See Part 1
Evolution of Commercial Real Estate Finance Leading to Crowdfunding
1970’s – The Start of the Modern Commercial Real Estate Market
New class of entrepreneurs with access to private capital emerged
The first publicly owned funds dedicated to real estate came into being
Real estate syndicators increasingly began developing sophisticated vehicles for financing
1980’s – ERTA, S&Ls and Real Estate Limited Partnerships
Recessions & rate spikes led to formation of Economic Recovery Tax Act of 1981 (ERTA)
Real estate limited partnerships, taking advantage of ERTA provisions, increased rapidly in size and number
More and more, real estate activity moved from the hands of individual entrepreneurs and onto the books of institutional investors
S&L industry swelled, underwriting standards loosened, and uncertainty about the underlying value of real estate assets permeated (ring a bell?)
Congress enacted The Tax Reform Act of 1986 which among other things, repealed tax benefits of ERTA and stopped real estate syndicators in their tracks
Hundreds of S&L and other thrifts along with local banks shuttered leading to the creation of a government-run entity known as the Resolution Trust Corporation (RTC) to asset manage and eventually sell off all the loans and properties back to the private sector
1990’s – Institutionalization of Real Estate Investments
Massive amounts of capital was pooled by large financial companies to acquire asset pool...
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...d run with it to fund their own deals and charging them a technology licensing fee for it. Now is a full service and actively managed solution highly scalable? Would love to hear your insight.
Other factors I think will dictate success include strong & scalable technology (managing investments and distributions for 1000’s of investors is no easy task), industry experienced management (in underwriting, property management, fund/capital administration, compliance, etc. – startup portals like AngeList Syndicates and Syndicate Room operate on this same concept of industry professional run portals), strong branding and customer engagement, and perhaps heven ancillary profit centers that can buoy the portals during a down market.
From 1986 to 1989, the Federal Savings and Loan Insurance Corp. (FSLIC) closed 296 institutions with assets totaling $125 billion. With the creation of the Resolution Trust Corp. (RTC) in 1989 an additional 747 thrifts with assets totaling $394 billion were closed. That is a combined total of $519 billions in assets that contributed to a massive restructuring of the number of firms in the industry as stated by Curry & Shibut (2000).
This case study examines various real estate contracts – the Real Estate Purchase Contract (REPC) and two addendums labeled Addendum No. 1 and Addendum No. 2 – pertaining to the sale of 1234 Cul-de-sac Lane in Orem, Utah. The buyers in this contract are 17 year old Jon D’Man and 21 year old Marsha Mello; the seller is Boren T. Deal. The first contract created was Jon and Marsha’s offer to purchase Boren’s house. This contract was created using the RESC form, which was likely provided by their real estate agent as it is the required form for real estate transactions according to Utah state law. The seller originally listed the house on a Multiple Listing Service (MLS); Jon and Marsha agreed that the asking price was too high for the neighborhood (although we are not given the actual listing price), and agreed to offer two-hundred and seven-thousand dollars ($207,000) and an Earnest Money Deposit of five-thousand dollars ($5,000). Additionally, the buyers requested that the seller pay 3% which includes the title insurance and property taxes. After the REPC form was drafted, the two addendums were created. Addendum No. 1 is from the seller back to the buyer, and Addendum No. 2 is the buyer’s counteroffer to the seller.
Just as the great depression, a booming economy had been experienced before the global financial crisis. The economy was growing at a faster rtae bwteen 2001 and 2007 than in any other period in the last 30 years (wade 2008 p23). An vast amount of subprime mortgages were the backbone to the financial collapse, among several other underlying issues. As with the great depression, there would be a number of factors that caused such a devastating economic
the monopoly that had formed and acted quickly to extinguish it before other trusts of this
Housing is the most instable component. It gave a new perspective for research that economists did not have. In the Great Recession the housing decreased more than anything. From 1997 to 2005 a momentum (the rate of acceleration of a security's price or volume, Investopedia) was driven. In 1997 no more capital gains taxes on houses up to half million dollars. The Bubble started in 1991.
