Atlanta is a big city. And that means there’s something exciting hiding around almost every corner. From activities to parks and places to eat and grab a drink, you never know where your new favorite spot is waiting.
Take it from these local experts. Atlanta is full of hidden gems throughout the city. Today’s the day to find your next go-to spot.
1. The Edible Garden
As a hidden gem within a local favorite, you’ll find the Edible Garden inside the Atlanta Botanical Garden located beside Piedmont Park. Situated all the way at the back of the Edible Garden, behind rows of growing veggies and herbs, you can watch a free Garden Chef demo, with the price of admission, each weekend from May to October.
“Saturday’s and Sundays at noon, 1:00, and 2:00 p.m., we make garden-fresh inspired recipes for all to sample,” shares Megan McCarthy, the Chef behind Healthy Eating 101. “I am one of the Edible Garden chefs that does the demos and have been keeping this beautiful secret since 2010! Our fig trees and others keep on growing!”
There are a lot of parks throughout Atlanta, many of which are dog-friendly. “One of our favorites,” says Laraine Wilkinson, Owner of Two Chicks and a Pack, “is East Palisades at Whitewater Creek, which is kind of an undisclosed dog park at the bend of the Chattahoochee River off Mt. Paran Road. It is an area where friendly and trained, off-leash dogs can go to and play with other dogs and humans. But, for those not off-leash trained, going on a weekday is best.”
Hidden within the Atlanta suburb of Sandy Springs, East Palisades is one of the city’s most scenic spots with a small bamboo forest you can hike through.
Also within Sandy Spring’s borders, you’ll find the Cochran Shoals Trail within the larger system along the Chattahoochee River. This particular trail is a local favorite since it’s half covered in shade for a more comfortable walk.
3. The food in Reynoldstown
Source: facebook.com/staplehouseATL
Fully tapped into Atlanta’s thriving food and drink scene, Biggerstaff Brewing Company owner, Sarah Davies has a couple of suggestions for can’t-miss hidden gems in Atlanta’s Reynoldstown neighborhood.
“For a casual experience, my go-to is El Tesoro. The food is delicious, the vibe is chill, and the drinks are great. For an elevated experience, my go-to is Staplehouse. The food is divine and the patio is magical.”
For some vegan fare, Anmarie Smith of DV Photo Video suggests another Reynoldstown staple, Chi Chi Vegan. She considers it a great lunch spot and suggests the vegan tacos.
One of many historic districts on the east side of Atlanta, Reynoldstown is full of character and community. Its location provides easy access across the city and is a safe and walkable neighborhood.
4. Trail of the Muscogee
Source: C Brown Photo
Tucked away in Stone Mountain State Park, the Trail of the Muscogee is ideal for a quick getaway according to local photographer Cindy Brown of C Brown Photo. “It’s a one-and-a-half-mile loop trail that winds through a wooded area (where we’ve seen deer) and beside a lake.”
This Stone Mountain Park hidden gem is also referred to as, “the lake trail” because of its pristine beauty. With an easy path through native stone and hardwoods, this particular trail is great for hikers of any level.
Stone Mountain as a whole is a local favorite. “I love walking up Stone Mountain,” says Erica Thomas, Editor-in-Chief and Founder of Eating with Erica. “It’s a great workout and provides even better views. It’s truly the best of both worlds, burning calories while taking in the beautiful views of Georgia. I love to visit first thing in the morning.”
5. The Works
Source: facebook.com/theworksatl
“One of my favorite go-to spots is The Works in the Westside neighborhood of Atlanta,” says Leslie Andrews of Leslie Andrews Photography. This mixed-use spot combines local culture, food, drink and retail shops. “I love it because it’s right by my house and it has so many options of places to eat and drink. You can grab your food and sit outside on the patio in the sun or you can head over to the park area to catch some live music.”
Andrews knows first-hand the advantages that come with finding a home on the Westside. This vibrant area is one of the many examples around Atlanta of the culture and beauty that result when history and heritage meet.
