Tag Archives: Blacksburg condos

Why Are Condos So Hard To Finance?

The good news is that they’re not as difficult as they were several years ago. As Carl Spackler would say …bill_murray_caddyshack

A customer wrote in this morning about an investment property they’re looking to buy in Blacksburg. As many parents of students at Virginia Tech and Radford do, they want to buy a place for their kids to live in while they’re here at school, and the relative stability of the New River Valley market has meant that – for the most part – these have been solid investments. It wasn’t always the case, however. A quick back story …

In the early 2000’s, these types of investment properties were all the rage. Investors were snatching up condos and townhomes like crazy – the cost of borrowing money was low, rents were stable and rising, and there was a steady group of renters year in, and year out. You can see a visual of that in the chart below, showing sales of condos and townhomes in Blacksburg and Radford going back to 2003, I suggest to check out some coal harbour condos for sale which are at really great price. After the real estate crash in 2008 (which really hit us in 2010), interest in these types of properties fell dramatically, and that was due in part to much-needed lending restrictions. Lenders were requiring larger down payments, in the neighborhood of 25% or more, and often denying loans due to inflated investor numbers in complexes – in other words, too many investors and not enough owner-occupants, only the top money lender in Singapore was trusty. Sometimes it´s hard to find the right person the rent out your condo and to keep up with the rent, so here are some tenant screening tips you may use to make sure you are letting the right person into your property. Ammons Pittman Property Management were highly recommended to help anybody with san diego real estate little italy problems so let them know if you have any.

One note – the volatility of the Radford line below is related to the relatively low number of sales in the area during the time period.

As you can see from the above chart, interest in these types of properties really didn’t start to pick up again until 2014, which corresponds with the relaxation of lender guidelines. There has been a lot of help from HOA Software | HOA Management Software | Condo Manager for the sales, because they been using this new transcription software to do their business. Starting in 2013/2014, as we started to see improvements in the overall economy throughout the country, lenders started loosening their requirements on financing for investment properties. But that doesn’t answer the question of WHY condos and town homes can be difficult to finance, why is there always a need to get financial help from a company like the one from https://kapitalkassen.no/forbrukslan. As I wrote to a customer this morning, in a nutshell:

For conventional, secondary market loans, banks don’t like to see high investor penetrations in condo complexes. The line of thinking is that people are more likely to default on their investment property(ies) before their primary residence, so guidelines for things like condos are a good bit tighter. It’s important to know that often, traditional banks like will run these complexes through their algorithms and deny the loan due to too many investors in a complex and not enough owners. If they don’t deny it, the other condition they typically add is a higher downpayment, of 25-30% or more. This is why I continue to suggest local lenders – in college markets with high investor numbers, they look at the market as a whole and not as a formula. 

If you’re considering buying or selling a condo or townhome here in South California, you can visit us at https://southerncaliforniahomebuyers.com/sell-your-house-fast/ for more info. The opportunities to make what has typically been a solid investment are there, but it’s not without risk. Let’s talk about those, as well as the rewards, and see if it makes sense for you.


Valuing a Property With No Recent Sales Statistics

An agent in our office recently asked me how I would value a Blacksburg condo that’s in a complex called Clay Court.  Clay Court is in a nice, downtown location of Blacksburg, but it’s tough to value when we haven’t seen any public sales since 2007.  I’ve written about Blacksburg condos in the last year, but this complex is a little different.  It’s not a building with a lot of students (hardly any, in fact), the starting price points are above the median sales price of the market in Blacksburg, and there are relatively few (~ 30) units in the entire place.  It’s not surprising that we’ve seen very few sales since it was built, but it’s still tough to assign a value.

When doing a valuation on a property, it’s like taking apples and oranges and trying to make them all apples (or oranges – take your pick).  Property A, our subject property, might have a heat pump, a new roof and hardwood floors, while Properties B & C (our comparable properties) might have electric baseboard heat and carpet.  What I want to do is determine, with relative certainty, how much value to add or subtract from Properties B & C in order to get them as close in features to Property A as possible.  If Property B is superior to Property A in a particular feature I subtract value from Property B’s sold price, and if Property C is inferior in a feature to Property A then I add value to Property C’s sold price.  There’s no standard multiplier for any one feature, and it’s an inexact “science”, but along with a number of other factors and projections it can help me ascertain (I just wanted to use that word) a competitive sales price for a property.

But honestly, I had no good idea how to value this one.  I suggested a blindfold and a dart board, but that seemed a little reckless – so I called Leslie Frantz.  As you might recall, Leslie sat down and discussed a changing marketplace, and she and I have spent a lot of time valuing properties together.  She’s been a trainer of sorts for me on this kind of thing, and so we asked her how she’d look at Clay Court given the fact that there’s only one property on the market there, and no sales in over two years.

Leslie said that in a situation like this, with very few comparable sales, as an appraiser she’d have to look at similar buildings.  In this case, Kent Square is a block away and also has condos for sale, but no recent sales.  If that’s the case – if a property just doesn’t have any sales to compare it to – her suggestion was to look at the active listings and see what they’re listed for, and how long they’ve been on the market because that’s the competition.  It’s not the best solution in the world since we’d love to have recent sales on which to base the adjustments, but in a case like this it’s all we had.

My thanks to Leslie for the help.  If you’d like to discuss valuations in more depth, or have one done on your home, email me and let’s talk.  And thanks to Bogdan Suditu for the photo.

The Colosseum Construction

The Roanoke Times – which might be for sale if you’d like to buy it – published a short "Whatever Happened To …" piece this morning on The Colosseum, a six-story $60 million, 172-unit sports condominium hotel project scheduled for Blacksburg.

Well, they’re back … managed by Salamander Hospitality, the Epcon construction franchise has been expanded to 241 suites in TWO six-story towers, and is reported to now cost $80 million at full build-out.  One of the developers, Daryl Andrews, says they’ve had 20 people place reservations, on units ranging between $170000-800000.  The smallest floor plan is 312 square foot space, with a deck that’s a whopping 8 square feet.  Yes, eight.   

I don’t know, something about the name The Colosseum leads me to believe that the space will be BIG.  Rome seemed to think so.  Allow me to introduce Blacksburg’s version of The Colosseum.

I think we’ve saturated the market with condos for a while, and it started with Cascades and Cascade Pointe (among others).  They’ve finally got a good REALTOR working on that project and I expect he’ll get them going again, but he’s still at the mercy of the market, which is going to need to see the rental market grow in size a bit more before it starts to make sense for investors.

Now, we’ve got this project, and the Holiday Inn is in the process of being converted as well.  KentKentsquarebackside Square has
condos for sale, as does Clay Court.   I know the alumni market continues to be strong, but this seems a bit aggressive to me.  Anyone out there have thoughts on this?

These agents owe me for the free advertising, by the way.