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The purpose of this article is to analyze valuation methodology for several atypical types of apartments. Various circumstances and situations can cause an apartment complex to have above-or below-market rental rates, occupancy rates and operating expenses. This analysis examines the following two situations:

low-income subsidized apartments, which receive above-market rental rates from HUD or another government agency, and projects that are part of the Low Income Housing Tax Credit (LIHTC) program.

The LIHTC program was established by the U.S. Congress to encourage development of affordable housing in economically disadvantaged areas. Project developers receive a tax credit for following the guidelines established by the program. They typically sell these credits to Fortune 500 corporations for 45 percent to 60 percent of the total project cost, excluding land.

The first step in the valuation process is analyzing market value definitions. The following is the definition from the Texas Property Tax Code, Section 1.04 (7): market value means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:

a. exposed for sale in the open market with a reasonable time for the seller to find a purchaser,

b. both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions to its use, and

c. both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

Section (b) of the Texas Property Tax Code further requires: the market value of property shall be determined by the application of generally accepted appraisal techniques, and the same or similar appraisal techniques shall be used in appraising the same or similar kinds of property. However, each property shall be appraised based upon the individual characteristics that affect the property’s market value.

The definition of market value, according to the 10th edition of The Appraisal of Real Estate published in 1992 by the Appraisal Institute, is: market value is the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.

The term which requires further review in the above definition is “knowledgeably.” Is the purchaser knowledgeable regarding the effort required to comply with subsidized housing program requirements and tenants? Does he consider the effort to be rent for real estate or compensation for services? Does the purchaser of an LIHTC project understand that maximum rents are now established for at least 15 years based on deed restrictions? (LIHTC deed restrictions are now required for 30 years in Texas and most other states.)

Fee simple estate is defined in the third edition of the Dictionary of Real Estate Appraisal published by the Appraisal Institute as: absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.

The practice in Texas is to base the assessed value on the value of the fee simple estate as opposed to the leased fee estate. This analysis is based on valuation of the fee simple estate instead of the leased fee estate.

The definition of leased fee estate in the third edition of the Dictionary of Real Estate Appraisal is: an ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.

The primary difference between the fee simple estate and the leased fee estate is that the tenant and landlord are each bound by commitments to pay rent and allow use of the property for a term. The contract rent agreed to between landlord and tenant may or may not be equal to market rent. For example, if a landlord entered into a 30-year lease for rent of per square foot 15 years ago (when market rent was per square foot) and the current market rent is per square foot, the tenant has a substantial advantage. The tenant has a leasehold estate which may or may not have value depending on the term of the lease, the contract rent and market rent.

The Dictionary of Real Estate Appraisal defines leasehold estate as the interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions.

Conversely, if the tenant agreed to a rental rate of per square foot in a strong market 10 years ago, and is committed to pay that rent for another 10 years, there is a substantial advantage to the landlord, and the tenant has a leasehold estate with a negative value. Practice in Texas is to establish the assessed value based on the fee simple estate instead of the leased fee estate. Therefore, the relevant criteria for determining market value includes market rent, market expenses, market occupancy and market derived capitalization rates. If a taxpayer made a poor business decision 10 years ago and has substantially below-market rent, it is inequitable for the taxing entities to reduce their ad valorem tax due to the bad business decision of the property owner. Conversely, if a property owner made a fortuitous or wise business decision and entered into an above-market lease, it is not appropriate to collect an above-average level of ad valorem tax from him because of his luck or prudence.

Market rent is defined by the third edition of the Dictionary of Real Estate Appraisal as: the rental income that a property would most probably command in the open market; indicated by current rents paid and asked for comparable space as of the date of appraisal.

Market rent is the compensation paid for the use of the real estate. It should not include compensation paid for factors other than the use of the real estate such as additional services which are not typically provided.

The next step in this process is to analyze valuation of properties which participate in subsidized programs which receive above-market rental rates. The final section will address valuation of projects in the LIHTC program.

Valuation of Subsidized Housing

This analysis will consider both the income and the sales comparison approaches to value. The cost approach is not utilized since it would provide similar results after calculating external obsolescence due to differences in rental rates.

Income Approach:

Apartment owners who participate in subsidized housing programs may or may not receive above-market rental rates. For many years, HUD offered above-market rental rates as an inducement to property owners to participate in the program. There are two reasons for HUD paying an above-market rental rate:

to compensate for the inconvenience of dealing with a bureaucratic government program which mandates detailed inspections not typically required in the private market; and to compensate for working with residents who tend to be at the lowest socioeconomic level in our society.