6. Arabia Mountain
A little outside the perimeter, Arabia Mountain in Lithonia has great lakes and amazing wildflowers that bloom throughout the year.
To get started on at least one of the area’s trails, you’ll pass the AWARE Center, which rescues and rehabilitates wild animals. You can hike and help save local wildlife all at once.
7. The East Side
Source: facebook.com/RevolutionDoughnuts
Popping up again with some additional East Side recommendations, Anmarie Smith of DV Photo Video also suggests you swing into Revolution Doughnuts for great vegan donuts and tasty coffee. You can find Revolution Doughnuts in Decatur and Inman Park.
You can also head to The Eastern, an up-and-coming venue in Reynoldstown, for a fun night out. “There is not a bad seat in the house and it has beautiful acoustics. LOVE this spot.”
For Michael Diane, Atlanta Wholesale Manager at PERC Coffee, a favorite East Side location, that’s perfect for a date night, is Gaja in East Atlanta Village. “It has really good Korean Food, but its cocktail menu is one of my favorites in Atlanta, by far.”
Other Atlanta gems to enjoy
Source: facebook.com/poorhendrix
The few places already listed by our experts only skim the surface of what Atlanta has to offer. Providing a few more suggestions, Diane first takes you to Summerhill.
“For a cute afternoon snack I love stopping by Big Softie to get some amazing soft serve and it’s next door to Little Tart Bakeshop,” he shares.
For an actual meal, and a few beverages, Diane scoots over to East Lake and visit Poor Hendrix. This is a fun gathering spot to meet up with friends.
When you’ve had enough of the city and its immediate neighborhoods, don’t forget to extend your reach into the suburbs. Hidden gems abound throughout.
A-Town is calling
Feeling tempted to venture out into Atlanta and explore an area you might not go to regularly? Even if it is a familiar spot, like the Botanical Gardens or Stone Mountain, you may be surprised at what you can find if you take a closer look. It’s what makes Atlanta such a magical place to live, even if you’re new here, and such a fun city to explore.
Lesly Gregory has over 15 years of marketing experience, ranging from community management to blogging to creating marketing collateral for a variety of industries. A graduate of Boston University, Lesly holds a B.S. in Journalism. She currently lives in Atlanta with her husband, two young children, three cats and assorted fish.
You may have heard the good news: In recent weeks, several mortgage and real estate brokerage execs have exclaimed that we may have already reached the bottom of the market. For prospective home buyers and sellers, that could mean a gradual decline in mortgage rates, which would unlock inventory and—dare I say—sales activity.
But there are still ultra-competitive markets in America where those conditions will simply be offset by rising prices.
You may have seen a picture making the rounds on Housing Twitter and LinkedIn recently. It shows about 50 people waiting in line at an open house in Mount Laurel, New Jersey. The house ended up having five offers and sold for $50,000 over ask.
In much of suburban New Jersey, where new construction is rarer than cheap Bruce Springsteen tickets, the pandemic-era conditions never left. There’s still plenty of money and demand emanating from New York City and Philadelphia and very little inventory. I mean very little inventory.
In New Jersey, the median list price last week of a single family home checked in at $565,000, according to Altos Research data. In May 2020, it was $425,000. Single family inventory last week fell to 8,556; three years ago it was 21,874.
This has serious consequences for real estate agents and loan officers alike, since it’s usually a zero sum game. You land the client and get a commission, or you don’t and you get bupkis.
“I sent pre-approvals two-to-three times a day, and then there are 30-plus offers on the homes and I virtually never get contracts,” one veteran loan officer told HW in late March. “One home recently had over 60 offers! Incredibly frustrating, and I know and have spoken with multiple $100 million-per-year originators/friends who are writing nothing here as well.”
