Category: Candea Development

Armand Candea Shares What Home Features Buyers Want Most

Within the past year and a half, the real estate market has changed drastically, not only in terms of housing prices but in what features are most desirable in a home. Since the start of the pandemic and stay-at-home orders, the time Americans spend at home has increased by close to five hours, causing many Americans to reconsider what features they most desire in their living/working space. Armand Candea of Candea Development, the Chicago-area real estate development firm, has seen these changes first hand and today will share what American buyers most desire in a home’s features in 2021. 

Laundry Room 

Expected Costs: Between $1,500-15,000 

Percentage of home buyers interested in this feature: 87% 

Out of any home feature, homeowners have noted an interest in a dedicated space for laundry where they can wash/dry clothes, iron shirts and pants, and keep dirty clothes out of the living space. According to the National Association of Home Builders’ (NAHB), this feature tops the most-wanted features list of a majority of home buyers. As the average time homeowners spend at home continues to increase, it has become more important for homeowners to keep an organized home and a dedicated space for laundry. 

Concrete Patio 

Expected Costs: $1,700 to $4,500

Percentage of home buyers interested in this feature: 82%

Since the start of the COVID-19 pandemic, there has been a stark uptick in the interest of buyers in functional outdoor living spaces. Homes with wood/ concrete patios, outdoor kitchens, built-in grills, and fireplaces have received much more interest from prospective buyers in 2021 than homes with grassy yards. To increase the value of a property, Armand Candea of Candea Development recommends homeowners invest in a dedicated outdoor living space. 

Walk-In Kitchen Pantry 

Expected Costs: $600-$2,000 depending on the scale of the project 

Percentage of home buyers interested in this feature: 81%

According to the most recent NAHB report, a walk-in pantry is home buyers’ second-most desired kitchen feature, just behind a double sink. Most homeowners would agree that a kitchen pantry’s additional storage space is essential to avoid overcrowded shelving and can help create a more enjoyable cooking experience. With new trends in organization, a kitchen pantry’s ability to store clear food storage containers and canned goods also has another level of appeal.

Armand Candea of Candea Development Discusses What Drives Down Property Values

One of the primary reasons real estate is considered such a great investment is its rate of appreciation. Today, the national average for appreciation has risen to just over 14.5% year over year of 2% per month. However, while most homes’ values will only go up, certain things can drive down a property’s value. Armand Candea, co-owner of the Chicago-based property development company Candea Development, has worked within real-estate development for the better part of 15 years and understands the nuances of property value. In order to better help first-time homeowners and aspiring property developers, Armand Candea of Candea Development will share within this blog the biggest factors that drive down a property’s value. 

Poor Exterior Paint Quality

For all Candea Development properties, Armand Candea and the Candeateam ensure that only high-quality exterior paint is used for the home’s façade. This is largely due to the fact that a home’s exterior condition greatly impacts its value. A home that has a faded, cracked, or peeling exterior can drive a home’s value down significantly. In addition to port quality paint, the color of paint can also impact a home’s value. For this reason, homeowners should consider painting their home neutral colors such as beige, white, or gray before putting their home on the market. 

Proximity to Certain Facilities and Businesses

Before settling on a new location for a housing development project, Armand Candea and the Candea Development team will research the neighborhood and see if their potential location is close to any sites that may drive down the property’s value. Unfortunately, a home’s proximity to a number of locations can significantly drive down its value and reduce the chances of it being sold on the housing market. Some sites that are associated with major drops in property value include: 

A Poor Scoring School (22.2 %)

Strip club (14.7 %)

Homeless shelter (12.7 %)

Cemetery (12.3 %)

Funeral home (6.5 %)

Power plant (5.3 %)

Shooting range (3.7 %)

Hospital (3.2 percent)

Neighborhood Foreclosures

If a home forecloses close to your development property, it can hurt that property’s value. This is because home appraisers compare all selling prices within a neighborhood when estimating a single home’s value. Foreclosure homes can sit vacant for years without selling, driving down the price and the prices of homes in the surrounding neighborhood. For this reason, if more than one home forecloses in your neighborhood, it could significantly impact your development property’s selling price. 

