Take as a for instance: A third year NFL player who’s had a few stand out years nearing a new contract, and is expecting a salary jump equal to his impact. He’s confident in his game, he’s also now confident mixing with businessmen, owners and managers. Opportunities come his way regularly and more are expected with the new contract. He’ll see options for real estate investment with varying degrees of risk. Friendships and emotion may come into play in his decisions. After all the loan risks have even been spelled out to him, he’s confident – and no one gets into an investment expecting failure. But if the deal goes into default and he hasn’t protected himself, he could lose a whole lot more than his initial investment. Confidence in his game came from years of practice and hard work but bringing that confidence to investing without preparation could affect him for years to come.

I’m often called for help with defaulted loan negotiations by high net worth clients who have made investments involving a personal loan guarantee that has them in a perilous financial situation. Often their problem could have been avoided altogether through basic investment analysis combined with prudent asset protection planning.

Sometimes they don’t even know the difference between a straight cash investment, where their risk involves their original investment capital only vs an “at risk” investment, which involves the investor becoming liable for the entire project’s debt by signing on as the guarantor of a bank loan to the project.

The typical example is investing in a real estate deal either with pure cash, called an “equity” investment, by putting up cash for say 20% of the deal vs an equity and “risk” investor by putting up cash and taking the additional risk of signing a bank loan to finance the deal for say 40% of the deal. Is the additional return worth the risk portion of the investment? It’s hard to say without a detailed analysis of the specific project, however the investor is many times too consumed with the potential returns to spend the proper due diligence on ways the deal going south could impact them in a negative way – beyond any cash invested. Even a small project can involve loans in the millions of dollars, and if the project fails, the banks will be looking for the guarantors to pay off the entire loan. In a financial analysis the additional risk might seem worth it, but if there are multiple loan guarantors and only one of them has available assets that are not protected, that guarantor could be faced with the liability of the entire loan amount – which can be a pretty daunting prospect.

When I’m asked about the quality of a potential investment, especially when the investment involves direct ownership of a business or real estate, my first question is always “are you signing any bank loans personally?” And, if they are, “have you protected your personal assets?” All too often, especially in this economic climate, the investment later hits a wall, fails to perform as hoped, and the debt is looming as a catastrophic liability to the investor who signed on as a guarantor of the loan. In many cases the investor did not receive enough of an increase in potential profits to in any way justify the risk of signing for the loan. In other words they would have been far better off to be a passive investor, contributing and risking only cash, rather than risking a loan being called and the bank reaching into their personal assets, including cash, stocks, cars or homes.

Does that mean an investor should never sign a loan guarantee? The additional risk can be very lucrative, but the answer depends on the investor, the investment, the financial strength of any other guarantors and the level of the investor’s personal asset protection. If the returns justify the risk and the guarantor has prudently taken asset protection steps, then the right deal may justify the additional risk. The decision should be based on a clinical look at the facts, including a realistic analysis of what could cause the deal to fail, and what the personal asset ramifications are in case of a failure, not solely on how much confidence the investor has in the deal.

The goal is to win the game without the alternative costing you an arm and a leg.

Loan Guarantee Risk Assessment for Professional Athletes is a post from: Cranewoods Development LLC

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RE/MAX CityWide has announced the complete sellout of Le Brittany Condominiums at 9^th and Race in Cincinnati’s central business district. The 18 unit project has a mix of 2 bedroom 1.5 bath units and 1 bedroom 1.5 bath units, with selling prices between 179k and 240k. The project was originally an apartment building which was fully converted to condominiums.

Guiducci was recently selected by Cranewoods Development to list the McFArland Lofts project in the downtown Cincinnati West Fourth Street historic district.

“The McFarland Lofts is an exciting project for us. It has the advantage of being in the price-point ‘sweet spot’, and combines great location with inside garage parking, private balconies and 2 bedroom 2 bath contemporary floor plans”.

 “With all units in the McAlpin, Le Brittany, 18 E. Fourth, Park Place, American Building and Fountain Square Lofts selling out in this price range, we are extremely low on inventory and look forward to a strong demand for these historic condominiums”. 

The McFarland Loft’s 8 units also benefit from the 10 year City of Cincinnati real estate tax abatement project, intended to provide a significant financial incentive for homebuyers in the urban core.

