Area Counties Qualify for HUD’s $1Billion Resilience Competition

 
The U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro and Dr. Judith Rodin, president of the Rockefeller Foundation, announced a $1 billion National Disaster Resilience Competition. The competition will make $1 billion available to communities struck by recent natural disasters to promote risk assessment and planning. It will also fund innovative projects to prepare communities for future storms and other extreme events.

“This competition will help spur innovation, creatively distribute limited federal resources, and help communities across the country cope with the reality of severe weather that is being made worse by climate change,” said Castro.

Funding for the competition comes from the Community Development Block Grant disaster recovery appropriation under the Disaster Relief Appropriations Act in 2013. It’s a response to requests from state, local and tribal leaders for help, according to HUD. Prior to the competition, representatives from eligible communities will have an opportunity to attend Rockefeller-supported Resilience Academies to strengthen their funding proposals submitted to the competition. Applicants must tie their proposals to their area’s eligible disaster. For example, a community that suffered a flood might want to offer flood buyouts in distressed areas and then create wetlands that limit future flooding, while simultaneously creating a nature preserve or recreation area.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, said that storms responsible to millions of dollars in property damage that swept through the area last March would definitely qualify for the resilience program.

“In our area, Okaloosa, Walton, Santa Rosa, and Escambia counties all suffered major damage,” he said. “Any funds awarded from the resilience program could greatly benefit communities here in the future.”

The $1 billion National Disaster Resilience Competition has 67 eligible applicants, including Florida. To qualify, a state must have a major disaster declared in 2011, 2012 or 2013. HUD says Florida had three major declared disasters in that time that impacted 45 counties.

The Rockefeller Foundation will provide technical assistance to eligible communities. More information on the National Disaster Resilience Competition can be found on HUD’s website.

 

 

 

E-Commerce Challenges Retail Sector

The rise of e-commerce has challenged retailers for several years, and coupled with the recession it’s spelled gloomy sales for bricks-and-mortar businesses. With online sales rising every year, consumers are making it clear they love the convenience of shopping online, leaving franchises and mom and pop stores scrambling to attract customers.

“There’s no doubt that e-commerce is impacting bricks-and-mortar businesses,” said Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida. “New devices and apps make it easier for consumers to shop online all the time, and many choose to do so despite the fact that the risk of having their credit card information hacked is at an all-time high. There are also plenty of folks who believe it’s cheaper to order products online instead of driving to stores when the price of gasoline increases.”

With stores such as Blockbuster Video and Borders going out of business, retailers have had to adapt to e-commerce threats by working harder to win customers with savvy marketing, exclusive in-store offers, and loyalty programs. Many retailers are reconfiguring stores so they won’t need as much space for inventory. According to Barrett, banks in particular seem to be implementing new strategies to use space more efficiently.

“The days of big banks with numerous offices, spacious foyers, and waiting areas are over,” he said. “The trend now is for banks to build or lease smaller branches of 600-700 square feet with tellers greeting customers with iPads. Banks are betting on getting more exposure with two smaller banks than larger buildings at a single location.”
Aside from banks staying ahead of the curve, the industrial real estate sector is also  using space more efficiently in order to compete with e-commerce. Many are choosing to establish new distribution centers instead of changing the footprint of their retail space.

Barrett added that retail businesses have a rosier outlook on the Emerald Coast due to the throngs of tourists who visit the area year-around.

“When tourists are on vacation, they love to shop at all the area’s brick-and-mortar stores, outlet malls, and boutiques,” he said. “I believe this is why we still have a lot of investors interested in retail space as well as industrial space and raw land in our area.”

Banks Lower Military Mortgages

A new government agreement with five of the nation’s largest banks is helping active-duty military service members save hundreds of dollars or more each year on their mortgages. Banks also pledged to make enrollment easier, notify service members who qualify for lower rates, and simplify the entire process to help more military families own homes without overwhelming debt. Research from the Government Accountability Office (GAO) found that many military service members fail to take advantage of the benefits available under the Service Members Civil Relief Act because they’re unaware of them or they don’t want to complete the paperwork.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, said that under the previous law in 2003, active-duty service members could have mortgage rates and other debt fees capped at 6 percent.

“With so many military families residing here on the Emerald Coast, we learned that many were simply not taking advantage of benefits that could lower their mortgage payments,” he said. “In most cases, families were unaware they qualified for these benefits.”

Five of the country’s largest mortgage lenders – Wells Fargo, Bank of America, Ocwen Loan Servicing, CitiMortgage and Quicken Loans – all agreed to make the application process easier and take a more proactive approach to notifying those who are eligible. The lenders have pledged to make frequent checks of the Defense Department database to see if their customers qualify for any unclaimed benefits.

“This is great news for military families in this area,” stated Barrett. “Reducing mortgage interest rates can result in saving thousands of dollars.”

 

CRE CLOs Offer Investors More Options

Investors searching for higher yields have been flocking to CRE collateralized loan obligations (CLOs) for the past two years. Driven by target yields in the mid-teens for equity investors, real estate insiders say momentum continues to grow due to favorable stock market performances over the last several years.

“The market is on a roll, despite all kinds of predictions that the bull market will collapse any day now,” said Craig Barrett, co-owner of NBI Properties in Fort Walton Beach. “The investors we are working with are taking advantage of reduced borrowing rates and more loan options from lenders.”

Barrett added that commercial real estate CDOs were the financial vehicle of choice prior to the recession, but disappeared during the recovery. He said the new CLOs have an improved, simplified structure that is preferred because they are secured loan transactions.

Moody’s reported that 2013 closed with an estimated $2 billion in CRE CLOs issued, with an even bigger volume anticipated for 2014. However, CRE brokers say one of the biggest hindrances for the growing CLO market is the need to educate investors and discourage familiarity with CDOs, which are largely blamed for contributing to the 2008 financial crisis.

Barrett said there are there are important differences between the CDO structure and CLOs pertaining to commercial real estate.

“Before the recession, CDOs offered B-piece buyers a way to get leverage off of their double B and lower unrated portfolios,” he said. “People should know the new CLOs only include loans, and interim financing suitable for three, five and seven-year loans. What we’ve noticed is that
CLOs are not dominating commercial mortgage interim financing, but they still play an important role in the market.”

Recently issued CLOs have typically targeted loans on properties in transition. For instance, a typical loan could be structured for a class-C apartment building with an upfront reserve or future funding for renovation. The property would likely have a high occupancy level and be located in a tight market, but could possibly be in need of an upgrade in order to maintain and improve cash flow.

“Overall, CLOs are a good option for borrowers,” said Barrett. “We’re happy to help investors with the rules and regulations involved in order to take advantage of CLOs.”

 

 

Florida Property Owners Benefit from Credit Score Leniency

While many people are aware that lower credit scores make it difficult to qualify for loans, homeowners in most states are discovering that bad credit increases the cost of homeowners insurance. However, a recent study by CNBC revealed that Florida is one of only four states that do not penalize borrowers with low credit scores by raising property insurance rates.

According to the study’s findings, only Florida, Maryland, California and Massachusetts quote low credit score homeowners the same rates as those with high credit ratings. Nationally, homeowners who have poor credit pay an average of 91 percent more for homeowners insurance than those who have pristine credit reports, according to a new report by insuranceQuotes.com. According to Craig Barrett, co-owner of NBI Properties, insurance rates are just another reason why more people are relocating to the Sunshine State and to the Emerald Coast.

“When we speak with prospective buyers, they will say it’s not their mortgage or their commercial lease that is killing them, but it’s the insurance,” said Barrett. “On top of that, so many people are dealing with less-than-perfect credit scores since the recession a few years ago, so paying 91 percent more for insurance doesn’t help these folks one bit. We love to be able to tell them that in 46 other states they would have to pay more based on their credit rating.”

The report also concluded that homeowners with credit scores in the fair or “median” range may pay 29 percent more for their insurance than someone with an unblemished credit record. Findings also revealed that how insurance companies weigh the significance of a person’s credit score can vary greatly from company to company and even state to state. Insurers started using credit-based insurance scoring in the early 1990s when FICO studies discovered a correlation between a person’s credit and his or her likelihood of filing a claim.

“There’s no denying that credit scores still have an enormous impact on an individual’s overall finances,” said Barrett. “Everyone knows that maintaining a good credit history is very important. But for those who are just starting out with no established credit or for those who went through some rough times and saw their scores drop, it’s good to know that Florida is one of the few states where they might be able to get a break.”

