Everything to Know About Pre-Foreclosure Home Investing

As the world continues to struggle with the COVID-198 pandemic, most media outlets seem focused on a looming eviction crisis. Fewer journalists seem interested in a potential foreclosure surge in the US. The number of foreclosure and pre-foreclosure homes seems lower in 2021 than in 2020, but few programs exist to prevent a crisis from emerging.The good news is that knowing how to identify a pre-foreclosure home gives real estate investors opportunities to purchase properties at low prices. Before you spend any money on a property, take a few minutes to read this guide to pre-foreclosure home investing.

What Is a Pre-Foreclosure Home?

A home typically enters pre-foreclosure when the owner misses two mortgage payments. It’s a formal legal proceeding that happens at the beginning of the foreclosure process. If the property owner cannot meet their financial obligations to the lender, that person will default on the mortgage, giving the lender an opportunity to take possession of the home and sell it to recover their money.The steps between pre-foreclosure and foreclosure can take several months, especially when the homeowner takes steps to repay the debt or seeks protection from the courts.

Types of Pre-Foreclosure Home Sales

A home enters pre-foreclosure when the mortgage lender notifies the borrower that they have defaulted on the loan. At this point, many owners realize that they cannot catch up on the missed payments and penalties. Even if they can, they might not have enough income to continue paying the mortgage. When people realize this, they often decide that they would rather sell the property than lose it to the lender and damage their credit history.There are actually several types of pre-foreclosure home sales and related situations you should know about.

  • Pre-Foreclosure sale –[/b] With a standard pre-foreclosure sale, you could purchase the property simply by paying the mortgage’s remaining balance. Spend some time negotiating with the owner and lender, though, to get the best possible deal.
  • Short sale – [/b]Not all short sales are pre-foreclosure homes. Some of them are simply “underwater,” meaning that the home’s value is less than the remaining mortgage balance. In this situation, you will typically need to purchase the property with a single payment.
  • Auction sale –[/b] If no one buys the property before foreclosure, it usually goes to an auction. The money raised by the auction goes toward repaying the mortgage, and the highest bidder takes possession of the house. Again, expect to pay a lump sum to the auctioneer.
  • Bank-owned property sale –[/b] In the worst-case scenario for homeowners, the bank takes possession of the property and lists it for sale. Many banks have departments dedicated to taking possession and selling properties. The bank will likely expect a single payment instead of letting you finance the purchase.

Pre-Foreclosure Homes Could Present Opportunities to Real Estate Investors

It’s important to remember that you can get a great deal on a home at any point after the pre-foreclosure process begins. Ideally, you should purchase a pre-foreclosure home before it turns into a short sale, auction sale or bank-owned sale. With a pre-foreclosure, you don’t have nearly as much red tape to deal with. Purchases often happen quickly and smoothly. Plus, you get to help someone experiencing financial hardship get out of a bad situation (while collecting a property that could help you turn a profit).The amount of money that you can save buying a pre-foreclosure home depends on several factors, including location and how much money it costs to repay the mortgage. Keep in mind that you don’t necessarily have to pay the asking price. You should begin the negotiating process by offering about 20 percent under the breakeven point.If you need to borrow money to purchase the property, the interest rate will cut into your profits. Negotiate for a low rate so you can get a higher ROI and keep your payments affordable.

Pros and Cons of Buying Pre-Foreclosure Homes

Pros of Buying a Pre-Foreclosure Home

  • You can get the property at a lower price, which leads to a high return on your investment.
  • You have more power in the negotiating process.
  • You can use a low-interest mortgage to help fund the purchase.
  • You can view the properties in person before deciding whether you want to buy, an opportunity you lose once the home reaches the auction stage.
  • You could earn money quickly by selling the home or renting it for long-term investment.

Cons of Buying a Pre-Foreclosure Home

  • You might need to spend time and money rehabbing the property before you can rent or sell it.
  • Unpaid taxes and liens could complicate the purchasing process.
  • It can take a lot of research to find a good foreclosure investment opportunity.

Identify More Pre-Foreclosure Homes With ProspectNow

ProspectNow makes it much easier to find pre-foreclosure homes in your area. The database includes information about more than 100 million residential properties. The platform identifies which listings are pre-foreclosures, so you can focus on investment opportunities that interest you.Other benefits of becoming a ProspectNow member include:

  • Accurate contact information for the actual property owner capable of making decisions (even when an organization lists its name as the owner).
  • Predictive analytics that help you determine which residential properties will probably enter the pre-foreclosure, foreclosure and other stages of repossession.
  • A frequently updated database that gives you an accurate view of your area’s real estate market.

Many independent investors and investment groups find that ProspectNow helps them earn higher ROIs while spending less time on lead generation. You don’t have to make any financial commitments to determine whether ProspectNow meets your needs, though. You can start a free trial to experience the platform. When the free trial ends, you can choose a monthly membership that doesn’t require any long-term commitments.Find more preforeclosure homes that make excellent investment opportunities by starting your free trial with ProspectNow.

7 Signs of a Great Commercial Real Estate Website

Building a great commercial real estate website can make it easier for your agency to connect with potential clients and close more deals. Perhaps best of all, websites can do a lot of the work for you. Instead of talking directly to people who may or may not want to pursue properties seriously, you let your online listings fill some of that role.

Unfortunately, not all commercial real estate websites have the features that they need to attract traffic and get people interested in properties. If you want to get more out of your website, make sure it has the following features.

Great Real Estate Websites Let Visitors Filter Listings

Your commercial real estate website should let people browse the properties that you represent. You may need to talk to a website developer to make this feature work well for you and your clients since it involves connecting a database to your site. The database, however, will help you save time while giving interested buyers the information they need.

You don’t want to force clients to search through every listing before they find something that appeals to them. Adding several filters will help people focus on the types of properties that appeal to them. Some of the filters you might want to use include:

  • Price
  • Size
  • Location
  • Asset Type
  • Building & Lot

You might want to include subcategories, too. For example, clicking Asset Type could open a more detailed list with filters like:

  • Office Buildings
  • Retail
  • Restaurants
  • Hospitality
  • Industrial
  • Mixed-Use
  • Multifamily Residences

The more specific you can get, the easier your clients can find the properties that match their unique needs.

