational groups away from the wall, instead of pushing sofas and chairs to the corners. You want there to be a flow to each room, and keeping the walls clear of big furniture will actually make the room feel bigger, says HGTV.

3. Accessories in Odd Numbers

Although yoursquo;ll need to declutter, you still want your space to feel like a lived-in home. Do this by decorating with groups of accessories like vases, books or plants. Staging professionals often recommend grouping similarly hued objects in odd number pairings of varying heights and shapes.

4. Add 1 or 2 Bold Accents

While you want to keep your staging deacute;cor fairly neutral, adding one or two bold accent pieces will help highlight a particularly great feature of your home. Adding a dramatic chandelier that matches the >

5. Use Mirrors

Mirrors can help brighten a dark hallway, bring light into a room and make a room seem larger, says Forbes. For a big impact, get a cheap mirror and add a decorative frame, or group a lot of small mirrors in differing shapes and sizes. In a room with a window, place mirrors across from the window to reflect the sunlight.

Staging is all about helping potential buyers create an emotional connection with your home. Help buyers picture themselves living in the house by decluttering, grouping furniture and accessories, adding one or two bold accents and using mirrors. Now get ready for the offers to roll in.


> Full Story

Real Estate Experts and Lawyers Working Together: A Partnership for Growth

As residential towers and commercial buildings rise toward the heavens, as they pierce the clouds and refract the light from sheets of glass unto frozen crystals, creating a rainbow so many stories above the ground but below the stars, construction accelerates. It accelerates in cities large and small, increasing the need for real estate developers and agents - in addition to buyers and sellers - to have sound legal representation. For construction to continue apace, so the economy does not lose its pace, we need real estate experts and lawyers to work together. Anything less than full collaboration threatens to stall growth and bring the real estate industry to a standstill.

According to Wayne R. Cohen, a professor at The George Washington University School of Law and a partner at Cohen Cohen, P.C., lawyers are an essential part of this equation. He says:

Growth is sustainable only to the degree that there are enough lawyers to ensure developers can break ground without fear of breaking the law, because they do not have the right permits or are in violation of some zoning ordinance. As much as the law can hinder growth, or an injunction can slow or stop it, good lawyers can do their best - they can do everything in their power - to reverse that restriction.

I second Cohens analysis, since the real estate industry cannot operate without effective legal counsel. The same rule applies to the rights of tenants who can too easily be bulldozed pun intended by one side. If there is to be balance, lawyers who specialize in these matters need to come forward.

What I foresee is not so much an adversarial >For these things to happen, a conversation must begin and actions must follow. The arrangement must be right, so lawyers can do justice and real estate developers can pursue legal means for a just outcome. In turn, a national conversation can ensue for the good of the public and the advancement of those goods that benefit the republic - things like the construction or repair of parks and playgrounds, the renovation of libraries and museums, the expansion of roads and highways, and the availability of affordable housing.

If the currency of the legal profession is language, if lawyers pride themselves on the precision of the words they use, much like architects and engineers must be precise in their calculations, they have a duty - we all have a responsibility - to have a dialogue about how lawyers can aid the real estate industry and assist the economy.

The jobs that result from that discussion are one of several rewards for us to enjoy.

I welcome this chance to talk, so we can succeed greatly and grow mightily.

A writer and branding consultant, Lewis Fein covers the real estate industry, technology, and marketing, among other issues. A graduate of The Emory University School of Law, Lewis resides in Southern California. You may reach him at
> Full Story

Industry Icons Saul Klein and John Reilly Join Realty Times as Executive Editors

June 28, 2018 Las Vegas, NV ndash;nbsp; Realty Times is pleased to announce the addition of two of the most prominent industry professionals as Executive Editors. They bring over 80 years of combined real estate expertise and knowledge, engaging and influencing all functions of real estate; as a managing broker, MLS/Associations board member, licensed attorney, architects of real estate communities and passionate educators.

Together, they will pursue the Realty Times mission to deliver an experienced and competent voice, providing balanced bilateral reporting and editorial.nbsp;

ldquo;For 21 years Realty Times has been a trusted source of real estate news. In todayrsquo;s world of misinformation, Saul Klein and John Reilly will provide Realty Times readers a significant level of confidence and trust as their integrity has been well established,rdquo; stated John Giaimo, Realty Times President.

ldquo;This is really the dream opportunity for John Reilly and I, after long and successful careers in the real estate Industry.nbsp; It is like being able to step off the field, as an athlete or coach, and being able to step into a commentator role. We are excited about getting started.rdquo;

About Realty Times:

As one of Americarsquo;s largest and most trusted real estate news portals, Realty Times connects buyers, sellers, brokers, nonprofits and agents with everything real estate >

About Saul Klein:

With over 40 years in real estate, Saul Klein is well recognized as an industry pioneer, especially in real estate syndication and education, and one of the few luminaries that paved the way for real estatersquo;s transition to the online world. Saul is the co-creator of ePRO, technology certification course that certified 70,000 students, as well as the creator of the 2 National Listing Syndication Service, Point2 Technologies. Mr. Klein is a proud member of the first REALTOR.com Team, pre-IPO, responsible for obtaining first 500,000 listings.

About John Reilly:

John Reilly is a real estate educator and one of the foremost writers of real estate materials, including several published books and numerous articles. His national bestseller, "The Language of Real Estate", published by Dearborn Publishing, is now in its seventh edition and selling over 125,000 copies. Together with Saul Klein, John founded Real Estate Electronic Publishing Company REEPCO, which produced RealTown and Internet Crusade. In 2000, John moved to San Diego to devote his efforts full time to real estate electronic publishing with a focus on the development and moderation of NARrsquo;s online e-PRO Technology Certification Program.


> Full Story



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