Five-unit apartment buildings vs. four-unit single-family homes: A comparison

Investar USA focuses on placing capital in real estate deals in select markets. The company has even started a series of blogs to educate and inform everyone about all things real estate and investment. Today’s blog is a great example of this as it explores apartment buildings and single-family homes and compares them as investments.

The truth of the matter is that there are a lot of people out there who want to invest in a single-family home. After all, the market seems perpetually vibrant, with many individuals looking at having a single-family home as one of their top goals in life. However, for investors, putting their money in an apartment complex with over four units may seem just as tempting.

While many real estate and financial experts mention that there isn’t a concrete answer on which investment is better, investors, especially young ones, may put the situation against a context of factors that influence them.

For example, in the finance industry, there is a huge difference between residential properties that have one to four units as opposed to apartment buildings with five or more units. Investors of the former will follow the Residential Lending guidelines, while the latter will have to go by the Commercial Lending guidelines. While the guidelines can be found online, it’s best to consult with real estate professionals on the matter, especially if investors are looking for the right lenders. There’s also the fact that not every bank can finance both types of investments.

As far as valuation is concerned, residential buildings with one to four units use the Comparable Sales Approach. The price of the property will depend on the sales prices of neighbors who are selling or have sold their properties. As for apartment buildings with five or more units, the Income Approachof valuation will be used to determine the market value. Investar USA explains these approaches as being dependent on the net operating income of the entire building.

Investar USA is a leading North American residential and commercial property developer specializing in renovating and repositioning diverse properties throughout the U.S. and Canada.

Building Materials are Getting Pricey: Investar USA Discusses Strategies for Managing Rising Costs

The price of standard building materials has been steadily rising over the past few years. How can developers achieve the goal of producing affordable housing when they bear the brunt of escalating costs? Investar USA offers three tips for successfully mitigate the risks associated with skyrocketing project costs. Investar USA is a respected real estate development firm specializing in multifamily development.

The cost of construction materials has been escalating at an alarming pace, and real estate developers must develop flexible strategies to manage the significant financial risks. Here are a few solutions that may help investors manage rising prices.

Pricing Ceilings

While most projects are structured on a lump-sum pricing basis, this strategy shifts the risks from contractors and sub-contractors to the project owners. When renovation or repositioning projects escalate in scope, it’s the investors who must bear the brunt of any subsequent cost overruns. By creating a maximum price ceiling, investors simultaneously give themselves flexibility within the project while ensuring protection for the project owner. According to the guaranteed maximum price contract, the contractor may receive compensation for the costs and fees up to a certain point, after which the contractor is liable. Moreover, funds are returned to the project owner if the initial costs were overestimated.

Cost Escalation Provisions

Because the costs of materials are constantly fluctuating, investors are well-advised to include escalation clauses in project contracts, particularly for specific materials that are more likely to experience sudden price spikes. There may also be delay escalation provisions to protect project owners from price increases during project delays. When a project is halted through no fault of the contractor, the contractor agrees to honor the price of materials throughout a certain delay timeframe, after which the project owner is responsible for the current cost of materials. only during the length of time specified in the contract. Once that period of time has elapsed, the owner is only responsible for the cost of the materials at the

Shared Overrun Risk.

Project owners can reduce the risk of escalating materials costs through Integrated Project Delivery. This strategy divides savings among the parties if the final cost is lower than the Target Cost that was established when the project was originally designed. The Integrated Project strategy also allows the parties to decide how to share cost overruns if the final cost exceeds the target cost.
Determining what the shared risk will be between the project owner and the contractors is critical to managing costs successfully. With the price of materials showing no signs of lowering, real estate investors must have a comprehensive understanding of the scope of the project and the potential for volatility.

Investar USA a leading North American residential and commercial property developer, specializing in renovating and repositioning diverse properties throughout the U.S. and Canada.

Las Vegas is primed to be the next multifamily rental hotspot for real estate investors. But does it live up to the hype? The following post from Investar USA discusses the reasons why Las Vegas is an attractive prospect for smart multifamily investment. Investar USA is currently focused on real estate investment in the Southwestern U.S.
Are you considering investing in Las Vegas property? The current population statistics may cause you to look more closely at this strategy. 2020 may be a great time to invest in single-family or multifamily rental property, because people are flooding to Sin City!
The projected population growth rate for Las Vegas is higher than the growth rate nationally. According to statistics from the U.S. Census Bureau, between the years 2012 and 2016, the net migration to Las Vegas was nearly 6.5 percent. Here are a few reasons why people are flocking to Las Vegas.

