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What Will Cause the Next Recession? A Look at the 3 Most Likely Possibilities

The risk that the Fed will miscalibrate interest rate policy and cause a slowdown or a recession is rising, in part because of the timing of the tax cuts and spending increases enacted this year. The United States economy is either at or near full employment, and inflation is already near 2 percent. That means the Fed could be raising interest rates to slow the economy just as tax policy is also working to slow the economy. “There is probably some kind of perfect path where the Fed could thread the needle on this,” raising rates just enough to prevent overheating but not enough to leave rates so high as to risk a recession once the impact of tax cuts fades, Mr. Guha said. The stimulative benefit of the tax cut “is going to hit the economy in a big way this year and the next year,” he said. The value of corporate bonds outstanding rose by $2.6 trillion in the United States between 2007 and 2017, according to data from the McKinsey Global Institute — rising to about 25 percent of G.D.P. Perhaps the economic damage will be higher in other countries that are more reliant on trade than the United States, causing a slowdown in the global economy that reduces demand for American products over and beyond what tariffs might cause. It could be the thing that triggers a popping of the corporate debt bubble. For the trade war to cause a recession, it would probably need to do major damage to business confidence, and lead companies to hold back from capital investments because of uncertainty over the future of trade policy. So a trade war alone might not directly cause a recession in the United States.

Rising Tide of Inflation

In December 2015, the Federal Reserve began raising interest rates, from an extended period of the lowest rates in 5000 years. Often, higher rates act as a drag on gold, since gold does not pay interest. Normally, rising interest rates would signal a strengthening Dollar. A good way to shield yourself from the rising price inflation, and falling markets associated with higher interest rates, is by purchasing gold and silver. Oil Inflation = Everything Inflation Often, one of the precursors to general inflation is oil price inflation. For some businesses, this is a 100% increase in the wage costs to hire a new employee. Disruptive Inflation = Great Time to be Protected If it seems as though the pressures on our costs of living are set to rise, it is because they are. We are overdue for disruptive inflation, that often happens about every 30 years. In 1945, inflation was 2%, and was 14% by 1947. In 1972, inflation of 3% became 11% by 1974.

Buying Rental Properties To Guard Against A Stock Market Crash

One that came up recently - should I buy rental property to guard against a stock market crash? We know if the markets correct that dramatically, people would theoretically move to bonds, so the value of the bonds would go up. With the real estate market just as hot as the stock market, she would buy that rental home at the same time everyone else was trying to get into real estate. Truism #1: Investing in direct real estate may be appropriate in two situations. Truism #2: Be careful about going into a real estate investment with friends or family. Truism #5: Counting on a large portfolio of real estate to sustain your retirement plan is not very smart. People who counted on real estate income in 2009 ended up very stressed and losing their shirt, especially if they leveraged their properties. I have this gory real estate discussion with clients too often and decided as long as a real estate investment isn’t going to torpedo a financial plan, I don’t fight it much. They fear the markets when the market is in the doldrums and love the market when everyone is making money. Real estate is no different.

How do you know if blockchain is right for your business?

Companies in the mortgage industry are investing in a variety of technologies to make their businesses more efficient, but many are still unsure about the potential of blockchain. Because it’s new, companies may not even know how to evaluate the benefits of blockchain to their business. Further, with successful proof of concepts across a variety of use cases, it is time for software providers and companies to explore practical implementations of blockchain technology. What’s worse is that there are so few Blockchain-as-a-Service companies providing practical solutions beyond consulting and white papers.” This is where the experimentation and wise spending DiClementi mentions in the roadmap play an important role. Business stakeholders can immediately evaluate the value to their business with the accompanied user interface that is flexible to users’ data format. Blockchain can easily be modified or fitted to your existing complex data, no extra work necessary. It’s simply not prudent to spend large sums of money on consulting if the end product cannot be built or maintained by the existing team. DiClementi pointed out that none of the companies using their products need blockchain developers. You don’t need the other companies you work with to benefit from blockchain, either. Bring them to the Factom team during the MBA Technology Conference at booth #447.

4 SEO Tactics That Realtors Need to Know

You’ve researched the competition, and you’re confident your website is much more functional (not to mention beautiful) than their website. Start Small: Use Modest Keywords Dominating SEO is kind of like baseball. Once you have a few wins under your belt, then it’s easier to have success with higher level keywords. Use tools like the Keyword Explorer by Ahrefs to determine how difficult it is to rank for keywords. Moz has more tips that will help you write efficacious URLs. A premier caching plug-in is the WP-Rocket. Fix Broken Links Broken links on your website can damage your SEO efforts. Basically, Google lowers websites in search engine ranking results that have broken links. If you already know how to fix them, then use the Broken Link Checker to discover what needs fixing. Have you had success marketing your real estate website?

How To Start Investing In Real Estate

The less debt you have, the more real estate you can purchase. Make your first real estate purchase There is a tremendous amount of information about how to invest in real estate. The first real estate purchase you make should be the home you live in. Plan on putting down 5-20% depending on the loan you can qualify for. Start accumulating more houses Once you made your first purchase, now you can start saving and looking for a second rental home. Make sure you research the going rental prices and look for a deal in a good neighborhood. Before buying a rental home make sure your mortgage payments, taxes, and insurances are less than your potential rental income would be. Pay down your debt as soon as possible It’s important to have as little debt as possible when investing in real estate. One investor I know purchases a home and works to pay it off as soon as possible. Once he fully pays the off house, he will purchase a second home and work to pay off the entire mortgage.

