Why Are Church Properties in Detroit Now More Valuable?

The ability of taking one solid idea and having it lead to another is one of the best things about being involved in real estate. Many people benefit in many ways from a single action. What is even better is that you don't have to be the one that comes up with a brilliant idea. Putting yourself into a situation where you can learn ideas and build on them to benefit yourself and your team can be as valuable as originating a concept.

 

A great example of this is the (below linked) story about a group that has secured funding for the idea of creating situations which create revenue through business use for churches. It's a situation that helps get people off the streets and spreads the entrepreneurial style.

 

What does this have to do with real estate?

 

To me this has plenty to do with real estate. At this moment, there are a number of church properties for sale, while others are abandoned because a church moved to a better facility or went under. There are properties which could be converted into church (or other religious use) facilities and used for this purpose. Consider that a group just received $1.2 million in funding to implement the concept in Detroit, it's obvious that other people believe in this path.

 

Real estate investors in Detroit aware of this program likely realize that not many people are aware of this new program for small businesses. Knowing this, and finding actual or existing church properties could start them off with a new and viable opportunity. Brokers have a way to expand businesses looking to rent commercial property. Contractors could benefit by getting work renovating church interiors to support business use. The list goes on. 

 

One thing that stands out to me is that there is nothing to say this idea, including the ability to secure seven-figures of funding, is limited to Detroit. There is a lot to be said about getting the jump on an idea and being first. 

 

Let's discuss.

 

https://www.dbusiness.com/hustle-and-muscle-articles/churchspace-closes-1-2m-funding-round-moves-to-detroit/

 

 

Why Short-Term Rentals May Be Coming Up Short

I continue to talk with new investors that think short-term rentals is their best path for getting started in real estate despite the many challenges already in place. With short-term rentals, more than any other facet of real estate, there are so many factors which go above and beyond the property and the numbers.

 

Unfortunately, new research brings another challenge for those already involved with short-term rentals, especially in communities which cater to international travelers. Miami, Los Angeles, San Francisco, and NYC are among the more prominent examples. Fresh research shows the expected significant losses from international travelers not coming to the U.S.

 

Much of the hotel industry has already, and wisely, been on the attack, resulting in more "staycation" advertising and marketing campaigns to the public. However, short-term rental owners do not have that luxury. Advertising venues like Air BNB and VRBO will continue to generate revenue from communities which cater to domestic travel and not necessarily need to increase their campaign spending.

 

This research is a major example of why gathering ongoing research is so important in real estate. It could be a reason for an owner to sell or seek a long-term tenants rather than deal with the added challenges of a smaller audience of potential tenants. Meanwhile, it is possible that an individual or group with strong connections to continuing international travelers could pick up a bargain by purchasing a short-term rental property at this time.

 

There is more to it than making the numbers on the property work.

 

https://www.hospitalitynet.org/news/4127190.html

 

 

 

How Preparing A Real Estate Project Is Like Planning A Restaurant

Operating a restaurant business has plenty of similarities to investing in real estate, and that is without investing specifically in a restaurant property. There is so much more than the concept when you consider operating costs, employees, the menu, and the competition.

 

However, like with real estate, so much depends upon market conditions. Research shows how, in many communities, the economy has impacted the number of times many people are eating out. Some restaurants, especially chains, have integrated pick-ups into their primary operation. Others, however, were not geared toward having pick-up. This means that the menu offered is now only a part of the operation. Customers lose the experience of being there when they come in, grab their bag, and leave.

 

Real estate developing and investing is becoming the same way. The goal should be the solutions that a property or investment provides. Knowing who would buy or rent and their preferences is an important part to the potential for success.

 

Whether for a restaurant or a real estate project, the numbers need to work. However, these days, so does the methodology. I help create and enhance business plans. Keep in mind that investors and decision makers are not only looking at your proposal. Let's make your plan come to life.

 

https://www.nebraskanewsservice.net/news/a-changing-consumer-market-rising-food-cost-and-delivery-apps-how-the-restaurant-industry-is/article_5123650f-3e97-4da2-a825-c42afbb2e40a.html 

 

 

International Investors Are Not Stopping.......

One strategy for real estate investors is to gauge what other investors are, and are not, doing in terms of investing trends. Many, including myself, find it interesting that international investors continue to look at U.S. opportunities while many domestic investors are hesitant at this point in time.

 

It seems like I'm telling at least one valued client or connection every business day that "the opportunities there right now won't be there if and when rates or market conditions change". If loan rates are high right now, but the numbers work, you go in to a deal knowing that you can refinance when rates go down enough to make it worthwhile. You might even be able to cash out by that time. 

 

Newer trends are emerging, such as a greater emphasis on infrastructure, and the expanding need for data center properties. (I already have one client that knew to have some opportunities for data centers available for hungry buyers right now instead of "waiting to see what would happen".) While there are some legitimate concerns in the current market place, what it should mean is the need to expand researching to identify the "upcoming" real estate opportunities sooner instead of waiting until after the fact and facing fierce competition.

 

https://www.afire.org/survey/pulse14425/

 

 

 

Office To Apartment Conversions Start With Location

In real estate, if you are going to perform research on a concept, you need to go all in. The purpose is not to prove your theory. It is to gather enough data and information to be able to make an informed and unbiased decision. I recently had a coaching client tell me he did not need to research converting office space to apartments any further because he saw where doing so is not cost effective. Upon my query, he told me his finding was based on data for the large city closest to where he lives.