Armand Candea Talks About How to Increase Value in a Neighborhood

Armand Candea expert in real estate development in the greater Chicago area, knows the importance of real estate development, the ability to create community between neighbors, and increasing value within the neighborhoods. When it comes down to creating properties that are unique and stand out from the norm, it is important to also keep in mind that the idea behind these developments is to increase the value in the neighborhood. So, what does increase neighborhood value? One way to increasing the value of your neighborhood is to bring in owners rather than renters. Renters are wonderful, but they simply do not have the same investment in the properties and neighborhood that owners do. Also, it is important to develop a relationship with the real estate agents that are working in your neighborhood.

Make sure you are keeping your neighborhood clean. Who wants to look at trash around the area? It makes your neighborhood look dirty and cheap. Whenever you see any sort of trash, you should grab it and dispose of it properly to create a clean neighborhood for everyone.

Visitors that come into your neighborhood cannot see inside your home, so to give a first good impression, you need to focus a lot of your home improvement efforts into your landscaping. If you do not have a green thumb, no problem- you can always hire a landscaper to help detail out your yard and put in the right trees and bushes to make your yard look amazing.

Push for infrastructure, if you have a neighborhood that is filled with potholes and cracks in the sidewalks, you need to get them fixed. Having dog paths or bike paths will also bring a nice feature to your neighborhood. If you can get a decent number of neighbors together to lobby the city council for street repair in your area, then you can get the funding for infrastructure maintenance that will help to boost your neighborhood’s value.

The bottom line is to work together. No matter how spirited you are in improving your neighborhood, it is hard to do it alone. You will need the help of your neighbors to make the change happen and that means you need to be willing to not just meet your neighbors but create relationships with them. When you work together, you will see property prices increase, and you will all gain the rewards of a more valuable neighborhood as a group.

Trends in Chicago Real Estate

Located in northeastern Illinois on the southwestern shores of Lake Michigan, Chicago is the third-most crowded city in the United States and the fifth-most crowded city in North America. Chicago city has been called by many nicknames, but it is mostly known as the “Windy City.” The city was rated as one of the most balanced economies in the United States, and this was due to its high level of diversification. Today, the Chicago city is recognized as the fourth-most important business center in the world. Interested in investing in the Chicago real estate market in 2021? Candea Development talks about the real estate trends that are currently going on in the Windy City. Since Chicago has seen a rise in real estate prices and a lower-than-average job growth, this might not seem like a good place to invest in real estate just yet.

According to Candea Development, the housing market trends show that the Chicago real estate market prices are still affordable.

  • In the Chicago neighborhoods where Real Wealth members invest, the median purchase price was only about $130,000 in 2020, which estimates around 49% more affordable than the national average.
  • This shows us that real estate in Chicago is still more affordable than many other areas in the United States. In the surrounding areas where Real Wealth members are investing, property values are even more affordable.

The Chicago rental income is strong.

  • In the neighborhoods where Real Wealth members invest, average homes rent for a median $1,600 per month, which is around 1.23% of the $130,000 median purchase price. This is about 81% higher than the national average.
  • This shows us that, in some Chicago neighborhoods, there is a solid opportunity to generate cash flow at a significantly higher rent-to-purchase ratio than many cities across the nation today.

Chicago offers equity growth potential.

  • Since 2010, Chicago’s population decreased by 0.13%. During the same time, the national population grew by about 6%.
  • In the past year Chicago lost over around 330,000 jobs due to COVID-19, which calculated to be an annual job loss rate of 7%. This is just above the U.S. annual job loss rate of 6%. This shows that Chicago’s diverse economy is keeping the job market somewhat stable.

Markets everywhere are still trying to come back from the Covid-19 pandemic. Businesses all over the world have suffered a loss in money. In the real estate market prices have risen for potential buyers, but for the seller’s profit is looking good.

