Apartment Investor's Advisor September 2008 EZine

Agent photo

Katherine J. Higgins

The Market Leader in North Bay Apartments

Investment Broker

Bradley Real Estate - Luxury Division

(415) 721-2595 office

(415) 302-7730 cell

(415) 721-2596 fax

851 Irwin Street, Suite 104

San Rafael, CA 94901

www.khiggins.com

Apartment Investor's Advisor

September 2008 EZine

Dear Investors,

Despite the uncertainy in the US economic marketplace, many positive signs point to an unclogging of the credit markets as soon as the sub prime bailout is worked out by Congress this weekend.

Looking at the overall instability of the stock market, residential housing and the lending environment, commercial real estate looks downright boring and stable! Thanks to strict underwriting requirements for these types of properties, this segment of asset class is THE most stable by far. I can remember a similar market in 1992 during the savings and loan crisis where there were no loans available for anything for about six months. Sellers who needed to unload properties either sold at a steep discount or hunkered down and waited for the market to turn.

Sure enough, in 1993, the lending crisis ended and people jumped back in the market. Prices started to rise again and so did interest rates. All signs are pointing to that kind of recovery right now here in Marin.

For one, the apartment inventory is the lowest I have seen in years. Gross rent multipliers have moved down as the market has slowed and rents continue to go up. In 2008, apartment industry experts saw an 8% increase in rents in this year alone. All these signs point to a stabilization of prices and increased profits in the future.

If you have been sitting on the side lines for the past 18 months, now is the time to make your move. I expect a large in flux of new buyers fleeing the stock market in the next 3 quarters. That has already started to happen. Getting in on the ground floor with today's low prices and interest rates makes the most sense for the saavy investor.

Happy hunting!

Katherine J. Higgins
Investment Broker
Mobile: (415) 302-7730

Marin Apartment Market Update

There were some great deals this summer for the aggressive apartment investor.

A couple of examples: a totally redone Victorian triplex in Gerstle Park was listed in the spring for $1,399,000 priced for an owner occupant. After two or three price reductions, it finally sold for $900,000 or 13.6 times rents! If the buyer holds for 2-3 years, he is sure to make $200-300,000 as the market moves up and housing prices move up.

In another situation, an exchange buyer from San Francisco was determined to buy single family and take advantage of the soft market. After looking diligently for many weeks, she ended up buying a luxury condo in San Rafael for $645,000, nearly $150,000 less than a similar sale that took place only 90 days prior to her close of escrow. Yet another great deal occurred when a 7 unit complex in San Rafael sold for $1,572,000 some $78,000 less than asking and at a 13.2 gross rent multiplier. This was a great deal for the buyer because he was able to very quickly raise rents about $150 per unit and increase his annual income by $12,600 the first year.

My advice is to get out into the market, look at the inventory, study the rental market and make an offer! You will be surprised at the deals out there right now!

Below are my available listings. Please give me a call at 415-302-7730 if any of them look like something you may be interested in.