MikeBolen.com

For multifamily investors nationwide, concerns about falling rents and rising vacancy has resulted in a decline in prices for apartment buildings. The “capitalization rate,” which measures the relationship between the price and cash flow of properties, increased yet again this time one-quarter of one percent from the second quarter of 2007 to second quarter of this year, according to Real Capital Analytics Inc., a real-estate research firm. The cap rates are now at levels last seen at the end of 2004, the firm says.
The decline in prices has led to a pickup in sales activity across the nation. Real Capital Analytics reported last month that sales in June were “well above” recent months’ figures, with $5.5 billion already having closed or in contract in the third quarter compared with $8.7 billion in sales in the second quarter.
Multifamily apartment building sales already were far outpacing deals involving other commercial property, such as office buildings and strip malls. The availability of credit from government-sponsored Fannie Mae and Freddie Mac has buoyed values and fueled new deals. Turbulence at the mortgage titans, which together with Ginnie Mae hold 35% of the mortgage debt on multifamily housing, riled apartment owners last month as investors worried about the fate of Fannie and Freddie. But those worries dissipated as the housing bill signed into law last month made the government’s implied guarantee of Fannie and Freddie’s $5.2 trillion in mortgage securities more explicit.
There appears to be no indication that the hunger for these multifamily loans by the government backed agencies will end anytime soon. Indeed, Fannie Mae announced last month that it would increase its commitment to buy loans on multifamily housing of up to $5 million to provide additional liquidity for rental housing. Fannie said it invested $20 billion in multifamily housing in the first half of the year. While that is down 25% from $27 billion in the first half of 2007, the number of total deals has fallen by 45%. Multifamily also remains a safe investment so far this year: Delinquencies on Fannie- and Freddie-backed multifamily loans in the first quarter were just .09% and .04%, respectively.
Here at the RE/MAX Napa Valley office, RE/MAX Cornerstone Commercial I specialize in multifamily investment real estate. I am an avid student of the bay area market with an emphasis on the Napa Valley wine country. Put my 16 years of experience and expertise to work for you in your next multifamily real estate investment. You can contact me Mike Bolen at 707-254-9999 or Mike@MikeBolen.com.

This article was written primarily by Nick Timiraos with the Wall Street Journal

Foreclosure filings were reported on 72,285 California properties in July for the highest total among the states, according to a report released Thursday. Foreclosure notices on small and medium size multifamily surged to record highs too.

RE/MAX research said California’s foreclosure activity increased 5 percent from the previous month and was up 85 percent from July 2007. On a year-over-year basis, bank repossessions in California were up 427 percent, while auction notices were up 67 percent and default notices were up 34 percent. However, default notices declined 4 percent from the previous month.

Throughout the country, foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 272,171 properties during the month, an 8 percent increase from the previous month and a 55 percent increase from July 2007. The report also shows one in every 464 U.S. households received a foreclosure filing during the month.

In actual foreclosures Nevada continued to document the nation’s highest state rate in July, with one in every 106 households receiving a foreclosure filing during the month. Foreclosure activity in Nevada was up 15 percent from the previous month and 97 percent from July 2007, pushing the total number of properties with foreclosure filings to over 10,000. Bank repossessions in Nevada were up 384 percent on a year-over-year basis, while default notices were up 59 percent and auction notices were up 31 percent.

One in every 182 California properties received a foreclosure filing in July, the nation’s second highest state actual foreclosure rate, while one in every 186 Florida properties received a foreclosure filing.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in selling just multifamily apartment investments.  My colleague Armando Lincoln 707-299-9779 part of the team handles all real estate commercial and residential that is not multifamily. Over 65% of our sold real estate deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen for multifamily Mike@MikeBolen.com or 707-254-9999.  Contact Armando Lincoln 707-299-9779 for all other commercial and residential real estate opportunities, and Ken Dunbar 707-365-9070 for all commercial leasing needs.

We also work with over 25 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial real estate investment buyers than our team. Put the power of the RE/MAX Napa Valley team to work for you.

Here at the RE/MAX Napa Valley office, RE/MAX Cornerstone the company has created a press release to announce the affiliation of me, Mike Bolen, Armando Lincoln and Ken Dunbar to the new RE/MAX Napa Valley office, RE/MAX Cornerstone. Our three person commercial team was ranked by the North Bay Business Journal at the 11th largest in the Bay area in 2006 and the 10th largest in 2007. Prior to our affiliation with the RE/MAX Napa Valley office RE/MAX Cornerstone the three of us were affiliated with Intero Real Estate Services.