Armand Candea Explains the Top Mistakes in Real Estate Investing

Real estate investing is an excellent way to build wealth. With low interest rates, the Internet, and YouTube videos, it has become more popular than ever. But these things have also led people into making huge mistakes. Armand Candea, with Candea Development knows that without a plan, it is easy to slip up and make a mistake that can affect everything. So, before you decide to invest in real estate, it is wise to understand the pitfalls. Here are the most common mistakes real estate investors make and how to avoid them.

First mistake is not having a strategy.You are excited to dive right in an buy your first property, but without an investment plan it could lead you anywhere. Avoid this mistake by making a business plan before investing in real estate.

Second mistake is neglecting to do research. In a hurry and eager to begin, that is great, however not doing research can be a costly mistake. Avoid this mistake by doing your due diligence. Do your research to know if the property you are wanting to invest in is actually a good investment. Getting a home inspection is an example of doing your research to see if the home has mold, leaky roof, legal issues to name a few.

Third mistake is choosing the wrong financing. Some loans make it easy but with high interest rates, short terms, or penalties, avoid this mistake by understanding your loan terms. The best financing is a conventional, fixed-rate mortgage (or paying cash).

Mistake four is underestimating costs. Armand Candea explains a big part of real estate investing is estimating income and expenses. However, any miscalculations can make or break any deal. Underestimating costs reduces profit. Avoid this mistake by figuring all your expenses. A basic list of these expenses looks like this:

  • Taxes
  • Insurance
  • Utilities
  • Mortgage payment
  • HOA fees
  • Maintenance
  • Property management
  • Marketing
  • Realtor commissions
  • Rental income
  • Vacancies
  • Renovations and repairs
  • Closing costs
  • Market value and after repair value (ARV)

Mistake number five is working alone. Armanda Candea says working alone is time consuming and can lead to expensive mistakes. Avoid this mistake by working with real estate professionals that will help you achieve your goals.

Mistake number six is expecting fast and easy results. Do not dive right in and invest just because you see someone else build significant t wealth through investing. Avoid this mistake by looking at the big picture and investing for long-term. Focusing on long-term will make your expectations more realistic. Choose deals that make sense for your business and focus on long-term equity.

Mistake number seven is waiting too long to invest. Some new investors wait for the perfect new property to invest in, but this is not necessarily realistic. Avoid this mistake by lowering your expectations.

Mistake number is eight failing to screen tenants. Do not think that just because you have a rental property that you can escape vacant and tenant problems. Avoid this mistake by establishing a written rental agreement. Screen and check for references to keep issues at bay.

Mistake number nine is not having a saving buffer. Most investors make all the repairs right away when they buy a property, but what they fail to know is that problems might pop up. Avoid this mistake by saving an emergency cash buffer to cover unexpected expenses and damages.

Mistake number ten is no exit strategy. New investors do not plan for things to fall apart, things do not always go as planned. Avoid this mistake by planning your exit strategy. If things do not go as planned when you invest in a property, have more than one alternative in place.

Real estate investing is not always easy, it is not a get rich quick strategy. Now that you know the most common mistakes in investing in real estate, you will be better prepared to not make these mistakes. Take the right steps to make the best investment decision that is right for you.

Candea Development on The Hottest Housing Markets in The United States

The real estate prices have gone up considerably in 2020, and they are still rising. The average home value in the United States is roughly around $269,000. This is due to the help of low interest rates. The average home price went up about 22.2% compared to 2019, and the existing home sales reached their highest level since 2006. Candea Development knows this is a good time to be a homeowner, but not a great time to be a home buyer, especially in some real estate markets. New statistics reveal that these cities are predicted to be among the hottest housing markets in 2021. This translates to higher prices, bidding wars, and a slim inventory to choose from. It is a seller’s world. So, if you already own a property in these 15 metropolitan areas, you will have an easy time selling, however if you are trying to buy in any of these areas these will be some of the hardest areas to buy a home.

