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Peer to peer mortgage lending Dallas Texas

Peer to Peer mortgage lending Dallas Texas | InvestmentClub360

Peer to peer mortgage lending Dallas Texas

Peer to peer mortgage lending is an online platform or company that connects borrowers with lenders. It is an alternative means with which real estate investors/developers can acquire capital from investors instead of seeking loans from banks and other traditional means.

It cuts out the lending protocols of the bank and makes it easy for investors to seek capital from other investors. Peer to peer is conducted by a P2P platform who brings the borrowers and the lenders together.

The P2P platform does not lend money to investors seeking for funds; they only bring the investor seeking for funds with other investors who want to invest.

Peer to peer lending platforms has made it easy for investors to get funds to expand fund their investment without going to the bank to seek loans.

P2P lending involves low-interest rates, simple applications, and quick decision making. All these have made P2P a better alternative to traditional means of seeking loans from the bank and made it a huge success in the modern world. The number of P2P lenders getting into the mortgage business has increased steadily.

The lender can set the interest rate and compete for the lowest rate reverse auction model or fixed by the P2P company on the basis of the analysis of the borrower’s credit score.

The lender’s investment is not normally protected by any government guarantees. This means the government cannot guaranty repayments in case a borrower is defaulting to pay back.

For this reason, the lender mitigates risks by choosing which borrower to lend to. The lender can also further mitigate risks by diversifying his investment loan among many borrowers.

According to a report by PriceWaterhouseCoopers, US P2P platforms have issued approximately $5.5 billion in loans in 2014. It is estimated that by 2025, the market could reach up to $150 billion or higher.

Process of obtaining a peer to peer mortgage loan

The process of obtaining a P2P mortgage loan varies by companies. Different P2P mortgage lending companies have different processes before giving out loans, however, the process typically follows a similar pattern.

The pattern is:

  1. The developer/borrower begins an online search and application for a loan. The borrower then receives pre-qualifies interest loan amounts and interest rates from the P2P company.
  1. The borrower then chooses the loan amount and interest rates which he/she wants and is most convenient. The borrower will then complete the application and receives a letter of pre-approval from the P2P company.
  1. The borrower will then submit his/her offer to the P2P company and close the loan. Here, the borrower will need to upload his/her purchase agreement, state his/her interest rate, obtain a property agreement and sign final documents.

As a developer/borrower, before applying for a mortgage loan, you need to know the ups and downs. You need to know all it entails.

What are the Pros?

  1. P2P lenders tend to approve loans for people with low credit scores more than for people with high credit scores.
  1. The interest rates on P2P loans are typically lower than the interest rates of other traditional loan lenders.
  1. Service fees on P2P loans are also typically lower than other traditional loan lenders.

What are the Cons?

  1. The time to process and approve a P2P loan may be longer than that of the traditional loan lenders.
  1. Collections fees for borrowers who don’t pay back on time can be very steep.

Peer to peer intermediaries provide the following services to better secure a lenders investment:

  1. An online investment platform that enables borrowers to attract lenders. It also allows lenders to identify and give loans that meet their investment criteria and expectations.
  1. The P2P intermediary identifies borrower’s identity, bank account, employment status, and income.
  1. Develop credit models for loan approvals and pricing.
  1. Perform borrower’s credit checks in order to filter out borrowers that are not qualified.
  1. Provide customer service to borrowers and also collect fees from borrowers who default in payments.
  1. Process payments from borrowers and remitting the payments to the lenders who invested in the loan.
  1. Ensure legal compliance and reporting.
  1. Loan servicing.
  1. Find new lenders and borrowers and connect them together.


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How to do Crowdfunding for Real Estate Development in Dallas, Texas

How to do crowdfunding for real estate development in Dallas, Texas

How to do crowdfunding for real estate development in Dallas, Texas

Crowdfunding is a way in which real estate developers raise capital. It is a way investors raise capital by reaching out to a large pool of investors who contributes a little amount of money. Crowdfunding is different from the traditional way of raising money in that it is usually done online.

Real estate developers use their crowdfunding websites and social media platforms to reach out to more investors who are interested in investing.

Real estate developers have adopted crowdfunding as an alternative traditional means of raising funds for real estate projects. Crowdfunding is a better alternative to traditional bank loans as it entails very low-interest rates.

Benefits of Crowdfunding

Unless you’re as wealthy as Bill Gates or Warren Buffet, you will most likely need investors to be able to acquire the amount of money you need for a real estate deal. As a developer, you will most likely need investors who want to invest in order to be able to generate capital for a real estate investment.

A lot of developers and investors have chosen crowdfunding as an alternative way of raising funds needed for real estate projects.

There are several benefits of crowdfunding which include:

  1. Crowdfunding increases your chances of raising money to fund your real estate investment

With crowdfunding, you have easy access to credits and capital without going through the stressful procedures of getting a loan. As an agent investor, you are able to keep your personal funds for other uses and keep your personal credit scores intact.

It helps you to secure funding for real estate projects when other traditional means of raising funds are not available or are limited.

  1. Crowdfunding helps to grow your investor network

Through crowdfunding, you are able to reach out to a lot of investors across your state, country and all over the world. You get to communicate and make deals with a lot of investors and grow your investor network. 

  1. It helps to save time and money

Crowdfunding helps you save time and money as you only use an online platform to reach out to lots of investors who want to invest. It takes a little amount of money and time to create a crowdfunding website compared to when you seek for loans via traditional means. You can also make use of your personal social media platforms to reach out to investors who are willing to invest.

  1. You gain access to lots of contributions and feedback from your online audiences.

Crowdfunding is a way to get feedback and contributions from the online audience about you and what you do. As an investor or developer, it is important that you pay attention to what investors are saying, their feedback and contributions.

From their feedback and contributions, you gain access to important information and knowledge on how to succeed in your fund sourcing campaign from potential investors.

  1. It is also a marketing strategy to inform people about your business and what you do

Crowdfunding is a marketing tool to promote your brand. Apart from launching a fundraising campaign, it is also an opportunity for you to promote your brand and what you do. It is an avenue to sell yourself as a reliable and professional real estate developer/investor. 

Crowdfunding Channels to source for funds

As a real estate investor who is looking for ways to expand and grow his/her portfolio, there are two crowdfunding investment channels to seek funds from willing investors. These are:

  1. Equity investment

Equity investment gives investors an equity stake in the real estate property/investment. It effectively turns investors into shareholders. Equity investment is what most real estate investors are willing to invest in because it yields higher returns than debt investment.

Returns are based on rentals income of the property. Investors also earn a share of the appreciation value of the property in case the property is sold. Payouts are usually sent quarterly.

  1. Debt Investment

Debt investment means the investors are basically lenders to the developer/property owner. Each Investor receives a fixed amount based on the interest rate of the property mortgage loan as well as the amount invested. Payments are usually given every month or quarterly. Investors are given priority during property payouts.


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Equity Multiple Real Estate, Dallas, Texas

Equity Multiple Real Estate, Dallas, Texas | Investment360

Equity Multiple Real Estate Dallas, Texas

Equity multiple is a performance metric that is commonly used in commercial real estate. It is what investors use to measure the performance of real estate opportunities.

It is a metric that is used to calculate the expected or achieved total return on an initial investment.

Equity multiple is the total cash distribution received from an investment divided by the total equity invested.

For example, if the total cash distribution received from a project is $2,000,000 and the total equity invested in the project is $1,000,000, the equity multiple will $2,000,000 divided by $1,000,000 which is $2x.

When an equity multiple is less than 1.0x, this means that you are getting less cash than you invested as an investor. When an equity multiple is more than 1x, it means that you are getting more cash than you invested.

From the example cited above, it means that an investor is expected to get $2 for every $1 invested. The $2 includes the $1 initial investment.

Equity multiple doesn’t put time into account. It ignores the time value of the money. This means it is much better if the holding period is 1 year rather than 10 years. This is why an investor needs to consider the equity multiple of an investment against similar investments.

Equity multiple is often reported along the Internal Rate of return (IRR).

What is the Internal Rate of Return?

Internal Rate of Return (IRR) measures the percentage rate earned on each dollar invested for the period it was invested while equity multiple measures how much cash an investor will get from an investment.

