By Mary Kathryn Kennon, marketing coordinator, Carter
ATLANTA (Jan. 19, 2012) – In a just-published article, a national magazine from The Wall Street Journal includes thoughts from Carter Chairman and CEO Bob Peterson on investing in multifamily REITs.
In the February issue of SmartMoney, Peterson tells writer Alyssa Abkowitz that multifamily real estate investment trusts are a smart investment right now. As a group, apartment REITs are up 9 percent this year, and they’re still fairly priced, Peterson says.
Peterson knows firsthand about the current apartment market and about REITs. After a great response to apartments at The Banks in Cincinnati, Carter is planning a second phase that will include more apartments at the successful mixed-use development along the banks of the Ohio River. Carter also is pursing development and investment opportunities in urban, infill multifamily developments in cities such as Nashville, Tenn.
As for REITs, Peterson is a past executive of CarrAmerica Realty Corp., a former real estate investment trust. In late 1996, Peterson sold Peterson Properties to CarrAmerica. When the transaction closed, he joined the REIT as Southeast regional managing partner and later was named president of CarrAmerica Development. Peterson also served on CarrAmerica’s investment and operating committee.
The SmartMoney story quoting Peterson highlights two different ways to invest in the housing market. While Peterson recommends apartment REITs, veteran house-flipper Doug Clark says big payoffs are available for house-flippers who have the cash, do-it-yourself ability and a high tolerance for risk.
If you would like to learn more about Carter’s investment strategy in multifamily, contact John Akin at [email protected]
Here’s the SmartMoney article.
2 Ways to Invest in the Housing Market Now
Even with the broad housing market still in a funk, some investors are putting cash back into real estate.
Play It Safe: Apartment REITs
When it comes to safe investing, real estate doesn’t exactly pop into mind these days. But the bust that has beleaguered builders and real estate agents has actually been a boon for many apartment owners. Vacancies are at their lowest levels in six years, and rents are on the rise nationwide. Those factors aren’t stopping families — many of them former homeowners — from becoming tenants, says Bob Peterson, CEO of Carter, a commercial real estate company in Atlanta. The simplest way investors can capitalize: Pick up shares of a real estate investment trust, or REIT, that specializes in apartments. REITs collect the rents and then pay out at least 90 percent of their taxable income to shareholders through dividends. While such REITs as a group are up 9 percent this year, they’re still fairly priced, Peterson says. Home Properties (HME: 55.52, 0.16, 0.29%) now owns about 120 properties and yields 4.6 percent, while UDR (UDR: 24.78, -0.11, -0.44%) is about twice as big and yields 3.3 percent.
Go for Broke: Home Flipping
Do you have a lot of cash on hand? More important: Can you install drywall? If you said yes twice, then “flipping” an abandoned house could be your next big score. With the number of foreclosures still rising, there are plenty of rehab projects to choose from, and banks often sell them at big discounts. But navigating a foreclosure auction is tricky; pros say investors usually end up buying homes first, sight unseen, and inspecting them for damages later. Buyers likely then need to sink a hefty amount of time (at least six months, flippers say) and money into rehabbing the home. There’s no guarantee of selling the rehabbed house for a profit, either, which is why veteran flipper Doug Clark calls it “the riskiest part of the real estate industry.” But the potential payoff can be huge. Clark recently paid $1.6 million at auction for a 14,000-square-foot Utah mansion. He spent $250,000 to fix it up and expects to sell it for $3 million. Not bad for a couple of months’ work.