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Real Estate ICOs Are Moving In, But Investors Aren’t Floored

In fact, there are at least four ICO issuers right now with a real-estate component – BitRent, a way to speed up financing construction projects; Etherty, real-estate management through equity access; Caviar, a fund that tempers the volatility of crypto investments with loans to real estate projects; and Trust, a way to tokenize equity in real estate and other real-world assets. Nussbaum said: "If done responsibly and legally, I do think these types of projects can advance the industry by offering previously inaccessible liquidity and investment opportunity to individuals." And Nussbaum isn't alone in his thinking. Yet, even with new momentum for this particular token use case and increasing interest by consumers and businesses in cryptocurrency, there are still hurdles to tokenizing real estate on a blockchain. Liquid land The concept of selling shares of a property is nothing new – real estate investment trusts (REITs), modelled after mutual funds, own and manage properties, allowing investors to buy in for small amounts. And not only that, but tokenizing home equity could also make the space, which has been attractive to investors but difficult to trade, more liquid. Scott Hoch, an analyst at Apex Token Fund explained, "A new level of liquidity is created when tokenizing traditional assets. "There has to be a lot shaken out in the blockchain world," he told CoinDesk. Tokens at the town hall Yet, there are signs that the right people are taking an interest in crypto tokens for real estate. Not only is Cook County interested in updating the law to accommodate crypto, but a handful of locations – a city in Vermont being the most recent – around the world have launched pilots to determine whether putting land titles on a blockchain would offer efficiencies and other benefits.

New online real estate investment platform launches in Arizona

Online crowdfunding platforms for real estate financing continue to emerge across the industry and in new marketplaces. The latest example: Sharestates has expanded and launched in Arizona. Sharestates, an online real estate investment platform, announced its inception into the Arizona Banking Department roster of lenders as Sharestates Investments, LLC. With this launch, Sharestates will be offering its loan products to the real estate speculation and development community in a statewide effort. Sharestates’ launch into Arizona coincides with its overarching goal of providing both borrowers and investors with a user-friendly and hassle-free way to make investments within the greater real estate ecosystem. Moving into Arizona is an opportunity for our company to make an impact on a growing real estate market,” said Sharestates CEO Allen Shayanfekr. “Growth, more importantly sustained growth, is essential for the stability of Sharestates. We are excited about providing borrowers in Arizona the premium services and products that have come to be expected from the Sharestates brand. We look forward to working in conjunction with the existing lenders and origination teams in Arizona to expand our footprint in this evolving movement known as real estate marketplace lending.” While real estate marketplace lending continues to grow throughout the United States, Sharestates remains the preeminent resource for borrowers and institutional investors looking to optimize returns and make a significant impact on the industry. The event will be held March 14-15, 2018.

Earn a Million Purchasing, Renovating, Marketing, and Selling

A full time rehab investor needs to manage the four phases of every deal. Becoming a rehab millionaire means having at least 16 deals in work every month and maybe more. Four deals turning a $20,000 profit each month will bring in $960,000 each year. But if you want to be a million dollar real estate investor, you’ll systematize the process to keep the pipeline full. Have a Plan Having four deals in each phase is a full time job managing your own business. You’ll need a system to keep it organized. Decide how much time you are going to dedicate to this business. It all starts by putting the first deal together and then growing your business one deal at a time. The houses you want, won’t actually sit on the market for months. Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for seven years.

Tax-Savvy Investment Strategies for Retirement Accounts

While most people receive Social Security, a secure financial retirement depends on also having significant savings in a retirement account. Many of us now live beyond this life expectancy, so the amount of funds accumulated in retirement accounts depends not only on what you contribute during your work life (and how well those investments did), but on your investment returns after you retire. A Coordinated Approach If you have more than one retirement account, such as a 401(k) at work and a personal IRA, it’s essential to coordinate your investment strategies across all your holdings. If you put them in your tax-deferred retirement account, the interest on the bonds effectively becomes taxable because all of your distributions are taxed as ordinary income, regardless of the source of the earnings. Factors in Making Investment Choices There’s no single strategy that’s right for all individuals. As inflation pushes interest rates higher, the value of an investment in a bond fund declines. Certificates of deposit (CDs) don’t have fees, but there are fees for investments in mutual funds, annuities and various other types of investments. Compare the fees and consider them to be one factor in your investment strategy. There’s no bar to investing in real estate, but there are various restrictions that make direct investments in realty impractical for most people. To make good choices for your personal situation, take advantage of investment advice that may be offered by your employer or the mutual fund hosting your account.