We are very proud of our new affiliation with the new RE/MAX Napa Valley office, RE/MAX Cornerstone. Our affiliation with the RE/MAX Napa Valley office will benefit our clients in multiple ways including:

1. RE/MAX has over 108,000 licensed agents to market property to through our global proprietary intranet.

2. 400,000 page views per month on RemaxCommercial.com

3. RE/MAX is the highest ranked real estate search for keywords “commercial real estate” and “commercial properties”

4. 53% of all real estate TV commercials are RE/MAX

5. Quarterly Wall Street Journal commercial property ads and RE/MAX Napa Valley always participates

6. RE/MAX commercial practitioners completed over $12 billion in sales last year

7. The president of CCIM is a RE/MAX agent

8. The RE/MAX Napa Valley office has a AAA+ corner of 1st & Main location to showcase your listing.

9. RE/MAX Napa Valley has the strongest internet presence of any real estate office in North Bay, visit www.MikeBolen.com, www.RemaxNV.com, www.RemaxNapaValley.com, & www.JoinRemaxNV.com

10. The RE/MAX logo is one of the 10 most recognized brands in the world and we put the 800 pound gorilla to work for you.

For these reasons and many more, myself, Armando Lincoln and Ken Dunbar feel we can complete more transactions in a successful fashion by being a part of RE/MAX International through our affiliation at the new RE/MAX Napa Valley office, RE/MAX Cornerstone.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in selling just multifamily apartment investments.  My colleague Armando Lincoln 707-299-9779 part of the team handles all real estate commercial and residential that is not multifamily. Over 65% of our sold real estate deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen for multifamily Mike@MikeBolen.com or 707-254-9999.  Contact Armando Lincoln 707-299-9779 for all other commercial and residential real estate opportunities, and Ken Dunbar 707-365-9070 for all commercial leasing needs.

We also work with over 25 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial real estate investment buyers than our team.

Pre-foreclosures hit record highs in July 2008 both nationally and in 14 states and the District of Columbia according to new figures from ForeclosureS.com, California-based foreclosure information specialists.

“So far this year, more than 1.25 million Americans faced the risk of loosing their homes to foreclosure, up 7.3% from June 2008, and up 88.62% from July 2007,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com.

California-based ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, foreclosure auction, and/or REO (lender-owned real estate after a foreclosed property reverts back to the lender). Pre-foreclosure filings are the first initial notice and do not all end up foreclosed.

Foreclosures and short sales (selling homes for less than their loan value) make up a huge chunk of today’s sales market and those low sales prices are skewing sales values down. Now thanks to the new housing bill recently passed first time home buyers are coming into the market to grab their $7,500 tax credits, FHA reform is easing their loan process, and there is a ton of affordable housing to chose from. Plus, for the first time in a long time you can buy a near-new home for less than its replacement cost and buy multifamily with positive cash flow.

A look at a few of the July numbers from ForeclosureS.com:

-- Pre-foreclosures by region based on filings per 1,000 households

 July 2008 YTD versus July 2007 YTD 2007:

     -- Southwest, 21.4 pre-foreclosures per 1,000 households YTD vs.

      10.5 per 1,000 YTD 2007;

     -- Southeast, 24.1 per 1,000 vs. 11 per 1,000 YTD 2007;

     -- Northeast, 8.4 per 1,000 vs. 6.7 per 1,000 YTD 2007;

     -- Midwest, 11.3 per 1,000 vs. 9.3 per 1,000 YTD 2007.).

-- States with the most pre-foreclosure filings per 1,000 households

 July 2008 YTD:

     -- Nevada (59.1 per 1,000 up 126.44% from YTD 2007);

     -- Arizona (54.9 per 1,000, up 403.67% from YTD 2007);

     -- Florida (48.3 per 1,000 up 176% from YTD 2007);

     -- California (25.2 per 1,000, up 119.13% from YTD 2007).

Until the foreclosure and short sales move out of the market downward pressure will continue on small to medium size multifamily properties. Larger multifamily where foreclosure on commercial loans is near non-existent will have little downward pressure from the foreclosure market with higher cap rates being propelled by tough capital markets.

Now is the time to buy multifamily rents are exceptional, vacancy is at record lows and prices have fallen to record lows when compared to income. Here at the RE/MAX Napa Valley office, RE/MAX Cornerstone I specialize in multifamily property contact me, Mike Bolen at 707-254-9999 or email anytime Mike@MikeBolen.com. I look forward to hearing from you.

A key piece of downtown Napa real estate is becoming free from a long term below market lease. The property located in downtown Napa on Main Street between 1st and Pearl is ideal for a mixed use development. The current owner Keith Rogal said in July, “I have felt for a long time that that block was crucial to make a more pleasant and vibrant downtown.” He finds the parking lots and open space around Mervyn’s “deadening.”

Read more here:

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in multifamily investments. Foreclosure, off market, short sales and soft market proeprties. Most multifamily is never advertised I mail over 12,000 postcards each and every month and make 1000’s of phone calls. Call or email me anytime with questions or to view a property. You can reach me, Mike Bolen anytime via email Mike@MikeBolen.com or give me a call 707-254-9999. I look forward to finding the perfect investment for you.