They Provide a Lot of Information About Listed Properties

Commercial real estate websites should also provide as much information as possible about their property listings. Ideally, you can provide information about each property’s:

  • Land acreage
  • Building height
  • Building class (A, B, or C)
  • Tenancy
  • Year built
  • Sale type
  • Parking
  • Zoning
  • Size
  • Frontage
  • Building FAR (Floor Area Ratio)

You can make commercial properties more attractive by adding a paragraph or two that describes their features. A straightforward list helps, but some people will respond better to evocative language. By highlighting the property’s positive attributes online, you can get clients in a positive mindset before they even visit the site.

The Most Effective Sites Make It Easy to Share Content

People browsing commercial real estate websites usually want to buy, lease, or invest in property. They don’t always find what they want, but they might discover listings that they think will interest their business partners.

Websites and their listings become more effective when you make content easy to share. Consider adding features that will let visitors share directly to social media platforms like Facebook and Twitter. You can also add an email icon that will automatically generate a message and link. That way, the visitor only needs to add their partner’s email address to send the information.

The easier you make it for people to share content on your commercial real estate website, the more often they will do it.

The Site Lets Visitors Use Multiple Media Formats to Explore Properties

According to the National Association of Realtors, the free most valuable features that you can add to your website include photos, detailed information about the properties, and floor plans.

Don’t let this short list limit the types of media you use to show off your favorite properties. Instead, try to engage your site’s visitors with more innovative media options like videos and 3-dimensional walkthroughs.

A 3D walkthrough will take the most time and money to create, so you might want to reserve it for high-priced commercial properties. A video, however, doesn’t have to require many resources. Your smartphone probably has most of the tools that you need to take attractive videos. Then, you have someone edit the footage and maybe add a pleasant soundtrack to improve the production value.

The Website Removes Properties as Soon as They Get Sold

Your commercial real estate website needs to list all of your available properties for sale. It’s equally important to remove property listings as soon as they get sold. If you leave listings in the database, you could mislead potential clients and investors. The result will make your agency look unprofessional. You might also find yourself responding to phone calls and emails about properties that have already been sold. That’s a waste of time that doesn’t serve anyone.

The Commercial Real Estate Website Has the Newest Listings

As soon as you know that you have permission to represent a commercial property, you need to get the listing added to your website. The faster you add the listing, the more likely it is that you will attract interested buyers. You never know when someone will visit your site. If you wait so much as half a day, you could miss the perfect client.

Improve your Commercial Real Estate Website With Help From ProspectNow

ProspectNow can help you turn a mediocre commercial real estate website into a great site that helps people properties that truly interest them.

Once you get started with ProspectNow, you can access a database that includes over 40 million apartment and commercial properties. Use the database to identify interesting real estate in your area. Since the database includes the name and contact information of each property’s decision-maker, you can reach out to the current owner or lessee to ask about representing them.

You can even use ProspectNow to learn about a business’s SIC code, revenue, number of employees, and other information that can help you target potential buyers.

You don’t have to commit to a membership today. Sign up for a free trial so you can determine whether ProspectNow has the features that you need to make your website more useful.

 

Fraud Prevention: How to Protect Your Clients from Wire Fraud

Javelin Strategy and Research firm conducted a 2021 study into identity fraud and found that last year alone, 49 million American consumers fell victim to this crime. What is more, fraudsters amassed $56 billion by targeting the American public. Most losses came from identity theft, and around a quarter came from conventional identity fraud. The latter is when cybercriminals attain personal information which they can use for monetary gains. 

Scammers who typically infiltrate and access business emails have hit the business sector even harder. In 2020 firms lost a staggering $1.8 trillion collectively through this crime. Business Email Compromise or (BEC), as it is commonly known, is a growing problem for firms, but specifically for the realtor sector. This is because properties have a high ticket value. If fraudsters gain access to correspondence emails, their rewards can be significant.

Since the pandemic, more firms have been conducting business online because of the restrictions. This has meant that requests for wire transfers have been considerably greater. However, it has also got the attention of opportunistic cybercriminals. 

Tom Cronkright, who is a CEO of a firm that specializes in preventing real estate wire fraud, says consumers expect to make online payments. He mentions it is not uncommon for people to think that there is nothing suspicious about wiring funds through an email. Sadly, it’s this sentiment that is fueling cyber-crime.

Although, with the right wire fraud prevention advice, people can reduce the likelihood of being vulnerable to these types of cyberattacks.

You can help your clients by educating them on the methods scammers use and the measures they can take to reduce the likelihood of falling victim to cyber-crime.

What is Wire Fraud?

According to JPMorgan Chase and co, Wire fraud is any fraudulent activity that occurs over interstate wire communications, which includes the telephone and internet.

Sometimes, fraudsters may call and pretend to be someone they are not to trick the target into sending money electronically. Although, the preferred method for cybercriminals is email because they can target many individuals and businesses simultaneously. 

Wire Fraud Methods Used by Cybercriminals

Cybercriminals use various tactics to commit wire fraud. Here are the four primary methods:  

Phishing 

Fraudsters send emails that appear to be from a trusted source like a bank or company, for instance. Then they aim to direct the recipient to a false website that looks authentic. If the target enters their details, criminals can use that information to steal money. 

Voice Phishing and SMS Phishing

Cybercriminals use voice calls or messages to trick their intended targets. It may involve both live or automated calls or a text message. The content of the call or text message is typically intimidating as the intention is to cause alarm and to prompt the recipient into taking immediate action. For instance, the scammer might make an email look like it’s from the recipient’s bank, warning them they will freeze their account unless they respond immediately. If the intended target then follows the scammer’s instructions, they could access the target’s bank account. 

Malware 

This type of software damages a computer by infecting the operating system. It often occurs when someone opens a dishonest email or clicks on a link that directs the target to a malware website.