IRR and equity multiple are usually reported together because they complement each other. The difference between them is that they measure two different things.

IRR takes into account the time value of money but equity multiple does not take the time value of money into the account.

Equity multiple is a performance metric that puts IRR into perspective by summing up the return on investment in absolute terms. It does this by describing the amount of cash investment that will yield over the entire holding period.

Accessing risk in real estate investments

Neither equity multiple nor IRR adequately account for risk. Investors should pay adequate attention to the risks inherent in a project as part of the due diligence process.

This is very important especially if high equity multiple opportunities are projected for low-quality properties or if the financing is inherently risky. Investors owe it to themselves to adequately consider all the risks involved before acquiring an investment even if the deals are particularly attractive with upside potentials.

It is important for investors to be skeptical of deals advertised, particularly with high equity multiples. This is because most metrics in real estate are projections, not certainties. Investors should adequately examine which key assumptions drive a deal with high equity multiple.

Investors should keep in mind that the metrics do not consider all factors and should be analyzed as part of the due diligence process.

Equity multiple is a very important tool for real estate investors. It is recommended that you pair equity multiple with IRR when evaluating a potential real estate investment and appropriately analyze the risk in order to identify the investment that best meets your investment criteria.


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Real Estate Investing in Land Dallas, Teaxs

Real Estate Investing in Land Dallas,Texas (Ultimate Guide in 2019)

Investing in land has become increasingly profitable. Investors are having more interest in land investment as it requires low or no maintenance and with good investment profits. Continue reading about Real Estate Investing in Land Dallas.

Investing in lands in Dallas has become increasingly profitable for investors. Investors boost and diversify their portfolios by investing in Land in Dallas.

The land is a limited property; it can’t be manufactured or created. The number of lands available now is the number of lands that are going to be available forever. The value of land will always appreciate as more buildings and constructions are been done. The need for land is continuously growing, creating a high demand for it.

The population of Dallas is constantly increasing and the demand for more residential buildings keep increasing. Lands are going to be needed for these buildings to be built.

It is not a question whether or not land appreciates because it will always appreciate. The only question you may ask is how much it appreciates. 

Benefits of Investing in Land in Dallas

There are several benefits of investing in land in Dallas. As an investor, you will find out that it is easier and more profitable to invest in land rather than investing in commercial and residential buildings.

Some good benefits of investing in lands include:


  • Lower start-up capital 

The prices of land are generally lower than the prices of commercial and residential buildings. Purchasing land requires lower capital. You can easily save up to have enough money to purchase a land unlike purchasing a building that cost a small fortune. 

More investors and taxpayers have the opportunity to invest in lands due to lower prices of land as compared to purchasing a building. You can start your investment with low capital and generate profit over time to expand your portfolio. 


  • It generates good profits

The land is one of the investments that always appreciate. The demand for land is always increasing due to population and economic growth.

As an investor, you can hardly run into a loss by investing in lands. The value of land appreciates over time. Land does not depreciate.

When you buy a land at a cheaper price and leave the land for some years, it appreciates in value and you make good profits.


  • Low maintenance 

Unlike maintaining a building, you do not maintain the land. Land requires very low or no maintenance. The only thing you might need to do is to cut down trees or clear off the bushes if you want.

Otherwise, you can leave the land as it is for years and its value will not depreciate. You don’t spend extra money on maintaining the land.

You also don’t need to hire a management company to help you manage the land or you don’t need to spend money repairing damaged parts. 


  • A source of additional income

You can make your land a source of additional income. You can do this by finding creative ways to make the land usable.

You can lease out the land for use as a parking space, playground, farmland, or to be used for special events. You can also lease it out to be used as a garage until you want to sell it.

You can lease out the land for a couple of years until you are ready to sell it. This way you make extra income from the land and still retain the value of the land.


  • Lower Taxes

The taxes of buildings and structures are much higher than taxes on land. You pay just a little amount of tax on a land as compared to the huge amount of tax you will pay on a residential or industrial building.


  • It is flexible

The land is a flexible asset, unlike buildings. You can use land however you want. You can decide to develop on it, lease it, or leave it to appreciate.

You are not limited to how you can use the land; hence its value continues to appreciate due to its flexibility. 


  • It is limited

The land is not produced or manufactured. They aren’t making any more of it. The amount of land available now is the amount of land that is going to be available forever.

Land is a valuable resource with limited quantities available. Most people do not realize this on time. There will be a time that land will be very scarce and this will skyrocket the prices of land. Holding a land for a long-term is a way to increase the profit you will make on the land.

Why you should invest in land in Dallas

Dallas is a good investment ground for land. Many investors are coming into Dallas to invest in land and more investors are still expected to invest in land in Dallas. 

You may be wondering why you should invest in land in Dallas, below are some of the reasons:

  • Absorption of undeveloped or underutilized land in Dallas-Fort Worth continues at a record pace

Different areas in the Dallas-Fort Worth are becoming very strong in employment. More people are relocating into the city due to the availability of jobs. Jobs creation does not only help to increase the economy of a city or a country, but it also helps to increase the population. 

More investors and partners are coming into the Dallas land investment market due to potentials and profits. There has been greater interest in land in Dallas-Fort Worth within the last two years than in the previous six years.

This is due to the growing population and economy in the city. Investing in land in the Dallas area has become increasing alluring and profitable to investors.

Low top rates, buy costs surpassing replacement costs, and diminished retail demand has made some investments riskier. However, the value of lands has continued to grow and land investments have continued to experience increased profits.

  • External factors are making land investments more attractive

Investors and buyers are getting more cautious, yet there is a reported increase in land interests in the Dallas-Fort Worth area. 

There is increased interest in lands in outer regions, especially in the concentric circles around Dallas-Fort Worth, as per the report.

Land investments are becoming increasingly when compared with other types of investments such as oil and gas, stocks and bonds, technology and other investments they are perceived to be riskier.

  • The so-called fairway is still a great buy-in and around the Dallas-Fort Worth area

The stretch of land limited in Interstate 35 East and U.S. 75 from downtown Dallas up to the Red River keeps on being a great buy. The risk of buying these lands are much lower if you keep them long-term. 

Southern Dallas keeps on pulling in new and reputable developers searching for land for short-term and long-term developments.

Forney to upper east Rockwall to Princeton still has lower costs per acre of land. West DFW has appealing short-term and long-term investments.

  • The increasing population keeps increasing the demand for land


The population of Dallas-Fort Worth is estimated at about 7.4 million. This makes the cities two of the fastest-growing cities in the United States. The Urban Land Institute recently named Dallas-Fort Worth as the top real estate market in the U.S.

An average of 300-600 people relocates to Dallas every day and these people will need new homes to live. This increase in the population of Dallas creates more needs for construction of new homes which increases the demand for lands.


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Industrial Real Estate Investment in Dallas, Texas

Industrial Real Estate Investment in Dallas, Texas

Industrial real estate is typically properties used by manufacturing companies and production companies. They include properties such as warehouses, factory buildings, garages, manufacturing buildings, distribution buildings, showrooms, docking bays, and plant sites. Let’s discuss Industrial Real Estate Investment in Dallas.

Industrial real estate investments are high-risk, high-profits investments. An industrial real estate investor needs to know the ins and outs of industrial real estate investment. 

Dallas industrial real estate market is one of the most solid real estate markets in the U.S. The market has continued to grow strong from previous years through the first quarter of 2019. 

Dallas is a good investment ground for industrial real estate investors who wish to make good profits from their investments.

Dallas Industrial Real Estate Trends

The Dallas industrial real estate market has continued to make good records and has been very solid in 2018 through to 2019.

Industrial rentals have continued to surge higher while development and construction sector continues to spring up due to good economy and e-commerce in the city of Dallas. This is validated by a recent report from COMMERCIAL Cafe’s.

In the year 2019, Dallas has experienced stability and continuity in terms of development as the total square footage scheduled for delivery by the end of the year is set to match the total pipeline volume of the year 2018.

In 2018, developers brought 270 projects which amounted to 105.7 million square feet of new industrial space to the U.S. In 2019, 304 projects amounting to 104.6 million square feet are expected to be delivered.

All these projects need more industrial space and properties, leading to an increase in demand for industrial real estate in Dallas and the U.S in general. 