 

 

Florida Reels In A Cool BILLION in Settlement

Comedian Mike Myers and his goofy Doctor Evil character always liked to stress the importance of one BILLION dollars. But unlike the fictional comedy, nearly 17,000 Floridians will receive more than $1 billion in relief as part of a record-setting settlement with Bank of America. The Florida Attorney General’s Office recently made the announcement, calling it a “historic” resolution. Overall, the state is earmarked to receive about a seventh of the settlement’s $7 billion in aid to communities and homeowners hit hard by the housing market crash that led to the Great Recession.

Bank of America Corp. agreed to pay $16.65 billion to end federal, Florida and other state investigations into the sale of toxic mortgage securities during the subprime housing boom. Consumer relief will include principal reduction and forgiveness, loan modifications and new loans to credit-worthy borrowers struggling to obtain loans. Financing will also be available for affordable rental housing to help communities still recovering from the financial crisis that affected thousands of families statewide.

“We’ve learned that some of the details are still being finalized as far as who in Florida will be receiving aid,” said Craig Barrett with NBI Properties in Fort Walton Beach. “Programs are being organized and set up in order to help eligible borrowers.”

Many of the bad loans that backed the securities came from firms Bank of America acquired in 2008, including Countrywide Financial Corp. of Calabasas and Merrill Lynch & Co. Prior to the fallout, Bank of America had already incurred approximately $60 billion in losses and legal settlements from its purchase of Countrywide, which was one of the nation’s biggest subprime mortgage lenders during the housing boom of the mid 2000s.

Why Online Websites Won’t Replace Brokers

On the heels of recent news that Zillow, the most popular real estate listing website, has plans to acquire its biggest competitor Trulia for $3.5 billion, lots of questions are looming about the possible merger. Namely, people are wondering what this will mean for buyers and how if will affect real estate firms, agents, and brokers. Insiders say that once Seattle-based Zillow acquires Trulia, the companies will dominate the real estate listings market, accounting for 48 percent of web traffic for listings (not including local websites).

NBI Properties co-founder Craig Barrett said that online websites such as Zillow offer an alternative to the traditional MLS listings that agents and brokers have used for years. He said the online services offer a wealth of information for buyers, but have not disrupted the function of real estate brokerages.

“In my experience, websites like these are useful in the initial phases of research when buyers are browsing or shopping around to see what kind of properties they are interested in,” Barrett said. “It gives buyers a head start because they can meet with us at NBI and tell us specific types of properties they have checked out in the area. Based on what they have seen online, we can research the availability of their selections or recommend similar properties they may wish to see and compare with their findings.”

Once the Zillow and Trulia merger is finalized, Zillow stated that both brands will retain their own identities and continue to offer buyers, sellers, and renters access to information about properties at no charge. The company also said it will provide advertising and a software solution designed to help real estate professionals grow their business. By implementing these solutions, Zillow said the company will benefit consumers and the real estate industry, even though the service is bound to drive some traffic away from real estate brokerage websites.

“Overall, we look at this as innovation and not competition,” said Barrett. “Numerous studies prove that the majority of consumers and investors still prefer to buy real estate through an agent. Also, at NBI we use a lot more of the commercial real estate databases.”

Barrett also said consumers using online real estate databases should be aware that listings are not always up to date or accurate. He added that he had experienced several instances of buyers who called to inquire about a property they had seen online, only to be disappointed to learn it had been sold months earlier.

“The bottom line is the websites are good research tools, ” he said. “But overall, nothing can replace local realtors who have inside knowledge about the area and often know the history of a property and its condition. Buyers also rely heavily on realtors for price negotiations, guidance with the loan process, and contacts with inspectors, insurance underwriters, property appraisers and much more.”

 

Commercial Real Estate Rosy in Third Quarter

If the Real Estate Roundtable’s third quarter Sentiment Survey is any indication, commercial real estate markets in the States continue to enjoy a slow but steady recovery. Slight increases over the second quarter in two of the survey’s indices, “Overall” and “Current” quarter are in line with overall economic growth detailed in a recent positive report about higher-than-predicted gross domestic product (GDP) in April, May and June. Craig Barrett, co-owner of NBI Properties in Fort Walton Beach says the survey results are reflective of what his firm has been experiencing on the Emerald Coast.

“We’re busier than we were at this time last year,” noted Barrett. “We’re leasing properties to new businesses, franchises, and to professionals relocating to this area. Also, financing options have definitely improved since last year and investors are finding it easier to obtain sources of capital.”

Overall, the survey reported that commercial real estate is on the upswing, although some respondents voiced concern over policy matters on Capitol Hill that could affect the industry. Notably, some said they feared recovery is threatened by policy-related risks such as the scheduled expiration of the federal Terrorism Risk Insurance Act (TRIA) on Dec. 31 and the looming prospect of higher interest rates.

“We’re somewhat concerned about the TRIA expiring because it could cause a wave of economic setbacks and problems,” said Barrett. “I think we’d definitely see difficulties with banks and lenders again, which would mean that funding for new projects could come to a halt.”

The U.S. Senate voted resoundingly (93-4) for a seven-year reauthorization of the TRIA on July 17. House legislation countering with five-year extension program reforms cleared a key committee in June, but remains in limbo until Congress meets again in September.

 

 

 

 

 

CFPB Clarifies Rule for Inherited Homes

The Consumer Financial Protection Bureau (CFPB) recently clarified a rule that has been perplexing for heirs of mortgaged homes. A new interpretive rule stipulates that when a borrower dies, the name of the borrower’s heirs may be added to the mortgage without triggering the CFPB’s Ability-to-Repay rule. The new action is important because it allows heirs and surviving family members to acquire the title to a property, assume the mortgage, or apply for a loan workout.

The Ability-to-Repay rule, which was enacted in January, was intended to protect consumers from irresponsible mortgage lending by requiring lenders to verify that borrowers are financially able to repay their loans.

Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, said the new rule is significant because it affords heirs the opportunity to work with a lender to pay off the mortgage.

“Specifically, surviving family members can work directly with lenders to pay off loans or seek loan modifications,” he said. “The rule can also apply to other family-related transfers such as those occurring due to living trusts or divorce.”

The CFPB requires mortgage servicers to have procedures in place to promptly identify and communicate with heirs and surviving family members.

 

CRE Investors Benefit from 1031 Exchange

 

At NBI Properties, we’re fielding lots of questions from investors interested in the IRS tax code 1031 exchange. This important tax code is attractive to investors because it permits the sale of one investment property to in order to purchase a higher-priced investment property — all without paying capital gains taxes and depreciation recapture taxes. The 1031 exchange is popular with investors because it can be used in multiple ways, according to Craig Barrett, co-founder of NBI Properties.

“By taking advantage of the 1031 exchange, investors can sell properties while taking part of the profits out,” he said. “However, when most of the profit is rolled over into a new property, investors may defer taxes on the amount that is rolled over.”

Since tax codes tend to be complicated and confusing, it’s important to retain a highly qualified real estate broker and tax expert. A few basic guidelines about the 1031 Exchange to consider include:

Properties qualifying for a 1031 exchange must be for business use or investment (“productive use” as descrIbed by the IRS).

Property must be of “like-kind” (also broadly interpreted by the IRS).

A qualified intermediary is required.

The investor cannot have constructive receipt of sale proceeds at any time.

The 45-day identification period and 180-day closing requirements must be met.

Price of the replacement property must be equal to or greater than the relinquished property.

The amount of mortgage on the replacement property must equal or exceed that on the relinquished property.

All of the funds from the sale must be reinvested in the replacement property.

In addition to these general guidelines, many investors consider the time restrictions the most difficult part of a 1031 exchange, and especially if transactions involve commercial real estate. As stipulated in the tax code, investors must identify a replacement property within 45 days of completing the sale of the property they are exchanging for a more expensive property.

The other major requirement is that a Qualified Intermediary must be used. This is a person holding a specific license allowing them to make the financial transactions on an investor’s behalf.

“The entire process sounds overwhelming, but it’s worth it because the tax savings for investors is huge,” explained Barrett.