15. Minneapolis, Minnesota– Typical Home Value $308,000

14. Seattle, Washington– Typical Home Value $813,000

13. Las Vegas, Nevada– Typical Home Value $310,000

12. Houston, Texas– Typical Home Value $204,000

11. San Diego, California– Typical Home Value $689,000

10. Miami, Florida– Typical Home Value $389,000

9. Riverside County, California– Typical Home Value $474,000

8. Washington, D.C.– Typical Home Value $672,000

7. Atlanta, Georgia– Typical Home Value $311,000

6. Dallas Fort-Worth, Texas– Typical Home Value $273,000

5. Denver, Colorado– Typical Home Value $498,000

4. Tampa, Florida– Typical Home Value $281,000

3. Nashville, Tennessee– Typical Home Value $316,000

2. Phoenix, Arizona– Typical Home Value $310,000

1. Austin, Texas– Typical Home Value $454,000

Candea Development says it is a sellers’ market, yet many homeowners are hesitant to put there house up for sale, especially during the pandemic. No need to risk moving if there is still a pandemic going on out there, many homeowners are saying. With low inventory across much of the nation, buyers are making concessions to convince sellers to accept their offers. To secure deals in hot markets, some buyers are offering free leasebacks, mainly allowing the seller to live in the house for free for a short period after the closing. Word of advice for those who are in search for a home in a hot market, “find a great real estate agent who can guide you through the process but be prepared for the emotional ups and downs.”

Armand Candea Discusses How to Get Started as an Entrepreneur in Real Estate Development

Armand Candea, co-founder of Chicago real estate development firm, Candea Development, has worked in the construction and real estate industry for many years. He and his brother Alan built the Candea Development firm and built both commercial and residential properties in the many neighborhoods of the greater Chicago areas. As the Candea Development flourishes in the Chicago area, Armand Candea understands the challenges entering the real estate development sector as well as becoming an entrepreneur in real estate development. The real estate business is filled with risks and challenges, however with a clear understanding of the fundamentals of real estate investing, massive wealth can be built over time. Armand points out a few important factors to consider in getting started as an entrepreneur in real estate development.

  1. Learn The Basics. You do not need to go to school to get a college degree to get into real estate, however it is critical to have some basic knowledge about real estate transactions, financing options, real estate terms, as well as real estate laws. You can learn this information by simply browsing the Internet, YouTube, blogs, webinars, and of course online courses. Any information you receive from these resources will give you a solid foundation to jumpstart your journey in becoming a real estate entrepreneur.
  • Development A Real Estate Investment Business Plan. Real estate investing can be a challenge for first timers, so to become a successful real estate entrepreneur you should approach it as a business. Begin by setting up your investment goals, make detailed steps in how you are going to achieve those goals, have a business plan and stay organized, and maintain focus.
  • Build Your Real Estate Team. To become a real estate entrepreneur, you would need to understand that you need a solid team to work with. This is not a solo type of gig. It is wise to build a team of experts who can fill in where you lack experience. Having a team with a diverse set of skills will help assist in various areas of investing. With having a competent team to assist, you will be able to maximize your return on investment and avoid beginners’ mistakes. Start with a small team, but know as your business grows, so will your team you work with.  Some professionals to consider added to your team are, real estate agents, home inspectors, mortgage brokers, accountants, and attorneys.
  • Choose a Real Estate Investment Strategy. The optimal investment strategy and property type for you will depend on several things, this includes your investment goals, location, and financial capacity to name a few. An example of this would be to purchase an investment property, rent it our short term, or traditionally. If you cannot access enough capital to buy a property, you can still invest with no money. You can do this by wholesaling, or house hacking. Focus on the strategy that best suits your situation and investment goals.
  • Make Your First Investment. Building wealth in the real estate industry starts with a single investment. Purchase your first property and build from there. Make sure your finances are in order, evaluate the real estate market, understand which market you tend to purchase, check the demographic trends, real estate laws, job market, security, neighborhood amenities, and the general economy. Once you find the investment location, next step- find a profitable investment property.

Becoming a real estate entrepreneur will have its challenges and failures, it is a tough road, but it can be an excellent way to build wealth and create financial freedom.

Candea Development Talks About How to Present a Property Development Deal

Candea Development, construction and management firm founded by the Candea brothers, Alan, and Armand- know all about property development. They understand the business process, which encompasses activities that range from the renovation and release of existing buildings to the purchase of land and the sale of developed land to others. The brothers also believe that it is important to know exactly how to present a property development deal.

