An affordable housing complex in a downtown neighborhood with rodent infestation and broken elevators has found new ownership, prompting its residents to expect rent increases. Capital Realty Group has been on an aggressive buying spree of affordable housing properties, adding 17 throughout 2017.
Investing in REITs
REITs expose investors to commercial real estate without the hassle of buying and managing physical properties themselves. Furthermore, REITs can be traded on stock exchanges for greater liquidity than traditional real estate investments; REITs typically boast higher dividend yields with moderate long-term capital appreciation potential.
When investing in REITs, look for companies with solid profits and healthy balance sheets, as well as strong indicators of economic activity in their target area – such as population growth and job creation, falling vacancy rates, and rising rents as indicators that the economy is expanding and demand is increasing for office spaces, apartments or warehouses.
To diversify your portfolio, consider REITs specializing in affordable housing. By supporting their investments, REITs specializing in this sector help bridge the gap between lower-income households and market-rate rentals they can afford, allowing you to keep a social mission while diversifying your portfolio.
REITs (real estate investment trusts) can be defined as investments combining equity and debt in real estate investments, explicitly emphasizing retail, industrial, or healthcare real estate properties. When shopping for REITs to buy, consider those with solid business plans and low price-earnings ratios; additionally, check their credit ratings – ideally, invest only in REITs with investment-grade ratings.
REITs can help diversify your investment portfolio but should only comprise part. Invest in stocks, bonds, and cash to reduce risk and ensure maximum diversification. You can learn more about REITs by visiting the SEC EDGAR system.
Property purchase can be an arduous task that takes both money and time. REITs offer investors new to real estate investing a way of diversifying their investments simultaneously – this feature is particularly advantageous.
Getting Started in the Developing Business
Affordable housing investment can be an exciting and profitable real estate market segment. However, many challenges must be surmounted to ensure its success, such as securing land ownership, financing arrangements, government grants, and overseeing construction efforts and marketing. To aid their efforts and increase their chances of success, developers should draft a business plan outlining project goals and schedules detailing each stage of its life cycle.
Although development businesses present many obstacles, those willing to put in the effort can find success in them. Affordable housing remains an attractive market as private equity firms search for reliable sources of revenue – in 2017, private equity firms purchased more affordable units than ever before!
Cathay Manor, a federally subsidized senior housing complex in downtown Los Angeles, now has a new owner. According to public records, Capital Realty Group from Spring Valley, New York, purchased it for $97 million or $359,259 per unit – making this sale one of Los Angeles’s priciest since a property tax went into effect last April.
Capital Realty plans to make several immediate upgrades, such as fixing leaks and addressing hot water issues, renovating kitchens and bathrooms, replacing flooring in common areas, and not displacing residents during renovations. Residents will not be affected during these renovations, according to Capital Realty. In the long run, full-scale restorations will include upgrading cabinets, appliances, and countertops in kitchens, bathrooms, and living rooms and installing new lighting, flooring, and decor in corridors and community spaces.
The company acquired the property from Jewish Federation Apartments, a nonprofit organization that had owned them for more than 50 years and retained its 501(c)3 status; their ownership will now be transferred to Buffalo Jewish Federation, which will operate and provide programs.
Getting Started in the Maintenance Business
Capital Realty Group operates 17,130 affordable housing units in 27 states and ten complexes in New Jersey alone, such as Bethany Manor in Keyport, which it purchased for $24 million from its previous owner in March. They plan several immediate upgrades, such as fixing plumbing leaks and hot water issues, before undertaking an entire restoration project, which includes renovating apartments and community spaces to address residents’ service requests.
PILOT Agreement. Under its agreement with the borough, this company pays 15% of its net rental income instead of property taxes as part of a PILOT arrangement.
Getting Started in the Marketing Business
The Capital Realty Group is dedicated to making homeownership accessible for low-income families. Their communities welcome and accommodate people of all backgrounds. At the same time, cutting-edge methods for financing homes exist (low-interest loans, down payment assistance, and flexible mortgage terms are among their specialties). Furthermore, The Group works towards improving residents’ quality of life through recreational activities and green spaces.
Recently, a company bought Bethany Manor, an affordable apartment complex in Keyport that had previously received subsidies through low-interest loans from the federal Department of Housing and Urban Development. When that subsidy ended last year, residents became alarmed that rents would increase from $440 for efficiency units up to over $1,201 for one-bedroom apartments, rightfully so given issues like rodent and cockroach infestations, broken elevators, and inoperable fire protection that plagued Bethany Manor.
Capital Realty acquired the property and negotiated a new agreement with the borough that extended payments instead of taxes (PILOTs) by seven years and addressed lingering issues by investing in renovations such as kitchen and bathroom upgrades and standard area enhancements.