Email Account Compromise 

As the name suggests, hackers use this method to access the targeted email account. They achieve this by either using stolen data or by creating domains that look almost identical to the authentic ones. Phishing and spam tactics are also used to gain access to email accounts. In this scenario, fraudsters aim to make the email look genuine by posing as an authority figure like an executive officer.

Wire Fraud Prevention

Conveyancing fraud is on the increase, but here are three things you can advise your clients on to prevent them from falling victim to a scam.

1. Protect Personal Identity

Encourage clients to protect their personal information by ensuring that their digital devices are using the latest operating system. This means doing software updates when necessary and using a virtual private network (VPN) to increase online security. 

Also, make them aware that it’s unlikely that a legitimate caller would ask for personal details over the phone. Before discarding any other forms of personal correspondence like physical letters, it is wise to shred them. Email passwords should be unique. If a client uses the same password for all their accounts, one security breach could lead to many. 

2. Identify Key People 

Be sure to mention who the key people are in the home buying process. If possible, introduce any significant people to the client directly so that they know who they are. If this is not possible, advise your client to ask their lawyers for their contact details as soon as they hire them. This way, they will recognize the phone number and email address when the lawyer makes contact. 

3. Protect Payments

The best way to protect payments is to identify the person who will receive the money. If it is a solicitor, for instance, send a small amount of money to their account and wait for them to confirm that they have received it before wiring larger funds. For added security, talk to them just before and as you are sending over the money.

Wire fraud prevention methods can reduce your likelihood of falling victim to a scam.

Fraud Detection and Response

If you suspect or know that a client is a victim of wire fraud, encourage them to act quickly. When you report fraud within 24 hours, sometimes the banks can recall the wire transfer. Although, this is not a guarantee that they will return the funds, around a third of wire fraud victims will have their funds recovered.

As a broker or investor, you can help to protect your clients by informing them of wire fraud prevention procedures.

 

A Crash Course on Social Media Marketing for Real Estate Agents

A 2018 report from the National Association of REALTORS Research Group reports that 77% of real estate businesses use social media. The vast majority (97%) use Facebook. Other popular platforms include LinkedIn (59%) and Instagram (39%).

Using social media, however, doesn’t necessarily mean that agents know how to make the most of their interactions. The following crash course on social media marketing for real estate agents will provide some essential tips that agents can use to grow their client lists, attract interest in properties, and close more sales.

Research Your Target Audience’s Needs and Motivations

Social media marketing for real estate agents works best when agents understand the needs and motivations of their target market. If your clients want to buy multi-million dollar homes, it doesn’t make sense for you to post content about affordable housing.

The more you know about your clients, the more effective you can make your social media campaigns. Take time to learn about your audience or you will waste time and energy sharing posts that don’t motivate your clients.

Take a Strategic Approach by Setting and Adjusting Goals

Social media accounts let you track how many interactions and impressions your posts receive. Taking a strategic approach to social media marketing for real estate agents will help you determine what types of posts work best for you. Over time, you may decide that you want to adjust your approach to publishing content.

If you have a professional website or blog, you can use data from your publishing platform to decide which posts drive traffic to your site.

Make data a priority. Ideally, some experimentation will lead you to a social media strategy that helps you sell more properties. When you don’t get the results you want, take a step back to decide whether you need to change your strategy or stop wasting time on social media.

Learn What Types of Content Perform Best on Different Platforms

Different social media platforms excel at sharing certain types of content. Generally, you should:

  • Share curated content (article summaries, guest posts, etc.) and videos on Facebook.
  • High-resolution photos of houses, commercial properties, and land on Instagram.
  • Thought leadership content intended to attract attention from other real estate professionals on LinkedIn.

Trends can change quickly, so pay close attention to the ways that successful real estate agents use their social media accounts. Don’t hesitate to follow a strategy that works well for someone else.

Use Hashtags to Help People Find Your Posts

Hashtags play an important role in helping social media users find posts that interest them. For example, a person who wants to buy an apartment in Los Angeles might search for the hashtag “#LAapartments” or “#LARentals.”

Plenty of online tools can help you research trending hashtags. You don’t have to spend money on a hashtag research service, though. Before you publish a post, read the tending hashtags in your market. You should also look at the hashtags your colleagues and competitors use. Who says you have to create an original hashtag for every post?

Write Captivating Copy That Will Encourage People to Click Links

Don’t share boring content on social media. With the wealth of information available online, no one will pay attention to lackluster posts. Social media marketing for real estate agents should include beautiful photographs of properties, calls to action to visit property profiles, and engaging descriptions of property amenities.

If one of the homes you want to sell has a stained glass window with an interesting history, share a picture of the window and tell its story. The combination will captivate people and encourage them to engage with the post. You might find the right buyer for that property online.

Respond to the People Who Interact With Your Posts

Real estate is an extremely social industry. Successful agents know how to get along with diverse people, read body language, and pay attention to subtle communications.

You need to bring that same perspective to social media. When someone interacts with your posts, you should repay the kindness. You don’t have to provide a full reply, but you should at least “like” the response. It shows that you pay attention to your account and take an interest in other people.

Use Tools to Schedule Your Social Media Posts

Consistent posting can help your social media account attract a larger following. Since real estate agents spend a lot of time working outside of their offices, they can’t always think about making content and posting it at times when their audiences are online.

You can make consistent social media marketing for real estate agents easier by adopting a tool that lets you schedule when your posts get published. Popular options include:

Explore plans offered by these services to find the prices and features that appeal to you. Once you sign up, spend some time one or two days per week creating social media posts and scheduling when they will get published.

Post Content About Emerging Trends in Your Area

As local trends evolve, social media marketing for real estate agents should also change. ProspectNow can help you stay ahead of emerging trends by giving you predictive analytics about residential and commercial properties. The database and its tools can help you focus on the latest properties to hit the market.

You can also predict which properties owners might want to sell soon. Reach out to them so you can get ahead of your competitors. ProspectNow includes the contact info of owners, so you won’t have to contact government offices.

Learn more about how ProspectNow can improve social media marketing for real estate agents by signing up for a free trial. If it works for you, you can choose a membership that makes social media more effective and leads to higher revenues.