 

 

Diversifying Investments With Real Estate

Many people accustomed to investing in the stock market are aware of the age-old advice that it’s wise to practice diversification. The idea is to minimize risk by not putting all of your eggs into one basket (or one particular stock) and to aim for a mix of different stocks, bonds and mutual funds. While all of these options will help diversify your portfolio, there are several reasons why adding real estate to your investment strategy is a good idea.
“Owning real estate is a tangible investment,” explained Jayme Nabors, co-owner of NBI Properties in Fort Walton Beach, Florida. “Instead of passively owning stocks and depending on a company’s performance to rack up gains, real estate offers investors more control over their profit margins.”
Real estate is typically a long term investment, although some investors prefer short term “flipping” transactions. Investors can purchase commercial or residential properties with a traditional mortgage, seller financing, or private loans. The silver lining is that tenants pay rent to cover the cost of repaying the loan and investors build up equity.
“The beauty of investing in real estate is that someone else pays for your property while you reap the benefits of ownership, including tax deductions and building equity,” said Nabors. “At NBI, we’ve found that once investors get involved in real estate, they are interested in adding more properties to their portfolios.”
Investors who own just a few properties may choose to manage tenants themselves while others opt for property managers to take care of all the details. Unless you have ample time to make improvements, collect rents, and take care of maintenance and repairs, it’s easier to hire a reputable property management firm to handle these important details.
“In our area, we currently manage more than 3000 properties,” said Nabors.”Many of the investors we work with live in other states and rely on us to handle the day-to-day business of keeping their properties we’ll maintained. For investors who own multiple properties, hiring a competent property manager is a necessity and eliminates a lot of headaches.”
For more information about real estate investment opportunities or property management, contact NBI Properties at 850-243-0007.

FEMA Allocates Disaster Assistance for Northwest Florida

Two months after a storm system brought massive flooding to Northwest Florida, $66.5 million in disaster assistance has been approved by the Federal Emergency Management Agency (FEMA) to help homeowners, renters and business owners recover. Residents with property affected by the storms and flooding from April 28 to May 6 in Escambia, Jackson, Okaloosa, Santa Rosa and Walton counties have until Monday, July 21, to register for disaster assistance with FEMA.”The deadline is fast approaching, so we are encouraging all of our clients, friends, and neighbors to register claims with FEMA as soon as possible,” said Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach.

Those needing assistance can register online at DisasterAssistance.gov or at m.fema.gov on a smartphone. To apply by phone, call 800-621-3362 or TTY 800-462-7585.

To date, more than 14,200 people have been in touch with FEMA seeking help or information on disaster assistance following what local officials called the worst flood in Northwest Florida in decades.

Since the May 6 disaster declaration, more than $32.1 million in financial assistance has helped more than 6,600 homeowners and renters who were affected by the spring storms and flooding. This amount includes more than $26.6 million in rental expenses and essential home repairs and nearly $5.5 million to help cover other essential disaster-related needs, such as medical and dental expenses and lost personal possessions. In addition, the U.S. Small Business Administration has approved more than $34.4 million in low-interest disaster loans for qualified homeowners, renters, businesses of all sizes and private nonprofit organizations.

FEMA is continuing to work with state and local partners to connect people to recovery resources in their communities. Those who need extra help are encouraged to call Florida’s 2-1-1 information helpline or visit HelpNWFLrecover.org.

Several voluntary agencies, local community- and faith-based organizations and other non-profit groups are also helping those affected by the flooding with long term needs. Among these voluntary agencies are the American Red Cross, United Way, Volunteer Florida, Operation Blessing, Florida Baptists and Samaritan’s Purse.

More than 3,300 local residents and business owners have met with FEMA mitigation specialists at disaster recovery centers and home improvement stores for advice and tips on how to rebuild safer and stronger. An additional 62 requests have been made for FEMA’s Public Assistance program by eligible state agencies, local governments and certain private non-profits. Requests for public assistance start the process of getting eligible costs reimbursed, which helps get communities back on track following a disaster. The nine counties designated for public assistance are Bay, Calhoun, Escambia, Holmes, Jackson, Okaloosa, Santa Rosa, Walton and Washington.
For more information on Florida disaster recovery, survivors can visit fema.gov/disaster/4177, the Florida Division of Emergency Management website at FloridaDisaster.org or the state’s Facebook page at facebook.com/FloridaSERT.

 

 

 

U.S. Job Market Picking Up Steam

The overall job market is finally picking up steam, and this time it’s to just projections or false optimism. With reports indicating employers added 288,000 jobs in June, it marked the fifth straight monthly gain above 200,000 since the infamous tech boom in the late nineties.
The hiring flurry in June helped cut the unemployment rate from 6.3 percent to 6.1 percent, the lowest since 2008. The numbers are surprising to some because of how poorly the year began. The economy shrank at a steep 2.9 percent annual rate in the January-March quarter as a harsh winter contributed to the sharpest contraction since the recession.
“Obviously we don’t experience setbacks here due to harsh winters,” said Craig Barrett, co-owner of NBI Properties in Fort Walton Beach, Florida. “We actually benefit from residents and business owners interested in relocating here due to milder weather. We have been busy working with new businesses who are setting up shop here and bringing new jobs to the area.
As an example, Barrett added that NBI Properties recently executed a five-year lease with Baker Distributing at 101 Lovejoy Road in Fort Walton Beach. The company is engaged in the sales and distribution of HVAC, refrigeration, food service equipment, parts and supplies for both residential, commercial and marine applications.
“They have plans to add numerous jobs in sales and distribution, so it’s a nice boost to the local economy,” Barrett noted.
During the past 12 months, the economy has added nearly 2.5 million jobs — an average of 208,000 a month, the fastest year-over-year pace since 2006. With the job market surging, the stock market is following suit with the Dow Jones industrial average recently jumping 92 points to top 17,000 for the first time. Economists say it’s a clear sign the U.S. economy is improving while major economies are plummeting in Europe.

NBI Sponsors 7th Annual YOLO Relay Series

NBI Properties is a proud sponsor of the 7th Annual YOLO Board Relay Series. The three-part monthly relay series features race events at The Bay, South Walton’s newest waterfront dining destination located at the southern the foot of the 331 bridge. The events will include relay-style competition between male, female and co-ed teams of three in a recreational division.

“We love sponsoring the Relay Series because we are all paddle board enthusiasts at NBI,” said Craig Barrett, co-owner of the real estate firm. “We’ve been huge supporters of YOLO Board ever since they joined our community two years ago and we leased them the property for their beautiful store. It’s been very exciting to watch them grow and to host fun-filled events such as the Relay Series.”

The events include racers of all ages and skill levels competing for the coveted champion title, all the while rallying in friendly competition on local waters. Paddlers will compete on YOLO 12’ recreation boards provided for complimentary use to racers by YOLO Board during each event.
This year’s event will include giveaways, refreshments (including local craft beer Grayton Beer Company, available for purchase), and kids activities, as well as a welcomed new division to the race program dedicated to Special Olympics Florida SUP athletes from Okaloosa and Walton Counties. A strengthened supporter of Special Olympics since 2012, YOLO Board’s mission is to make SUP accessible and easy for area athletes.

The first Relay Series event was held June 19th and was an overwhelming success, with hundreds of people cheering on the racers. The next two scheduled races (weather permitting) are set for July 17th and August 7th at the following times:

Schedule of events:

4:30 Special Olympics Athletes Relay

5:30 Women’s Relay

6:00 Men’s Relay

6:30 CoEd

For general details on the event, visit http://www.yolorace.com/. The Bay restaurant is located at 24215 Highway 331 South in Santa Rosa Beach, FL.

 

 

 

 

 

 

 

NBI Welcomes von Herder Haus Kennels!

 

NBI Properties is pleased to welcome von Herder Haus Kennels to the area! NBI leased the 6300 square foot indoor training facility located at 180 Lynn Drive in Santa Rosa Beach to Steve Kotowske, who describes his business as a “one-stop shop” for dogs.

“We have two kennels for boarding, a large training area for our obedience classes, a Sniff Check program for training drug detection dogs, and a small retail shop for holistic supplements,” said Kotowske, a certified trainer who has worked with all types and breeds of dogs. “This building is perfect for us because there’s plenty of room for all the services we offer.”

Prior to leasing the space from NBI, Kotowske was operating out of his home and offering some private in-home training classes for dogs. The business quickly grew, so he started looking for locations that would be suitable for boarding, training, and all aspects of his business.

“NBI helped us find the ideal spot,” said Kotowski. “My wife and I looked at a lot of buildings that we’d have to spend thousands of dollars to renovate and make major improvements to fit our needs. Finally, NBI showed us this location and we knew right away it was exactly what we needed.”

One look at the facility and it’s evident that this is not your average boarding kennel. There are basic boarding options, but also plenty of upgrades for owners who like to pamper their pooches. In some areas, dogs are not kept in cages, but have their own rooms with natural lighting and a common play area for socializing. For the super spoiled pet, there are expansive 20 x 20 “Home Sweet Home” doggy condos furnished with all the comforts of home, including cable television that is always tuned to the Dog TV channel.

