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Real Estate Credit Investments NAV rises to EUR1.69 per ordinary share

Real Estate Credit Investments, the Cheyne Capital managed investment company formerly known as Queen’s Walk, has reported an increase in net asset value from EUR1.59 to EUR1.69 per ordinary share since its recent fundraising.

The company’s net profit was EUR3.1m for the quarter ended 30 September 2010, compared to a net profit of EUR2.8m for the quarter ended 30 June 2010. This represents the fifth consecutive quarter the company has recorded a profit.

The investment portfolio generated gross cash flows of EUR4.5m in the quarter compared with an estimate of EUR3.5m and EUR6.1m received in the previous quarter.

Subsequent to the extraordinary dividend of 14.5 cents per share already paid for the period 1 April 2010 to 15 September 2010, the company has not declared an ordinary dividend for the second quarter. The company has announced a preference dividend of 2.3p for the period 16 September 2010 to 31 December 2010 and currently intends to declare a second interim ordinary dividend in due course.

RECI is delivering on the objectives it laid out in September 2010. The EUR26.6m capital raising that was completed on 15 September 2010 has put the company in a position to invest in undervalued real estate debt.

As at 30 September, the real estate debt portfolio was valued at EUR37.4m, or 37 per cent of the investment portfolio, up from 31 per cent three months earlier.

RECI made EUR9.8m of new bond purchases in the three months to 30 September. From 1 October to 15 November 2010, the company has purchased a further EUR15.4m of bonds, increasing the overall fair value of the real estate debt portfolio to EUR52.9m or 45 per cent of the investment portfolio.  

Tom Chandos, chairman of Real Estate Credit Investments, says: “It is a sign of the growing strength of Real Estate Credit Investments that it has delivered a fifth consecutive quarter of profit while laying the foundations for future growth with fresh investments in the real estate debt portfolio.”

The Practice of Buying and Selling Real Estate Notes

Real estate notes are used to record details of the sale or transfer of property. Each time property changes hands a new note must be executed and recorded through district courts. Note holders can sell their notes in whole or part or use them as collateral to secure financing for other investment properties.

Real estate notes are often used with mortgage loans to secure financing. They are also used with owner will carry contracts such as seller carry back trust deeds. In this type of transaction, property owners act as the mortgage financier. Buyers provide a down payment and the balance is paid in installments until the debt is satisfied. Future payments are an asset that can be sold to a note buyer for lump sum cash.

Another use for real estate notes is to purchase stocks held in a real estate investment trust. REITs are companies that own multiple pieces of real estate. Investors partner with others to buy properties and obtain ownership shares. Investors purchase stocks and combined funds are held within the trust.

It is common practice for investors to sell notes to obtain cash to purchase additional investment properties. While selling notes is a good way to quickly raise capital, this practice is not without risk.

Note buyers do not pay full face value for real estate notes. Note holders may be responsible for the cost of obtaining property appraisals or property title fees. Additionally, note buyers assess transaction fees.

When the note is secured by property being sold under owner will carry financing, the property owner can either sell to an investor or use as collateral to secure bank financing. Owner will carry is becoming a very popular strategy for buying residential and commercial properties.

Banks have tightened lending criteria and do not have the same level of funds available prior to the banking crisis. Many people who want to buy homes cannot qualify for bank financing. Entering into seller-financed contracts lets them engage in credit repair strategies while working toward buying the property.

Buying and selling real estate notes requires a comprehensive understanding of real estate laws, IRS regulations, and personal finance. It can be beneficial to obtain legal and tax counsel; especially when commercial properties are involved.

Investing in cash flow notes can be a lucrative business for those who take time to learn the ropes. The Internet is a good source for conducting research, but to get into the meat-and-potatoes requires networking with other investors and industry-experts. This can be accomplished by participating in online networking groups or joining local real estate clubs. One good source for locating local groups is Meet Up.

Another good spot for learning about real estate notes investing practices is public libraries. In addition to books and magazines, libraries often offer investing and personal finance courses on CD or DVD at no charge. Also peruse the Classifieds section of local newspapers to locate investors offering real estate investing classes.

Related Capital Raising Real Estate Fund Articles

All About Property Real Estate Investing

Investing real estate information permits us to get the information regarding money you have saved, and raise it, by creating your own financial range. Here, you will find practical real estate investing information to help you with your own finances, and information about the different types of real estate investments, such as stocks, bonds, mutual funds, real estate, and others.

Property real estate investing is a very smart way to invest your money if looking for a good return on your investment. You may invest in house to create positive cash flow or looking to buy a home and flip the same for profit. Either way real estate is effective way of investment. The best criteria of buying a property and selling it off at higher rate are of course, location.