7 Types of Real Estate Allowed in a Self-Directed IRA

Self-directed IRA investing offers great tax advantages to real estate investors, though the exact benefit will depend on the type of account used. Choose between rental properties (both residential and commercial), undeveloped land, fix-and-flip opportunities, and more. In this article, we will describe some of those opportunities by exploring seven types of real estate that can be held in a self-directed IRA: Single-Family Homes Single-family homes are the most common type of residential property, and the most common type of real estate found in self-directed IRAs. If your self-directed IRA doesn’t have enough cash for these types of investments, your IRA can even apply for a non-recourse loan or partner with other funding sources. You could use your savings to be a real estate lender and help others purchase homes while also bringing in a profit for yourself. The payments will go directly to your retirement account. While this may not be a great choice for generating immediate rental income, these properties can be developed to produce a profit, sold to developers at a profit, or even sold to the government for use by the state. There are also things to consider, such as performing the proper due diligence and educating yourself not only on the tax laws in the United States, but the tax implications and transaction process in the country where you are investing. For more information, consult a financial professional or tax advisor about real estate transactions and banking outside of the U.S. Real Estate-Owned Properties If a property has been foreclosed and taken back by the bank, it is referred to as real estate owned, or REO. Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor.

Perceived Barriers Keep Many From Owning a Home

The U.S. housing market might be experiencing its best year in a decade in 2017 but misconceptions about mortgage and the home buying process were holding back many potential home buyers according to a recent blog published by Freddie Mac. According to the blog, that cited the fifth annual America at Home survey by NeighborWorks America, 74 percent adults and 84 percent of the millennials surveyed felt the homebuying process was complicated. The average millennial also thought the minimum down payment to buy a home was 21 percent and 70 percent adults felt they didn’t have enough money saved for a down payment. The survey, based on responses from 1000 U.S. adults and 500 millennials (adults aged 18-34 years), also revealed how much the burden of student loan debt is delaying homeownership. It found that in 2017, 29 percent of adults knew someone who delayed the purchase of a home because of student loan debt. Among millennials, 38 percent knew someone who delayed buying a home because of student loan debt. In addition, the survey found that relatively few consumers know where to find knowledgeable advice about how to qualify for a mortgage and buy a home with approximately 73 percent of all consumers and 62 percent of millennials saying they were not aware or were unsure about down payment assistance programs in their communities for middle-income homebuyers. Urging home buyers to separate myth from fact, the Freddie Mac blog stated that the average down payment among first-time homebuyers in 2016 was 6 percent and 14 percent for repeat buyers, with programs like the Freddie Mac Home Possible Advantage mortgage providing down payment options that were as low as 3 percent. “A great place to start is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership,” the blog noted.

Millennials Are Out of the Basement and Into Buying Homes

Homeownership in the United States peaked in 2004, when 69.2 percent of all U.S. households owned their dwellings. The rate bottomed at 62.9 percent in the second quarter of 2016, a level not seen since 1965. Let’s look at bit closer at each in turn: • Employment: As was reported this morning by the Bureau of Labor Statistics, the job market continues to improve. • Rents: Ever since the financial crisis, rents have been rising nationwide. Now, rents have caught up with buying, even for entry level properties. U.S. Census Bureau data show that homeownership rates are highest for those householders ages 65 years and over (79.2 percent) and lowest for the under-35 age group (36 percent). The state of housing is, to a great extent, being determined by millennials -- after moving out of their parents’ basements and forming households, the next step tends to be having kids. And, I suspect, this demographic is likely to continue being the central force in the real estate market for decades to come. Admittedly, ground zero in the financial crisis was the credit market. But credit and housing are inexorably linked.

Single-Family Rental Lease Expirations and Vacancy Rates Improving

Both lease expirations and vacancy rates among single-family rental securitizations showed continued improvement in December 2017, according to the latest data from Morningstar Credit Ratings, LLC. According to Morningstar, single-borrower, single-family rental lease expirations declined for the second consecutive month, dropping from 5.2 percent in November to 4.5 percent in December. This fits with long-established trends, as typically renters are less likely to move during the winter months. The retention rate for expiring leases dipped slightly, hitting 78.0 percent in November 2017 (which is the most recent data available, according to Morningstar). In spite of Houston topping the charts, vacancy rates in H-Town actually improved for two months straight, after six consecutive months of increasing vacancies. The MSA with the second highest vacancy rate for December was Nashville, Tennessee, which declined from 8.0 percent in November to 7.5 percent in December. The Morningstar monthly performance summary covers 24 single-borrower deals with over 88,000 properties. You can read the full report by clicking here. The event will feature top subject matter experts and skilled SFR practitioners leading discussion panels and training sessions that will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, mid-cap, and large investors, and new developments related to technology and professional services. You can find out all the details by clicking here.