The main focus, however, is the What’s Up, Dog training program which offers professional dog training from puppies through competition obedience. Kotowske continues to provide in-home private training to the Destin, Fort Walton Beach area including Rosemary Beach, Sandestin, Pensacola, Freeport and Panama City Beach.

Whether it’s a new puppy who needs to learn rules and stop chewing shoes or an older dog with some bad habits, Kotowski can help with proven training methods. A longtime trainer and breeder of world class German Shepherd show dogs, he loves the challenge of training any dog to be a better pet.

In addition to obedience training, protection dog training is available for approved dogs and handlers. Kotowske describes this as a serious endeavor and not something every dog is capable of. He says that most people don’t need a ‘protection’ dog; they merely need a deterrent, and there is a big difference.

“A well-trained dog can be a great deterrent to crime,” he said. “An uncontrollable dog is a distraction to the owner and can actually allow crime to happen right under your nose.”

If that isn’t impressive enough, Kotowske works with the Walton County Sheriff’s Department and other law enforcement agents to train their drug detection dogs. The program is called Sniff Check, and also offers drug detection services to regular business and drug rehab centers who want to achieve a certified drug-free workplace.

“Businesses are interested in this because they can avoid expensive drug testing and also save money on Worker’s Comp and insurance,” he said.

Kotowske also gets calls for home drug detections, mainly from parents concerned their children may be taking drugs. He no longer charges for this service, as he believes the welfare of a child is more important than his fees.

Lastly, he said the kennel sells top-notch nutraceuticals for dogs from Nature’s Pharmacy.

“We really do have everything for dogs here,” Kotowske added. “There is no place like this anywhere in this region.”

For more information about von Herder Haus Kennels, call 850-420-2894 or check out the web site at www.vonherderhaus.com.

 

Disaster Relief Deadline Approaching

According to the Federal Emergency Management Agency, (FEMA) area residents have less than two weeks to apply for disaster assistance from recent devastating storms and floods. Residents in Escambia, Jackson, Okaloosa, Santa Rosa and Walton counties are eligible to apply for disaster assistance that may include money to help pay for temporary housing, essential home repairs or other serious disaster-related expenses. The deadline to register for assistance is Monday, July 7.

Another option for residents is to submit loan applications to the U.S. Small Business Administration for low-interest disaster loans, which is the primary source of federal funds for long-term recovery. The quickest way to apply for an SBA disaster home or business loan is filling out an online application at DisasterLoan.SBA.gov/ela. The deadline for applying for these low-interest loans is also July 7.
“We’re trying to get the word out about FEMA assistance and low-interest loans because some people are not aware they can qualify for aid,” said Craig Barrett. “We saw a lot of property damage in many communities throughout our area, so we are encouraging people to get relief for these disasters so they can repair or rebuild.”
Those who sustained damage from the storms and flooding from April 28 to May 6 can apply for assistance online at DisasterAssistance.gov or use a smartphone at m.fema.gov/ until midnight July 7. Residents may also apply by phone at 800-621-3362 or TTY 800-462-7585 until 10 p.m. July 7. Recovery assistants remain available from 7 a.m. to 10 p.m. (CDT) daily.
For more information on SBA low-interest disaster loans, call the SBA disaster customer service center at 800-659-2955 or TTY 800-877-8339, send an email to DisasterCustomerService@SBA.gov or visitSBA.gov/Disaster.

Retirement Communities Boast New Amenities

Baby boomers are redefining retirement by remaining busy and active during their golden years. They have little interest in traditional retirement communities, which is forcing developers to thinking more creatively about housing options for people over 55. As a result, many builders are seeking to attract older people who want to remain active or continue with their jobs.
“Seniors are a major force in the housing market now because they have built up equity in their homes and they can use it to move,” said Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, Florida. “But instead of quiet retirement communities, they are looking for places with amenities so they can socialize and remain active.”
Pleasing retirement-age clients is becoming increasingly crucial for developers as projects catering to this group rank among the hottest sectors. Last year, there were approximately 21,000 starts of age-restricted homes – an increase from 13,000 in 2012, according to the National Association of Home Builders.
Most agree that demand for age-restricted communities will continue to grow rapidly over the next 10 years or so due to the aging population. The number of people 60 to 75 years old is projected to jump to 56 million in 2025 from 46 million currently.
Nabors added that builders catering to retirees on the Emerald Coast are catering to active seniors who want fitness centers, clubhouses, swimming pools, and tennis courts.
“Boomers are interested in taking advantage of the Florida lifestyle by playing tennis, swimming or bicycling year-around,” Nabors said. “Builders are responding by developing communities where seniors can pursue their interests without leaving home.”

 

Boomers Shaking Up the Housing Market

Boomers are making a splash with cash in the housing market with a record number of them using cash to purchase homes. Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida, said his brokerage is seeing more boomers plunking down cash for homes on the Emerald Coast than ever before.
“We are seeing more homeowners taking advantage of the increased equity in their current homes to purchase another home,” Barrett said. “In our region, many are opting for second vacation homes near the beach while others are looking for the perfect spot to retire. But we’ve found they are choosing to pay cash rather than taking on another mortgage.”
A recent study by Bloomberg also confirms that 29 percent of non-investment buyers used cash to fund their housing transactions in the first quarter of this year, marking the highest numbers ever compiled.
Barrett added that the economic recovery, attractive interest rates and the stock market in a bullish mode have all contributed to the influx of boomers paying cash for new residences. He said that boomers tend to have more equity than other generations because they owned homes during the 30-year housing bull market.
“Boomers have a lot of clout right now because they can tap into decades of accumulated equity from their existing mortgages,” he said. “Facing their retirement years, they are skipping the hassles of having a mortgage in favor of paying cash.”
Reports confirm that in April, the median price of an existing-home was $201,700 compared to $67,800 in 1982 when many boomers had purchased their first properties. Census data also shows that 16.3 million Americans older than 60 owned their homes outright in 2012, which is up from 12.1 million in 2009.
“The data shows that baby boomers will be a strong influencers driving the housing market for years to come,” Barrett said. “Boomers today are generally more active and in better health than their parents, so they are living longer and focused on enjoying retirement.”

 

 

Emerald Coast Cancer Center Leases New Location in Destin

NBI Properties is pleased to announce the expansion of Emerald Coast Cancer Center (EMCC) to a new location in Destin. ECCC has been serving Okaloosa and South Walton County for more than 20 years, treating cancer and blood patients from Destin, Fort Walton Beach, Freeport, Mary Esther, Navarre, Niceville, Santa Rosa Beach, Shalimar and Valparaiso. Established at 1024 Mar Walt Drive in Fort Walton Beach, ECCC leased a second 3,000 square foot state-of-the-art facility from NBI Properties at 7720 US Highway 98 West in Destin.

“We were pleased to be able to find a great location for them,” said Craig Barrett, co-founder of NBI Properties. “This location makes it more convenient for many of their patients who don’t have to travel as far for regular appointments and treatments.”

The Emerald Coast Cancer Center is a member of the Emerald Coast Health Alliance, an organization formed and owned by local healthcare providers. It is an Independent Practice Association (IPA) established to provide patients, employers, and payors in the region with a multi- specialty network of high quality physicians and other healthcare providers. Services include:

Physician Consultation on cancers
Physician Consultation on blood diseases
Chemotherapy by certified oncology nurses
Referrals for services not provided by our practice
Referrals to home care or Hospice care when needed
Financial / Insurance Counseling

For more information on ECCC, call the Destin office at 850-622-8165 or the Fort Walton Beach office at 850-863-3148.

 

 

 

Investors Taking Advantage of Rising Rents

Think it’s taking longer to buy a new home? Try looking for a rental and you may be surprised to find it’s taking just as long. That’s because rental prices are soaring in most parts of the country, and especially in Florida where many are still recovering from the housing crisis in recent years. Although rising rates are bad news for renters, it’s good news for investors who are cashing in on the national trend,

“Several investors we worked with in 2010 or 2011 when rental real estate was a great deal are telling us they are reaping the benefits now,” said Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, Florida. “These clients are now able to get a nice return on their investments by taking advantage of the national trend and raising rents accordingly.”

A recent study from Harvard University found that half of all renters in the U.S. are currently spending more than 30% of their income on housing, which is up 12 percentage points since 2000. Nabors said that while rental prices on the Emerald Coast have increased to keep pace with the trend, he believes prices in the area are a bargain compared to other parts of the country.

