Eagle Quest Properties

The Census Bureau today released the Report on Residential Vacancies and Homeownership. This data covered fourth quarter 2009.

From the release…

• National vacancy rates in the fourth quarter 2009 were 10.7 percent for rental housing and 2.7 percent for homeowner housing.
• The rental vacancy rate was higher than the fourth quarter 2008 rate 10.1 percent and not statistically different from the rate last quarter 11.1 percent.
• For homeowner vacancies, the current rate was not statistically different from the fourth quarter 2008 rate 2.9 percent or from the rate last quarter 2.6 percent.
• The homeownership rate at 67.2 percent for the current quarter was not statistically different from the fourth quarter 2008 rate 67.5 percent, but it was lower than last quarter’s rate 67.6 percent.

via Census Bureau: 130.6 Million Housing Units in the US; 18.9 Million are Vacant.

Personally, I think it’s more because of several reasons:

• more competition in the area…Michigan has a number of casinos now, but didn’t before
• Windsor’s downtown is dead, so less local business; nobody feels safe in downtown Windsor after dark
• a lot of people from what I understand have moved out of Windsor, looking for work
• a lot of jobs were lost because of GM and Chrysler’s bankruptcies, so less customers from both Windsor, Detroit and Flint areas
• the economy’s in the toilet, so less disposable income

I think the passport issue is just a red herring.  It’s not the real issue.  Rick Laporte just wants to blame it needlessly on George Bush Jr. because he happens to be an easy scapegoat.

More than 100 workers at Caesars Windsor were laid off Monday, and the union that represents them fears more job cuts are coming.

“We’re working with casino management … to try to save as many full-time jobs as we can. But if business doesn’t pick up, I suspect there are probably going to be more layoffs farther down the road,” said Rick Laporte, president of CAW Local 444.

All the people who received notice of their indefinite layoff worked in the casino’s food and beverage department.

Laporte said he believes the situation is the result of diminished business at Caesars Windsor because of the new U.S. passport requirement at the border.

via Caesars Windsor lays off 100 workers.

How large is Morgan Stanley’s exposure to commercial real estate? It’s very difficult to tell, actually.

As we learned during the horrors of 2008, there are so many ways for banks to hide their exposure to certain asset classes. In fact, many banks were so good at concealing their exposure that their own management had no idea what they owned.

This morning’s Wall Street Journal notes that Morgan Stanley has about $18 billion in exposure in just one unit–the institutional securities unit–to commercial real estate. Some of that might be hedged, although until we know how Morgan Stanley is hedging these risks that’s no much to go on. The days have long since passed when banks could simply announce a position was “hedged” or “hedged with CDS” and expect investors to feel reassured.

via Morgan Stanley’s Commercial Real Estate Portfolio Is The Worst On The Street.

Distress is piling up in the multifamily market, but it’s still not as bad the other real estate sectors, according to the most recent Troubled Assets Radar from Real Capital Analytics (RCA), a New York-based research firm that tracks commercial real estate.

According to the report, which measures assets in default, foreclosure, or bankruptcy, to date in 2009, 588 apartment communities, totaling $8.1 billion, fell into distress. Overall, 1,133 apartment communities, totaling $17.7 billion, were in trouble across the country.

Those numbers don’t surprise Debbie Corson, a principal at Atlanta-based Apartment Realty Advisors. “We’re getting a lot of calls and doing a lot of opinions of values for lenders, special servicers, and owners who are trying to figure out where the market is and what the value of these assets are,” she says.

via Multifamily Financial Distress Doubles – Distressed Assets – Multifamily Executive Magazine.

U.S. banks have been charging off soured commercial mortgages at the fastest pace in nearly 20 years, according to an analysis by The Wall Street Journal. At that rate, losses on loans used to finance offices, shopping malls, hotels, apartments and other commercial property could reach about $30 billion by the end of 2009.

The losses by regional banks on their commercial real-estate loans will be among the most watched details as thousands of banks report second-quarter results over the next two weeks. Many of the most troubled banks have heavy exposure to commercial real estate. So far, 57 banks …

via Commercial Loans Failing at Rapid Pace – WSJ.com.

The vacancy rate for U.S. apartments reached its highest level in more than 20 years in the second quarter and could soon exceed record highs if the recession persists, real estate research firm Reis Inc said.

The national vacancy rate rose to 7.5 percent, the highest since 1987 and an increase of 1.4 percentage points from last year, according to a report Reis released on Wednesday. The record high was 7.8 percent in 1986.

“We are reaching that historic high very quickly,” said Victor Calanog, Reis director of research.

via U.S. apartment vacancies near historic high: report | Reuters.

And therein lies the problem: Less employed workers means less discretionary spending, less homes being built, bought and sold, less trips or none to the local mall, less warehouses needed, less manufacturing, less transportation… all resulting in a big pullback in GDP.

Consumers are spending less, not more. When they do spend, it’s on staples: food, gas and clothing.

via How to invest real estate | The Commercial Real Estate Fallout: Profiting From the Death of the Shopping Mall – Contrarian Stock Market Investing News – Featuring Bargain Stocks.

By Ilaina Jonas

NEW YORK (Reuters) – The U.S. urban commercial real estate markets probably will not recover until 2017, the head analyst of commercial mortgages for Deutsche Bank Securities (DBKGn.DE: Quote, Profile, Research, Stock Buzz) said on Monday.

via No recovery for U.S. property markets until 2017 | Industry Summits | Reuters.

Chrysler US begins motions to reject 1/3 of all dealerships.

Credit Slips: The Footwear Begins to Fall.

We started looking at real estate investing when we were in Vancouver, Canada.  However, because of the prices and low rates of return for real estate in Vancouver, we looked elsewhere for real estate investments.  The proverbial grass is greener on the other side of the fence saying comes to mind, doesn’t it?

To keep the introduction short, we attended a number of real estate seminars on investing in residential real estate, multifamily investments (meaning two or more units), foreclosures, probate sales, auctions, etc.  By the time we’d attended so many seminars, we were tired of going to seminars, and we wanted to actually buy something.  We had completed a fair amount of research on the subject, and determined that Indianapolis was the best place in the USA to purchase cash flow properties.  So, we waited until our mentor, Jeff Schnitter (Robert Allen’s foreclosure expert) was having a bootcamp in Indianapolis on foreclosures.

We signed up for it as soon as we heard about it.  During the seminar, we found out they were doing field training in Indianapolis to buy property, so we signed up for that as well.  We both went out with different field trainers in Indianapolis (Julia went with the husband’s group, and I went with the wife’s group).  We learned a lot from our experience there.

Take a look at the pictures of the house.  You can see what it looked like before rehab.  What it looked like during rehab.  And what it looked like after rehab.