It has not been unusual for HUD to pay contract rent of .70 to .80 per square foot per month for subsidized housing projects, even though the market rent for competing projects might only be .45 to $ 0.50 per square foot per month. The rent and sales comparables used in this analysis are located in a neighborhood characterized by income levels in the bottom quartile of the Houston area, minimal new construction of residential or commercial buildings for 25 years and heterogeneous levels of quality and appeal. Some sections, such as Riverside, have experienced gentrification, but other areas are marked by poorly maintained properties. Both the market rent projects and the subsidized rent projects are located in the area south of downtown Houston, bound by 288 to the west, Interstate-45 to the east, and Almeda-Genoa to the south. Consider the following tables which list rental rates for projects which do not participate in a subsidy program (market rent projects) and projects which do participate in a subsidized rent program:

Nowadays, everybody considers 3D as a quite standard thing – we have tons of that kind of media around us, such as 3D computer games, 3D movies and so on. This virtual environment is getting deeper in our lives and to be honest, people like it. For many, it’s like being a part of the future, like touching something that we could have only read about in science fiction books some 30 years ago.

Sometimes we do not really understand that 3D is already something that we expect, not only consume as a product in the Movies and pay attention to in TV ads. Speaking in terms of the usual business based on goods production, sometimes we wish there was a 3D model or animation of some product before we buy it.

A major part of all sales is done online these days, using the ever growing sales channel – the Internet. You can find nearly everything on E-bay or Amazon, if not – there must be something you are looking for in the Internet itself, with all its billions of web pages and millions of online businesses. And when speaking about some unique product that needs more info for the buyer to make a decision – a higher level of the product visualization is required.

Here we go – Real Estate business sector, with thousands of agencies and millions of properties. And thousands of buyers too! I was one of them recently.

Having browsed a number of local real state agencies’ web sites and their offers, I was a bit concerned about the size of the information presented – merely enough to give a brief description. A couple of low resolution photos, usually giving no solid picture of the interior, sometimes a graphical 2D floor plan – and that’s it.

My mind was demanding something more visual, a video from inside the house for example. But, everyone knows that videos are big files and internet is not a cable television and I understood that technically it would be rather naive to expect it there. Eventually, I found a link that brought me to what was called a “3D House Walkthrough” – a computer graphic animation that literally let me walk through the house, around the house and even the back yard.

Now that was a nice discovery. Something that I thought I would never find appeared to be there – well, I never doubted that if there is will there is … an Internet. My further research on such functionality for Real Estate web sites was not very promising, as I could not find anything else of that kind. To my understanding, the majority of agencies either underestimate the power of 3D or just are not aware of such services at all.

www.House-Walk.com was the 3D house flythrough video developer, and I say Thank You, it was nice walking that virtual house without a need to drive miles to it.

To my belief, this kind of 3D presentation is highly demanded and will soon be a wide spread feature on every Real Estate web site.

Choosing a financial planning that is right for you can be very confusing and a little more difficult. Find a person or company that you can trust with your financial planning is important. Thus, learning where to start it takes some consideration.

Before starting the search for the planner some time to evaluate what your real situation, it is financially. There are several free online calculators that can help you start your current financial situation. This will help you get a better idea of what type of help you are looking for a consultant.

In addition, you will want to have what your goals are for the short, medium and long-term plans. This will help you determine exactly what type you looking for advice from a professional. There are several areas where a professional can help. For example, you may only want to help properly plan for retirement. On the other hand, you may be looking for help in all areas of your finances, you will be financially secure.

Now that you have to make some of the foundational work, you’ll want to dedicate time to research before hiring a consultant. There are several things you should consider to help you decide on the best match for you. First, make sure that the company or individual has the proper license, which is essential to your state and county.

Next, if you want to explore, experience shows that the planner has. Find out how long the person or company has been in business and what areas they are experienced in. Depending on the type of assistance you are looking for, you want to be sure they have plenty of experience in this field. Place a firm that is experienced in all areas can be helpful for you as your needs may change over time, and you will be able to stay with the same company.

As with any service you choose a lease, it is advisable that you ask to check the references of former and current clients, whether they were satisfied with the services provided by the company. You may even want to check with friends and relatives for their recommendations.

In addition to accessories, find out how the provider charges for services. For example, you want to know, is a provider of services for a fee or do they order from suppliers of financial products. Be sure that you are as easily planner charges you for services.