“Of course there’s always a demand for beachfront rentals in this area and owners are able to command top dollar for those coveted spots,” he said. “But overall, statistics show that major cities have been hit the hardest with soaring rental prices, so it’s not much of a problem here now.”

If you’re interested in investing in commercial real estate, including rental properties and multifamily units, please call NBI Properties at 850-243-0007.

 

Private Lending Popular With Investors

Private lending is all the rage again with investors who are looking for high returns. With many banks still not lending enough to keep up with demands, investors are turning to hard loans or short term loans to finance deals.

Hard money lending is a popular option for investors because it helps generate passive income from real estate investing. Private contracts are drawn up for the benefit of both the borrower and the lender, but there are rules that dictate the hard money market. One such rule is that these are short term loans with lifespans averaging between six months and two years. Because hard money loans earn more interest than longer term loans, these can be extremely lucrative for investors.

Another plus for hard money loans is that hard money lenders mostly aren’t as concerned about the credit rating of the borrower. Instead, lenders are more interested in the value of the property securing the loan. In today’s economy, the majority of hard money lenders refuse to lend more than 70 percent of the appraised value of the property. This results in a 30 percent buffer to secure the loan.

Jayme Nabors, co-owner of NBI Properties in Fort Walton Beach, Florida, said his brokerage works with many investors on financing and lending alternatives, including hard money lending and short term loans.

“We work with people who are interested in real estate investing as a hard moneylenders suggest options for them,” he said. “Some people set up their retirement account as a source of funds to make loans with a self-directed 401K or self-directed IRA account. Many people don’t realize that with a self-directed IRA, they can make hard money loans with the earnings going back into your retirement account tax deferred until they begin making withdrawals.”

In addition to hard money lending, short term loans appeal to lenders because they derive the maximum interest. They are also repaid in full long before the principal is reduced in order to lower the amount of interest being generated. Borrowers prefer these loans because they are typically granted within a few days, making all cash offers for properties possible. Cash offers are critical to nearly all distressed sellers, which becomes an actual benefit for the seller. Short term loans are seen as good options because they offer a win-win-scenarios to both parties involved.

“Overall, moneylenders can achieve an average of ten to twelve percent above the prime interest rate and short term loans will come in at around twelve to fourteen percent,” Nabors said.

NBI Welcomes Momma Goldberg’s Deli to Fort Walton Beach!

NBI Properties is pleased to announce the opening of Mama Goldberg’s Deli in downtown Fort Walton Beach. NBI leased the 2,200 square foot space to the Alabama-based franchise that specializes in sandwiches, salads, soups, and other freshly prepared deli items. Centrally located at 184 Miracle Strip Parkway Southeast, Mama Goldberg’s spent more than $300,000 on a customized buildout and other enhancements to the property.

Mama Goldberg’s first opened in Auburn, Alabama, in 1976 and has always been a family owned and operated business. For more than 37 years, it has proven to be a successful player in the fast-casual dining market and loyal customers have grown accustomed to the delicious food and relaxed, sociable atmosphere. The “old school” deli theme allows customers to create their own sandwiches and salads as well as choose from the appetizing specialty menu. All sandwiches, soups, and salads are made with the freshest ingredients to ensure a high-quality dining experience.

According to owner Steve Sutherlin, the new restaurant in Fort Walton Beach caters to locals, tourists, and the military. Favorite menu items include the Big Momma and Big Daddy submarine sandwiches and the Cajun Turkey Wrap. Mama Goldberg’s also offers catering at affordable prices for local events. The restaurant is open Monday through Saturday from 10 a.m. to 10 p.m. and Sundays from 10 a.m. to 4 p.m.

“We’re proud to welcome Mama Goldberg’s to the community,” said Craig Barrett, co-owner of NBI Properties. “We can already tell that it’s a very popular spot for lunch and dinner.”

Investors Backing Off Fannie Mae and Freddie Mac

Many investors assumed Fannie Mae and Freddie Mac were history after the government seized control of both mortgage giants in the 2008 financial meltdown. Their stocks plummeted and many shareholders exited their positions.
What a difference a few years can make! Currently, both Fannie and Freddie are on the upswing again and reporting more than $200  billion in profits in the past two years as the housing market slowly recovered. Last week, Fannie and Freddie reported a whopping additional $9 billion in profits for the first quarter. Investors who stayed the course are now looking to reap their rewards.
“We’ve heard from some investors who have owned shares in Fannie or Freddie for a long time,” said Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, Florida. “They’ve been patiently waiting for years and now they are optimistic their diligence is going to pay off in spades. We’ve been cautioning them that waiting for Fannie or Freddie to pay off might not be a wise decision.”
This week, a Senate panel is scheduled to vote on a bill that could dismantle the companies in order to shift the risks of mortgage lending from taxpayers to the private sector. If passed, the bill, which has the support of the Obama administration, would leave Fannie and Freddie’s loyal shareholders with nothing.
Other political insiders say the bill may not reach the Senate floor this year. They recall how the government suspended generous dividends in 2008, and four years later ruled that the firms send all of their profits to the U.S. Treasury, eliminating any chance of shareholders recovering value from their long-held investments.
Fannie and Freddie once traded at $80 and $70 a share on the market. Their stock has remained in the $1 to $6 range during the past year.
“There are too many unknowns with Fannie and Freddie and lots of investors are no longer willing to take a wait-and-see approach,” said Nabors.”There are plenty of better ways to invest right now.”

After the Storm: Getting Back to Business

It’s been a few days since one of the worst storms The Emerald Coast has ever seen swept through our area and caused unfathomable damage. With roads crumbling, motorists stranded, houses collapsing into sinkholes, and water damage to hundreds of homes and businesses, it will be awhile before things get back to normal. At NBI Properties, our office in Fort Walton Beach was flooded with four inches of water. While we’ve lived here for more than five generations and know how bounce back from storm damage, many of our friends and neighbors are overwhelmed and don’t know where to start. Here are a few tips to get your property or business restored as soon as possible – or to prepare for any storms in the future:
Business owners all have a common goal of returning to “business as usual” as quickly as possible. If you have lots of staff or volunteers to help you, that’s great. If not, consider hiring a disaster recovery service. It’s usually better to hire professionals instead of tackling the muddy damage yourself, and it’s useful to have someone else to point out necessary repairs. A disaster recovery service can also offer advice on how to prevent problems in the future.
Act quickly for document recovery, as timing is crucial before mold sets in. Mold can begin growing in 48 hours and can make it difficult to return documents to a usable form. With computers, remove your hard drives and consult a company that specializes in recovery. For copy machines, wet toner should be carefully removed.
Reduce humidity by increasing air circulation. Run air conditioning 24 hours a day and use fans and dehumidifiers to keep as much air flowing through your space as possible.
While clearing your office or building of debris or muck, look for items that can be recycled rather than dumped. Dry out all areas as much as possible to prevent the growth of mold and micro-organisms.
Take pictures of the damage as soon as possible if you are reporting it to a landlord or to an insurance company.
We wish all of our friends, neighbors, clients and tenants the best as we do whatever it takes to get back on our feet. After all, our area has survived storms worse than this, and we will survive this one!

Sincerely,
Craig Barrett and Jayme Nabors
Co-founders, NBI Properties

Rising Interest Rates Impact CRE Investments

Commercial real estate investors have been quick to notice that interest rates have been slowly trending upward since the Federal Reserve announced it would suspend it’s bond-buying program last December. Since then, long term interest rates have inched up from one percent to three percent with mortgage interest rates now in the four percent range. However, rising interest rates do not always spell trouble for commercial real estate investing because economic factors typically play an important role as well.

“The investors we are working with now are more interested in overall economic growth, as well as how the economy continues to improve in this area,” said Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida. “Economic growth is good for investing because it leads to new construction, higher rents, and higher occupancy rates.”

Barrett added that more investors are interested in apartment buildings and condominiums due to the option of raising rents as interest rates rise. With most tenants signing one-year leases, investors feel comfortable with raising rental prices to keep up with costs and interest rates.

“In this area, apartment buildings and condos have been selling at prices above market value,” he said. “We also work with investors who want a turn key operation and come to us to broker the deal and continue with us for property management.”

Overall, Barrett said most investors are looking for strong positive cash flow that generates income along with property value appreciation as a hedge against inflation. Ideally, he noted that sound investments should offer protection against inflation and rising interest rates.