I found an interesting article about futures that can be purchased to hedge against a decline in value of your real estate holdings in the San Francisco bay area. As real estate investors in Napa, Sonoma, Marin and Solano county the past two years have ushered in some interesting buying opportunities. Here is a way to protect your equity:

Using Futures To Hedge Your House

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in working with multifamily investment buyers and sellers. If you have a question about Napa, Sonoma, Marin or Solano multifamily give me Mike Bolen a call 707-254-9999 or email me anytime.

I guess I will say it again, “What a difference a month makes.” The Napa County July 2008 multifamily apartment sales market saw a steep decline in prices driven by the sale of the 15 unit complex on Lincoln. July was the weakest month on record for apartment sales in Napa County for 2008 when measured by price.

July sales:

July 2008 average unit sale price- $126,734

1761 Park Ave - $162,500 per unit

370 S. Minahen - $219,950 per unit

316 Coombs - $138,750 per unit (4 Units)

680 Lincoln Avenue - $106,666 per unit (15 Units)

So it is now possible to purchase a Napa Valley multifamily apartment real estate investment with 100% financing and still have positive cash flow after paying principal, interest, taxes and maintenance. Coupled with extremely strong rents and an ultra low vacancy rate it makes you wonder why we still don’t have more buyers for multifamily.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in selling just multifamily apartment investments.  My colleague Armando Lincoln 707-299-9779 part of the team handles all real estate commercial and residential that is not multifamily. Over 65% of our sold real estate deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen for multifamily Mike@MikeBolen.com or 707-254-9999.  Contact Armando Lincoln 707-299-9779 for all other commercial and residential real estate opportunities, and Ken Dunbar 707-365-9070 for all commercial leasing needs.

We also work with over 20 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial real estate investment buyers than our team.

Here is a unique multifamily property. This property is located at the high end Napa Valley resort called Silverado Country Club Resort and Spa this luxurious #1 Rated Silverado Resort Clubhouse Condo boasts some of the best features of any hotel condo in the country.

The ground level condo (No Stairs) features a fireplace and easy walking distance from the swimming pool, golf course, Silverado mansion, spa and many other Silverado Resort amenities. Unit rents for $550 per night on hotel rental program take advantage of the excellent Silverado rental income of approximately $25,000 net income to the owner and use personally as desired. A full country club membership may be purchased for a discounted $38,000 the normal fee is $85,000.

Check out the resort here.

Check out the property for sale here.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in multifamily real estate. I am a full time agent working out of my office located in downtown Napa right on the corner of 1st and Main next to the Mondavi Opera House. Feel free to stop by if you’re in the area, email Mike@MikeBolen.com or call me Mike Bolen at 707-254-9999

Quick update the 15 unit apartment building located at 680 Lincoln Avenue in Napa just sold for $1,600,000 in an all cash deal both sides of the transaction were brokered by Tom Lyons at Income Property Services. The sale of this 15 unit building will cause further downward pressure on the already declining North Bay apartment market. The units were mostly 2 bedroom units including one large 3 bedroom unit. At $106,666 per unit this is a tough comp for the market to swallow. Expect further downward price modifications of property currently marketed for sale. Look for my July sales update in a few days.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone our team specializes in off market pocket listings. Over 65% of our sold deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen  Mike@MikeBolen.com or 707-254-9999.

What a difference a month makes. The Napa County June 2008 multifamily apartment sales market improved over May. May was the weakest month on record for apartment sales in Napa county for 2008. Where we witnessed a paltry 2 sales not so in June:

June 2008 average unit sale price- $203,421

106 Valley Oak Circle - $149,700 per unit

161 Valley Oak Circle - $162,500 per unit

2158 Wilkins Avenue - $165,000 per unit

15 Randolph Street - $214,250 per unit

2445 Pine Street - $225,000 per unit

1933 Main Street - $236,000 per unit

1018 Myrtle Street - $271,500

I made a prediction   http://www.crehq.com/blog/36/napa-county-may-2008-multifamily-apartment-sales/  on June 3rd 2008 that we would see triple the sales in June than what we saw in May. We actually sold triple + one in June over May, not bad!

As an update 1711 Lincoln was removed from the market and did not sell nor has it gone into foreclosure. I will continue to update you on the Napa real estate market as it pertains to multifamily apartment and land deals so check back here often.  

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone our team specializes in off market pocket listings. Over 65% of our sold deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen for multifamily Mike@MikeBolen.com or 707-254-9999.  Contact Armando Lincoln 707-299-9779 for all other commercial sales opportunities, and Ken Dunbar 707-365-9070 for all commercial leasing needs.

We also work with over 20 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial investment buyers than our team.