Dallas-Fort Worth, Chicago, and the Inland Empire are the top three locations for industrial construction in 2018 and also in the year 2019.

Dallas-Fort Worth is the third most attractive industrial real estate market and it is estimated to move upwards with more projects expected to be available. According to reports from Yardi Matrix, about 57 more projects amounting to approximately 18 million square feet is expected to be available in Dallas in 2019.

The most active owners of industrial property by square footage this year are Crow Holdings at 2.24 million square feet with five projects, the second is Hillwood at 2.16 million square feet with four projects and Trammel Crow at 2.01 million square feet with three projects.

Dallas-Fort Worth has also been ranked as one of the top investment targets among the U.S. metros. It was listed as the second most desirable investment market by investors for the third year consecutively. This is according to the CBRE’s 2019 Americas Investor Intentions Survey.

According to Randy Baird, the CBRE executive vice president, “There has been unprecedented investor interest for industrial and logistics properties in the Dallas-Fort Worth area coming not only from U.S investors but also global capital from Asia, Europe, and the Middle East”.

Dallas-Fort Worth is catching the interest of all types of capital since we are at a central point in the US production network. We have a pro-business environment with low costs of doing business and we have country driving populace development.

Investors are pulled in not just by the present market essentials, which are more grounded than at any other time, yet by the long haul see that Dallas-Fort Worth and Texas all in all will keep on outpacing the nation in populace and occupation development, meaning long haul asset appreciation.” 

The study, which covers all asset types, found in 2019, additional investors are organizing auxiliary markets that can offer more potential for both values and pay development. Investor’s interest for secondary resources expanded for the fifth year in a role at 33% to increase critical ground on value-add at 37% as the most preferred strategy.

The survey likewise analyzed how investors see every one of the different types of assets, both Industrial and logistics is as yet the preferred property type by 39% of investors as the most appealing for investment in 2019.

Multifamily intently followed in the runner up, with 37% of investors naming it as the next most attractive property type which has gone up from 20% in 2018. Office properties were preferred by 10% of investors as the most appealing for purchase in 2019. 

As far as multifamily investment is concerned, Dallas Fort-Worth has been appealing to capital because of the amazing economic growth we have seen through this cycle, bringing about solid retention and lease development in the multifamily space.

This economic growth combined with multifamily is being seen as the most recession-proof asset class has prompted the extraordinary flow of capital into the multifamily space.

Generally, the survey demonstrates that investors will stay active in the commercial real estate market in Dallas this year, with 98% of respondents planning to make investments.

There has been an articulated move toward more prominent alert, with the portion of investors wanting to either keep up or increase spending in 2019 tumbling to 75% from 88% in 2018.

Dallas Economy and Industrial growth Q1 2019

The Dallas-Fort Worth economy keeps on flourishing, as population and business growth surges higher. As per Moody’s Analytics, the Dallas-Fort Worth population increased by 104,000 yearly. This equates an average of 290 new residents every day, reaching a population of 7.6 million residents toward the end of March 2019. 

The Dallas-Fort Worth employment rate also increased during this time by 96,000. The unemployment rate remained at 3.5% at the end of Q1 2019. Out of the 96,000 new jobs, 21% (20,522 jobs) are from the industrial sector comprising of goods production and trade, transportation, and utilities.

The trade, transportation, and utilities account for 61% of the whole industrial sector which is the leading indicator for the expansion of industrial space.

Dallas Fort-Worth Industrial Real Estate Market Q1 2019

Market Overview 

The Dallas-Fort Worth (DFW) industrial market closed Q1 2019 with a slight decrease of 10 basis points (bps) in opening quarter-over-quarter, posting a rate of 7.0%. This denotes a 60 bps uptick from the 6.4% rate toward the end of Q1 2018, a result of the 29.1 million square feet (msf) of new supply added to the DFW market. 

The DFW industrial market saw 9.3 msf of new leasing during the first quarter, leading by South Dallas (2.8 msf), Great Southwest (1.1 msf), Alliance (1.1 msf) and North Fort Worth (1.1 msf).

Dallas-Fort Worth’s industrial market produced 5.2 msf of net retention in Q1, somewhat outpacing the 5 msf of new supply included during the quarter. This denotes the tenth straight quarter that net ingestion in the DFW industrial market has surpassed 3.0 msf.

Great Southwest led the market in net retention for the quarter with 1.6 msf. Firmly following was Alliance with 1.5 msf, of which 1.3 msf was an aftereffect of Stanley Black and Decker possessing their Alliance Northport build-to-suit. 

The Mesquite submarket was not a long way behind, retaining almost 860,000 square feet (sf), most of which was due to Ashley Furniture’s move-in to their new local appropriation focus.

During the first quarter, developers included almost 5.1 msf of new item to the local inventory, 55% of which was work to-suit item. Of the 22 projects completed, the average size of the building was around 230,000 sf.

Cushman and Wakefield are following an extra 30.1 msf of industrial product right now under development. This denotes the first run through in DFW history that product under development has arrived at the 30 msf edge.

Of this record-breaking new supply under development, 18 msf is theoretical item 23% of which has just been pre-rented. In light of current interest, the general opportunity rate is required to encounter just a little uptick for a quarter or two preceding by and by leveling out. 

Asking rates stay stable in the DFW industrial market. The first quarter finished up with an overall asking rate of $5.19 psf, denoting a 2.8% increment from the rate that was set toward the end of 2018.

The warehouse and distribution product type, which as of now has an asking rate of $4.35 psf, produces the highest quarter-over-quarter gain in the DFW area, increasing by 2.1%.

Dallas Economy and Industrial growth Q2 2019

The Dallas-Fort Worth (DFW) economy keeps growing strong both in growth of its population and employment. As of June 2019, the population attained a new high of 7.6 million residents and job market grew by 97,000 over the previous year.

According to Moody’s Analytics, industrial jobs represented 24,700 jobs which are 25% of all the new jobs added. The market for industrial demands is driven by trade transportation, and utility sector jobs, accounting for 74% (800,400 jobs).

The industrial employment in DFW as of June 2019 is totaled at 1,084,000 jobs. Due to the addition of jobs in the industrial sector, the unemployment rate has reduced below the national unemployment rate. 

Dallas Fort-Worth Industrial Real Estate Market Q2 2019

Market Overview 

The DFW industrial market maintained solid positive momentum through the first half of 2019. The quarter shut with a 10-bps decline in vacancies to 6.9% compared with the earlier quarter.

The vacancy rate increased by 50 bps year-over-year because of the high volume of new supply.

Developers added 4.7 million square feet (msf) of new products to the market in Q2 and an aggregate of 9.8 msf of new deliveries year-to-date 2019. 

Build-to-suit projects were 72% of newly completed projects. The 12 projects finished this quarter had an average building size of 390,000 sf.

Last quarter instituted the market’s first time in history surpassing more than 30 msf of under construction activity. Construction stayed at a high in the market with an extra 30.3 msf, bringing the market to the second consecutive quarter of surpassing 30 msf in under construction activity. 

Speculative projects represented most of the projects under construction at 21.4 msf (70%). Just around 10% of the speculative projects are currently pre-rented. High demand for products in the DFW market will keep vacancy rates generally stable with slow decreases. 

The overall leasing activity (excluding renewals) totaled 4.5 msf with the most activity in South Dallas at 1.0 msf. The Pinnacle/Turnpike and Alliance submarkets followed with 833,000 sf and 691,000 sf.

The DFW industrial market continues with its positive occupancy growth and retained 5.7 msf in the second quarter of 2019.

Net retention outpaced new supply included the quarter by 1.0 msf. This denoted the eleventh straight quarter net absorption surpassed 3.0 msf in the market.

The highest cumulative increase in occupancy was in the DFW Airport submarket at 2.9 msf pursued by Great Southwest and Pinnacle/Turnpike at 1.2 msf and 830,000 msf.

Asking rental rates remained generally stable in 2019 in the DFW modern market with a 0.2% decline compared with the earlier quarter.

Generally, rental rates diminished by 5.8% year-over-year to $5.18 per square foot (psf) on a yearly net premise. Compared to the in-place rate at year-end 2018, asking rent increased by 2.6%.