Find out who is related to the planner or control. Some are independent consultants or work in private companies, while others are associated with large financial institutions and banks. These large institutions may limit the products and services that can be offered to the customer. Because of these limitations, it is often better to seek financial planning, be self-employed or in private companies.

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While you’re acquiring refund home loans, almost everybody has thoughts. In making one of the most critical financial actions in your lifetime, it will be better to get aid from mortgage specialists to make sure that you will not lose out on anything.

Expert Mortgage Counselor

When looking for a licensed home finance loan agent to help you to secure refund home loans, you should search for all those who have:

• Experience. There are hundreds of mortgage brokers and lending corporations available in the market. It is simple to claim that they all come and go. For that peculiar rationale, you have to pick a home loan broker that’s been around for quite some time now. Regardless of the dynamic developments of the mortgage loan business, there are plenty of things that remain regular every year. If you want to work with a veteran house loan broker, you’ll have a good chance of staying away from the faults newbies normally make.

• Good Track record. Reputation would mean everything with regard to the home finance loan industry. Both your selected lender and agent ought to be reputable, which means they’re recognized by the mortgage society as well as the credit seekers. Two methods for establishing good reputation is finding great customer opinions and affiliating with mortgage organizations.

• Achievement. Track record and experience won’t mean anything at all should you fail to be a success. Every dealer and loan company must be capable to show that they can finish the job. You will still find it more comfortable to obtain a home financing loan with brokers and lenders who have showcased excellent loan procurements.

However, you have to do something if you need to have the best mortgage suggestions. After searching out the excellent refund home loan broker and lender, it is the perfect time to begin asking questions. Don’t be reluctant to ask your agent or loan provider about whatever bothers you in relation to you home mortgage. Listed below are example concerns that you may decide to consult with your agent and loan provider.

1. Will my loan application be authorized?

Albeit this is an easy question, many home mortgage candidates are actually moved to get loan packages tha they have basically no ability of getting. This type of moves are designed by deceitful agents who simply want to profit. So before signing anything, ask your agent this question and make sure that you obtain a excellent response.

2. What loan type can be right for me?

There are many home loan products on the market that could cater to your circumstance. You want to consult your specialist in relation to your own personal and financial situations. A fantastic agent will be able to provide you with a loan that would flawlessly match your instances.

3. Precisely how much will the overall cost be?

A part of your mortgage loan team’s work should be to supply you with advice concerning how much you may be paying out in general. This type of information is essential because it will let you better control your own financial savings along with other costs with regard to the credit.

The definition is very simple:

“Financial Freedom is when your money works for you and you don’t work for money anymore.”

The amount of money you need for financial freedom is uniquely dependent on you. I will show you below that you don’t necessarily need millions to have financial freedom.

In your planning, you never touch the principal while you are doing your calculations.

You also want to make sure you have more than one source for your income needs. That is actually true no matter if you are in the accumulating phase of life, financially free prior to retirement or in retirement.

The lifestyle / million-dollar question here is:

Are you content with a simpler life with the freedom of no money worries?

OR

Do you want your toys and luxuries at any price?

Either one is attainable, but let’s look at the two options and what it takes to be financially free.

Example 1 – Simple Lifestyle:

Required Income: ,000 per year
Annual Return: 9%

In order to be financially free, you would need 0,000 to earn the above income.

Example 2: Toys and Luxuries:

I will use a required income of 0,000, although some of you will say: Are you kidding, how could I ever live with that little money?

Required Income: 0,000 per year
Annual Return: 9%

In order to be financially free, you would need ,200,000 to earn the above income.

I am sure you are thinking now, 9% annual return is pretty high. What about down years in the market?

I don’t think you should invest all that money in the financial markets. What about one or two small businesses that give you passive income? Examples that come to mind are Laundromats, Self-Service Car washes, Vending Machines and your return will be much higher than 9%.

All these have some work involved, but are fairly passive and can be systemized considerably.

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Outsourcing Architectural Design – The word defines itself that it is a process of designing building architecture and structures. These may be any – ranging from residential house to industrial and commercial buildings. In this process, mainly building plans and diagrams are prepared according to certain specifications. While creating such house plans designs, each and every small portion of building component’s information is taken care. After all, the success of your building house construction design heavily depends on the accuracy of architectural designs.

Creating such innovative and attractive building architectural designs is a job that requires great concentration and depth knowledge of Building Architectural Engineering Concepts. Architectural designers, building architects and many more business professionals are available these days that provide their expertise in outsourcing architectural house plans design.