Investors Cite Real Estate As Best Investment

Americans have not lost their love affair with real estate as a sound investment, as evidenced by a new Gallup poll. Of more than 1,000 adults surveyed, more participants cited real estate as their favorite long-term investment, followed by gold, stocks, mutual funds, savings accounts/CDs, and bonds. The poll differed from a similar Gallup poll in 2011 that found Americans believed gold was the best long term investment.
Jayme Nabors, co-founder of NBI Properties, said the survey results mirror the economic performance of the times.
“In 2011, everyone was interested in buying gold, silver and precious metals because they were at all-time highs and real estate values were lower,” he said. “Now everything has reversed and investors are showing a voracious appetite for real estate, especially since interest rates are still relatively low and prices are improving.”
The Gallup poll found that survey participants with higher incomes were more inclined to say real estate and stocks are the best investments. Those in higher income brackets are also more likely to say they are homeowners (87 percent), followed by middle-income earners (66 percent) and lower-income earners (36 percent).
The survey concluded that homeowners are slightly more likely than renters to choose real estate as the best choice for long-term investments – 33 percent versus 24 percent, respectively, according to the poll.

Commercial Lending Increases

The Mortgage Bankers Association (MBA) issued commercial loan numbers for last year in it’s recent “2013 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.”According to MBA, commercial and multifamily mortgage bankers closed $358.5 billion in loans. Commercial banks and savings institutions were the leading investor groups with $100.5 billion. CMBS (commercial mortgage-backed securities) had the second highest volume, $79.8 billion, followed by life insurance companies and pension funds; Fannie Mae; REITS, mortgage REITS and investment funds; and Freddie Mac.

“For the past several years, investors have been waiting for lenders to make moves and be more active,” said Jayme Nabors! co-founder of NBI Properties. “Last year was finally the turning point when we started seeing more banks excited about commercial lending.”

According to the MBA report, multifamily properties had the highest origination volume at $136.9 billion, followed by office buildings, retail properties, hotel/motel, industrial and health care. First liens accounted for 97 percent of the total dollar volume closed. Driven in part by increased coverage, the report’s dollar volume for commercial and multifamily mortgages closed in 2013 was 47 percent higher than the volume reported in 2012. Among repeat participants, the dollar volume of closed loans rose by 22 percent.

Nabors added that he expects commercial lending on the Emerald Coast to remain on the upswing due to rising property values and low interest rates.

Consumer Demand, Infrastructure Drive CRE

A recent survey of public and private-sector leaders conducted by the Urban Land Institute and EY Global Real Estate concluded that the the quality of infrastructure systems – including transportation, utilities and telecommunications – is a key factor influencing real estate investment and development decisions in cities around the world. Consumer demand was also cited as a top concern.
Conducted in January 2014, the survey tallies the opinions of 241 public sector officials and 202 senior-level real estate executives (developers, investors, brokers, lenders and advisors) based in large and mid-sized cities across the globe.
The survey found that 88 percent rated infrastructure quality as the number one influencer of real estate investment and development. Public leaders rated infrastructure quality as the highest influencer (91 percent) while private leaders ranked it second highest (86 percent).
Demographic forces, including consumer demand and workforce skills, ranked as another top consideration determining real estate investment locations. Consumer demand was listed as the top factor by the private sector (90 percent).
Strong telecommunications systems (including high-speed internet) led the list of infrastructure categories that drive real estate investment, along with good roads, bridges, and reliable and affordable energy. Public transit led the list of infrastructure investment priorities. Seventy-eight percent of survey respondents’ said public transit systems, including bus and rail, should receive top priority for infrastructure improvements, followed by roads and bridges (71 percent) and pedestrian facilities (63 percent).
Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, Florida, said that infrastructure is the first thing investors ask about when they are interested in commercial properties on the Emerald Coast.
“Of course they know we have excellent roads and highways here since we don’t have snow or sleet to deal with half of the year,” he said. “That’s a huge plus, but we also rank high in other categories such as telecommunications and utilities.”
The public’s willingness to pay for infrastructure was ranked as the top factor shaping both infrastructure and real estate development over the next 10 years, followed by consumer demand for compact, walkable development, and the prevalence of families with children. The cost and availability of energy and the use of innovative pricing systems to fund, manage and operate infrastructure ranked slightly lower.
Nabors said that investors he works with at NBI Properties are also impressed with the area’s quality of life, schools, and recreational facilities.
“One of the first things investors from out of town comment on is the fact that we have so many beautiful public places, parks, and common areas,” he said. “Investors or business owners who are thinking about relocating are usually impressed that this is such a great place to live and work.”

Five Things to Consider Before Investing

Research the Property

This is an important first step for new or experienced real estate investors. Although you’ll be dealing with brokers, attorneys, and other professionals for any commercial real estate transaction, it’s good to do your own due diligence for peace of mind and to avoid any surprises that could crop up later in the deal. Do web searches about the property you are interested in, talk to others who own businesses in the area, and visit the property at different times of day and during the evening to get a better sense of the area. Although having a broker you can trust is a huge plus, you’ll feel better about the transaction if you thoroughly research the property beforehand.

Don’t Buy From a Picture

After researching a property, don’t even think about buying it until you’ve seen it — in person! We’re still amazed by investors who see a few images of a property on the Internet and then say they are ready to buy it. Our advice is just common sense. Don’t buy properties sight unseen! Whether you live across the country from the property or reside in the same town, make time to go see it and do a walk through with the broker. Not seeing a property before buying it is risky business.

Hire A Professional to Inspect the Property

We’ve worked with some investors who think they can skip this step because they have been buying properties for years and can easily spot repairs that need to be made and estimate the costs. An professional inspection will usually only run you a few hundred dollars and can pay for itself if faulty plumbing, wiring, or other problems are uncovered. No matter how new a property may be or how great everything looks, don’t take chances by doing your own inspections. What you could miss could end up costing you thousands of dollars to rectify later on.

Avoid “Great Deals”

If you’re an experienced investor, you know the type of brokers we are talking about. Instead of offering sound advice and attractive properties for fair values, they like to steer you to the “great deals or steals” that can make you rich overnight. Of course they don’t want you to pay too much attention to the fact that some of these great, discounted properties have been on the market for months or longer. They’ll tell you it’s just because no one else has been smart enough to see the full potential of the property. If you’re still willing to listen to these kinds of brokers who operate more like used car salesmen, then we’re willing to bet they also have some nice waterfront property in Arizona to show you! Bottom line, if someone is trying to pressure you into a deal that seems too good to be true, start running like Forrest Gump because this is a deal you probably don’t need!

Always Have Extra Cash For a Rainy Day

One of the things that new investors learn quickly (and sometimes the hard way!) is the need to always have enough cash reserves. Things can and will happen, and properties will need plenty of upkeep, repairs and maintenance. Properties require maintenance and repairs. Failure to have enough cash reserves to properly maintain the property will almost always result in the investor losing money when the property deteriorates and loses value over time.

Florida Leads Nation in Recovery

Although Florida was one of the first states to feel the sting of a national recession with job losses starting in 2007, economist Sean Snaith said the state now leads the nation in recovery. In his First Quarter Florida Economic Forecast, Snaith noted that the national recovery began in June 2009, but Florida was slow to join in and lagged behind the pace of the rest of the nation for several years. Today, that’s all changed as the state is definitely a front-runner as well as a magnet for economic growth.
“This has been no small accomplishment,” said Snaith. “Looking forward, Florida will extend its lead over the national economy the next several years as we expect the Florida economy to continue to outpace the nation as a whole.”
NBI Properties co-founder Jayme Nabors said the Emerald Coast has been showing strong signs of economic growth in the past three years.
“Around here, we’ve seen that construction is up and lots of new jobs are being created,” he said. “Eveything was at a standstill during the recession, but things are really clicking now and more places are hiring.”
According to Gov. Rick Scott, the state has created more than 500,000 new private sector jobs since December 2010. “That’s half a million jobs in just over three years,” Scott says.
The sectors expected to have the strongest average growth during 2014-2017, he says, are construction (10 percent); professional and business services (4.3 percent); trade, transportation and utilities (4 percent); education and health services (2.3 percent); and leisure and hospitality (1.8 percent).
Snaith also notes housing starts that jumped in 2013. In 2014, total starts will be more than 108,000, he projects. That will rise to just under 144,000 in 2015, hit 161,600 in 2016, and go up to 165,500 in 2017. He says the growth in residential activity will catalyze growth in the commercial sector and push employment growth in the construction sector into double digits.
Nabors added that his brokerage, NBI Properties, is getting more interest from investors in commercial real estate listings as well as residential communities.
“We’re hearing that housing starts will average 32.5 percent growth during 2014-2017, with the most rapid growth in 2014 and 2015,” he said. “That’s going to be a huge boost for this area.”