FHFA extends deadline for industry to provide input on alternatives to FICO

Originally, the deadline for industry participants to provide feedback on the credit score issue was Feb. 20, 2018. The FHFA announced Friday that it is extending the deadline to March 30, 2018. “FHFA is seeking input on all aspects of a potential change from the current Classic FICO requirement, including feedback on the operational and competition considerations of continuing to use a single credit score model or allowing the use of more than one credit score model,” the FHFA said in its announcement. In its request for input, the FHFA laid out several different scenarios for how Fannie and Freddie could use credit scoring models in the future, including: Option 1 – Single Score: The Enterprises would require delivery of a single score –either FICO 9 or VantageScore 3.0 – if available on every loan. Option 2 – Require Both: The Enterprises would require delivery of both scores, FICO 9 and VantageScore 3.0, if available, on every loan. This option would require policy decisions about how to treat borrowers with a credit score from one provider but not the other. This option would require policy decisions on the length of time a lender or correspondent would need to commit to a certain credit score. Additionally, policy decisions would need to be made on whether to require mortgage aggregators and brokers to adopt a single score approach or whether to allow them to aggregate loans underwritten with FICO 9 or VantageScore 3.0 scores. Where a borrower did not have a credit score under the primary credit score, a lender would have the option to provide the secondary credit score. FHFA and the Enterprises would need to determine how a secondary credit score option would interact with each Enterprises’ automated underwriting systems’ ability to evaluate a loan application where the borrower(s) do not have a credit score and how to apply the policy for manually underwritten loans.

Foreign Investment in the U.S. Luxury Real Estate Market Reaches a New High

Foreign investments into the United States luxury real estate market have hit a new high, according to a recent market report from Beauchamp Estates in association with Leslie J Garfield & Co. According to the National Association of Realtors, 44 percent were all-cash purchases. “Data from the National Association of Realtors shows that just five overseas countries dominate investment into U.S. residential real estate, accounting for 50 percent of all transactions,” says Jed Garfield, president of Leslie J Garfield & Co. “They are Canada, the United Kingdom, China, Mexico, and India.” Perhaps most interestingly, the report found that around 40 percent of overseas buyer transactions for properties above $2,700 per square foot were concentrated in three major hubs: Miami, Manhattan, and Los Angeles. Miami Beach, North Bay Road, and Palm Beach ranked high among house hunters—but island destinations such as Fisher Island and Bay Point also proved popular because of the associated privacy and security. Gated or secure waterfront homes were the most sought after, and buyers generally purchased a home that was just over 13,000 square feet. “Miami is a leading hub for overseas buyers investing in U.S. luxury real estate,” says Gary Hersham, managing director at Beauchamp Estates. “Miami is extremely popular with high-net-worth buyers from South America—Colombians, Brazilians and Argentinians—with other key overseas buyers being the British and investors from the Philippines.” In Los Angeles, buyers snatched up properties in coastal areas such as Malibu or along the Pacific Coast Highway, as well as in ritzy neighborhoods such as Beverly Hills and Hollywood Hills West. “In Los Angeles, wealthy overseas buyers tend to purchase in gated communities and prefer mansions or family houses located on large plots,” says Hersham. “Our clients from Britain, France, and Israel who make enquiries about Los Angeles tend to work in the film industry, the media, finance, or tech sectors, and their Los Angeles property serves as both a holiday home, business base, and investment.” And in Manhattan, house hunters generally purchased an approximately 9,500-square-foot property on the Upper East Side, Tribeca, or Greenwich Village. According to the report, homeowners looked for duplexes, penthouses, and townhouses, and prioritized properties that were close to Central Park.


Want to buy a new home? Builders want to help

And a supply shortage can make it hard to find homes for sale within your budget. Experts say this news should make home shoppers, who seek positive signs in the real estate market, feel more confident. In January, the number of new construction housing units increased to an annual rate of 1.326 million. But the growth rates will be modest.” Homes are still affordable, despite the ending of historically low-interest rates and increasing prices. The illustration below shows the difference between buying a home today at 4.5 percent (with 20 percent down) and buying a home in 1981 at 18.75 percent with 20 percent down. So the median-priced home today is much more affordable than it was in 1981. Dietz says the NAHB is expecting around a 5 percent increase in single-family home construction in 2018. “And we can expect builders to build as much as possible as soon as possible.” Ailion explains that, for years, builders have focused on constructing higher-priced new homes. Home affordability calculator “Rising demand and low supply resulted in home prices rising 41 percent over the past five years. That’s up from eight percent a year earlier, per Dietz.