How to know if landlord is the real landlord?

Real Estate Q&A QUESTION:

Dear TMO-

I'm planning on getting an apartment in the Near West side of Chicago. I know there have been a lot of scams going on as of late, so I was wondering if there was a way to check if the landlord is the actual person who owns the land and/or apartment. Is there anyway of finding this out? How do I go about finding out if the person I'm signing an agreement with and giving the deposit to is the real landlord?

TMO's Answer:

The best bet is to check the county property records and get the owner name of record.  Most counties have websites where you can search property records by property address.  The results will show you the legal name of owner:  person or entity.  If the person is one and the same then your question is answered.  If it is a corporation then you most likely would need to check with the state's Secretary of State website and look up the business or entity name and verify the registered agent or contact person for entity. If the owner or Landlord has property manager then the previous suggestions will not answer the question but will help you verify ownership.  Then ask the property manager to get you a signed letter from the landlord or show you the signed property management agreement.  In any case if you are unsure of who you are dealing with, do your homework and get things in writing that are signed directly by the landlord that matches owner of record. Hope this helps-  TMO

TMO reader's  are welcome to chime in and provide more answers below in the comments section.

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TMO completes Due Diligence assignment

TMO was hired by a buyer of US distressed commercial real estate loans to underwrite and make an evaluation of the quality of the underlying commercial real estate securing the loan.  The loans being sold were part of the $2B loan sale by Wells Fargo and LNR Property Corp. TMO evaluated three commercial properties in excess of $11M in the Denver and Colorado Springs markets.

To learn more about TMO's national commercial real estate consulting services and national due diligence call or email TMO. 1.866.539.1777

Is Cost Segregation right for your property or portfolio?

What is Cost Segregation?

Cost segregation is a tax reporting strategy that provides distinct advantages over the straight-line depreciation method on commercial properties. Property owners can generate cash flow on existing properties by accelerating depreciation expense deductions and deferring federal and state income taxes. In addition, owners can amend past returns and generate income through tax refunds.

NEWS:  CCIM Uses Cost Segregation to Generate $1.7 Million tax refund When Arvid Albanese, a CCIM and President of the Albanese Group, LLC, in Ft. Lauderdale, FL, learned of the benefits of using cost segregation reporting, he commissioned a study on 900,000 sf of self-storage properties in his company’s inventory.

“I liked the idea of getting capital out of my investments that I could turn around and invest in other areas,” says Albanese.

The study on the Albanese Group’s properties, conducted by a private firm, was completed within 30 days. Based on the results of the study, the Albanese Group amended past tax returns on the properties, and within 120 days had received two checks from the IRS – one for more than $800,000 and another for more than $900,000.   Source:  CCIM Institute email 6/5/09 www.ccim.com

Contact us today for a review of your commercial real estate portfolio.  We can tell you if Cost Segregation is right for you as well as provide other cost saving income generating solutions for shopping centers, retail real estate and other real estate investments.  CM Commercial, Thomas Morgan, CCIM toll free 1.866.539.1777

Permanent Financing for Retail Properties

Authored by TMO guest blogger: Mark Jeffries, Vice President, Q10 | Essex Financial Group Over the past 9 months or so, the credit markets have experienced a shake-up unlike any in recent memory. The main impact of this on retail property permanent financing is related to the fall-out of Conduit or CMBS (Commercial Mortgage Backed Securities) lenders.  As recently as the summer of 2007, retail property owners and purchasers were able to obtain 80% loan-to-value financing from a CMBS lender without much difficulty.  Life Insurance Companies were typically offering 70-75% financing with similar fixed rates to CMBS.  Today, without the need to compete with CMBS, Life Insurance Companies have scaled back to leverage levels in the 65-70% range. The good news is that fixed rates from Life Companies are currently in the 5.75% to 6.5% range, are most often non-recourse, and can offer fixed terms of up to 25 years.  One of the potential dangers on the horizon is inflation, which could lead to higher interest rates across the board.

If a property owner is considering a refinance it makes sense to lock in a rate soon rather than later in my opinion.  We’re happy to provide financing estimates and analysis to assist borrowers in making difficult strategic capital decisions.  Retail properties continue to be viewed favorably by Life Companies as vacancy rates remain low in most markets.  We anticipate the capital markets will stabilize later in the year, and CMBS will return to the scene but likely on a more limited basis. Mark can be reached at 303.843.4023

High Remarks: Confessions of a Real Estate Entrepreneur

I recently devoured Confessions of a Real Estate Entrepreneur by James Randel and I have to say I rate it as the best commercial real estate book available today.  Although, he does not get into the technical aspects of investment real estate, his stories and points, are the most realistic of any other commercial real estate book in my library (and yes, my commercial real estate library is quite large). My clients and partners who are multi-millionaires through real estate investment, play the game very similarly to the way Mr. Randel outlines.  They add value in their purchase, operation and sale of investment real estate to create a disproportionate return on equity invested and share of the upside.  In other words, they are earning north of 30% annual return on every dollar in the investment; while mitigating and managing risk a the same time.

If you are looking for ways to get into the real estate game, this is a good primer.  He discusses finding and adding value to deals, how to work with lenders and attorneys, the basics of ownership and contracts; and touches on brokerage and development among other interesting real estate topics.  As compared to other similar books written by experienced investors, this one is somewhat low on ego (still high on non-real estate people's ego scale) and even has a chapter devoted to his mistakes where he lost millions.

Overall this is a great conceptual read full of seasoned advice and fun stories. He touches on some technical aspects of financial analysis such as Net Present Value and Discounted Cash Flow Analysis and how investors use the techniques. But readers should turn elsewhere for detailed methods and how to of such techniques.  The CCIM Institute has several classes devoted to the nuts and bolts of investment and market analysis, which I highly recommend.

To learn how you can earn 20% annual returns on you dollars, simply contact me and we can discuss your needs and objectives.

Thomas Morgan, CCIM 1-866-539-1777