 

 

 

A Quick Guide to Finding Bank Owned Commercial

Finding bank owned commercial properties for sale can give you a low-cost way to enter the commercial real estate market. Banks often gain control of commercial properties when investors can’t repay their loans. Banks don’t want to hold the real estate any longer than necessary. They want to sell the commercial properties so they can cover the rest of the mortgage. This creates a unique opportunity for you to find commercial real estate at below-market prices.

Use this quick guide to help you find bank owned commercial properties that you can use to earn a quick profit or generate ongoing income. Some options take more time and effort than others, so choose the one that works best for you.

Contact Banks to Get Information About Commercial Properties They Own

Many banks have real estate departments that will help you learn more about the properties they have for sale. Try reaching out to institutions like US BankWells FargoChase Bank, and Citibank.

Expect it to take some time for you to get information from banks. They want to sell the properties, but it’s not a top priority for them because banks make most of their money from mortgages and other loans.

Once you get a list of bank owned commercial properties, you may need to do some extra research to decide which ones interest you. Some bank listings will give you a lot of information. Other listings are a bit sparse. At the very least, you should plan to visit the location to make sure it seems like a good investment for you.

Attend Local Real Estate Auctions to Find Bank Owned Commercial Properties

If you don’t want to talk to individual banks about the properties they own, you can attend foreclosure auctions in your area. Foreclosure auctions give you a relatively easy way to bid on several bank owned commercial properties.

While real estate and foreclose auctions have benefits, they also present some challenges. You will not have an opportunity to inspect the property before you bid. You have to make a decision based on information provided by the auctioneer. Ideally, the bank will give accurate information that helps you make a good decision. You may get some unwanted surprises, though, when you visit the property you purchased.

A foreclosure auction may also require all-cash payments. Banks have already been through the foreclosure process once with the property, so they don’t want to do it again. If you don’t have the capital to outbid other investors, then you probably won’t have the option to buy the properties that interest you most.

If you can’t attend bank auctions in person, you can use a foreclosure agent who knows the area and has existing relationships with banks.

Browse a Commercial Real Estate Database That Lists Bank Owned Properties

Online listings of bank owned commercial properties give you the easiest way to explore investment opportunities. An updated database will show the most recent commercial real estate for sale in your area. You can filter the listings to focus on the ones currently owned by banks.

You also get other benefits from browsing properties on an online database. For example, you can focus your search on specific types of commercial real estate, including:

  • Offices.
  • Retail spaces.
  • Industrial sites.
  • Hotels.
  • Multifamily residences.

You can also learn details about each property’s characteristics.

By using an online commercial real estate database, you save time and get more of the information you need to choose a property that fits your investment needs.

Use ProspectNow to Find Bank Owned Commercial Properties for Sale

ProspectNow’s online database lets you search for properties by owner. That makes it easy for you to focus on commercial real estate owned by banks.

You can also use ProspectNow’s predictive analytics to stay ahead of the market. Is a retail store or apartment complex close to foreclosure? Contact the bank now so you can make an early offer. ProspectNow’s ROI calculator will even help you determine whether you should make an offer on a bank owned property.

Get started with ProspectNow so you can discover bank owned commercial properties that you can buy to resell or rent to tenants.

 

 

 

Chinese Investment in U.S. Commercial Real Estate: Everything You Need to Know

The U.S. commercial real estate (CRE) industry is a complicated landscape that shifts often. COVID-19 has put a lot of pressure on owners who cannot attract retail and business tenants. Many foreign investors in U.S. commercial real estate worry that they will lose money before the industry recovers.

As one of the largest foreign investors in U.S. CRE, Chinese companies and individuals have dramatically altered their approach to buying and selling real estate in the United States. Let’s dive into the recent history and emerging trends influencing Chinese investment in U.S. commercial real estate. The more you know, the more easily you can position yourself to profit from the situation.

China Owned More U.S. Commercial Real Estate Than Other Foreign Countries Pre-Pandemic

China stands out as the largest foreign investor in U.S. commercial real estate. In 2018, Chinese investors accounted for 21 percent of foreign U.S. commercial property buyers. Canada came in at a distant second with 7 percent. Mexico, Germany, Italy, Israel, United Kingdom, Venezuela, and Vietnam all tied for third place at 5 percent.

Interestingly, the increased percentage of Chinese purchases went against the general trend of American CRE’s foreign ownership. In 2016, foreign investors spent $7.9 trillion on U.S. commercial real estate. In 2017, the amount fell to $6.7 billion. It declined even further in 2018 to $4.8 billion.

Since the beginning of 2019, as the COVID-19 pandemic adversely affected economies worldwide, China has spent less money on U.S. real estate. Even during such an uncertain time, the sudden shift in strategy has taken many CRE investors by surprise.

Why Chinese Investors Purchase U.S. Commercial Real Estate

Chinese investors started selling much of their U.S. commercial real estate in March 2020. The sales have potentially opened opportunities for domestic investors. They have also revealed how deeply Chinese companies had built inroads into the American economy.

Some American investors and real estate developers, including Paul Murad of the real estate firm Metroplex, says that “Chinese firms have access to what seems like infinite government lending.” He worries that Chinese firms’ financial capabilities have helped the country’s leaders become so enmeshed with American business leaders that they have an unfair advantage when negotiating with the U.S. government.

Whether this is true or an unfounded conspiracy mattered much less in 2020, when China loosened its influence on American CRE. Still, it’s important to note that Chinese firms still own major food, entertainment, technology, and medical companies throughout North America.

Chinese Firms Selling More U.S. Commercial Real Estate Before and During the Pandemic

Anyone convinced that China has been using commercial property as a way to grow its influence around the world has a much harder time making that argument successfully in 2021. Even before the pandemic disrupted the global economy, China started selling properties as financial returns fell. The Wall Street Journal reports that “Chinese investors sold off billions more in U.S. commercial property last year than they bought.”

