The sky is falling, the sky is falling (NOT)

I had a call from an appraiser today inquiring into the details of a sale I recently closed. She said she has heard from several people in the business that CAP rates had increased to as high as 7 on similar deals. The sale she was calling me about was a sub-5 CAP well located 23 unit apartment building.

I asked her if she had any sales that have closed at CAP rates like she was telling me and she said that no, actually, she was confused as to why the sentiment would be that CAP rates had risen so much in the past few months when the sales she was seeing close were actually not much different than last summer. I asked her if maybe her sources were buyers or lenders and she replied that yes, in fact, the people she had talked to were lenders and one buyer.

So here is the thing: if you own an operating apartment building today you are probably fully rented with rents higher than a year ago. Regardless of what the media says you are feeling pretty good about owning that asset. If you weren’t selling last summer and are now a buyer wanna-be, lender wanna-be, or an appraiser tells you that the sales value today is 20% lower than last summer you certainly are not selling today. The point is that the people selling today (and there are 2-4 apartment building sales that close every week lately) are selling for pricing similar to last summer. I guess this defies prevailing wisdom (or really just wishful thinking by a lender who really isn’t actually making any loans on apartment buildings anyway).

Buyers are able to get debt for apartment buildings pretty much the same as a year ago. Rates are up slightly but still in the mid 6% range for fixed rate loans. Well located mid-size apartment buildings always trade at a price with a CAP rate lower than the debt rate (well, at least for the past 22 years). The rental market for apartment has rarely looked better and alternative investments have rarely looked worse.

I haven’t seen any evidence of sales at lower prices but I sure have heard a lot of talk about it. The problem is that it is all talk.

Canadian Financing for Las Vegas Condos!

We have discovered a great lender for Canadians wanting to buy Las Vegas homes, either as a second home or as an investment! This lender charges no loan discount points or origination fees, and the rates are the same as what a US citizen can obtain.

Lately all our blog posts have been about finding Las Vegas mortgages for our clients. With the high rate of national foreclosures, many traditional venues and programs have been discontinued, leaving buyers, even those with substantial down payments, in limbo. It has truly been a challenge for us to find mortgage lenders with reasonable down payment and rate structures.

In our never ending quest for foreign national financing for Las Vegas real estate purchases, we have literally stumbled across a lender who is able to loan money at competitive rates to Canadian citizens. This lender is able to use Canadian credit scores and income to provide mortgage loans for the thousands who are trying to flee a harsh winter climate for a few months each year.

General program guidelines for this lender are as follows:

The program is available for both second homes and Las Vegas investment properties. The minimum down payment is 20%, although the best financing on investment properties would be with a 25% down payment.The programs that are offered are full qualifying loans. Available are the 3/1, 5/1, 7/1, and 10/1 Adjustable Rate Mortgages. Each is a 30 year loan with a 30 year amortization locking in the loan rate for the short term of the loan. For example, if you got a 3/1 ARM, your start rate would be locked in for three years. (Rates are typically lower for shorter loan locks.)

The typical documentation list is as follows. Based on your own individual circumstances, more documentation may be required:

2 years personal tax returns including all pages and schedules
2 years T4s2 years corporate tax returns including all pages and schedules (if self employed)Most recent 2 months bank statements reflecting name, account number, and 2 month transaction history
Most recent 1 month retirement/investment account statement reflecting name, account number, and current balance.
Mortgage statement on any property owned in borrowers personal name reflecting name, property address, current balance, current interest rate, and current payment.
Line of credit statement on any property owned in the borrowers personal name reflecting: name, property address, current balance, current interest rate, current payment, and available balance.
Lease agreement for any rental properties.Clear copy of passport to include the signature page and picture page.

Two unique benefits of this lender are their rate renegotiation prior to closing and their loan modification process.The rate renegotiation is available to a client in the event that they lock their rate in but before closing rates drop. The borrower has the ability to renegotiate the rate to that day’s pricing with a modest premium paid.The loan modification process would come in to play should rates drop after the borrower has closed the loan.

There is a one time modification available to the borrower. It allows them to simply lower the rate with no documentation, appraisals or closing fees that a refinance would incur. It is one page that the client signs and it gets recorded behind the deed of trust. Again, a modest fee is paid for this privilege should the borrower elect to take advantage of it.Like all loan programs, there is no guarantee on how long this one will last.

So if you are a Canadian citizen who has been thinking about purchasing property in the States, call us right away so we can put you in touch with this lender. 702-985-7654 Once your financing is in place, we can find you a phenomenal STEAL on Las Vegas foreclosures! There are some incredible deals to be had in the Las Vegas high rise condo market.

Mos Def in Trouble

Why is it when celebrities come to Las Vegas, they inevitably end up in trouble with Metro? The big news of course has been the conviction of O J Simpson by a Nevada jury on 12 felony counts.

But he isn't the only celebrity (well, former in his case) that was wanted by Metro. Apparently rapper/actor Dante Smith aka "Mos Def" has an arrest warrant issued for malicious destruction of property and felony robbery. It all started in earlier this year in August, he threw a man's camera on the ground and then took it. Allegedly Mos Def mistook the camera's owner as a paparazzi. It turned ouf that the owner of the camera, Volker Corell, was a staff photographer for the Men's Apparel and Garment Industy Convention that was in town during that time.

If you wondering why its taken several months for charges to appear for such a serious issue, that's where it gets a little lame. According to Cornell, he cites an injury to his hand and private property...okay. Some how I thihk they will some kind of "settlement" coming around for the replacement of the camera.

Coincidentally, Mos Def has a new movie called Cadillac Records where he plays Chuck Berry on December 5th. There is no such thing as bad publicity...