The property real estate investment industry had developed over the last couple of years due to the USA housing. Anyhow the market is still of the new companies and newbie’s. The newbie should have the potential to make profit and grab the opportunities that are available in market.

If you are investing in property real estate you should not wait until gets sold, you can rent the same out and earn the income regularly. Because you are keeping your property on rent you get the return on your investment. Another advantage would be the frequency, in property real estate investment you invest only ones and get income regularly whereas if you invest in mutual funds as such, you need to pay regularly.

Investing in real estate property is in a greater degree in your control than other portfolio. The property wherein you are going in to invest is yours and you can renovate it anytime under you needs. Real estate investing is also very secure, because the property market may be hot or cold you may use your property for loan purpose also. And can sell it off when you are satisfied with the in turn.

Investing in real estate property can be very lucrative with many of the investment opportunities being things like hotels in tourist locations and malls in high density population centers. Making you high return on your money. Property real estate investing refers to a wide range of investment strategies that capitalized on investor’s home country. Investing in property simply means investing in a location other than where you live.

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How to Start Your Overseas Real Estate Portfolio

Real estate is a tried and tested asset class and the majority of people agree that as a long term investment commodity there is nothing really to beat it for consistently returning strong growth and increasing yields…however, when a country’s housing market goes temporarily cold as real estate prices move outside of the affordability gap, real estate investors often look overseas for the development of their property based portfolio.

Currently the real estate markets in countries such as the UK and US are slow and the ability to profit from property locally is reduced – therefore more people than ever are thinking about moving their focus abroad and starting an overseas real estate portfolio to enable them to build a passive income for life.

If you would like to learn more about building a passive income for life from investing in overseas real estate here are the main five considerations to bear in mind to maximize profit, reduce risk, increase yields and capitalize on opportunities as they present themselves – but before we begin it is always prudent to mention that the value of any investment can always go down as well as up, and that investment decisions should be taken carefully and be made with the assistance of qualified and experienced advisors.

Tip One – Real estate markets around the world emerge, boom, go bust and re-emerge all over again, but they do so at very different points in time as each market is heavily dependent on the current state of the economy in the given country. As we all know economies ebb and flow like the tide and there is no such thing as a guaranteed market where property prices will keep rising. However, there are countries in the world going through major economic change where the real estate market is emerging and where the long term forecast is for a period of prolonged growth. An investor who is not risk averse and who is planning an overseas real estate portfolio should try and identify which countries have a strengthening economy and an emerging real estate market.

Tip Two – Having found an emerging market an investor needs to determine the key factor that makes an investment into real estate in the given country a good decision. I.e., if a country’s property market is simply booming because of hype and an investor can see nothing to support the long term success of the market then they should walk away. If an investor can see massive room for growth but an interfering government who may attempt to restrict property investors from taking their profits then an investor has to decide whether or not they can still make enough profit from real estate to make any investment worthwhile.

Tip Three – Having determined that there is potential within a given market an investor needs to learn how to harness the power of other people’s money! As real estate is an expensive and slow to liquidise commodity it is unwise to pay cash from personal funds for an investment property, rather it’s wise to raise finance at a low interest rate from a secure financial institution. An investor should look into whether an international mortgage or a local mortgage is possible and affordable when buying overseas real estate.

Tip Four – As previously stated, over the long term real estate is considered by many to be one of the most consistently returning asset classes – the key to this consistent success is however the ‘long term’ bit! I.e., when buying real estate abroad for capital growth and rental yield it pays to be able to keep that real estate for ten years or more to ensure the greatest reward is derived from the investment.

Tip Five – And finally, having determined that the key factors exist to suggest that a property market has legs to run and that any hype surrounding its progress is based on fundamentally accurate facts as detailed in Tip Two, an investor need to ensure they buy real estate that will suit the market demand that is making the real estate market successful! Therefore if the baby boomers are driving a given market consider buying single level properties in secure communities, if on the other hand the young professionals are driving the market think about purchasing well located, designed and facilitated apartments.

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Investments in Real Estate Market in India

Today the real estate market in India is at an all time high. With the emergence of multinationals, the demand for office and residential space has increased many folds. But the investors of this market still consider India as an emerging market for the restrictive laws relating to Foreign Direct Investment (FDI) and earning profit is difficult in India’s property sector. Sensing this, Government has liberalized the laws relating to FDI in February 2005. With this now Non Resident Indians (NRIs) or Overseas Corporate Bodies (OCBs) can invest upto 100% in the sector and also in real estate industry and construction ventures. A foreign Company with 60% NRI holding is considered as OCBs. But still Government has certain rules in place for purchasing commercial property by foreign company i.e. property for business purposes.