Other foreign investors followed the trend. Still, the Chinese were the largest sellers of retail centers, hotels, and office towers. In 2020, Chinese firms sold $20 billion more U.S. commercial real estate than they bought in 2019.

The reason behind these sales seems fairly obvious when one looks at the ROI Chinese investors were receiving. In 2010, Chinese companies saw a 20% gain in property prices. As the economy recovered from the Great Recession, CRE prices surged and made a lot of money for investors. In 2019, CRE prices increased a mere 2.5%. During the last quarter of 2019, prices only went up 1.1%.

It’s easy to see why foreign investors would want to pull out of the market and take their profits home.

Buying Commercial Property Owned by Chinese Firms

Chinese firms do not seem desperate to unload commercial properties in the U.S.. They are, however, unloading properties as shopping centers and offices lose tenants. Without reliable monthly revenues, it doesn’t make sense for the investors to retain ownership of U.S. properties. At the same time, investors who bought U.S. commercial properties a decade ago know that they still have time to make profits by selling their real estate.

What probably matters more than anything is the continued disruption caused by COVID-19. Chinese investors might have some time to wait, but they also know that commercial real estate prices will probably continue to fall for a few years. Now might seem like the perfect opportunity to sell.

You can take advantage of this opportunity by focusing on off-market properties. Identifying off-market properties gives you a chance to put yourself first in line when the owner wants to sell. Owners who haven’t thought seriously about selling may change their mind when they hear your offer.

Some of your options for connecting with off-market properties owned by Chinese firms include:

  • Networking with attorneys
  • Reviewing public records
  • Talking to local builders
  • Tapping into a database with predictive analytic features

Stay Ahead of U.S. Commercial Real Estate Investors With ProspectNow

Real estate investors need to stay ahead of emerging trends to make decisions that will lead help them make informed choices that lead to profits. ProspectNow has a database that lists more than 40 million apartment and commercial properties. This CRE platform has been an essential tool for real estate investors for more than a decade.

ProspectNow uses predictive analytics to pinpoint properties likely to enter the market soon. Predictive analytics looks at a broad range of variables to determine whether someone will want to sell their commercial property. Once identified, you get detailed property characteristics and contact information so you can reach out to the current owners.

Get started with ProspectNow to take advantage of our most sophisticated predictive analytics and updated database. The next time a Chinese firm plans to sell a commercial property, you’ll have information that lets you get involved before your competitors.

 

4 Reasons You Need a Commercial Real Estate API

The real estate industry continues growing faster than many sectors. According to Newmark, remote working has caused office space demand to sink – yet technology, life sciences, and medical retail are segments seeing expanded growth meaning an explosion of need in Class A – Industrial buildings. The need for a commercial real estate API continues growing.

This is due, in part, to more commercial real estate (CRE) investors seeking ‘smarter’ buildings. Tech use and adoption isn’t just on the rise – it’s here. What does this mean for commercial real estate agents and brokers? For software developers? As competition grows stiffer, commercial real estate APIs won’t be a nice-to-have – they’ll be the norm. These data APIs can save time and help you meet investors’ and buyers’ needs.

It Starts with One Thing – Data

Before we delve into APIs, you need to know what they’re made of – data. Property details and other real estate data are the building blocks of real estate APIs. The source of this data is your first objective before you begin development. Interested individuals searching your site or app are looking for specific types of information when they browse your real estate listings during a property search.

They might look for things like:

  • Walk score
  • Points of interest
  • Median property value
  • Crime rate
  • Average lease length
  • Lot size
  • Parking
  • Amenities
  • City, state, or country
  • Property owner information

So, where do you find that data? And how will you use it?

What is a Commercial Real Estate API?

Today’s internet-based world calls for robust data – it’s no different for the real estate industry. To create your own real estate API, you need a developer schooled in Artificial Intelligence (AI) and machine learning. They can use algorithms that can interpret data sets quickly, providing increasingly accurate models. Whether you’re a newbie or an experienced agent, broker, or investor, this can seem like a long-distance race where the finish line is perpetually moved farther away. What if you could automate this data collection?

You can with an API.

So, what’s an API, exactly? The acronym stands for application program interface. It’s a tool used in software that’s basically a ‘translator’ of sorts. It takes data produced by one app and helps deliver it to another app. An API retrieves the requested information, packages it, and delivers it to the requesting application. This improves speed and creates a much more agile environment for associated programs.

Think of it like this:

You’re at your favorite restaurant. You basically know what you want, but you’re scouring the menu anyway. Your waitress is the API.

You’re the “app” that knows what food you want. The kitchen is the “app” that prepares that food.

The kitchen can’t prepare the food before it knows what you’re ordering, even if you’ve been there dozens of times. This is where your waitress API comes in. The waitress takes your order, alerts the kitchen which meal to prepare, and then delivers it when it’s ready.

How does this apply to commercial real estate? Consider CRE investors. They likely use the internet to search for investment properties. Just like the restaurant scenario, they’ve got several “food” options. They choose their potential market based on things like their budget or the investment property type they’re interested in. When they enter this information, they’re telling the “kitchen” what they want and asking to see if they have that in stock. The property API matches the request with available stock and returns the requested type of listings, whether the investor is looking for properties in the United States or elsewhere.

4 Reasons Why You Should Adopt a Commercial Real Estate API

Commercial real estate APIs are unique in the sense that they simplify the transfer of data. They’re the gatekeepers of property data and have rules for property listing retrieval. Using an API provides significant advantages. Some of the most important reasons why you should have a real estate API include:

  1. The processes used to retrieve information are housed in one tiny component
  2. Data retrieval is simplified
  3. Rather than coding to a database, information is coded to the CRE API
  4. Offers flexibility to software developers and real estate agents

Still not convinced?

How are you housing property data now? Are you copy/pasting listings from the MLS to your website or server?

Not only is this extremely time consuming, but you run such risks as:

  • Incorrect information
  • Increased hosting fees
  • Compliance difficulties

Now, this doesn’t mean you can’t replicate data on your website – this can actually boost your SEO. But doing so for each listing you want to make available for prospects and clients simply isn’t feasible, can lead to listing incorrect pricing or other information, and overall costs more time and money in the long run.

