The city of Houston has created a Multifamily Habitability Unit. The unit's goal is to coordinate apartment oversight between various city departments. The creation of the unit had the support of the Houston Apartment Association and effects properties with three units or more units.
The city of Houston believes that the new unit was necessary. Before the unit, one department might visit a property because of trash problems and another might inspect structural or safety issues. But often, there was no coordination between agencies, so problems would linger and a property could go from bad to worse. This could have a detrimental effect on the operations of nearby properties by giving the area a bad name.
See the Houston Code here.
Tuesday, December 14, 2010
Sunday, December 12, 2010
Food for thought about the fragility of the economic recovery.
I just finished reading the December Economic Letter—Insights from the Federal Reserve Bank of Dallas. It reviewed historical recessions against the current tepid economic expansion. The slow recovery is hovering around "stall speed" and that has raised concern that things could get worse again before getting better. Furthermore, that the likelihood of another recession may have risen.
As effective rent have begun to firm, a double dip or an extended crawl toward economic recovery would directly effect the health of the MF industry.
Click here to read the white paper from the Dallas FRB
Saturday, December 11, 2010
Here is a current snapshot of the MF new construction and vacancy rates in Fort Worth from the Fort Worth Star Telegram
By SANDRA BAKER
The number of new apartments on the Fort Worth market at year's end will be down 70 percent from last year, a Marcus & Millichap real estate firm research reports finds.
About 1,950 apartments opened in Dallas-Fort Worth in the third quarter.
For the year, the real estate firm predicts that about 7,800 apartments will be built in the Metroplex, 85 percent of which will be in Dallas.
In 2009, developers completed about 17,000 units, the report says.
The apartment vacancy rate was 7.8 percent in Dallas and 8.2 percent in Fort Worth at the end of the third quarter, the report said.
Job growth in North Texas, combined with a drop in the construction of apartments, will strengthen the market, the report said.
Many renters are upgrading to higher-quality apartments because owners offered concessions and lowered rents during the recession.
"The Fort Worth area continues to post a higher vacancy rate than the Dallas portion of the market, but improvements have been more pronounced in Fort Worth due in part to a significant reduction in apartment development activity," the report said.
Vacancy rates by submarket are: southeast Tarrant County, 6 percent; Hurst-Euless-Bedford, 6.7 percent; Grapevine, 7.6 percent; southwest Fort Worth, 8 percent; central Arlington, 8.2 percent; northwest Fort Worth, 8.5 percent; north Tarrant County, 8.8 percent; north Arlington, 9.4 percent, and east Fort Worth, 10.7 percent.
Wednesday, December 8, 2010
With the current condition of our real estate marketplace it is time to get back to basics...make sure the fundamentals make sense. This is something that I will keep putting out there.
Long gone are the days of buying a highly leveraged property at a 9 Cap and waiting a year or so then selling it at a 7.5 Cap. With financing harder to find and LTVs heading south, any acquisition must make financial sense. There is little wiggle room for error. There is no rising market to bail out a serious mistake in judgment or assumptions. It makes the buyer’s due diligence even more important than ever.
I just finished reading a great article in CIRE magazine that was geared toward a commercial property but the concepts should be used for all investment real estate reviews. The article can be read here CIRE Magazine Due Diligence: Digging Deeper