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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.

Advantages of Buying Turnkey Rental Properties

Advantages of buying turnkey rental properties are many especially for new buyers. Turnkey properties are also great real estate investment vehicle for investors who want a long term sustainable passive income without any hassle. A turnkey rental property is a good source of income to own because it provides a quick return on investment and a stable income with no work to be done by the owner of the property. For that you need to find reputable turnkey providers, which are real estate companies that find a property in a proven rental market with high ROI, rehab the property, and also place it in the hands of a local turnkey property management company. Advantages of buying a turnkey rental property is that the turnkey property companies do all the repairs before putting the properties out for sale. Another advantage of buying turnkey rental properties is that the turnkey investment companies also take the responsibility of finding qualified tenants. As an investor you need to put money into the best and most sustainable real estate markets, the markets in which property prices are steadily rising. Buying turnkey rental properties gives you an opportunity to expand into different real estate markets. It is always advantageous to not have all your turnkey rental properties in one given market. What more do you need from an investment?

You Think Your Landlord Is Bad? Try Renting From Wall Street

Her landlord, the Wall Street rental behemoth Invitation Homes, was raising her rent to $3,000 a month, an increase of more than $800 all at once. She’s one of hundreds of thousands of Americans who—whether they know it or not—are now renting from Wall Street. In Fulton County, Georgia, the study concluded, large firms with Wall Street backing were up to 19 percent more likely to issue eviction notices than smaller firms. Whereas rents for new tenants had gone up by 1.9 percent each year under the old owner, Starwood Waypoint suggested this could be increased to meet its corporate average of 6.2 percent. In a 2017 earnings call with investors, Invitation Homes reported that pet rents accounted for $1.5 million in additional corporate income. “This is taking the idea of housing as an investable asset class to a whole new level.” In just four years, single-family rental companies have initiated more than 30 securitizations backed by at least 100,000 homes, helping to resuscitate the market for private-label securities. Given the success of the market, some observers expressed dismay when Blackstone revealed in January that Fannie Mae was backing its next single-family rental securitization, to the tune of $1 billion. The NCST’s Gordon says she’s encouraged by the initial affordability numbers of Freddie’s deal, but wonders whether the rents will still be affordable in five years, given single-family landlords’ reputation for hiking rents rapidly. In California, where many Wall Street landlords report especially steep rent increases, tenants lack even the local protections afforded to apartment-dwellers. Soon after, the company called Barbee and told her that the initial increase was a mistake—and that she could remain in the house for another six months, at the current rent, due to her recent tragedy.

TRENDING

Millennials Are Skipping Starter Homes for Their Dream Homes

A new trend has begun to emerge. What’s a Starter Home? “Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000.” Finding Their Forever Homes Now A recent CNBC article revealed that there are many factors that delayed older millennials (ages 25-35) from buying a home earlier in their lives. As the dream of homeownership comes closer to reality, many millennials are saving for their forever homes. Diane Swonk, Chief Economist at Grant Thornton weighed in saying, “They rented for longer. Increased competition in the starter home market has also been a driving force in waiting to afford their dream homes. This has driven prices up and has led to bidding wars. Bottom Line If you plan on purchasing your first home this year, work with a local professional who can help you determine how much house you can afford. You may be pleasantly surprised. Members: Sign in now to set up your Personalized Posts & start sharing today!