If mortgage rates were to fall into the 5% range and stay there for a period, I think we’d see some supply shake loose in New Jersey. But for markets like suburban New Jersey, the demand will still vastly exceed the supply for years to come. There’s simply no easy or fast way to overcome two decades of underbuilding, NIMBYism and poor housing policies. It’s great for existing homeowners whose properties become more valuable due to scarcity. But it’s bad for everyone else, agents and loan officers included.
According to Altos data, the housing fever is even higher in Rhode Island, Massachusetts and Connecticut. In Connecticut, single-family inventory has dropped 80% in the past six years while prices have increased by 44%, according to data from the Federal Reserve Bank of St. Louis. And this is just the Northeast – try finding a home in Los Angeles for under $1 million.
What’s it like in your neck of the woods? Share your story with me at [email protected] and we’ll look at supply and demand in your market.
DataDigest is a newsletter in which HW Media Managing Editor James Kleimann breaks down the biggest stories in housing through a data lens. Sign up here! Have a subject in mind? Email him at [email protected]
Wondering when the best time to buy a home is? And the worst time? Well, thanks to data science, we no longer have to guess whether it’s fall and winter, or spring and summer.
I’ll save you the suspense: the very best time to buy your dream home is late summer, namely August and September, this according to a new study from real estate listing website Zillow.
Apparently prospective home buyers will find the most home inventory and a greater number of price cuts during these temperature-hot months, giving them better odds of finding that perfect home.
This means it might be easier to negotiate prices and perhaps even snag a lower price if the property stays on the market for a prolonged period of time.
Inventory Remains a Problem
An inventory glut in late summer
Could be the perfect time to buy a home
Because home sellers will be getting desperate
And there might be fewer competing buyers at that time
As you probably know (if you’ve been house hunting), inventory is scarce. It’s slim pickings out there and hasn’t gotten any better, despite predictions telling us otherwise. They were wrong about mortgage rates going up too…
Overall, inventory is off 5.3% from a year ago, meaning you’ll have to buckle your seatbelt and prepare for another tough year if you’re in the market to buy a home, or getting ready to be. Real estate investing is also getting a lot less attractive, and not so easy.
Conversely, if you’re a seller, you don’t even have to clean your house, make the bed, or mow your lawn – it’s already sold!
Okay, maybe you should do those things to fetch a higher price, but the seemingly endless seller’s market persists.
However, there are some house hacks (pardon the awful, awful buzzword) to increase your chances of landing your dream home.
Zillow found out that in most major metros, the month of August featured more for-sale listings than any other month during the year.
For example, last year in Los Angeles there were about 8,000 more homes for sale in August than in April. The total number of homes for sale increased from 26,000 to 34,000, a major 31% increase.
The same trend was found in many other metros, from Detroit to San Francisco, though not all of them.
However, it wasn’t just inventory that improved. Competition also went down in late summer, so even if fewer homes were on the market, there were fewer buyers chasing them.
Conventional logic tells us that many would-be buyers want to get situated well before summer ends to ensure they can get their kids enrolled in the new school. They may also be taking family vacations during late summer.
It’s also just plain hot in some parts of the country, which might affect buyer traffic and seller motivation, regardless of market conditions.
Price Reductions Most Common in Late Summer
As time goes on and desperation grows
Home price reductions might become more prevalent
Which leads to opportunity
And the potential to negotiate even lower!
With more homes and fewer prospective buyers comes price reductions. After all, the business law of supply and demand will dictate a homes price, and if fewer people are chasing more homes, the sales price must down come.
Zillow discovered that 15.1% of active real estate listings had a price cut in August, significantly higher than the 12.8% of homes in April.
That increases your chances of finding a home on sale, assuming the starting points (listing price) were relatively similar. September was also a good month to find a deal, with 14.3% of homes on sale, so to speak.
Of course, this wasn’t the case everywhere, with cities like Ft. Lauderdale seeing pride reductions drop in the six months from March to September.
By the way, if you’re wondering when it’s the best time to sell a home, it’s supposedly early May, per Zillow, though Redfin argued winter was the best back in 2013. