Mortgage & Commercial Lending News.

So you found this blog and you are reading it. Congratulations! Chances are you are considering acquiring a property through a private or “Hard Money” loan, or maybe you are just beginning to learn what is needed to become a real estate investor and are thus leisurely "surfing the net" to see what information is readily available on the topic. It might have also crossed your mind at some point that you want to know why it is that other people invest in real estate. Potential clients often ask us whether investing in real estate still makes sense for individuals. So, we spent a few hours jotting down a few ideas that could become helpful pointers to our readers.

At AMI Lenders in Houston, we have been helping real estate investors in many ways other than by providing them with private money mortgages. Over the years, one of these ways has been to answer questions related to real estate. One question we keep being asked year after year is: What aspects could help someone sell a house faster?

Early in May 2023, we read an interesting post by Tony Cantu published in the MPA magazine^[1]. Mr. Cantu interviews a Dallas based veteran lender who predicts that we will witness a transformation in the US real estate market “from a seller’s market to a buyer’s market some six months from now” (Mr. Cantu’s article is dated May 1, 2023). At AMI Lenders, one of Houston’s most reputed private money lenders, we think this topic is worth exploring because a shift to a buyer’s market would positively benefit our readers and/or clients who are currently in the market for a property -whether you are first time buyers, or are looking to improve or modify your current housing situation, or are looking into building up your real estate portfolio.

Suppose you have been thinking hard about starting to invest in real estate. In that case, you might have wondered whether to focus on a strategy of eventually owning multiple single homes for rent or whether to focus on one of eventually owning a few multi-family properties or apartment complexes. There really is not a clear-cut answer, nor could we recommend one over the other. What we can do is write down some points to be considered, which could eventually lead you to make the right decision for you.

Lately, we have been reading more and more articles, in all kinds of news media, about the U.S. economy entering a recession in the second half of 2023. This has prompted us to write a short entry on the topic. Mind you, our specialty is extending private money loans backed by real estate, and we still do not have a crystal ball to predict the future (L.O.L.). Yet, many of our client's business initiatives could be hurt in a recessionary environment. So, we think this context deserves some attention on our part.

In a previous 2022 blog related to observable trends in commercial real estate, we mentioned that some real estate investors are seriously looking into transforming Class B and C malls from retail or commercial use into other industrial uses, for example, Data Centers. In this post, we expand on that topic by exploring in more detail what characteristics could make for a successful Data Center.

Here at AMI Lenders, where we specialize in private money loans to finance real estate, we are frequently asked by our clients: “Should I go through the expense of getting a home inspection even if the seller (or their realtor) assures me that the house is in good condition?” And the answer is: most definitely yes!

The Fix and Flip industry, which involves purchasing distressed properties, renovating them, and then selling them at a higher price, has experienced significant growth in recent years. However, the industry's current state can vary depending on the location and overall economic conditions.

At AMI Lenders, we are primarily interested in what is happening in Houston, TX, and its surroundings. However, that does not mean we ignore what happens elsewhere in the country. During the first days of March, we read an interesting text (“Remember the mall?”) in a newsletter^[1], which is mailed daily to one of us by the Los Angeles Times. In the said newsletter, author Ryan Fonseca talks about what is happening with malls in Southern California (and broadly elsewhere in the country). The article by Mr. Fonseca ties in nicely with what we posted in mid-2022 about trends in commercial real estate (link here) and, particularly, retrofitting Class B and C malls, even though some of the California cases discussed happen to be retrofitting of Class A malls. So, let’s delve further into the topic.

Private hard-money lenders have been a significant financing force behind the Fix-and-Flip (F&F) business model, which has risen to prominence among real-estate investors during the past 10 to 15 years. Yet, given the hefty increase in mortgage rates during 2022, and a somewhat cooling housing demand, real estate investors might be hesitant about starting an F&F process during 2023.