Job Growth

While construction has usually been a healthy industry in Las Vegas, new residential and commercial buildings are consistently being planned, necessitating a greater-than-usual volume of workers. Additionally, entrepreneurship is thriving in Las Vegas, and new businesses are being created at a higher speed than the national average.

Job Diversity

While job growth is essential in any attractive multifamily rental market, it must go hand-in-hand with job diversity. Las Vegas has always offered abundant jobs in the hospitality, construction, and entertainment sectors, but employment reports are indicating that new jobs in healthcare and education are also being created, and professionals in the tech industry are in mounting demand.

Higher Quality of Life

People are not moving to Las Vegas simply for its employment prospects and proximity to casinos; Las Vegas offers an improved quality of life over comparably populated cities. Although Las Vegas is famous for its thrilling nightlife, there are also family-friendly markets, with parks and thriving suburban communities.
The cost of living is also low in Las Vegas, relative to the services it offers. While the suburbs are a little pricier than the city, it is still far more affordable than other metropolitan areas, namely in terms of healthcare, groceries, transportation, and utilities.
Smart investors will want to investigate their options sooner rather than later, since the market is becoming increasingly competitive. Whether you invest in single-family or multifamily rentals, the forecasts for Las Vegas residential real estate are excellent.
Investar USA is a real estate investment firm, specializing in revitalizing properties in the Southwestern United States.

Investar USA: How a Change in the Economic Climate May Affect Real Estate Investors

Trying to keep up with the economy from one day to the next is a lot like trying to keep up with the wind. The economy may be high one day and low the next, and understandably, this may make you feel unsettled as an investor in Alberta, Canada. The good news? Overall, real estate is still a promising area to invest in, according to the experts at Investar USA. Still, you should be aware of how economic changes could affect your returns, which we’ll take a look at here .

The first potential economic change worth exploring is a dip in the economy. The reality is, real estate, which the stock market impacts, is a cyclical area of the economy. As a result, even though the economy may be relatively strong right now in North America, it could contract in the coming years if a global recession strikes. So, what does this mean for investors in Canada? It means that existing commercial real estate’s performance may experience some downward pressure.

Second, you may see the interest rate rise in the future, and this could have an adverse impact on the commercial real estate market. Why? Because even though a rising interest rate may signal a growing economy, a sudden rate hike could make it harder for people to obtain capital for property development. As a result, real estate building efforts may come to a haltslow down.

Because the economy is so unstableebbs and flows over time, the smartest move you can make as a real estate investor is to diversify your real estate investmentsnot be overleveraged and lock in low the interest rates that are available today for as long as possible . In other words, invest in various types of commercial properties.Succesful real estate investing is all about keeping things simple. Invest in an asset class you are comfortable with, buy and hold for the long term and have someone else payoff your mortgage. This will enable you to enjoy real estate’s anticipated steady growth in the future while also more easily withstanding any economic bumps that might affect the market down the road.

Investar USA: Is There Opportunity in Opportunity Zones?

Are you looking to take your real estate investing venture to another level? Or, are you simply trying to get your real estate business on the map? It may be worth your while to look into the opportunities that come with Opportunity Zones, which are capturing the attention of many investors in United States today, according to Investar USA. Let’s take a look at what these zones are and how you can take advantage of them.

The purpose of Qualified Opportunity Zones is to encourage investment, development and job creation in economically distressed communities.

The Opportunity Zone designation is spelled out in the Tax Cuts and Jobs Act from 2017. Since this law passed, you can find Opportunity Zones in all areas of the United States. In fact, there are over 8,700 of these zones in America.

If you choose to invest in an opportunity zone, you must agree to follow the rules associated with investing in these qualified zones. But don’t worry -- your willingness to comply with these rules will yield some rewards. Specifically, you’ll be able to take advantage of major incentives related to the capital gains tax both immediately and long term.

Whenever you divest real estate, you generally have to pay capital gains tax on your earnings. However, if you divest a property in an opportunity zone and then place this capital gains in an Opportunity Fund, you can reduce and defer your tax liability associated with that gain. In addition, you don’t have to pay taxes on any appreciation you earn in the future through this fund.