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Commercial Real Estate Investment in Dallas, Texas 2019

Commercial Real Estate Investment in Dallas, Texas

Real estate investors are constantly looking for the best investment opportunities. Investing in the right properties and the right location will yield more profits. There are different kinds of properties that you can invest in as an investor. If you are looking to invest in properties that will yield you good financial rewards, Commercial Real Estate Investment in Dallas. 

Investing in commercial properties will yield more profits than investing in residential properties. However, you need to make adequate research and seek the services of commercial real estate professionals. This is because commercial properties are high-risk, high-reward real estate investments.

What is Commercial Real Estate?

Commercial real estate (CRE) refers to buildings or lands used exclusively for business purposes for the aim of generating profits. Any building or land used exclusively for business purpose and generating profit is known as a commercial building. Profits are generated from commercial properties by selling or leasing the properties. They are either sold or rented out to business owners who want to use the properties for business purposes.

Commercial real estate includes office buildings, medical buildings, hotels, shopping centers, farmlands, retail stores, malls, warehouses, restaurants, garages, gas station buildings, and departmental stores.

Investing in Commercial Real Estate Dallas

Investing in commercial real estate is a high-risk, high-reward investment. As an investor, you can make money through property appreciation and rental increments. The management and maintenance of a commercial property is the responsibility of the tenant, hence you don’t incur more expenses in managing and maintaining the property.

You can invest and own a commercial property through two ways which include:

  • Direct Investment


This is a way to own a commercial property by investing directly towards the ownership of the physical property. It simply means purchasing a commercial property directly. 

To be able to purchase a commercial property directly, you need to be a high-net-worth individual. This is because you need a considerable amount of capital to invest directly and own a commercial property.

Investing directly in commercial properties in Dallas could require a considerable amount of capital. However, it is a wise investment risk to take because you will be making good profits from your investments due to its high economic growth, high employment rate, and ever-increasing population.

  • Indirect Investment


Indirect investment means investing in commercial properties indirectly through various market securities such as exchange-traded funds, real estate investment trusts, or investing in companies that finance commercial real estates markets such as banks and realtors. 

Indirect investment means you are part-owner of the property and enjoys a part of the profits made from the property.

Advantages and benefits of investing in commercial real estates in Dallas

Investing in commercial properties in Dallas has many benefits and advantages. These include:

  • Increased profits


Making profits is the sole aim of investing in commercial real estates. When compared to investing in residential properties, the annual return of commercial properties is about 12% while the annual return of residential properties is about 6%.

The leasing rates of commercial properties is significantly higher than the residential properties. Dallas is a populated city with a good economy. Businesses are experiencing drastic growth in Dallas and commercial property owners are smiling to the bank due to high rentals. Commercial real estates have good returns and considerable monthly cash flows.

  • Longer lease contracts


Commercial properties generally have a longer-leasing contract compared to residential properties. A leasing contract for a commercial property could be up to 5 years or more while a leasing contract for the residential property could be for 1 or 2 years. 

The long leasing contract generates more cash which you can reinvest in purchasing another property.

  • Property appreciation


Commercial properties are always appreciating. Business owners are constantly looking for commercial properties to rent, hence increasing the demand for commercial properties. The increase in demand leads to the appreciation of the property which in turn leads to increment in rentals. Commercial property will continually increase in value.

  • The maintenance and care of the property is the responsibility of the tenant


The tenant doing business in a commercial property is most often the one maintaining and taking care of the property. This means you do not spend your money on maintaining the property. The tenants are in charge of maintaining the property and keep it in good condition to keep their business running and their customers happy.

Why investing in Dallas commercial real estate market is a good investment

An expanding population, pro-business environment, increased economic growth, and some other good reasons are luring investors to invest in Dallas commercial real estate market.

A survey conducted by NYSE ranked Dallas-Fort Worth as second in the U.S for real estate investor’s interest. Dallas commercial real estate market attracts both domestic and foreign investors with Canadian investors particularly interested.

The Canadian investors have invested a large amount of over $326.2 million in the Dallas-Fort Worth real estate market over the past 12 months and this is estimated to go higher.

Germans and South Korean investors are also trooping into the Dallas commercial real estate market. 

One of the strong reasons why Dallas is a lucrative ground for commercial real estate investment is its high employment rate and economic growth. A strong economic lead to rental increment as the demand for the property keeps increasing.

Businesses and organizations make good profits due to good economy and high employment rates. The people living in Dallas can comfortably afford their basic needs and buy whatever they want from these businesses. A business will not grow when the people around don’t have money to patronize the business. Hence, the high employment rate and availability of good jobs also make Dallas a lucrative ground for commercial real estate investors.

Dallas-Fort Worth is a dynamic region where no one industry dominates and growth projections are generally higher than other large U.S. Due to its diverse economy, the city is much more insulated against unforeseen macroeconomic events which might cause stronger economic headwinds in other States.

Nationally, industrial real estate is attracting the most investor interest, with 50 percent citing it as their preferred investment opportunity. Multifamily real estate follows at 20 percent, office at 14 percent and retail at 10 percent.

Along with investments, the region’s real estate scene continues to expand. CBRE reported it’s tracking more than 5.6 million square feet and 15 million square feet in current active tenant requirements for office and industrial space, respectively.

That’s an indicator that Dallas-Fort Worth will remain an attractive investment opportunity.

Dallas has remained on top of the list for the top real estate investment market for years. Dallas was ranked 12th after cities like New York, London, Paris, and Tokyo in JLL’s 2016 investment market survey.

Dallas city is comprised of high-tech and high-value sectors with good infrastructure and transparent business practices that all combine to make the city a robust commercial real estate market.

Commercial real estate market Data in Dallas-Fort Worth area 2019

The population of Dallas-Fort Worth is about 7.4 million, making the cities two of the fastest-growing cities in the U.S. The Urban Land Institute recently named the Dallas-Fort Worth area like the top real estate market in the U.S. This recognition was given for both commercial and residential real estate market.

Top business sectors in the Dallas-Fort Worth area reported employment growth over the years, especially in transportation, utilities, professional and business services. 

Below are the following Market data highlights from Q2 2019 Dallas-Fort Worth MarketView reports from CBRE:

Multifamily rental homes


  • Rentals grew 3% year-over-year as demands exceed supply
  • The net absorption in Q2 2019 is the highest that the market has experienced in 30 years.
  • The annual delivery in multifamily homes is exceeding annual starts, while the single-family development is declining simultaneously.


Office buildings


  • The gross asking rentals increased overall from $25.01 per sq. ft. to $25.26 per sq. ft. between Q1 and Q2 2019. Also, Class A asking rentals rose from $30.95 per sq. ft. to $31.37 per sq. ft.
  • Over the most recent quarter, vacancy remained flat.
  • The net absorption of office spaces slightly declined within the Q1 and Q2 2019.
  • 4.3 million sq. ft. of office constructions are currently ongoing and 46% of the offices are already pre-leased. 


Retail stores


  • Occupancy of retail stores reached a record high of 94.7% in Q2 2019
  • Retail construction and absorption both increased during Q2 2019.
  • The Collin Creek $1 billion redevelopment project has been approved by the planning and zoning commission in the DFW suburb of Plano. This is a mixed-use project including a hotel, 500 homes, 2,300 apartments, 300 senior living units, and 300,000 sq. ft. of retail space.

How to get started in commercial real estate

Do you want to invest in commercial real estate but you don’t know how to start? Here, we are going to show you how to get started and invest in commercial real estate. To ensure success and going into investment loss, you must first do your homework and thorough research. You must know the ins and outs, dos and don’ts of commercial real estate.

Below are some vital tips you need to follow for a successful commercial real estate investment:


  • Understand how commercial real estate is different from others


Commercial real estate is different from residential real estate. The income from commercial real estate is typically usable resulting from longer leasing period. A commercial real estate investor has better potentials and opportunities to earn a higher income than a residential real estate investor.

The location of the property and the type of tenant also has a great role to play in determining the demand for the property. A property located in a location with the low economy and low population will have a low demand. This will affect the value of such property. Also, commercial properties have better performance and value in urban areas compared to residential properties.


  • Analyze comparable properties


Before buying or selling a property, you must first compare the property with other recently sold similar properties. This is to help you determine the current market value of the property. To determine the current value of the property you want to buy, search for a similar property that the square footage is not higher or low than 10% of the property you want to buy. Doing this, you will come up with the most accurate comparable value for the property.