Advantages of ProspectNow’s API

Every real estate transaction begins with the hunt. ProspectNow is the perfect Realtors’ property resource. There are various APIs you can add to your site, such as:

  • Google Maps API
  • Zillow API
  • Restful API

The ProspectNow commercial real estate API key portal offers you the tools you need to set up our proprietary API for your prospects’ or clients’ use. Using our API Console, you can add all – or just a little – of our database information to your system. At the console, you’ll find API keys for practically anything someone might search for on your site, such as:

  • National property search
  • All MLS listings associated with a property
  • All properties owned by a specific owner
  • Owners’ email addresses
  • Foreclosure history

ProspectNow has helped investors, brokers, and agents like you since 2008. Ready to find more leads, close more deals, and make more money?

The Smallest Multifamily Properties With the Highest Cash Flow

As more people look to real estate for passive income streams, smaller multifamily properties show promise as investments.

New statistics show that homeownership is in decline. Forbes’ data showed that 78% of families could afford to buy a home with their incomes and interest rates in 2012. By the latter half of 2018, that number dwindled to 56%. While renting in some parts of the country can be more expensive in the long term, homeownership has a massive entry barrier in terms of down payments, closing costs, and so on. Because of this, more and more households turn to rent. This means there is a greater demand for landlords.

A beginner or small-time investor can secure a decent source of income by purchasing small properties to rent out to tenants. Here’s why you should consider multifamily property investing.

Why Invest in Small Multifamily Properties?

Multifamily properties allow you to pull from multiple income streams from one building. There are a few advantages of investing in multifamily properties over single-family homes. 

Mortgage lenders tend to follow Fannie Mae and Freddie Mac’s guidelines and limit investors to ten mortgages at a time. This will limit your ability to buy investment properties unless you’re already sitting on a mountain of cash. Multifamily property investing lets you maximize your mortgage limit. A portfolio of ten quadplexes looks more attractive from a cash flow standpoint than ten homes designed for one family each.

There are cost advantages associated with multifamily homes compared to single-family ones. Multifamily properties tend to have a lower price per unit. So even if they come with a larger upfront price tag, a quadplex building for four families will fetch a lower cost than four single-family homes. 

You’ll also have the rent of four households to cover expenses and the mortgage of your property instead of one household per mortgage. Turnover will be less painful in a multifamily property, as the other households give you a safety net you won’t find in single-family properties.

The economy of scale also comes into play when you factor in the costs of maintenance and repairs. In the event of a natural disaster, for instance, you’ll be able to fix the roof of that quadplex for a lower price than you would if fixing the roofs of four separate houses.

This style of property is often less competitive than the single-family homes that prospective homeowners and investors alike are quick to scoop up. However, the nature of multifamily properties means they’re almost always bought as an investment.

Multifamily property investing gives you a chance to grow your portfolio quickly. Buying one quadplex and filling it with four tenants means you added four revenue streams to your portfolio. You’d have to buy four houses to match that in a single-family home.

Finding Properties for Investment

Location

People are moving away from “24-hour cities” like New York and Los Angeles in favor of suburbs and quieter cities. This is even more true now in our post-pandemic world as more workers adjust to a work-from-home lifestyle. So-called 18-hour cities give people the best of both worlds as they can experience the hustle and bustle of city life with a more affordable cost of living. Cities like the following are seeing a lot more growth as a result:

  • Columbia, South Carolina
  • Kansas City, Missouri
  • Tucson, Arizona
  • Chattanooga, Tennessee

18-hour cities like the above are an excellent opportunity for new investment properties. As more people look to move into these areas, you’ll be in a prime position to rent them living space. Use ProspectNow’s likely seller algorithm for a chance to strike on properties before they hit the market. Keep reading for more information on ProspectNow’s likely seller feature.

Neighborhood

Going off due diligence regarding the property location, you’ll also want to look at the surrounding neighborhood. Much like when you place a value on a commercial property for sale, you’ll want to check some statistics in the immediate area to assess key factors. Make sure to look at the following:

  • Median property price
  • Price per square foot
  • Price to rent ratio  used to determine whether it’s more expensive to rent or buy in a given area. You calculate this number by dividing the median home price by the median annual rent.
  • Traditional rental income
  • Traditional cap rate

Consider looking in neighborhoods that show promising growth but have room for more residence space. This will give you opportunities to make improvements to the property after purchase and add to its value.

Type of Building

For those just getting started in the multifamily investment niche, experts recommend going for smaller buildings. This means duplexes (two units), triplexes (three units), and quadplexes or four-plexes (four units). These help you grow accustomed to the needs of handling multifamily properties while mitigating the risks and expenses that come with it. They’re also more affordable, making the barrier to entry that much lower.

Statistics

Here are a few figures you’ll want to calculate when looking at properties:

  • Net operating income (NOI): Your estimated monthly income with estimated monthly expenses subtracted. If you don’t have access to the expenses data, you’ll want to make a sound projection. A good rule of thumb is to cut your estimated income in half.
  • Cash flow: Your NOI less the mortgage payment.
  • Cap rate: A more complicated figure, calculated by multiplying the NOI by 12 and dividing that number by the market value. Note that a higher cap rate isn’t necessarily better – it signifies high potential returns but also higher risk. A lower cap rate means lower returns but lower risk. A good cap rate is around 5-10%, but you decide your level of risk.

Finding Multifamily Properties With ProspectNow

Operating since 2008, ProspectNow combines an extensive yet affordable property database with a full-featured CRM. Start your investment journey by looking up potential investment properties in any part of the country. 

You can look at all the properties currently on the market, or you can use ProspectNow’s likely seller algorithm. This lets you view properties that are likely to sell in the next 12 months but haven’t yet hit the market. Why is this useful? With the likely seller algorithm, you have the chance to make a favorable first impression on prospective sellers. You could also get a lucrative multifamily investment property ahead of your competition, perhaps closing a deal before the property hits the MLS.