Thanks to these incentives, you save money at tax time when you become an Opportunity Fund investor. For this reason, investing in Opportunity Zones may be one of the smartest financial moves you can make this year and in the years ahead.

Investar USA: The Current Pros and Cons of Real Estate Investing

As an investor, you’re naturally passionate about making money in the most efficient and effective way possible. That’s why you’re drawn to real estate, an area that plays a critical part in the economy of Alberta, Canada. But is it truly a great area to invest in? Here’s a rundown on the opportunities that real estate currently presents, as well as the challenges that come with this area of the economy, according to leading real estate company Investar USA.

The economy of Canada has been doing fairly well since it suffered a crash in the second quarter of 2016. At that time, it experienced its worst gross domestic product in seven years. However, these days, experts say that Canada’s economy is in a much better position. The economy experienced excellent growth during the second quarter of 2019, expanding nearly 4%. In addition, all of this happened in spite of the rocky economic environment worldwide. All of this means potentially new business opportunities in Canada, which means a greater demand for properties.

Real estate investment trusts, or REITs, are especially popular at the moment. These organizations, which are professionally managed, buy and manage commercial properties with the goal of generating for investors equity appreciation and cash flow. REITs are in such great demand because they require relatively low minimum investments and shares are easy to buy and sell. This has encouraged many average investors to finally get into the real estate market.

Of course, the challenge with real estate right now is that if a recession happens in the near future, this could cause the demand for properties to decrease. This can have an especially adverse effect on investors who have poured their money into areas of the nation that are more heavily hit by the economic downturn.

Nonetheless, compared with other areas that you could choose to invest in, real estate offers a great deal of potential. Thus, the property market remains an extremely attractive and prudent option for serious investors both now and in the years ahead.

Types on investments, REIT’s typically spread their holdings over several regions of the Country. This hedges the investors risk over many assets and locations as typically the economies of individual regions are different.

Investar USA: What Does “Workforce Housing” Mean?

Amid talks that a global recession is on the way -- and the fact that Alberta, Canada is currently experiencing a tough economic environment -- you may understandably be wondering what the best place to invest your money is. Specifically, in real estate, should you target commercial properties, or should you focus on workforce housing? Savvy investors today are sticking with the latter, according to Investar USA. Not sure exactly what this type of housing is? Here’s a primer on workforce housing and what this type of multifamily housing has to offer the modern investor.

The idea of workforce housing today stems from past efforts to provide workers at luxurious resort communities with housing. This was done years ago because these workers otherwise would not have been able to afford to reside in their employers’ towns in light of the huge disparity between housing costs and income.

A common misnomer, though, is that this type of housing is essentially “affordable housing.” The truth is, to be more accurate, you should call workforce housing “housing that happens to be affordable.” That’s because it doesn’t target members of the lower class; rather, it caters to many middle-class..

The challenge with investing in workforce housing is that renters might not be able to absorb increases in rent during an economic downturn. After all, over 33% of modern workers are paying rents that take up nearly a third of their incomes. In addition, during a recession, the demand for housing will decline. Still, compared with other types of real estate assets, workforce housing should do relatively well considering the circumstances.

In light of this, many institutional investors have been focused on investing in workforce housing. If you’re interested in keeping your bottom line strong in the years ahead, no matter how well or poorly the economy performs, it may be in your best interest to follow suit.

Investar USA: What Does “Workforce Housing” Mean?

Amid talks that a global recession is on the way -- one that may ultimately affectand the fact that Alberta, Canada is currently experiencing a tough economic environment -- you may understandably be wondering what the best place to invest your money is. Specifically, in real estate, should you target office commercial properties, or should you focus on workforce housing? Savvy investors today are sticking with the latter, according to the experts at Investar USA. Not sure exactly what this type of housing is? Here’s a primer on workforce housing and what this type of multifamily housing has to offer the modern investor.

The idea of workforce housing today stems from past efforts to provide workers at luxurious resort communities with housing. This was done years ago because these workers otherwise would not have been able to afford to reside in their employers’ towns in light of the huge disparity between housing costs and income.

A common misnomer, though, is that this type of housing is essentially “affordable housing.” The truth is, to be more accurate, you should call workforce housing “housing that happens to be affordable.” That’s because it doesn’t target members of the lower class; rather, it caters to many middle-class. professionals.