Know the Facts About Short Sales

Realtors routinely get calls from home buyers who are misinformed about short sales. Often the buyers believe a short sale means a property will be a good deal and is being sold by a distressed seller, particularly in areas where prices have already begun to rise quite substantially. Some buyers also mistakenly think the sale will happen quickly, when the reality is that short sales can take a long time to complete.

“A short sale simply means that a home is being sold for less than the amount of the outstanding mortgage,” said Craig Barrett, co-owner of NBI Properties in Fort Walton Beach, Florida. “It doesn’t mean the transaction will happen any faster, as the sellers’ bank has to approve the sale before the closing and confirm that the seller can no longer afford to pay for the property.”

Before a short sale can be approved, banks will evaluate the seller’s finances as well as the buyers. This process isn’t quick, and can actually take far longer than buying from a motivated seller. The mountain of paperwork and signatures required to complete a short sale can often mean paperwork becomes lost and the process is delayed. Often banks will not allocate the same level of resources to short sales as they would for other bank procedures that are considered to be more profitable, and as a result the entire process can be cumbersome and time-consuming.

“The worse case scenario is when a short sale involves two different loans,” said Barrett. “This can mean a major loan is being settled as a short sale while the second loan may be smaller, such as a line of credit, and can be completely wiped out. If these loans are from two different banks, then the process can get even more complicated, as each bank will have its own system and is unlikely to communicate with the other bank.”

Sellers interested in a short sale should look for an agent who has experience with this process so they will be more able to push the sale through. Buyers interested in short sale homes should find out if an agent is experienced with short sales and can advise if the purchase will be a long drawn out process.

Maximizing Real Estate Tax Deductions

The tax deadline of April 15 is just around the corner, and even though deductions for homeowners remain largely unchanged since last year, it’s worth checking to make sure you have all your deductions in order. It’s also good to keep in mind that if Congress doesn’t take action, some of your real estate deductions will expire for the 2014 tax year. Since many people prefer to do their own taxes or use popular software programs, it’s worth reviewing these tips to make sure you’re getting credit for all of your deductions.
As usual, mortgage interest deduction is the top tax deduction for homeowners. This applies to primary home values up to $1 million. Congress has been considering limits to this deduction for high-income earners, but no laws have been passed yet. The latest proposals are that households with incomes above $400,000 may see a limit placed on them in the future.
If you’ve embarked on any remodeling projects, it’s important to know that home improvement loans have a limited deduction. If you take out a loan secured by the equity of your home, you can deduct the interest paid in many cases. However, routine maintenance such as replacing carpets or painting are not qualified interest deductions.
Something else you don’t want to overlook is mortgage point deduction. These are also known as origination fees, generated when you first buy a home or when you decide to refinance. The fee is charged by mortgage underwriters to originate the loan. For example, a one percent origination fee on a $100,000 house would be $1,000. For an original loan, the entire fee can usually be written off for the tax year the purchase was made. For refinance loans, the fee can be written off in proportion to the amount paid during the tax year.
If you decided to “go green” and use eco-friendly materials in your home, you may be entitled to deduct energy efficiency tax credits. Improved insulation, energy efficient windows, furnaces, hot water heaters, and solar panels can add up to a nice tax credit. This is not a reduction in your taxable income. Instead, it’s a full credit that lowers your tax bill by the full amount of the credit. Generally, an energy efficient tax credit is 10 percent of the total cost with a cap of $500. There are also caps for specific items such as a $150 cap for a furnace.
Private mortgage insurance is often overlooked by homeowners that might not be aware they are paying for it. Home buyers who have less than a 20 percent down payment for a home are typically required to purchase private mortgage insurance that can cost a couple of hundred dollars each month. This cost of homeownership is deductable if the loan originated after January 1, 2007. However, just like other real estate deductions, there are limits. For households with an income between $100,000 and $109,000, the deduction is phased out at 10 percent for every $1,000 in income above $100,000 and not available above $109,000. Something else to consider with private mortgage insurance is that you can stop paying it when your equity reaches 20 percent of the home value. This is accomplished by making monthly payments and/or when the market value of the home increases above the 20 percent threshold.
Did you sell a home in 2013? If you sold a primary residence in 2013, you are exempt from paying capital gains on the first $250,000 of profit. For a couple, the limit is $500,000. If your profit from a sale exceeds $250,000 for an individual or $500,000 for a couple, there may still be deductions to reduce your tax bill. You can deduct several costs associated with the sale, such all fees paid at closing and capital improvements you made while you owned the home. Other possible deductions include damage repairs and marketing costs to sell the home.
Did you work at home in 2013? If so, you may be entitled to claim a home office deduction. You can write off the expenses associated with a home business office that you use exclusively for business. Starting in 2013, there is a simplified procedure that allows you to deduct $5 per square foot and up to 300 square feet.
Finally, if you were delinquent on taxes, check to see if you qualify for debt forgiveness. Until 2007, the IRS considered any debt that was forgiven to be income that taxes were due on. The Mortgage Debt Forgiveness Relief Act of 2007 canceled this debt tax for the short sale of a primary residence up to $1 million for individuals and $2 million for couples. This may also apply in the case of a foreclosure when the mortgage company does not recover the full loan amount and does not require the ex-homeowner to repay the balance owed.

Survey Shows Optimism for Spring Sales

More real estate professionals are feeling optimistic about the coming spring season and that sales will get quite lively. The MRIS Spring Real Estate Outlook Survey collected the responses from more than 1,300 real estate professionals within Northern Virginia, Baltimore, Washington DC, and parts of Pennsylvania and West Virginia.

According to the survey, more than 71% were more optimistic about the coming spring season compared to 2013, and are predicting that sales transactions will increase this year compared to last year. Some 82% of those surveyed think average sales prices will also increase this spring. Experts point out that the housing market in the mid-Atlantic region began to stabilize last year, and this year they expect to see increased inventory and stabilizing house prices. The survey also looked at the challenges faced by home buyers and sellers, including inventory levels and new mortgage rules.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, FL, said that sales are expected to pick up even more when the northern states thaw out.

“We’re into the best time of the year with a lot of tourists coming to the area for spring break and vacations with families,” he said. “That always spurs a lot of interest in second homes, vacation homes and people who want to relocate here and enjoy the Emerald Coast lifestyle.”

Buyers Seek Energy-Efficient Mortgages

According to a recent survey by U.S. News & World Report, more of today’s buyers and homeowners are interested in the benefits of obtaining a “green” mortgage. The survey found that buyers are finding energy-efficient mortgages attractive because they allow homeowners to roll the cost of “green” home improvements – such as solar panels, geothermal heating, tank-less water heaters and more energy-efficient heaters or air-conditioning systems – into their mortgage financing.

Fannie Mae, the Federal Housing Administration (FHA) and the Veterans Administration (VA) offer loan programs that include energy-efficient mortgages. The loans come with a few restrictions, however. On FHA loans, the cost of improvements usually can’t exceed 5 percent of the property’s value and is capped at $8,000 while with VA loans, veterans can usually add up to $6,000 in energy-efficiency improvements. On conventional loans, funding for energy improvements is often capped at 10 percent of the appraised value of the completed property.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida, said his realtors have been fielding more questions lately from buyers interested in green mortgages.

“Right now we’re getting more questions and interest in energy-efficient mortgages because it’s tax-season and buyers are looking for deductions,” he said. “They want to know how much they can lower their taxes by making certain improvements or buying a home that qualifies as energy-efficient.”

Lending experts warn borrowers to be make sure they’re comfortable with the higher monthly mortgage payments spurred by a bigger loan. But over the long-term, the decrease in a home’s energy costs may make up the difference. In fact, many lenders won’t even process an energy-efficient mortgage unless it will result in a net cost savings. Often the savings can be significant because the average homeowner spends about $2,200 annually on energy bills, according to the Department of Energy’s Energy Star Program. The Environmental Protection Agency says that adding insulation and improving the sealing of a home has the potential to curb total energy costs by 10 percent.

According to Energy Star, programmable thermostats can save homeowners $180 annually; replacing single-pane windows can offer a $500 annual savings; solar water heaters offer a $140 savings; and energy-efficient HVAC systems can offer $200 or more in savings.