Why consumer protection regulation is necessary — but often useless

No one was more shocked than I was at the fast closing. Yes, my time to close was lightning-fast compared to the 44 days that Ellie Mae pegs as the average time to close, but that was only one factor in when I looked at lenders. Which brings me to the part about regulations being both necessary but also sometimes completely useless as written, and that brings me to TRID. Like me, most homeowners are shopping lenders before they even know their property address, so what they are comparing are pre-approvals, not loan estimates. Lenders are not bound by the terms of pre-approval letters and therefore comparing them is not helpful. The thought of starting over at that point with another lender was extremely unappealing. If the whole point was for consumers to shop around for terms and rates once they had the loan estimate, that’s a total non-starter in many housing markets today. And if the secondary goal was for consumers to try to get a better deal on their own from title and settlement companies once they have the closing disclosure with the fees outlined, it demonstrates not only a failure to understand the way buying a house actually works, but even how human beings actually work. Three days away from closing I would have paid more money in closing costs if it made the process easier or quicker — I was not looking to add another item to my to-do list. The updates from regulators provided some clarity on areas lenders were concerned about, but the fact remains that five years after issuing the rule and almost three years after requiring implementation, lenders are still having to figure out what the bureau meant in the first place.

Are we headed for a housing slowdown this summer?

Mortgage interest rates just hit the highest level in seven years, but those in the lending trenches already knew that, right? What about borrowers who want to buy a new house this summer? Is that sticker shock going to drive some prospective buyers to remain prospective buyers this summer? These are the questions that are probably plaguing Loan Officers right now. “Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” Khater said this week. “Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.” As Khater noted (and has previously noted), thus far, rising rates haven’t deterred buyers, but could a slowdown be coming if interest rates keep climbing? “While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5% could begin to hit the psyche of some prospective buyers,” Khater said. The yield on the 10-year Treasury is on the rise and continuing to rise on Thursday, and that will likely lead to even higher interest rates. And as they continue to rise, the question becomes when will those rising rates start making people think twice about getting a mortgage? Back in the early 2000’s, interest rates were above 8%, so 4.6% shouldn’t drive borrowers away.

Rental Rates on the Rise

Much like the housing market, the rental sector is showing no signs of a slowdown. According to the most recent CoreLogic numbers, which show that U.S. single-family rents were up 2.9 percent year-over-year in April, among some other noteworthy data points. This April’s 2.9 percent year-over-year increase is a 1.3-percent drop in the growth rate since the 4.2 percent peak, it notes. Low-end rental homes—properties with rents 75 percent or less of a region’s median rent—buoyed the index’s overall growth in April, SFRI says. On the other hand, rents for higher-priced dwellings—properties with rents exceeding 125 percent of the regional median rent—skipped ahead 2.7 percent year over year, the report shows. High-end rent growth tracked 1.1 percentage points higher than it did in April 2017, while low-end rent growth was 0.2 percentage points lower than April 2017. Growth also differed considerably across metropolitan areas. Las Vegas posted the highest year-over-year growth in April, at 5.9 percent, trailed by Phoenix (5.5 percent) and Orlando (5.3 percent). Both cities realized robust year-over-year job growth that month, inking gains of 2.8 percent and 3.2 percent, respectively. Honolulu was the sole metro among the 20 assessed to display a dip in the rent index, falling 0.3 percent year over year in April.

HUD awards $35 million to promote housing independence

In order to help low-income residents earn housing independence, the U.S. Department of Housing and Urban Development announced an award of $35 million. It will help these organizations hire or retain service coordinators who help residents find jobs, educational opportunities and help residents achieve economic and housing independence. The funding is provided through HUD’s Resident Opportunities and Self Sufficiency – Service Coordinators Program. The service coordinators provide services such as connecting residents to job training and placement programs and computer and financial literacy services. “It’s part of our mission to help connect public housing residents to better, higher paying jobs and critical services as a means of helping them move beyond public assistance and toward self-sufficiency,” HUD Secretary Ben Carson said. “This funding gives our local partners resources they can use to help residents become economically independent and achieve the dreams they have for themselves and their children.” HUD explained its program works by encouraging local programs to link public housing assistance with public and private resources, enabling HUD families to increase their income, reduce their need for welfare assistance and promote economic independence and housing self-sufficiency. Click here to see a list of where the $35 million grant is going, broken down by state. Recently, HUD announced Trump’s budget gives the department’s funding a boost of 1% from its proposed budget last year, and supports homelessness by requesting a record $2.4 billion to support thousands of local housing and service programs. However, not everyone agrees the new funding request is beneficial for the programs the department supports. The National Low Income Housing Coalition claims the budget slashes federal housing benefits that help millions of low-income seniors, people with disabilities, families with children, low-wage workers, veterans and other vulnerable people afford their homes.


5 Tips for Buying a Foreclosed Home

The home is sold as-is, and it’s up to the buyer to pay for repairs. While you’re looking for a real estate broker who works directly with banks that own foreclosed homes, get a preapproval letter from a lender. You might find the acronym REO, which means “real estate owned.” This signifies that the property has been foreclosed on and the lender now owns it and is selling it. The goal of combing through foreclosure listings is not to find a house; it’s to find an agent. “The problem is, buyers want to find the house first, and then they think they’ll work out the financing,” Jensen says. They need to work that out first.” Zimmerman says some first-time buyers make the mistake of assuming that the bank selling the home will also finance the mortgage as part of the deal. Just as with any other real estate purchase, you have to look at the recent sales prices of comparable properties, or “comps.” “You really have to look at the comps in today’s current market conditions and write a competitive offer based on that,” says Jensen. “Sometimes the bank prices the homes really low, and the home will have multiple offers over list price within hours. A lot of times, buyers will come to me and say, ‘We want to write offers for half price.’ It just doesn’t work that way.” Bid the higher price if homes are selling quickly. All the other ones were in the same condition, and they sold for $200,000.” Jensen further advises finding out how quickly comparable houses are selling.