Architectural engineers have specialization in architectural designs. Main job of these designers is to provide most accurate and effective architectural house plans designs. Architectural designer has to be very well aware of modern technologies that are on peak in Building Construction Business.

Architectural designs from such business professionals will not only give you your dream house plans designs, but also will make your house plans perfect from every perspective. Whether it is about strength of your house or look of your house, once it is built as per decent architectural designs, you will find your perfect house plans!!

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Ever asked yourself, ‘How do I save our home if my spouse dies?’ If this question worries you, then perhaps you should look into obtaining a mortgage life insurance. This is usually offered to home owners through as a mail offer, that is if their mortgage loan institution is affiliated with this type of insurance company.

The way this mortgage life insurance works is, the mortgage balance is paid in full, should your spouse or mortgage borrower die. Some people choose not to get this policy because they never see the money. The insurer will pay the money directly to the bank institution. Many feel a life policy disbursed to them can cover mortgage and anything else they need, while leaving them in control of how to spend the money. When a loved one dies, there are so many things to take care of such as funeral costs, and unexpected expenditures that comes with it. You still have to leave income to supplement your spouse’s income. With so many things to pay off, paying the mortgage in full might be moved to the bottom of the list. With home mortgage protection you can use your life insurance as you need and have your mortgage paid in full, without you having to worry about it.

Another reason why home owners choose to opt out of home mortgage protection is that as the mortgage balance minimizes so does the policy value. For example, when you purchase this protection plan when the mortgage balance was ,000 then the policy value is ,000 with a fixed rate and set premium rate. When your mortgage balance drops down to ,000, the policy value will also be ,000 but the premium rate and fixed rate will still be the same.

You can purchase a home mortgage protection or mortgage credit life insurance with return of premium. If the policy holder survives the premium term, then all the premium paid will be refunded back to the policy holder. So although the premium does not go down when the mortgage balance and policy value does, it can still be recovered.

Another thing to consider is there are no medical exams required like there is in a life insurance policy. There are however health questions that would need to be answered when trying to obtain a mortgage life insurance.

Since there is no medical exam or blood test done, it is much easier to obtain when having pre-existing health conditions.

These are just some things to consider when obtaining a mortgage credit life insurance. It mostly helps the lender recover their money should you die, but also benefits your family. It gives them a paid home, peace of mind and one less thing to worry about in your absence. This mortgage credit life insurance is not for everyone, some choose to opt out. You have to weigh in the pros and cons in your personal situation to figure out if this is the right choice for you and your family.

More and more Pennsylvania residents have thought of telling their boss to “shove it” and walk out of the door

Then we consider about all the bills we have and what we would do for an revenue.

Then we tell ourselves that we’ll just Start out A New Coffee House In Pennsylvania, because we’ve observed the show Good friends and they make it appear easy.

We then picture all the folks at the counter who will be lined up to acquire our delicious, fresh roasted coffee.

It’s easy to talk about the fascinating side of the coffee shop life-style and the profit potential but many unsuspecting new owners jump into an possibility and shed their existence savings.

Just because you think you will be the subsequent finest point does not mean it will happen.

There is absolutely nothing incorrect with optimism and the expectation of good results, but you have to be aware that the odds are stacked against you when you are Starting A New Coffee House In Pennsylvania.

The reality is that many independent and franchise coffee shop owners usually do not obtain a big pay off.

In fact most end up with a marginal salary and a hectic schedule.

You have to think about whether or not or not you have the ability to make critical organization decisions and if the entrepreneurial lifestyle is really for you.

This is the truth for about 90% of the cases.

We surveyed 10 coffee houses, and discovered that only 1, Starting A New Coffee House In Pennsylvania, was productive.

This statistic is steady with the statistics published by the Specialty Coffee Association.

To ascertain why the one coffee house was a achievement, we interviewed the proprietor. He felt his accomplishment could be attributed to the following:

Retaining create out charges to a minimum (or having no debt)
Hiring the correct staff
Supplying superb client support
Having a decor that is on par with the chains
Having competition in the town that educates the public about espresso based drinks (they compete with two Starbucks, Biggby Coffee, Dunkin Donuts, Bearclaw Coffee, and five independent coffee houses)
Roasting all of their coffee on web site with an Ambex, Profile Plus RT system
Spending 10% of the gross revenues on advertising
Becoming distinctive and various from the competitors
Giving to every charity in the neighborhood
Becoming included with local boards and govt
Obtaining as much press as achievable
Continuing to be flexible with the company plan
Supplying wholesale coffee (by roasting their very own coffee)
Remembering to have enjoyable

When asked what has made the Jackson Coffee Co. such a hit in a very competitive coffee town, the owner suggested marketing.