This paper is structured as follows. In order to better understand the Great Recession, the first section includes an examination on some of the key causes. Section two outlines some of the fiscal policy responses made by the government to the Great Recession. In the third section, relevant extant literature relative to studies on the fiscal policy implemented in response to the Great Recession will be discussed with a focus on potential problems. For problems noted, recommendations for resolution will be included. The objective of this paper is to consider relevant problems that might require further consideration in a research project about the long-term after effects of fiscal policy implemented by the U.S. government in response to the Great Recession.
JFK fueled the economy by investing in domestic, military, and space programs; also known as Kennedy’s New Frontier. “Anyone who is honestly seeking a job and can’t find it, deserve the attention of the United States government, and the people.” (John F. Kennedy, 1961) President Kennedy proposed to give aid to education, medical care for the elderly, mast transit, as well as a regional development in Appalachian, helping the impoverished community for decades. Kennedy signed the Housing Act of June 30th 1960 to aid middle income families and mass transportation users while also increasing urban renewal. Unfortunately, congressional support was limited; many of JFK’s proposals were shot down by a conservative congress ran by Republicans and conservative
The total cost of the Recovery act to US taxpayers was $787 billion dollars. The bill itself was created with the belief that increases in spending on the federal level would create and save jobs during recessions. More specifically, the purpose of the bill was to create jobs, drop the unemployment rate, stimulate the economy, have better quality of schools, and have better quality and efficiency of everyday life. The allocations of funds designated by the law are as follows: $81 Billion for protecting the vulnerable, $43 billion for energy, $59 billion for healthcare, $144 billion for state budget relief, $8 billion for other needs, $111 Billion for infrastructure and science, $53 Billion in education and jobs training, and the largest portion $288 Billion in the form of tax relief through the use of tax credits and increase business deductions.
This paper is written to provide a reasonably comprehensive overview of Section 1031 of the IRC as it pertains to real estate transactions, and to offer some thoughts on the wealth-creation advantages that 1031 Exchanges offer.
All good things must come to and end. In late 2005, the housing bubble burst, and housing began to decline in price. People who refinanced, particularly those who financed with variable interest rates suddenly found their homes were valued at much less. The housing market became flooded with homes for sale, because the homeowners with variable rates and interest only loans could not continue to make their payments. (Greenspan) The rise in the number of homes for sale caused further lowering of home values.
A few years later, the market shifted and people became more interested in detached homes than apartment homes. Once again, Go...
In order to understand the concept of financialization and the housing market on the global and local level, one must know that there is a global pool of money that is simply the worlds savings bank. In 2000 the pool had $36 trillion and has since doubled in size (Blumberg 2008). Its most recent profit increase was a result of developing countries and cities such as India, Abu Dhabi, and China making money. This doubled the cash pool available for investments, but left fewer solid investments for the taking. The solution was residential mortgages and the US housing market. The investment managers thought the low-risk high-return investment in the housing market was a good, stable idea. The glo...
When prices increase, the quantity decrease (Graph 1) and new firms enter the market in order to make economic profits. However this does not mean the real estate agents or brokers earn more money. On the contrary, the prices they charge may increase, but the number of houses each sell do not change (Goolsbee, 2005, Online). From this it is evident that the price of products in the real estate market is not affected by the entry of new firms.
financing. They are often comparatively modest, in-order to help the founders get on their feet, build
Introduction Real estate is a fixed, tangible and immovable asset in the form of houses or commercial property (Seldin & Richard 1985). Real estate market involves developing, renting, selling/purchasing and renovating of these assets (houses). Market participants include developers (contractors, engineers, and so on), facilitators (mortgage companies, real estate brokers, banks, management agents and so on), owners, renters (leasers) and renovators (Seldin & Richard 1985). Like other economic markets, real estate markets have internal and external forces that impact the market (Seldin & Richard 1985). Demand and supply forces have the major impact on the industry as they determine growth or decline in the market (Seldin & Richard 1985).