Once you’ve identified a potential investment, use ProspectNow to contact prospective sellers directly. All the contact information you could ask for is available directly on the platform. You can even lookup the name behind an LLC. Make your phone calls, emails, and even send physical mail through the platform. If you’re not sure what to say, use one or more of the templates available to you.

Ready to close more deals and make more money with multifamily property investing? ProspectNow is an essential tool for real estate investing and marketing. Try our platform risk-free for three days and see how much you could make with our system.

ProspectNow Real Estate Glossary of Terms

 

Real estate has come a long way from its days of unreliable data, unscrupulous brokers, and lack of transparency. Today, technology is increasingly playing a vital role in real estate to optimize investments and maximize returns. For example, ProspectNow uses predictive analytics to identify properties that will be for sale soon. This gives brokers, agents, and investors a leg up over their competition. Not familiar with predictive analytics? This page breaks down commonly used terms in modern real estate. 

ProspectNow has been around since 2008. Ever since its inception, the platform is dedicated to providing reliable real estate data that helps you close more deals. Easy to use, trustworthy, and at the cutting edge of real estate technology, ProspectNow helps you make more money from your investments. Get access to residential and commercial real estate data for free today! 

Real Estate Glossary of Terms

Predictive Analytics

This is the branch of analytics that uses data modeling, data mining, and machine learning to predict future events. Predictive analytics uses current and historical data to predict future outcomes of events. For example, with the help of predictive analytics, ProspectNow can identify the properties that are likely to be for sale soon. Typically, a data mining approach can be categorized as predictive analytics if the focus is on prediction instead of description and the outcomes are of immediate business relevance. For instance, analyzing if a particular ad set will resonate with your audience is an example of predictive analytics. 

Property Data

Property data is information pertaining to physical property in the real world. For this definition, we define a property as a piece of land or a building that belongs to a person or entity. A typical property data set will have the following information:

  • Location of the property (i.e. the physical address)
  • Type of property (e.g. residential, commercial, or mixed-use)
  • Ownership details
  • Age of the property
  • Market value
  • Sale price

Property data helps make informed decisions when buying or selling properties. It is also useful for predictive analysis in real estate. 

Loan Origination

Loan origination is the process of purchasing a mortgage loan from a registered lender. Typically, the process of loan origination involves the following steps:

  • Loan application
  • Submission of relevant documents by the borrower
  • Screening of the documents to verify the borrower’s credit score and financial history
  • Negotiation of loan terms
  • Processing of documentation
  • Loan approval 

The process is called loan origination because it’s completed by a loan originator. A loan originator might work for a big lender, such as a bank, or work independently. Independent loan originators can help borrowers find the best loan terms in the market.

Artificial Intelligence

Artificial intelligence is a branch of computer science that is concerned with building smart machines capable of mimicking human intelligence. It solves problems without human intervention, thus increasing business efficiency and reducing costs. Artificial intelligence is also helpful in reducing human error and optimization of human resources. Chatbots are a good example of artificial intelligence in use. Modern chatbots can handle routine customer queries with ease. This allows customer care teams to focus on more complex cases. Machine learning and deep learning are subsets of artificial intelligence that are useful for predictive analytics. 

AI-Powered Research

AI-powered research uses artificial intelligence to gather intelligible insights from data. These insights can be useful for businesses, governments, or public enterprises. Artificial intelligence allows the automation of various repetitive manual tasks. For example, with the help of robotic process automation, machines can scan documents and validate them, thus eliminating the need for manual intervention. Similarly, it can also mine relevant data from large datasets. With the help of machine-learning algorithms and predictive analytics, mined data is used to derive important insights. 

Machine Learning

Machine learning is a subset of artificial intelligence that allows machines to learn from past experiences and improve on their own, with no additional programming. Some prominent examples of machine learning are digital assistants that respond to our voice, self-driving cars, and recommendation engines for movies and music. ProspectNow’s predictive analytics also uses machine learning algorithms to accurately predict the properties that will go on sale in the future. 

Machine Learning Models

A machine learning model is a program that is trained on a specific data set. The program learns from the data set and then makes predictions for a dataset that it has never seen before. At their most basic, machine learning models can be categorized into supervised and unsupervised learning models. You can further break supervised machine learning models down into regression models and classification models. Neural Network and Random Forest are examples of supervised machine learning models. Clustering is an example of an unsupervised machine learning model. 

Public Domain

Public domain is content that is not protected by any copyright law. Works in the public domain can be freely shared, copied, or republished by anyone. The content might enter the public domain when:

  • The duration of copyright expires
  • A content creator puts work in the public domain with no copyright restrictions
  • Data deemed important for public transparency. For example, quarterly reports of companies listed on the stock market are available in the public domain.

TCPA Compliance

TCPA stands for Telephone Consumer Protection Act. The act came into effect to eliminate intrusive calling practices by telemarketers. To be TCPA compliant, telemarketers need to have express consent of the dialed party. TCPA prohibits telemarketers from using auto-dialers, pre-recorded messages, and text messages as a marketing outreach strategy unless they have consent from the dialed party. Users can file lawsuits against companies that fail to comply with TCPA. 

CAN-SPAM Compliance

CAN-SPAM stands for Controlling the Assault of Non-Solicited Pornography and Marketing. The CAN-SPAM Act came into effect in 2003 to establish the rules for commercial emails and messages. Every email that violates CAN-SPAM compliance can attract a penalty of up to $43,792. Here are the dos and don’ts for CAN-SPAM compliance:

  • Don’t use misleading information in the header
  • Don’t use misleading subject lines
  • Include your physical address in every email you send
  • Provide a simple way to opt-out of your emails
  • Handle opt-out requests promptly

MLS

MLS or Multiple Listing Service is a database of available property listings created by real estate brokers. It is a shared database that has to comply with the rules set by the National Association of Realtors. Real estate agents need to pay a membership fee to gain access to an MLS. Typically, an MLS will have important property data such as location, neighborhood details, photos, and square footage. An MLS is useful for buyers and brokers. The consolidated database allows buyers to quickly search through available properties. Therefore, it also levels the playing field for real estate brokers. 