Denise Guiducci is the Broker/Owner of RE/MAX CityWide, a downtown Cincinnati real estate company with expertise in the condominium and loft market. To find out more about her current downtown Cincinnati West Fourth historic district project, the McFarland Lofts, visit http://downtowncincinnatilofts.com or see all of her listings at http://www.remax-citywide.com

RE/MAX CityWide 513-7032353

Downtown Cincinnati condo project announces sellout is a post from: Cranewoods Development LLC

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November 8^th 2010 – St Augustine, FL   Bank and Real Estate development consultant Cranewoods Development announces that it has managed the final property closing of a planned multi-phase waterfront community in St Augustine Florida consisting of a future multi and single-family development that included a 3500sf West Indies style luxury home.

The St Augustine market had been hit particularly hard by the real estate downturn, ultimately creating intriguing opportunities for investors and homebuyers willing to step in and buy while prices are depressed.

“Properties are selling and inventory is being absorbed. Those are the indicators that prices are recovering. Now it’s a question of how fast,” stated Andrew Howe, President of Cranewoods Development. “This project had terrific value just sitting there, our job was to let people know about it in a way they understood.”

Cranewoods, a real estate development and consulting firm with offices in Florida and Ohio, has been assisting banks with distressed asset liquidation throughout the economic downturn. Several of the projects, including this one, were managed by Cranewoods prior to the financial crisis. Their expertise in the regional development market made them a logical choice to assist the original lenders in finding the best solution for their St Augustine properties through sales.

Cranewoods transformation from a real estate development firm to one offering financial, construction and real estate development consulting services is one of the success stories to come out of the financial crisis. Cranewoods has always provided consulting services but the economic downturn demanded more of their financial and market analysis experience than ever before.

“We’re brought in to review everything from the original financing to the original design and then asked to reimagine, essentially redevelop, an existing property in a way that minimizes risk and maximizes the asset,” said Howe. Cranewoods has assisted banks with troubled asset sales, management, and mortgage purchases. In addition to assisting others, they have found their own opportunities in the current market. Among Cranewoods’ more high profile recent projects is the McFarland Lofts, a condominium project in the Cincinnati Ohio’s West Fourth Street Historic District.

***

About Cranewoods Development:                                                                                    

Andrew Howe, President of Cranewoods Development, is an award winning developer and real estate consultant with over 35 years of experience. Cranewoods offers full service real estate consulting to lenders and investors. Services include: development consulting, bank loan workout solutions, court appointed receiver, turn-key development management, construction management and general project problem solving. To explore Cranewoods further, visit: http://cranewoods.com

Jacksonville, FL | Cincinnati, OH.

 PH: 513-257-0749 | 904-758-3434

Bank consultant announces sellout of St Augustine real estate project is a post from: Cranewoods Development LLC

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ENR is the leading news magazine for engineers in the construction industry in America and they rightly point out, “For developers able to roll with the recession’s punches, some new activity in markets this fall has owners and lenders finally mustering some optimism and cautiously returning to the fray.”

The article points out that Cranewoods rolled with the punches by realizing their expertise in construction and real estate development financing was needed by troubled investors, lenders and borrowers. Cranewoods began consulting long before the world’s economic troubles but their unique knowledge was in greater demand when so many projects and loans had to adjust to the changing economic conditions.

 The article calls Cranewoods a “poster child of survival” and quotes Andrew Howe on how it adjusted.

“When a local bank brought Howe aboard as a consultant on a stalled condo project in Jacksonville last year, “a light- bulb went on,” he says. Cranewoods took over the project, resurrected construction and brought the eight-story condo project to completion. The strategy that worked was “putting together a plan where everyone loses something, but no one loses everything,” Howe says.”

………..

“Having both construction and development experience is what kept us in the game,” he says, even though the projects presented some challenges. “[Taking over] half-finished projects is a specialized field,” he says. “Since the time when those projects were initiated, the markets had changed, which required we make design changes. We’re now in the business of fixing broken projects.”

As they say, go read the whole thing HERE

Cranewoods featured in Engineering News Record (ENR) is a post from: Cranewoods Development LLC

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Lenders lose about 40 percent of a property’s value on a foreclosure vs. about 19 percent on a short sale, according to industry estimates.

The program also offers $3000 in moving costs to the homeowner and some mortgage support if the owner moves into HUD approved housing. Read more about it here.