  • Use the right success metric


As a commercial real estate investor, you need to understand real estate finance and investing. Real estate finance and investing involve a lot of calculations and formulas. These include:

  • Net Operating Income 

    The net operating income equals all revenue and costs from a property. This calculates the amount investors will make from an investment after removing all operational expenses. This is calculated before payment of taxes.

  • Cash On Cash 

    This is a calculation that shows investors the rate of return on a commercial real estate investment. Real estate investors that rely on financing to purchase their properties commonly uses this. It measures the returns on out-of-pocket cash or the personal cash invested relative to the return on the part that was financed. It provides an accurate analysis of an investment’s performance.

  • Cap Rate 

    The cap rate or capitalization rate is used to calculate the value of income-producing properties. It is the ration of the net operating income to a property asset value. It provides investors with an estimate of future cash flows or profits from an investment.


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Healthcare Real Estate Investment in Dallas, Texas 2019 

Healthcare Real Estate Investment in Dallas,Texas 2019 

The healthcare sector is an economic force in the United States surpassing manufacturing and retail to become the largest employer of the nation’s workforce. The healthcare sector has over 13% of the total workforce in the country and it is expected to continue growing. Here we discuss about Healthcare Real Estate Investment in Dallas.

The aging population, prevalence of different health conditions and chronic diseases have made expansions of the healthcare sector a necessity.

Investment in healthcare real estate has risen significantly in the last couple of years. It is expected that the need for medical facilities and health-care related buildings will continue to grow in the coming years due to rising patient numbers.

Healthcare real estate investors are realizing good profits and returns from their investments with brighter future predicted. 

Healthcare Real Estate Investment Trends

According to JLL research, the sales of medical buildings in the United States reached almost $10 billion in 2018. 

According to the U.S. Census Bureau, by 2030, all baby boomers in the U.S. will be more than age 65. In another five years’ time, the number of people who are 65 years old and more will be more than the number of people who are under 18 years old.

By the year 2060, one in four people will be 65 years old or older and 20 percent of the total aged people will be over 85 years old.

This means there will be more needs for healthcare facilities such as doctor offices, outpatient facilities, surgery centers, medical homes, clinics, and so on.

New improvement doesn’t have all the earmarks of being surpassing interest, so overbuilding is most likely a lesser worry for real estate investors.

In addition, an extreme re-building of the system, for example, “welfare for all” with a transition to a single-payer system, would almost certainly expand access to medical care and thusly increase the demand on medical real estate needed. 

Administrative issues bring a specific measure of hazard and questions. However, regardless of how you feel about potential changes, whether gradual or radical, it’s probably going to carry more human services to more individuals, requiring more space to house healthcare providers and consumers.

Expanding Opportunities

The growth of the healthcare sector has caught the attention of retail property investors who were looking to move away from the sector. Investors who want to acquire more medical properties to their investment portfolios are diving into healthcare real estate. 

Before now, healthcare real estate investors have always avoided investing in medical office buildings and healthcare facilities largely because they are used for a specific and specialized function. This has drastically changed in recent times as needs for more healthcare facilities are required. 

The increasing private equity interest in healthcare operators should fuel an expansion of the facilities, giving a broader pool of net-lease investors more opportunities to own the buildings.

According to JLL research, single-tenant medical office transactions have totaled around US$2.5 billion for four straight years through 2018, which is about US$1 billion more annually than the three years before that period.

Medical real estate offers a better alternative to retails, with strong, dependable returns that are less susceptible to disruption from e-commerce. As long as trends in healthcare continue to point toward longer lifespans and increased care, medical facilities will remain critical and demand will continue to increase.

Healthcare Real Estate Investment Insights

Investing in healthcare real estate is a profitable investment plan. Below are some insights about healthcare real estate investment:

  • Real estate is the key to capture demand for the increasing number of patients 

Looking at patient-care facilities across the U.S, it is clear that the hospital-centric image of traditional healthcare is dwindling.

The growing and aging population is placing new demands on the nation’s healthcare system, while technology advances are shifting consumer preferences and increasing demand for easier access to care in lower-cost settings in communities.

Meanwhile, healthcare providers face ever-mounting pressure to expand care and quality of service while containing costs. 

Hospitals are not the only healthcare providers in town. While total patient numbers are rising, many hospitals face mounting risks of volume decline and margin erosion in their specific geographies.

Now more than ever, healthcare providers of all sizes are responding to the challenge and using real estate to serve patients more efficiently and effectively. 

  • Increasing baby boomers requires more care 

In the U.S. economy, healthcare is the fastest-growing sector. Spending has jumped 33 percent since 2000 alone and today accounts for 17.9 percent of the gross domestic product (GDP).

More growth is on the horizon, from now through 2025, we expect spending to continue to grow by another 5 percent or more annually.

The job force is also surging, with healthcare employment enjoying faster growth than any other sector in the U.S. workforce. Today, it comprises 12.2 percent of the nation’s workforce with another 18 percent increase over the next decade.

This momentum points to an overwhelming hunger for more modern, intelligent locations, as rapidly as possible. Add in our aging population, and long-term stability of this demand is all but ensured.

Roughly three-quarters (73 percent) of the nation’s healthcare spending now comes from the 50-plus population. More than 10,000 baby boomers are turning 65 this year, which makes them Medicare-ready.

And many more are on the way, considering estimates that the number of people 65 years old and up will nearly double by 2050, 80-and-up will triple, and 90s and 100s will quadruple between 2010 and 2050 alone.

By 2050, the U.S. population over 65 years is projected to nearly double from 48 million to almost 88 million. Doctor visits and medical expenses dramatically increase with age.

  • Millennials are redefining healthcare today

They don’t want a one-size-fits-all hospital campus. They want more convenient locations, with smaller, more concentrated offerings, at convenient times and self-directed and when they find the right fit, this brand-loyal generation is likely to keep the faith.

These preferences hold significant weight in an industry where young people are quickly becoming the dominant healthcare consumers, both for themselves and for their families as caregivers.

The majority of babies born in the United States this year (82 percent) were born to millennial parents, and many are looking to establish a relationship with a healthcare system for the first time.

Intergenerational dynamics, rising patient numbers in general and intense cost pressure all point to the need for new types of real estate, in new and more locations.

  • The setting of healthcare is changing 

Healthcare leaders are making major strides in meeting patients where they are while supporting financial health.

Value-based care with a focus on population health and the rise of consumerism has altered healthcare delivery, leading to new real estate strategies that include urgent care and building outpatient centers or smaller-scale micro-hospitals and health-system sponsored wellness centers. 

The migration from inpatient to outpatient care, which has been taking place over the past 20 years, has contributed to a decrease in the national occupancy rate for hospitals from 77 percent to 61 percent since 1980, according to data from the Medicare Payment Advisory Commission.

Why Dallas healthcare real estate investment is the best choice for everyone

Dallas, situated in North Texas, is the ninth-largest city in the United States and the third-largest city in Texas. The population of Dallas in 2014 was estimated at 1.28 million and grew to 1.3 million in 2016.

In 2010, Dallas had an official population of 1.197 million people which grew to an estimated population of 1.24 million in 2012 and 1.28 million in 2014. 

The Dallas metropolitan territory is a lot bigger and is one of the fastest developing city in the U.S. The 13-district Dallas-Fort Worth-Arlington metro territory has a populace of 6.8 million, which is the seventh biggest metro region in the United States.

A high percentage of the population in Dallas are baby boomers and they need healthcare services. Dallas is a city filled with foreigners and immigrants who need healthcare services.

Texas baby boomers are projected to yield a population of 5.9 million or 19.4 percent of the state’s total population in 2030 and Dallas is one of the cities with the highest number of baby boomers in Texas.

Dallas has a very good economy. It has GDP estimated at $450 billion, ranking Dallas 6th in the best GDP in the United States.

Dallas ever-increasing population, increase in baby boomers and with its good economy, makes the city a good choice for Healthcare Real Estate Investment in Dallas. 

How healthcare commercial real estate is different

Below are some vital things investors should know about healthcare real estate and why it is different from other forms of investments.

  • Medical office buildings (MOBs) boast uniquely stable long-term occupancy rates.