The challenge with investing in workforce housing is that renters might not be able to absorb increases in rent during an economic downturn. After all, even with the economy growing today, over 33% of modern workers are paying rents that take up nearly a third of their incomes. In addition, during a recession, which experts say will happen soon, the demand for housing will decline. Still, compared with other types of real estate assets, workforce housing should do relatively well considering the circumstances.

In light of this, many institutional investors have been focused on investing in workforce housing. If you’re interested in keeping your bottom line strong in the years ahead, no matter how well or poorly the economy performs, it may be in your best interest to follow suit.

Investar USA: Las Vegas May be the Next Hot Multifamily Market

With abundant new construction, job opportunities increasing, and luxury living accommodations developing at an exhausting pace, the Las Vegas market is ripe for affordable multifamily housing. In the following article, the team from Investar USA suggests that Las Vegas workforce housing may offer excellent investment opportunities for both individual and institutional investors. Investar USA is a real estate development and management leader, specializing in commercial and residential properties.
As the local economy flourishes and workers of all skill levels become increasingly needed, workforce multifamily residences in Las Vegas are becoming ever more sought-after. Investors who want to take advantage of long-term potential as new developments take shape could reap significant rewards in the long term. A few prominent projects include:

• • Symphony Park residential buildings. These high-end residences and commercial spaces will accommodate 324 luxury apartments. The buildings' proximity to The Smith Center for the Performing Arts are likely to make the development a highly desirable property.

• Circa Hotel and Resort. This development will be Downtown Las Vegas's first casino in more than 20 years, opening on Fremont Street in 2020. Completion of the resort will require the participation of more than 1,500 skilled workers.

• Viva Vision light show. Another Fremont Street attraction, the Viva Vision light show canopy will undergo a $32 million renovation, adding additional exciting features to an already spectacular installation. First unveiled in 1995, this light show features the largest standalone video screen in the world. The upgrade will intensify the brightness of the display by a factor of seven, and new LED technology will allow the display to be shown during the day.

With existing and announced construction projects creating fantastic opportunities, now may be the time to seriously consider how multifamily housing investments may pay solid dividends for years to come.
Investar USA has been a Phoenix, Arizona real estate mainstay for more than 30 years, offering solid property investment opportunities for both private and corporate investors.

Investar USA: Multifamily Renovations & the Value-Add Approach

As a real estate investor, you’re naturally eager to achieve strong financial yields when you own a multifamily property. And you’re not alone. Many investors specifically look for properties where they’ll be able to increase the rents, also known as value-add properties. Here’s a look at what the value-add approach involves in real estate investing, according to Investar USA.

At the moment, apartment building rents are not growing very quickly, and this has sparked a real estate price growth slowdown. Fortunately, though, you as an investor can still secure value-add properties -- properties where renovations totaling $5,000, for example, can justify higher rent amounts.

If you’re interested in purchasing a value-add property, you may notice in your search that the greatest demand for these types of properties exists for less expensive, older apartment buildings. Why? Because even if investors increase the rents in these types of properties, the rents will still be a lot lower than those associated with brand-new apartment buildings. Older apartment buildings in suburban areas surrounding growing cities are especially popular to value-add real estate investors.
However, some investors in multifamily properties are locating buildings to purchase and remodel in neighborhoods that are being gentrified near thriving downtown areas. In these particular markets, rents are on the rise with the spread of luxury apartment construction.

An example of the type of market mentioned above is the metro area of New York, which currently has more than 20,000 apartment units being newly constructed in urban areas on the periphery of the city, such as Queens, the southwest area of Brooklyn, New Jersey, and the Bronx. This 20,000-plus number is far larger than the estimated 5,000 units that are currently being constructed in the core part of the city.

Investors are clearly spending big money on value-add properties these days. So, if you’re interested in strengthening your bottom line this year, now couldn’t be a better time to try to make the value-add approach work for you as well.

Investar USA: Add Single-Family Homes to Multifamily Portfolio

Your real estate investment portfolio may be filled with multifamily homes -- and for good reason. These properties generally offer an excellent bang for your buck, with money flowing in from multiple tenants versus just one. However, there’s still room in your portfolio for single-family homes, according to Investar USA. Why? Let’s take a peek at the advantages of adding a single-family home to your multifamily rental portfolio this year.