CRE Outlook Positive

According to the National Association of Realtors® (NAR) quarterly commercial real estate forecast, market fundamentals in commercial real estate are continuing to improve — but at a slower pace. However, NAR chief economist Lawrence Yun said fundamentals are still experiencing an uptrend.
“Growth in commercial real estate sectors continues at a moderate pace from a very slow pace of absorption, despite job additions to the economy,” said Yun. “Companies appear hesitant to add new space. Office demand is expected to see only slow and gradual improvement. Demand for retail space is benefiting from improved household wealth, while industrial real estate is stable with increasing international trade, which requires warehouse space.”
National vacancy rates in the coming year are forecast to decline 0.2 percentage point in the office market, which has the highest level of empty space, 0.1 point in industrial, and 0.3 point for retail real estate. With rising apartment construction, the average multifamily vacancy rate will edge up 0.1 percent, but this sector continues to experience the tightest availability and strongest rent growth of all the commercial sectors.
“Of course, the apartment market fundamentals are the strongest, as nearly all of the new household formation in the past 10 years has come from renters, and not homeowners,” Yun added.
Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, said the demand for condominiums on the Emerald Coast remains strong and that commercial real estate transactions have only been hampered slightly by weather conditions.
“Florida has been the only state that has not had snow this year, so we’ve always got that going in our favor,” he remarked. “We’re also optimistic that there will be renewed interest from investors if the bill to eliminate commercial real estate taxes passes.”
NAR’s latest Commercial Real Estate Outlook offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.
Office markets:
Vacancy rates in the office sector should decline from an expected 15.8 percent in the first quarter of 2014 to 15.6 percent in the first quarter of 2015.Office rents are projected to increase 2.3 percent in 2014 and 3.2 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 44.6 million square feet this year and 50.0 million in 2015.
Industrial markets:
Industrial vacancy rates are anticipated to fall from 9.0 percent in the first quarter to 8.9 percent in the first quarter of 2015. Annual industrial rents should rise 2.4 percent this year and 2.6 percent in 2015. Net absorption of industrial space nationally is seen at 106.1 million square feet in 2014 and 110.6 million next year.
Retail markets:
Retail vacancy rates are expected to decline from 10.2 percent in the first quarter of this year to 9.9 percent in the first quarter of 2015.Average retail rents are forecast to rise 2.0 percent in 2014 and 2.3 percent next year.

Emerald Coast Real Estate Figures Strengthen

The latest figures show the real estate market on the Emerald Coast continued to strengthen due to continued demand as last year drew to a close. According to NBI Properties co-founder Craig Barrett, in Fort Walton Beach the average price per square foot is $109, an increase of 9% compared to the same period last year.

“It’s been a good year throughout the area,” Barrett noted. “If you look at prices and sales in Destin, Fort Walton, Crestview or just about anywhere in the area, the numbers are very encouraging.”

The median sales price for homes in Fort Walton from November 13 to February 14 was $140,000 based on 133 home sales. Compared to the same period one year ago, the median home sales price increased 1.1%, or $1,550, and the number of home sales decreased 15.8%. The average listing price for homes for sale in Fort Walton Beach FL was $258,785 for the week ending Feb 12, which represents a decrease of 1.7%, or $4,398, compared to the prior week.

“Demand for homes in this area is strong, and we continue to get a lot of interest from local, domestic and international buyers,” Barrett said.

Statewide the median prices for homes in Florida also increased during the fourth quarter, as the price for a single-family home was up 13.3% to $170,000, compared to the fourth quarter in 2012. The price for condominiums increased to reach $133,000, up 18.8% compared to the same quarter for the previous year.

Sales of existing single-family homes for the whole of Florida reached 54,845 during the fourth quarter, an increase of 4.7% compared to the same period a year ago. Sales of condominiums reached 24,538, a decrease of 2.1% compared to the same period a year earlier. The percentage of people paying in cash declined slightly down to 60% compared to 63.3% a year earlier. All cash sales accounted for 71.5% of condominium sales, and 45.4% of single-family home sales.

Top Economist Calls Home Prices “Low but Fair”

U.S. home prices soared 13.7 percent in the 12 months through November, according to the S&P/ Case-Shiller index of home prices for 20 cities. However, Nobel Laureate economist Robert Shiller, co-creator of the index, isn’t worried about the surge. That’s because while prices are only 7 percent below their 2006 peak in nominal terms, they’re actually 30 percent away in real terms.

“Prices are still low, but their level is fair at the moment,” said Shiller. “If we examine the history of prices since World War II, we can see that over time, in real terms, prices have not risen, but have been stable. We have therefore returned to the nominal area in terms of prices.”

In any case, upward price momentum has weakened, Shiller notes. “Prices may continue to rise over the next couple of years, but not by much.”

Craig Barrett, co-owner of NBI Properties in Fort Walton Beach, Florida, said that stable home prices on the Emerald Coast have made homes more attractive than ever to buyers.

“We’ve seen a lot of cash buyers, but financing is also getting a bit easier for borrowers,” he said. “Compared to other markets and home prices throughout the country, people are still finding that buying a home or property here is a very sound investment.”

When it comes to U.S. stocks, Shiller shies away from calling them a bubble. “U.S. stock markets are a bit overpriced, but they’re not super expensive,” he explains. “Profit forecasts are still good, so there is no need to dump all the shares. I advise keeping part of a portfolio in shares, of course on the basis of the risk level that each person wants.”

As for the economy, “we’re still licking the wounds of the great crisis, and it will take us more time to recover. The administration’s policy has improved the economy,” Shiller added.

Home Builders’ Confidence Blamed On Weather

Noticeable declines in U.S. builders’ confidence levels in the housing market are blamed on severe weather that has affected much of the country and has kept many buyers at home. The relentless cold weather and winter storms have affected builders’ projections of sales before the spring home selling season begins, and this could impact the rate of home construction.

The National Association of Home Builders/Wells Fargo builder sentiment index was recently released and dropped to 46, compared to a reading of 56 in January. This is the lowest level reported since last May, and readings below 50 indicate that builders think the sales conditions are negative rather than positive. In fact, the outlook for sales of single-family homes during the next six months and the outlook for traffic by would-be buyers have both declined since last month.

Craig Barrett, co-owner of NBI Properties in Fort Walton Beach, said chilly weather also affected construction and residential sales on the Emerald Coast this year.

“Of course we don’t have lots of snow to shovel like most areas of the country, but it’s been colder than usual this year and that always affects sales,” he noted. “The winter storms also affect potential buyers who cancelled trips when they were unable to get here to look at vacation homes or commercial properties.”

The weather has also had an effect on the general economy as retail and auto sales have both declined. In addition, builders are still struggling with a shortage of ready to build land, a lack of readily available building materials and skilled labor. In spite of the latest index, economists anticipate property prices and sales will continue to rise this year. Over the past two years the property market has been steadily recovering, boosting economic growth and job creation. Even though home construction rates slowed in December, this year was still the best since the housing crisis began.

New home construction only represents a tiny proportion of the real estate market, but It’s estimated that each new property creates three jobs in a year and generates around $90,000 in tax revenue.

FL Governor Proposes Cuts to CRE Sales Tax

Governor Rick Scott recently submitted his fiscal year 2014-2015 budget and made many of the state’s realtors happy and hopeful in the process. In addition to proposing a $100 million reduction in the state’s sales tax on commercial leases, the budget also included money to expand the Florida Division of Real Estate’s oversight of license infractions.

Jayme Nabors, co-founder of NBI Properties in Fort Walton Beach, Florida, said the reduction of sales taxes for commercial leases would be welcome news.

“With all of the many advantages that investors love about Florida, the sales tax imposed on commercial leases has been just about the only deterrent we’ve had to deal with during the past few years,” he said. “Now we can eliminate the last objection to anyone who is interested in commercial real estate in Florida.”

Scott said Florida businesses pay about $1.4 billion a year in sales taxes on their rent payments, and he said the tax cut — which equates to 1/2 of 1 percentage point — will make it more affordable for businesses to lease space. In addition, the proposed tax reduction would amount to savings of $104 million a year.

“Florida is the only state that imposes this tax, and we must keep working to make Florida the best place in the world to start and grow a business,” the governor said in a statement.

Scott was made the announcement in Orlando where he was joined by several small business owners and representatives from the Florida Realtors, the trade group that has been lobbying for several years to exempt commercial rent from the state’s sales tax. The organization has given more than $225,000 over the last two years to “Let’s Get to Work,” a political committee organized to help Scott win re-election.

Under the budget that the Florida Legislature will consider as they create a spending plan for the next fiscal year, Scott included $106,676 in additional funding for the Division of Real Estate, which falls under the Florida Department of Professional Regulation (DBPR).
The money, if approved by the Florida Legislature, would add two OPS staff (“Other Personal Services” – a temporary employee for short term or intermittent tasks) and additional funding to obtain subject matter expertise.