Although office space conversion may not be feasible in his area of concentration, his answer forced me to remind him that his research was not complete. My first question to him was “What is your intention?” Upon his silence, I expanded on my response. “What was your goal? Is it to find a location to do an office conversion? Or is it to find a good real estate investment within your local area?”

The answers to those questions go a long way in determining the next step. Those staying on top of the office space to residential trend know that some cities have solid opportunities for profit while others most definitely do not. It all depends on where you are looking, and that’s the point. 

Los Angeles needs the housing, but bureaucracy continues to make doing office to residential conversions too much of a challenge to adjust within the current climate. In Stamford, CT, developers are creating conversions even before legislators can keep up because there is so much demand and plenty of opportunities. In Pittsburgh, the city offers incentives and projects are affordable, but the demand for more housing is not enough to support the effort. Houston brings logistical concerns, such as office buildings not having enough parking sufficient for a large residential complex. 

There are plenty of situations where these conversions are appealing to all concerned, but it takes thorough research to find them. Meanwhile, there are plenty of cities with solid real estate development and investment opportunities, which may or may not involve conversions. Establishing clear goals is necessary before your research person or team begins to investigate. My client is another example of why you need a research person or team to help you make important choices.

 

https://propmodo.com/how-cities-are-turning-empty-offices-into-housing-and-what-it-really-takes-to-make-it-work/ 

 

 

A Taxing Commentary On How States Attract Businesses

Some states and municipalities clearly look at the short-term while others look to the long-term when it comes to generating revenue. It is not about geographic location, since there does not appear to be any regional trends.

 

The below linked article shows how corporate taxes have risen in Illinois at the same time there have been significant reductions in other states. Illinois is among the states that wants to generate revenue "today" from businesses located there, seemingly with little interest in attracting more companies to relocate or originate there.

 

Other states, including North Carolina, have reduced corporate taxes to encourage business growth. To compare, NC's decision has created 46 times more jobs than Illinois within the same time frame. More jobs also means more individual taxpayers supporting the state and local economies. 

 

I connect this to real estate developers and investors I talk with that tell me they are "too busy now to worry about a new project". What happens is that once their current "big" project either completes or falls through, THEN they begin to market and look for what's next.

 

Your best strategy is to include short-term AND long-term plans and goals and act upon them simultaneously. If you are not doing so currently, let's connect. There is no need to lose out on revenue just because your current project has ended.

 

https://www.illinoispolicy.org/corporate-income-taxes-have-stifled-illinois-pandemic-recovery/

 

Why A Multi-Million Dollar Build Is Halted In Progress

Research and tracking should not stop once a real estate project is underway. There are situations where changes can be made on the fly, even when millions of dollars are involved. It's easy to "set it and forget it", but I can't emphasize how often staying on top of the situation can make a huge impact on your project.

 

At this time, a multi-million dollar multi-family construction project in Jersey City is on hold even though it is underway. The reason is not because of rising construction costs, supply chain issues, labor challenges, financing concerns, or weather.  It seems the city recently adjusted its allowances for affordable housing, which took place after this project was planned.

 

Because of these changes, the structure could now be 20 stories higher! The developer obviously feels it is worth waiting on approval from the city and revising the construction plans, materials acquisition, and its timetable for completion because of the significant additional income possibilities an approval would create.

 

I'm not saying that we should see numerous projects stopped based on the potential for additions and changes. If the developer of this project does not get approval, or if the numbers for adding do not add up, this delay could prove costly for the short term.

 

However, if approval is granted by Jersey City and the additional 20 stories are built, the long-term additional gain will make these delays extremely worthwhile. It will have been a brilliant decision to do so. Yet, if the developer was not on top of the new allowances to create more housing and went ahead with the intended project, they would have lost a significant long-term revenue opportunity. One more time. Signing on the dotted line should not mean that research and due diligence should stop.

 

https://jerseydigs.com/imperial-tower-jersey-city-expansion  

How A Little Rock Could Be A Big Opportunity

Seeing that approval has been granted to a "mystery developer" for a $1 billion data center brings several elements to my attention. These are things for a real estate developer, investor, broker, or contractor to be aware of while researching and planning ahead.

 

I continue to preach the importance of pursuing the "next" project(s) no matter how busy things are at the current moment. There is not one source of information that could help you toward your next big deal. That's the point. The deal in the article linked below is planned for Little Rock, AR. I'm sure some people have stopped reading this upon seeing it's about Little Rock. However, it is really not.

 

The big takeaways should be the significant incentives this "mystery" developer is able to take advantage of. Little Rock wants this data center, with reasons ranging from the need to keep up with other large municipalities to the 50+ jobs it will create once completed.  

 

This developer gets a 65% property tax reduction over 30 years! In addition, the tax break threshold was reduced, for this project, from $500 million to $100 million. 

 

Little Rock is doing a great job of attracting something that will greatly benefit the municipality for years to come by doing what it takes to make it work for all concerned. However, Little Rock can't be the only municipality that would make these concessions. Having "proof" that such measures can be done to make a huge real estate development beneficial for all concerned is a great start for where opportunities and proposals come from.

 

Those that bypassed the story "because it is Little Rock" might be missing out on a huge opportunity for the future.

 

 

https://www.datacenterdynamics.com/en/news/mystery-developer-plans-1bn-data-center-in-little-rock-arkansas/