Motivated Seller

A motivated seller is a property owner who has a strong need—not just a desire—to sell their property. Very often, motivated sellers will settle on a much lower price or flexible financing terms, which makes these properties more lucrative to buyers. Several factors can drive property owners to become motivated sellers, such as the following:

  • The property owner is in foreclosure
  • A property owner cannot keep up with property taxes
  • The property is in poor shape and needs extensive repairs, which are beyond the means of the property owner
  • A property owner has inherited the property and has no inclination to spend any money on repairs or upkeep
  • The property owner is in the process of purchasing another property and their financing is contingent on the sale of their own property

LLC

LLC or a limited liability company is a corporate structure where the owners are not personally liable for the company’s liabilities or debts. An LLC has a more formal structure than a partnership or a sole proprietorship. It also offers owners more protection against liabilities compared to a publicly listed enterprise. By default, LLCs don’t pay federal corporate taxes. Instead, profits and losses are shown as individual incomes of owners in their tax returns because an LLC is not a recognized tax status.

Avoid the Pitfalls of Purchasing Property- 6 Reasons to Invest in REITs Right Now

The answer for those who wish to avoid all of the downsides of purchasing real estate outright while still reaping the rewards of the market is to invest in REITs. For those looking to invest in the real estate market, purchasing commercial or residential properties and renting them out is one of the most popular ways to earn income. Unfortunately, this method of real estate investment comes along with a hefty price tag, ongoing repairs, uncertainties with tenants. It is more time-consuming than many investors care to take on.

What Are REITs?

REITs, or real estate investment trusts, refers to companies who own or lease income-producing properties in various sectors. They are often traded on public stock markets and offer high returns for investors interested in real estate. Unlike purchasing an investment property outright, there is no high initial purchase price, no time-consuming buy and sell process. Investors do not have to concern themselves with the day-to-day operations or maintenance of each property. They are an excellent way for those who want to invest in the real estate market to get started with little capital without making a long-term commitment. 

6 Reasons to Invest in REITs:

1. Affordable for Average Americans

From Wall Street brokers to hedge fund millionaires, those who typically benefit from valuable real estate properties have the capital to purchase properties outright. Average Americans do not have the capital needed to compete in these scenarios, particularly when it comes to commercial real estate. REITs are unique because they trade on the major stock exchanges and must meet several requirements to reach this status. This allows everyone, regardless of their income, to invest in real estate assets. Likewise, REITs can be obtained differently, whether the investor purchases individual company stock or opts to invest through a mutual fund or exchange-traded fund (ETF).

2. Diverse Property Sectors

One of the biggest reasons to invest in REITs is their diverse nature. REITs exist in sectors across the board, offering plenty of variety to investors who want to diversify their portfolios. The most popular types of REITs include:

Retail

Retail REITs make up around 24% of all REIT investments in the country. They include shopping malls and standalone retail fronts. In this day and age, many brick-and-mortar retail facilities are struggling to keep their doors open in the age of online shopping. That said, there are retail industries, such as grocery stores, that continue to thrive. As your investment returns will largely depend on the tenants generating income and paying rent, it is crucial to do your research before forking over any cash. 

Residential

Residential investments typically refer to large, multi-family buildings like apartments or mobile homes when it comes to REITs. Although residential property REITs are a solid investment, location is key, and properties in large cities tend to yield the highest returns to investors in the long run.

Health 

Health-based REITs include everything from hospitals and doctors’ offices to retirement homes. The need for healthcare will rise along with America’s aging population. It is important to note that many of these investments rely on Medicare and Medicaid to receive payments. Despite this, it is still important to invest in a diverse healthcare market.

Office

Another popular REIT sector includes office buildings which typically come with long-term leases. While the office space can bring solid returns, it is key to consider strong economic areas before investing. For instance, a booming California city investment will likely bring higher returns than several properties in a small town where employment rates are low. 

Although these are some of the most popular property sectors for REITs, they are certainly not the only ones available to investors. Other top choices include industrial, resorts, time, infrastructure, and data centers. 

3. High Dividend Yields

To be classified as a REIT, the company must meet a precise set of requirements. Those who gain the title are rewarded by avoiding any corporate tax obligations, regardless of how profitable the company is. Instead, they must pay 90% of the taxable income earned to shareholders. This requirement typically results in high dividend yields of over 5 percent for investors versus other stocks, which average less than 2 percent.

4. Liquidity

When a person buys a residential or commercial property, it takes time and money to complete the process beyond the initial purchase price. The same is true when a person wishes to sell a residential or commercial property–with the added hassle of waiting to find a buyer. When investing in REITs, there is no wait time if you need to access your cash quickly. Instead, investors click a buy or sell button and can have their funds within a short period of time without any uncertainties such as inspections or legal processes. 

5. Competitive Long Term Growth Compared to Other Stocks

Historically speaking, REITs offer competitive long-term growth compared to other publicly traded stocks in the United States. While long-term growth can vary depending on the specific property sector of the REIT, real estate investments typically hold up well over time. Whether to provide shelter to the world’s population for farming, or retail purposes, it is a necessity. Because of this, many REITs come along with predictable appreciation. While it’s true that the trends may skew towards urbanization and the most desirable locations may change over time, the pure need for real estate makes a REIT investment more solid than investing in the latest tech trend, which may fade just as quickly as it arrived. 

6. Lower Risk Than Individual Properties

The risk of investing in a REIT is much lower than if you invested in an individual property. The income-generating properties rely on multiple streams of income instead of a single residential renter or storefront. If you purchased a property outright with the intent of renting it out to a single resident, you would be heavily relying upon that single tenant to make your investment-worthy. Likewise, all your eggs would be in one basket regarding location, employment rates, natural disasters, and the likes. Much like diversifying your portfolio by purchasing stocks in varying industries, a REIT is a way to maximize your investment. 

Want to learn more about how to invest in commercial or residential REITs successfully? You can avoid tedious research and get a complete overview of any relevant data in minutes, powered by Artificial Intelligence. Give us a call today at (888) 956-9998 to learn more about the process.