Incentives to Avoid Foreclosure is a post from: Cranewoods Development LLC

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“If the market hasn’t bottomed out [in Cincinnati], it’s very near bottom,” said CB Richard Ellis managing partner Ken Murawski, adding that the first half of 2010 will show marginal growth. Then, he says, things will start to get better in the second half of the year.”

Uniquely Cincinnati

Beyond the effects of the national situation, Cincinnati’s circumstances may also be effected by staff consolidations from various spaces in the Central Business District as businesses, particularly American Financial, begin their long planned move into the new Queen City Square office tower. The glut of available office space has caused many landlords to lower rates and negotiate new long term leases before current leases expire.

Buyer’s and Tenant’s Market

All that means, it is a good time for forward thinkers to get into the market for investment and new leased spaces at historically low prices compared to long term trends.

“I think now is an ideal time for real estate investors to begin acquiring properties,” said Keith Yearout, also in the CBRE Investment Properties Private Client Group. He said smart investors will selectively acquire assets now, instead of waiting for the heard to come back to the market at some point in 2011.

“I think investors have to take a hard look at where market rents are, strength of tenants, length of lease terms, but for the deals that pass the little more stringent underwriting criteria, I think there are attractive values out there,” Yearout added.

There are also some cautions pointed out in the article so read the whole thing.

Cincinnati Real Estate: Buyer’s and Tenant’s Market is a post from: Cranewoods Development LLC

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Cincinnati, OH (PRWEB) February 25, 2010 — Andrew Howe of Cranewoods Development gives local confirmation that Cincinnati is one of the “10 cities for real estate steals” as recently reported in U.S. News and World Report. Citing stable values during the recent boom and bust and a firm price to income level, Howe says, “Cincinnati real estate has always seemed to escape the dramatic boom bust cycles that devastate other parts of the country.” While the article predicts further price drops, it anticipates a bottoming in 2010 setting the stage for future appreciation.

 Howe, a Cincinnati real estate development consultant and a successful developer and general contractor for markets in Ohio and Florida for over thirty years, transformed his firm into a development consultancy using his expertise in development, construction and finance to assist lenders and development groups in resolving problem projects and loans. Cranewoods primarily serves the Greater Cincinnati area and Florida’s Eastern shore.

 Unlike Florida, Howe stated, “Cincinnati’s real estate stability moderates development profits in great years, but also limits the pain on the downside.” While Cincinnati has dodged the brunt of the crash, both lenders and developers have still been faced with stalled projects and loan defaults. The stabilization of the housing market has followed the same pattern as many other parts of the country, with the under 300k housing prices leading the market in sales. Although sales prices are at discounts to where they were in 2007-2008, the fact that there was an increase sales transactions during the second half of 2009 and 2010 is a positive sign for absorbing inventory, the first step in a market bottom and eventual recovery.

Howe points to downtown’s loft projects as a prime example. “Cincinnati’s loft condominiums in the under $300k range that are well designed and well located are starting to sell again,” Howe said, pointing to Hamilton County tax records showing a surge in downtown loft sales beginning in the 3rd quarter of 2009. “The real estate cycle will turn around as they all do. It’s a matter of survival while the market takes the necessary steps to recover.”

For many developers, survival means renegotiating loan terms with bank Special Assets Departments to get the breathing room they need to navigate the market. For lenders with defaulted loans and REO (Real Estate Owned) it means realistically managing the credit and assets to maximize value and minimize negative balance sheet impacts. Howe uses his expertise in both areas to help banks and developers navigate their projects, waiting for the market’s return to normalcy.

 About Cranewoods Development     

Andrew Howe, President of Cranewoods Development, is an award winning developer, general contractor and real estate consultant with over 35 years experience. Cranewoods offers full service real estate consulting to lenders and investors. Services include: development consulting, bank loan workout solutions, court appointed receiver, turn-key development management, construction management and general project problem solving. To explore Cranewoods further, visit: Cranewoods Development: Real Estate Development, Consulting, Construction Management | Jacksonville, FL | Cincinnati, OH.

Website: Cranewoods.com PH: 513-257-0749 | 904-758-3434

CLICK HERE FOR LINK TO ORIGINAL PRESS RELEASE

Cincinnati Real Estate Consultant Comments on Recent Listing in U.S. News report “Top 10 Cities for Real Estate Steals” is a post from: Cranewoods Development LLC

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In an article from February 12, 2010 entitled “10 Cities for Real Estate Steals”, U.S. News surveyed information primarily compiled by Moody’s Economy.com to search out markets where price-to-income ratios are most in line with their historical averages despite the challenging economic environment.