Indeed, from 2009 on, this sector has been the picture of stability. The quarterly weighted average occupancy ranged between a low of 90.4 percent in 2009 and a peak of 92.6 percent in 2016 a mere 200-basis-point spread from recent peak to trough.

Occupancy rates are expected to remain stable for the near future, with limited room for growth given the presently high rates.

Pricing has been steadily trending up, by an average of 49.8 percent over the last five years, with overall steady growth over the last decade despite the Great Recession. All told, MOB average sales price numbers bear out this sector’s appeal and relative resistance to downturns in the real estate market.

  • As other property sectors have tightened, MOBs offer high returns 

As competition for Core product in gateway markets has resulted in several years of cap rate compression, investors are moving into new sectors, with a greater focus on alternative property sectors.

The low yields for commercial office and other traditional real estate persist, institutional and foreign investors are increasingly turning to alternatives offering attractive returns.

Medical offices have consistently offered a 2 percent spread in cap rate or greater over similar benchmarks for the last five years, making it a desirable prospect given its consistent performance over a long time.

  • MOBs attract a high-quality tenant base 

As more physician practices move to hospital ownership, MOB’s hospital affiliation is increasingly important. As of mid-2015, one in four medical practices was hospital-owned, according to a study by Avalere Health. Further, hospitals acquired 31,000 physician practices, a 50 percent increase, from 2012 to 2015, according to the report.

According to an American Medical Association (AMA) study, the newest generation of doctors is shifting from owning their medical practice to joining larger multispecialty practices to leverage administrative and payer partnerships as well as lifestyle choices.

  • Construction of new medical facilities is keeping pace with demand 

Despite strong demand, MOB inventory crept up only slightly in 2017.  2018 expects to see higher completions and starts with virtually no speculative development, unlike other property types. These deliveries are in step with absorption, and overall, steady occupancies and increasing rental rates.

  • Healthcare real estate will continue to grow and evolve 

Despite the momentum around MOBs, the need for acute care real estate hospitals and hospital campus properties is also growing, and for good reason.

While healthcare services are trending from inpatient to outpatient facilities, hospitals will also see growth in total patient-day numbers. 

The volume of inpatient services will continue to grow regardless of declining inpatient utilization rates. Inpatient facilities will increasingly be focused on the sickest and most acute care needs, often requiring longer stays. With more hospital starts as health systems race to expand and replace obsolete facilities.

Roughly 75 percent of these hospital project starts are expansions or replacements, although entirely new hospitals are also being built, too, with 92 underway at the end of 2017. 

There are a handful of related drivers fuelling this demand for new hospital facilities, as well as the push for more micro-hospitals and licensed post-acute and sub-acute facilities.

Ultimately, however, the $21.4 billion of new hospital construction underway now is helping meet patient demand.


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1031 Exchange Investment Tips in Dallas, Texas

1031 Exchange Investment in Dallas, Texas | 1031 Exchange Tips & Rules

An American taxpayer or real estate investor who is planning the sale of a property must be ready to lose a certain percentage of the profit to the government. This is sad for most people as they have to lose part of their money to the government as capital gains tax. Let’s discuss 1031 Exchange Investment in Dallas.

Capital gains tax could be as high as 15% to 30% of the profit you made from the sale of your property. To avoid losing such amount, it is wise to use an investment strategy that prevents you from paying capital gains tax.

As a real estate investor or someone interested in buying properties or 1031 Exchange Investment in Dallas, you can acquire several properties without losing money on capital gains tax.

1031 exchange is a powerful tool or strategy to use in purchasing properties without paying tax. It is one of the best ways real estate investors and taxpayers can acquire properties and maximize their investments.

The 1031 Exchange has been cited as one of the most powerful wealth-building tool available to taxpayers and real estate investors.

 What is 1031 Exchange

The 1031 exchange took its name from Section 1031 of the United States Internal Revenue Code. It is a rule that allows a taxpayer to sell income, investment or business property and replace it with a like-kind property. It is a way which a taxpayer can defer payment of capital gains taxes on the profit made from selling an investment property.

The capital gains from the sale of an investment property are deferred as long as the rules binding the 1031 exchange are upheld.  In theory, an investor could continue deferring capital gains on investment properties until death, potentially avoiding paying capital gains taxes on all his/her properties.

This means you can rollover the profit from one investment property into purchasing another like-kind property and so on until death without paying capital gains on any of the property. You only pay capital gains tax when you decide to sell the properties for cash after several years.

What types of properties are known as like-kind?

For a property to qualify as an exchange property, it must be an investment property. An investment property is a property that is held and used for investment purposes. They are properties that are bought for the sole purpose of making profits.

Examples of investment properties are commercial buildings, office building, malls, apartment buildings, industrial buildings, warehouses, and other types of buildings used for businesses.

A residential building for private use is not used for an exchange. A vacation home or a family house is not a valid property for an exchange.

Like-kind properties must not be the same kind of properties. Most people get it wrong thinking that like-kind properties must be exactly the same type of properties.

The following properties can be exchanged as like-kind properties:

  • Land can be exchanged for a shopping center
  • A land can be exchanged for an industrial building
  • A shopping center can be exchanged for an office building
  • An apartment building can be exchanged for an industrial building
  • A single-family rental home can be exchanged for a multi-family rental home
  • Land can be exchanged for an apartment building

You can exchange any investment property for another provided that the profit made from selling the original property is the same or lower than the cost of the replacement property. If the cost of the replacement property is lower than the profit made from the sale of the original property, you will have to pay capital gains tax on the balance amount of the profit.

1031 Exchange rules

These are rules that must be followed for the exchange to be valid. If you do not follow these rules, the exchange may not be valid.

  1. Both properties (original and replacement) must be investment properties

1031 exchange only applies to investment properties. The properties must be for business use only. Properties such as office buildings, apartment buildings, commercial buildings, lands, warehouses, hotels, malls, and so on. A residential building for tenants is also regarded as investment properties so long as you and your family are not occupying the building.

  1. Both properties must be like-kind

Like-kind properties are properties of the same type. This means an investment property exchanged for another investment property is like-kind. Different kinds of investment properties can be exchanged for another. For example, a shopping complex can be exchanged for a warehouse.

  1. You must be the owner of the property for at least a year

You must be the owner of an investment property for at least a year before you can sell it for an exchange. A property owned for less than a year may not be valid for an exchange.

  1. The replacement property must be identified within 45 days

After you have sold your property, a replacement property must be identified within 45 days. Your intermediary must be notified with a legal form that proves the availability of the replacement property within the given period. The rule allows you to identify multiple replacement properties within the given period as long as one of the properties is eventually purchased.

  1. You must purchase replacement property within 180 days or 6 months

The 180 days’ rule state that replacement property must be purchased within 180 days for the exchange to be valid. This means that from the day you sold your property, you have 180 days to purchase a replacement property. You should also know that the money you made from the sale of your property will be withheld by an intermediary. The intermediary will only release the money to you when you want to pay for the replacement property.

  1. The name on the original property must be the same with the name on the replacement property

The name in the documents used in selling original property must be the same name used in the documents used in purchasing the replacement property

  1. The cost or value of the replacement property must be the same or more than the profit from the original property

The cost of the replacement property must be the same or more than the profit acquired from the sale of the original property. If you have leftover cash after purchasing a replacement property, you will most likely pay capital gains tax on the balance cash.


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1031 Exchange Investment in Frisco, Texas

1031 Exchange Investment in Frisco, Texas | 1031 Exchange Tips & Rules

Real estate investors are constantly looking for better investment opportunities. There is a good investment strategy with which a real estate investor can sell and purchase real estate properties in Frisco Texas without paying taxes on capital gains. Here we discuss 1031 Exchange Investment in Frisco.

This strategy is known as the 1031 exchange. This is an investment strategy that most real estate investors and property buyers are using to acquire more properties without losing income on capital gains taxes.

As a real estate investor or taxpayer looking to buy properties or 1031 Exchange Investment in Frisco, you can maximize your revenue by using the 1031 exchange in acquiring investment properties. 

What is 1031 Exchange?

1031 exchange also known as the like-kind exchange is a rule in the United States Internal Revenue Code that allows one investment property to be swapped for another.

It allows an investor or a property owner to sell a property and use the profit acquired from the sale of the property in buying another like-kind property.