“Our marketing is extremely efficient.

It has been what let the town know that we are right here and that we roast all of our personal coffee.” said Brian Surgener.

He boasts six billboards with Adams Outdoor, owns two of his very own billboards, does his very own television exhibit on JTV (a local tv network), promotes the Jackson Coffee Co. on two radio stations, does google ad words, and does as a lot guerilla marketing that he can consider of. “Maintaining our marking different from our competitors gets us noticed.

We never do what they do, and often discover that they copy our ideas.

Recently, the chain called Biggby copied one particular of their skinny latte billboards and utilized it for their very own.” said Brian Surgener.

The Jackson Coffee Co. is a popular spot for the whole town of Jackson, Michigan.

They serve among 450 to 500 customers per day. When we were there, the place was absolutely nothing short of a concert venue.

The lines have been prolonged, but when you tasted their coffee, you know why.

It surely was some great coffee. Surgener attributes the great tasting coffee to the fact that they roast their personal coffee. “Roasting on the Ambex 10 with the Roast Profile RT method is what offers us the finest coffee in town, and award that we have received every year we have been in business.” Business has been so good that a second shop was opened in 2009. A third store is planned for 2011.

Questions Which Reduce the Price

If you want to reduce a price, you can start by asking an incompetent agent just four questions.

1. “Why are they asking this price?”

You don’t have to say anything else. This question immediately puts the agent in the position of having to defend the price. And, if the agent is concerned about the price – as most of them are – you will often be given a reduction. The response is likely to be, ” Well, it’s a bit high, I know. But they will listen to offers.”

You can use this question for any product. It doesn’t have to be real estate. No matter what you want to buy, you can ask the reason for the price. It works in dress shops, it works in hotels, it works everywhere. All you say is, ” Why are you asking this price?”. And, if there is any chance of a reduction, you will get it.

Incompetent agents assume that a question about the price means the price is too high. As most agents want to lower the price to make a sale, they will admit that the price is high. They will try to get it cheaper for you. They won’t realize that you may buy at the price being asked. Buyers often say the reason they didn’t pay more for a home is that “the agent didn’t ask for more.”

So, when being asked with this question, the best agents answer this question by saying: “They are asking this price because…..[points out the positive features - location, condition and so on].” End of answer.

2. “Why are they selling?”

This is where incompetent agents reveal the sellers’ confidential reason for selling especially when the reason is not in the seller favor. The answer will be something like, ” Oh, they are getting divorced,” or “They are in a bit of financial difficulty,” or “They have bought something else and they need to sell this to pay for the other place.” It most defies belief that a professional person could reveal such details. When you know that the sellers are forced to sell, who can blame you for offering a lower price?

The best agents answer this question by saying: “They are selling for personal reasons but I know they are serious.” End of answer. This eliminates the dilemma the agent could be facing in upholding his fiduciary duty while at the same time being truthful without lying. Of course, if the actual situation is good for instance, like the owner is upgrading and need a bigger place, relocating to be near parents or school or migrating, then it’s fine to say.

3. “How long has it been For Sale?”

The longer a home has been for sale, the more likely it is to sell for a lower price. The perception is that the owners will be getting desperate and will accept a lower offer. Often this is true. The incompetent agent will answer this question by saying something like, “Oh, it’s been on the market for a while but they will listen to offers now.” The seller is again vulnerable to a low offer.

The best agents will answer this question by saying, “It has been for sale for six weeks (or however long) but we don’t expect it to be for sale much longer.” The seller is protected.

4. “What will they take?”

This is where the incompetent agents can really cost the sellers thousands or even hundred of thousands. Their answers to this question can be incredibly negligent. Assume the home is priced at S,500,000/- One of the common responses goes something like this: “Oh, they did have an offer of S,350,000/- which they accepted, but the buyer found something else, so I know you can get it for S,350,000/-”. If the home is what you want and you can afford S,500,000/- , the agent has just handed you at least S0,000/- of the sellers’ money. Incompetent agents always reveal sellers’ lowest price in response to the “What will they take?” question.

The best agents will answer this question by saying: “Well, I know they will take the asking price. Did you want to buy it?”

These four questions show how incompetent agents under-sell homes.

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