Property development, also known as real estate development, is the process of developing land or building into a higher use, in other words, buying land and building property on it. Renovating and improving property or converting one property from one type to another. The development appraisal forms the backbone of the financial side of property development and is the most important step within the property development process. Debt lenders and lenders process thousands of deals and development proposals every month, but they only finance a handful of them. To make sure that your property development deal stands out form the rest, there are a few steps that every developer and builder must follow when putting together their proposal.

Presentation is huge, the lender should be able to understand the deal within a few seconds, so the better the deal is presented, the easier it is for the lender to read and understand.

Headline and sub-points, the lender needs to be able to glance through the proposal to understand it, so divide the proposal into headlines and subpoints. An example would be, profit margins, development details, site, and location to name a few.

Make sure the appraisal is in numerical order, one small mistake could be a deal breaker.

Share all your information to the lender, such as, how did you calculate your total costs? How did you reach the GDV? Be sure to show the lender how much you know about the market.

Share a picture of the upcoming development or blueprint.

Show your experience in the industry, let the lenders see your previous projects and developments.

Be prepared to share the details of everything, purchase cost, development costs, professional fees, profit on cost, gross development value, so on and so forth.

Finally, consider the downsides like increasing building costs, decreasing sales, and calculating profit margins accordingly. This is important, so always have space for a contingency budget.

If these tips are followed when presenting your development deal, the success of receiving a thumbs up will likely be accepted.

Candea Development Reflects on What CRE Trends We Can Expect in 2021

Armand Candea forsees a bright future for commercial real estate

2020 was the catalyst for pivots in a variety of industries working through the pandemic. With the outlook for 2021 appearing brighter as factors such as vaccine distribution and businesses reopening revitalize industries, Armand Candea of Candea Development acknowledges that several sectors of commercial real estate have room to grow. Here, Candea Development reflects on a few real estate trends that are expected to continue through 2021.

Evaluating the Future of Office Space

Businesses have a variety of takes on how they should utilize their office space as the pandemic continues. Armand Candea notes that, through reassessing their needs for space, many companies acknowledge that their physical footprint is still vital to their presence. This means that companies are likely to keep some form of office space even as hybrid and remote work models increase in popularity. With vacancies in some areas, this gives businesses a range of options to satisfy their need for workspace. Some are finding that properties that used to house other businesses can be repurposed for office space without many changes necessary to facilitate the switch. Companies that are eying already existing office spaces for their work have shown interest in spaces that accommodate their shifting needs during the pandemic. Collaborative spaces large enough to accommodate social distancing, mixed use areas for hybrid schedules, and intuitive designs will likely continue to be popular in 2021.

Shifting Desires of Renters

Armand Candea recognizes that the need for housing has remained stable during the pandemic, largely because, regardless of the health crisis, people still need places to live. Still, just like other aspects of commercial real estate, there are shifts in what individuals are looking for. For example, renters have always responded positively to balconies and outdoor spaces. Even as more people receive vaccinations and venture outdoors, these personal spaces are still likely to be desirable to renters. Amenities that take the pandemic into account are also likely to remain on trend in 2021. With many are still unwilling to go to gyms, smaller gym areas in apartment buildings can give renters the opportunity to get exercise on the property. This is aided by complexes that have implemented smart solutions for renters to reserve gym access for small pockets of time.

Growing Emphasis of Warehouse Space

U.S. e-commerce sales are up about 36.7% from the third quarter of 2019, and the prevalence is continuing to grow during the pandemic. This boost in popularity and sales has emphasized that retailers will need warehouse space to properly keep up with consumer demands. Armand Candea of Candea Development acknowledges that the silver lining in the growing need for warehouse space has meant that vacant properties can see use once again. This means that developers can shift focus on properties that may be difficult to sell to brick-and-mortar retailers during this time take part in the adaptive reuse of commercial properties. Experts do not expect that the demand for warehouse space will wane anytime soon, giving some interested developers more than enough time to investigate repurposing larger spaces.