Cincinnati Real Estate Developers And Buyers
Certainly the news does not come as a surprise to the Greater Cincinnati real estate development community who have witnessed the near 30% downturn nation-wide and yet experienced very little of the trend locally.  In fact, buyers and investors see, despite some near term fluctuation, that many properties in the market are actually undervalued compared to the long term trends.

Cincinnati Recently Sold Homes

“10 Cities for Real Estate Steals”
Concerning the Greater Cincinnati real estate development market, the U.S. News reporter, Luke Mullins, states:

“Home prices in Cincinnati have remained relatively affordable throughout the nation’s recent boom-and-bust cycle. The area’s price-to-income ratio actually increased from 2006 to the third quarter of 2009. Its most recent reading of 1.41 is slightly below the 1.46 average ratio of the 15 years before 2003. Although home price declines have moderated in recent months, Moody’s Economy.com believes further drops may be in store as additional houses go into foreclosure. Home prices in Cincinnati are expected to bottom out this year before creeping higher.”

Here is the recent view of one local Cincinnati real estate developer, “It’s challenging to get deals done out there, but there are spots around town that are very well positioned.” via

The Real Estate Development trend in Greater Cincinnati Ohio
Mortgage rates have recently dropped to 4.93 and added federal incentives continue for first time and current homeowners looking to buy so expect the current short term fluctuation in the greater Cincinnati real estate market to begin to get back to its historical trend by the end of 2010.

Cincinnati Makes List Of Top 10 Cities For Real Estate Steals is a post from: Cranewoods Development LLC

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A court appoints a receiver only after both sides of the litigation are given an apportunity to give input upon the specific receiver and the goals of the receivership. In real estate, those goals could be as diverse as selling the property to completing construction to financial analysis and auditing.

The Court and Receiver
The litigants counsel define the skill set needed in a receiver for their particular property and identify an agreed upon receiver. But once the court accepts their choice, the receiver is an extension of the neutral court.

“Parties with an interest in the receivership should treat the receiver as an arm of the court and should not seek ex-parte communications with or special treatment by the receiver.”

What to look for in a receiver

“A receiver should be chosen on the basis of background, expertise, neutrality, availability, compensation rate and temperament, and not because of perceived alliances and relationships.”

What you need to know
If you think your situation may require a receiver, go read the clear yet short article and learn more about the process and what you may need to look for. Your familiarity will aid you and your counsel in choosing the right path and goals of the receivership in your specific situation. PDF on Court Appointed Receiver here.

Receivers and Receivership is a post from: Cranewoods Development LLC

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If you’re a veteran or active duty military, then you must consider a VA Loan, a benefit thanks to your service to the United States. A VA Loan is a great option for buying a home, whether it’s your first or your third time buying a house; the VA Loan gives you flexibility as well as offers an affordable solution to financing your next purchase.

Perhaps the biggest highlight of the VA Loan is the no down payment requirement. Sure, there were plenty of no down payment options 24 months ago, but like the housing bubble, those programs burst and now the VA Loan is the last zero-down mortgage product available. In addition to zero down, the VA Loan also has no private mortgage insurance, which is standard on conventional loans unless you put 20 percent down. Another aspect of the VA Loan is the relaxed credit requirements that still allow you to get a low interest rate. While most conventional products require a 720 or above to get the lowest rates, VA lenders generally only require a 620 minimum credit score, and the rates for those scores are still the lowest available.

The VA Loan also allows you to refinance into a lower interest rate (down the line) without appraisal or income documentation; said Jake Vehige, VA Loan Specialist with VAMortgageCenter.Com.

There is a VA funding fee associated with a VA Purchase Loan, however that fee is 2.15% of the loan amount for first-time VA users and 3.3% for subsequent VA Loan use. That fee can be rolled into the cost of the loan, or the seller is allowed to pay for it as well. Borrowers who can document at least a 10% service-connected disability are exempt from the funding fee.

Provided you’ve got good credit, doesn’t have to be great, you were honorably discharged and you’ve had steady income for the past two years, a VA Loan is definitely worth your consideration when purchasing your next home.

The VA Purchase Loan Has Many Advantages is a post from: Cranewoods Development LLC

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