As a general rule of thumb, single-family homes are easier to maintain than multifamily buildings are. This makes them extremely attractive to landlords who have no intention of employing property managers. After all, the older you get, and the wealthier you become, the more you want to minimize your staffing overhead.

On top of this, single-family homes may offer higher returns than multifamily homes in your area. According to investors, a major advantage of a multifamily building is that it offers economies of scale, or the lower per-unit costs enjoyed by larger entities. However, in some situations, you may find a single-unit property that provides you with a much better return than a multifamily property would. After all, the latter still comes with more expenses, features higher turnover, and demands more management.

Also, note that a multifamily property’s value depends on the property’s generated income. However, a single-family home’s value isn’t based on the income generated; instead, it’s based on what a buyer is willing to pay for it. This means that if you find a real estate market featuring higher rents compared with home values, you could generate more money with a single-family home than you would with a multifamily property.

The overall lesson here for real estate investors? Don’t discount the power and value of a single-family home in today’s rental market.

Investar USA – Tips for Creating a Winning Multifamily Strategy

Is there a perfect build-to-rent investment approach? The following article from Investar USA describes rental investment strategies designed to overcome diverse market challenges. Investar USA is currently focused on real estate investment in the Southwestern U.S.
Multifamily investment has been a popular investment strategy for the past decade, not only for seasoned real estate professionals, but for new, smaller investors looking to add controllable assets to their investment portfolios. Here are a few things to consider if you're entering the multifamily market.

Give careful consideration to your location.

The location of your rental property will mean the difference between success and failure, so choosing where to purchase your asset is of the utmost importance. Carefully research employment and population data for your desired market. Look for job diversity and steady growth, and don't let your judgment be entirely affected by trends or herd mentality.

Start small.

If you're seeking a flexible multifamily approach, it is advisable to choose smaller properties as your entry-level strategy. Duplex investments may lead to impressive long-term ROI, because they allow you the same tax benefits and incentives of larger multifamily properties, yet are accessible to investors who don't have large starting funds. They are easier to sell than large complexes if you ever need to liquidate, and you can purchase several in different locations to shelter you if one market experiences an economic downturn. Moreover, duplex investment is a great gateway option if you want to move to bigger properties!

Weigh the benefits and disadvantages of using management companies.

If you have the time and ability to perform frequent repairs and maintenance to your property, as well as manage the tenant screenings, agreements, disputes, and the potential (and actual) evictions, you may be able to comfortably act as your own landlord. But think carefully about the time and energy expenditure. If you decide that those responsibilities should be outsourced, a management company will be the way to go.
Property management companies can be excellent resources, but you'll have to research multiple firms, and interview at least three prior to selection, and always get referrals.
While the barrier to entry is higher with multifamily investment than it is with other asset classes, new investors can achieve success with a manageable, calculated approach. Just make sure your strategy is designed to meet your specific needs and goals, and you'll discover that multifamily investment can offer you solid financial security.
Investar USA is a real estate investment group specializing in properties throughout the U.S. Southwest. Investar USA is located in Phoenix, Arizona.

What are master-planned communities?

 A master-planned community refers to a large-scale residential plan offering a myriad of commercial and recreational amenities, from lakes, parks, and bike paths to stores and restaurants, golf courses, tennis courts, and playgrounds.  Some neighborhoods of this type may even have malls, schools, and office parks, clearly distinguishing them from your typical subdivisions, explains real estate firm Investar USA.

In terms of space covered or taken, the average master-planned community is normally sprawled over 2,500 acres of land.  It is its own self-contained environment strategically located in an urban or suburban area.  It can be distinguished in a way that multiple subdivisions are present and have their own unique features, characteristics, and target market.  For example, one area can have a niche market composed of retirees. 

While housing prices and the sizes of lots may vary depending on their location within the neighborhood, all residents of master-planned communities will have access to the amenities.  In most cases, these are made available exclusively to residents and guests. 

Nowadays, developers of these master-planned communities are seeing how partnering with adjacent land owners can improve sales and name recognition, explains Investar USA.  Already grand in scale, these communities are ready for further expansion to offer more unique features attractive amenities to prospective buyers.  All in all, the self-contained nature of master-planned communities is in line with the rise of mixed-use development in many major cities and hubs. 

Real estate firm Investar USA has over 30 years of experience in construction, renovation, and repositioning.  For more information on the company and its services, go to this