Although the investment period is restricted to minimum of 3 years for the FDI to avoid speculative trading but the real charm is that the investment is now allowed in the smaller projects of 25 acres, (which was 100 acres earlier). The hassle free and the easiest way to enter this market is by buying an investment fund. There are many attractive and transparent funds from reputed investments houses. It is expected that with the liberated laws, real estate investment fund will emerge soon. But care should be taken before acquiring any land and legal help should be taken at every stage of buying process.

The increase in global real estate investment interest in India is evident from the fact that US real estate billionaire, Sam Zell has termed India as world’s lowest cost housing market and is planning to make substantial investment. Further, Dubai based Emaar Group has already invested USD 100 million in Hyderabad. And companies from Canada, Malaysia, Tokyo, UK, and Singapore have all committed millions of dollars in India. This is all the result of easing of laws along with impressive property price growth.

The local factors contributing to this booming real estate market is the rise in demand for the property for sale and rent. With India’s population raising to over million the potential for growth in property demand is huge. In addition to this the growth of IT sector and outsourcing in particular geographical areas has led to the demand for office and housing space in those areas. With the increase in the buying power of these professionals and the availability of housing loans has made it possible for them to afford their own houses. The increase in demand has also inflated the property prices.

Before 2005 there was only 1.1% of foreign direct investment in India’s real estate sector. But after Government easing the controls and restriction on foreign ownership of immovable property and also on terms of ownership, there is a strong inward inflow of foreign investment interest in India. Government of India is keen to attract investment in this sector but in favor of control investment. As a result the local builders are earning around 30-50% of rate of return on capital and property prices has increased in excess to 20%. Cities like New Delhi, Mumbai and Banglore are mainly attracting these investments.

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Ben Hirsh is the owner of the Ben Hirsh Real Estate Group and an expert on Woodstock GA real estate . His unique website features a helpful sellers page where he explains what he can do as your Woodstock GA listing agent to sell your home. The site also features a Woodstock GA MLS search, Search where home sellers can study other homes on the market.

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How to Get Commercial Real Estate Investment Money

With the commercial property market booming across much of the western world, and emerging economies providing many investment opportunities, there has never been a better time to invest in commercial property.

The biggest single challenge facing developers with potential commercial projects is actually getting them funded.

However, with growing competition in the finance industry, relaxation of lending rules, and coffers full of money to lend, raising the funds for large scale investment projects can be simple and fast – as long as those seeking to raise the funds know how to go about it properly. The first place to start looking is the Internet. Increasingly, deals are being done online – and done fast – as long as you understand the project financing process.

Increasingly, investor pools are prepared to underwrite commercial property ventures – worth many hundreds of millions of dollars – with no credit checks, no complicated documentation, and no income verification. A commercial transaction is defined as one involving a commercial project which includes real estate as its foundation. Typically, there are two ways in which loans are made available:

The first is known as a “conforming” loan, when full documentation with limited concern for credit is required, while the second is “non-conforming” where there is no documentation required, no credit checks, and no income verification. The Loan-to-Value (LTV) aspect of all commercial transactions is one of the major considerations when providing finance. With non-conforming loans, typically up to 90% of the value of the project can be borrowed, depending on the project type. For example, non-conforming reacquisition transactions require a maximum of 50% LTV for consideration. Conforming commercial transactions offer considerable extended options. Any LTV, regardless of transaction type, purchase or refinance, is usually considered, but the following are also taken into account:

Conforming transactions approvals rely heavily on what cash an applicant has vested in a submitted project. Substitutes for cash include either collateral or a winning pro forma, but not less. Equity in real estate is not generally considered a viable substitute. Regardless of what an applicant might choose to substitute cash with, in order to justify an approval, no substitute can ever be effective without a project that makes sense.

A winning pro forma, if truly winning, can easily substitute for cash and ultimately lead to 100% LTV funding, though not without sufficient cash for closing. Commercial transactions generally take 30-60 days to close, providing they are approved and accepted. Obviously, uncomplicated transactions contribute to a speedier conclusion, whereas complicated transactions, or those requiring an inordinate amount of time to decipher, prolong the processing period.

Uncomplicated transactions are defined as those characterized by simplicity, such as a commercial building in need of refinancing. A more complicated transaction would be a development project, such as a new casino.Non-conforming applications are approved or declined much faster than conforming ones. Typically, an approval decision for a non-conforming transaction will be rendered within 2-7 days. Uncomplicated transactions are defined as those characterized by simplicity, such as a commercial building in need of refinancing. A more complicated transaction would be a development project, such as a new casino.

The bottom line with private investors is that generally they are sophisticated, non-predatory and do not jump on projects saddled with collateral or equity. They are, however, keen to do projects that make sense. Again, credit is of little concern on conforming projects and not required at all on non-conforming projects.

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