This means you purchase another property with the proceeds from another property without cashing out. All the profits go into the purchase of another like-kind property.

1031 exchange is a way to defer payment of capital gains taxes on properties acquired. It allows your real estate investments to continue to grow tax-deferred.

This means you won’t have to pay immediate taxes on capital gains. You will only need to pay taxes when you want to sell your investment properties for cash after so many years.

1031 exchange allows you to roll over the gain from one investment property to another, and so on until you want to sell for cash. However, you can keep the cash amount you use in purchasing the original property, you only can’t keep the profits.

For example, if you purchase a rental building for $500,000 and you sold it after 4 years for $700,000, you have made a profit of $200,000.

According to the rule, you can keep the $500,000 you used to buy the property 4 years ago but you will have to pay capital gains tax on the $200,000 profit. A capital gain tax could be 15% to 30% of the $200,000 profit.

To defer paying capital gains tax, you will have to use the $200,000 in purchasing a like-kind property of equal or greater value. This means the replacement property must be worth $200,000 or above to defer payment.

If the replacement property is lower than $200,000, you may have to pay capital gains tax on the balance profit.

1031 Exchange Tips and rules

1031 Exchange is binding by special rules which must be followed for the exchange to be valid. You most likely will need the services of a professional legal practitioner or experts in real estate investments and 1031 exchange to help you through the journey.

However, we are going to show you the rules and things you should know to help you through your exchange.

  1. Both properties (relinquished and replacement) must be investment properties

1031 exchange only applies to investment properties. It does not apply to properties for personal use. Investment properties are properties such as commercial buildings, office complexes, warehouses, hotels, condominiums, rental apartments, etc.

Your primary residence, vacation homes or other buildings for personal use do not apply with 1031 exchange. Both properties must be investment properties for productive use in a trade or business purposes.

  1. Both properties must be like-kind

Like-kind properties are two properties or assets that are of the same type. The two properties must be for investment purposes. The rule is liberal, however, there are strict time constraints that must be met.

You can exchange different types of investment properties for another. For example:

  • You can exchange a shopping center for land
  • You can exchange an apartment building for an industrial building
  • You can exchange an office building for a shopping center
  • You can exchange a single-family rental home for a multi-family rental home.
  • You can exchange land for industrial building
  • You can exchange a warehouse for an apartment building.
  1. The replacement property must be identified within 45 days

This is one of the key time limits that must be followed in the 1031 exchange. You must identify a replacement property within 45 days of selling your property.

You must tender a legal form to your intermediary to proof that you have gotten a replacement property within 45 days. You can identify multiple replacement properties as long as you eventually purchase one of them within the purchase time limit.

Also, the market value of the replacement properties should not be more than 200% of the market value of the original property/properties sold.

  1. You must purchase replacement property within 180 days or 6 months

This is the second time limits that apply to 1031 exchange. It states that you have 6 months or 180 days to close the purchase of a replacement property after selling your property.

After selling your property, an intermediary with be in possession of the cash until you close the purchase of a replacement property. The money will be in an escrow account or withheld by the intermediary.

After the replacement property documents have all been drafted, the intermediary will then release the money to you for the payment of the replacement property. All these should be done within 180 days for the exchange to be valid.

  1. You must be the owner of the property for at least a year

For a property to be qualified for a 1031 exchange, you must possess ownership the property for at least a year.

  1. The value of the replacement property must be the same or more than the proceeds from the original property

This means that there must be no leftover cash after the purchase of the replacement property. You must use all the profits you made from the original property into purchasing replacement property. Any leftover cash will be taxed as partials sales proceeds.

  1. The name on the original property and the replacement property must be the same

The same name you used in buying the original property must be the same name used in buying the replacement property.


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Ultimate Guide to Real Estate investment Dallas

Real Estate investment Dallas | Real Estate Returns and growth

Are you considering investing in real estate? Real estate investing is considered one of the best and most profiting investing. It has good potential returns on investment. It is almost impossible to go at a loss when you invest in real estate. Let’s discuss Real Estate investment Dallas.

Most people that want to invest in real estate are faced with the dilemma of finding the right location or area to buy properties. Purchasing a property in a wrong location can lead to a loss or a low return of investment.

Knowing the cities with good prospects and with potentials to maximize profit is very important. This is why before investing in any property, you should first make adequate research to know which area and cities with potentials to maximize good returns on investment.

Dallas real estate market is booming with great returns on investment. It is a market where you should very much consider investing on. Dallas real estate market has grown in recent times both in the increase of population and economic growth.

Dallas is a city where around 600 people relocated into every day. This shows a great opportunity for property investment as people will need homes to live in. Dallas is a choice location for a lot of people and this has made the city a great investment hub for property investors and home buyers.

5 reasons to invest in Dallas Real Estate Market

Dallas is home for both locals and foreigners. It is a choice location for a lot of people. The growth of its population and economy has made it a seller’s market for real estate. Investing in real estate in Dallas is a good choice you should make.

Let’s take a look at some of the reasons why you should invest in real estate in Dallas:

  1. Tax benefits

Tax payment on properties is one of the factors that can drive away investors from investing in properties in a particular location. Investing in real estate in Dallas reduces or eliminate taxes on properties.

Investing in properties and treating your investments as a business will enable you to eliminate expenses you would have incurred. Expenses including property taxes, travel fees, and repair costs can all be eliminated.

You can also avoid paying capital gains taxes on properties with 1031 exchange. It allows you to purchase like-kind property with the proceeds from the sale of another property. Buying properties with 1031 exchange helps to eliminate the payment of taxes on properties sold.

Buying properties in an Opportunity Zone allows you to defer payment of capital gains taxes.

  1. Population Growth and Economic Growth

Dallas is growing at a fast pace with about 600 people relocating to Dallas daily. Dallas is the 4th most populous metropolitan area in the United States.

It is expected that 50,000 new single-family homes and 50,000 new apartments will be built in Dallas County in the next three years.

With a 4% annual economic growth over the past years, Dallas has experienced a significant increase in population. Dallas had its roots in small-scale farming which has been boosted by oil business.

It has become an urban cultural and business center. Dallas real estate market is expanding daily, which is why more homes are needed to accommodate its populace.

Dallas is fast becoming a hub for business and as more people are relocating to the city, more homes are needed which is very beneficial for real estate investors.

  1. Job markets and high employment rates

Dallas has been ranked 2nd in the job market growth in the United States with over 500,000 jobs created over the recent years. The average salary in Dallas is rising to about $60,000 annually. This has resulted in the financial stability of people living and working in Dallas.

The high rate of employment, good economy and financial strength of its populace has made the city a great location for real estate investment.

With a GDP of about $450 billion, Dallas is ranked 6th in the best GDP in the United States. With people having good jobs and earn better wages, they can buy properties and pay rentals. They can spend more money on buying properties from investors.

Availability of jobs in Dallas helps to create a good economy and it is expected to increase in the future.

Dallas is ranked at 1st in the overall commercial real estate demand in the United States. This means that the demand for properties both commercial and residential is very high in Dallas.

  1. High rent to home price ratio

The ratio of the residential rental to home prices in the Dallas housing market is 16:1. This means that in 16 years, a property owner can get full return on the value of his/her property.

This is the highest-ranked property return in the United States. Also, the selling prices of commercial properties such as industrial, retail and offices all cost above the normal rates in Dallas.

  1. Growth of Airbnb

Airbnb (Air bed and breakfast) is an online-based market for renting properties. Foreigners, immigrants, and people relocating to Dallas can rent properties and accommodations through the platform.

On bookings, it takes a 3% commission and the balance payment goes to the homeowner. A lot of people uses the platform and Airbnb has recorded remarkable growth in Dallas over the years.

The growth of Airbnb has indicated that a lot of people are moving into Dallas and they need accommodation. Dallas is among the cities with the highest vacation rental services.

Hence, as a property investor, it will be wise to invest in property in Dallas due to the high demand for accommodations to rent. The value of your property will continue to rise due to the increase in demand.

Dallas Real Estate investment returns and growth 

The median value per square foot of homes in Dallas is $205, which is higher than the Dallas-Fort Worth-Arlington Metro average of $137.

