"Poorly performing apartments, empty warehouses, and empty office buildings are making the banks nervous," he writes. "For those with capital, a nose for risk, and patience (four to five years), there are opportunities at hand to invest in troubled properties."

In addition to foreclosure opportunities, Hockley says low vacancy rates in the apartment market means multifamily cannot be ignored. "Unfortunately there is not that much inventory available in the market place," he writes. "Over the last two years, sales have been flat. Local appraisers are spending 75% of their time appraising refinances and 25% of their time with sales."

Indeed, says Hockley, many investors can't sell because they are faced with significant prepayment penalties, and therefore locked into their investments for an average of five to ten years. Those that do come available will likely be prompted by estates coming into the market place, partnerships dissolving, and investors trying to reposition their investments, he says.

"As confidence returns to the market place, rents increase, prepayment penalties expire, and the demand for housing increases, developers will start building more projects, jump starting our economy and encouraging real estate sellers and buyers back into the market place," predicts Hockley. "I don't expect that to happen until late 2002 or early 2003, and then only if we are not in a full-scale war.

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