The median cost of homes right now recorded in Dallas is $379,900. The lease cost in Dallas is $1,618, which is lower than the Dallas-Fort Worth-Arlington Metro median of $1,695.

Dallas housing market in 2019 is one of the strongest markets in the United States. In spite of certain changes in the market, demands and sales have kept on moving at a high pace for over two years with no indications of halting.

Dallas real estate market figure for the year ending with the third Quarter of 2019 is certain. This is according to The Accuracy of the Trend Projection for Dallas is 82%.

In like manner, they estimated the likelihood of rising home costs in Dallas at 82% during this period. If this Dallas Housing Market Forecast is right, home costs in Dallas will be higher in the third quarter of 2019 than they were in the third quarter of 2018.

Dallas housing market for the next 3 years ending with the third quarter of 2021 is also positive. The Accuracy of the Trend Prediction for Dallas is 76%. It is estimated that the probability of rising home costs in Dallas is 76% within this period. If this is correct, home values will be higher in the third quarter of 2021 than they were in the third quarter of 2018.

2018 was extraordinary for the Dallas real estate market in terms of increment in the value and prices of homes. This pattern is required to continue in 2019. As indicated by Zillow, home estimations in the Dallas-Fort Worth-Arlington Metro became 14.3% over the previous year. Besides, Zillow predicts that costs will yield another 11.2% the next year. In this manner, if you invest in property now, your investment will yield significant profit in the next year.

What’s more, recollect that the Dallas housing market is anticipated to have an increasing rental demand. This is going to drive up rental costs, hence making your investment more profitable.

As indicated by Mashvisor’s data and analysis, the median home cost in Dallas is $423,768. This cost is above the United States national value. However, it is reasonable as Dallas is one of the top real estate markets in the United States.

Comparing with the real estate market in Los Angeles ($932,371), Miami ($663,700), Boston ($855,693), and Austin ($518,686), the cost is relatively lower in Dallas.

How to Invest in Turnkey real estate in Dallas

Turn-key real estate investing in Dallas is a way to invest in real estate and minimize investment risk.

Turn-key real estate investing is when you buy a property that doesn’t require additional investments, already has a paying tenant, and likely has ongoing management. It means investing in an already-made property where you don’t need to incur extra expenses in renovations and management of the property.

Investing in Turnkey real estate in Dallas offers many benefits and reduces investment risk or losses.

When you invest in Turn-key real estate, you most likely have income already coming in on the property. A Turn-key property most likely already have a tenant. This means that when you purchase a property, your tenant pays a significant part or all of the mortgage for you.

For example, you purchase a property for $200,000 and your mortgage is $1200 per month. If you have a tenant already occupying the property and pay monthly rentals of $1,200 or $1,000, this means you don’t get to pay the mortgage with your money or you only pay a little amount of the mortgage.

Investing in Turn-key real estate in Dallas offers you more control over your investment. You can either choose to manage the property by yourself or hire a property management company to manage the property on your behalf.

Before you invest in Turn-key properties in Dallas, you need to first make adequate research. You need to know the Dallas home buying process.

We will show you steps to guide you through the purchasing process of buying a Turn-key property in Dallas.

Step 1: Determine your housing needs and budget

Before purchasing a property, you need to determine your needs and know the kind of property you want. Have a list of the size of property you want, the facilities and nature of the property.

Also, your budget is very important when investing in properties. Your budget will determine the size and nature of the property. If you want a bigger-sized house or a luxury home, you should expect a higher budget.

Step 2: Get pre-approved for a mortgage

Get pre-approved for a mortgage to find out what price or cost of a property you can afford. Meet with the right lender and provide necessary financial documents so they can estimate the mortgage amount that you can afford.

Step 3: Meet the right real estate agent

When planning on purchasing a turn-key property in Dallas, you must find the right real estate agent. The right real estate agent will help you through the process of finding a good property and guide you through the purchase process.

The right real estate agent will make your investment process as easy as possible. A good real estate agent will likely recommend a good mortgage lender to you and walk with you through your investment journey from the beginning to the end.

Step 4: Begin your property search

Searching for the right property to buy in Dallas requires a lot of research. You can search through reputable property listing online. Check different property listings in Dallas for your choice property with the features you want and within your budget. You can also sign up on these property websites to get alerts and notifications for available properties that fit into your desire and budget.

If you do not have the time or experience in searching for the right properties, you can make use of a reputable real estate agent. Your real estate agent will show you different properties that fit into what you want and your budget. To be on the safer side, it is best to use a reputable real estate agent when searching for a property to buy in Dallas.

Step 5: Inspect the property

After finding a property you want to purchase, you must go inspect the property. This is to make sure that the property is actually what it is in photos. It is also necessary to inspect properties so you don’t fall into the hands of scammers. You need to be sure that the property is real and in good condition.

Step 6: Make an offer to buy the property

After negotiating the price with the property seller, make the seller know that you are serious about purchasing the property by making an offer. You can deposit some amount of money upfront or into an escrow account. You should also have your mortgage pre-approval letter ready to show to the seller.

Step 7: Fill out Paperwork

Fill out all the paperwork that legally binds the purchase contract. You may need the services of a legal practitioner to sign the papers and to ensure that all paperwork is authentic and binding the contract. Your real estate agent can also help you handle all the paperwork.

Step 8: Finance your property

This is where you provide a financial plan on how you will pay for the property. Determine the amount you want to pay for your mortgage monthly. The mortgage lender may calculate the amount you need to pay every month or you can calculate your monthly mortgage payments based on the amount loaned, number of years and interest rate.

Step 9: Closing

After you have signed all the paperwork and financed the property, you have secured ownership of the property. You may need to hire a property management company to manage the property for you or manage the property by yourself.

1031 Exchange Real Estate Investment in Dallas

To prevent paying tax on capital gains on investment properties, you can purchase like-kind properties in Dallas using 1031 exchange.

1031 exchange is a tax exemption rule granted in the IRS tax code that states that individuals can defer pay capital gain taxes or other taxes associated with the sale of a property if the proceeds from the sale of the property is reinvested into the purchase of a like-kind property of equal or greater value within a limited time frame, usually within 180 days.

If you sell an investment property and use the profit you made from selling the property to purchase a like-kind property, you can defer paying capital gains tax on the profits made.

For example, if you purchase a rental home for $200k and after some years you sold the property for $500k, you have made a profit of $300k. Under the 1031 exchange rule, if you use the $300k profit to purchase a like-kind property within the time limit, you won’t have to pay capital gains tax on the profit.

1031 exchange has rules binding it which includes:

  • The property must be an investment property. You can’t purchase a property for private use
  • You must hold ownership of the property of at least a year
  • The properties sold and bought must be like-kind
  • You must buy another replacement property within the 180 days’ limit.
  • You must identify another replacement property to buy within 45 days after selling the original property.
  • Both the original property and the like-kind property must be sold and bought in the same name.
  • All the profits made from selling the original property must be used to purchase the replacement property.

Medical Real Estate Investment Dallas

Investing in medical real estate in Dallas has become an increasingly profitable investment.

Investing in medical real estate in Dallas is probably the most brilliant move you can make today as an investor.

In addition to the fact that healthcare is a service everybody needs, it’s likewise a part sponsored by statistic development. Consistently, 10,000 Americans turn 65.

In several years to come, aging Baby Boomers will need more specialty housing and medical facilities This implies that the healthcare sector must continue to grow no matter the situation of the economy.

Investing in a medical real estate creates a completely passive investment profit. The tenant of the property is completely in charge of the management and ownership costs of the property.

Long-term leases of the property are backed by a regional hospital’s financial strength which helps to reduce investment risk.

A report from JLL stated that medical office has consistently offered a 2% spread in cap rates over other risk-similar investments.

Where medical offices are offering median cap rates of 6.7%, other offices and the S&P 500 Dividend Yield are offering cap rates of 4.2% and 3.0% respectively. This means that investors make more profits investing in medical properties.

Investing in medical real estate in Dallas has become increasingly profitable and irresistible to investors. As an investor, investing in medical real estate in Dallas is a profitable investment.

To go into medical real estate investment in Dallas, look for a reputable real estate agent that specializes in the business of healthcare and healthcare real estate in Dallas.

The real estate agent will guide you through the process of searching for a good medical property to buy, financing and legal documentations.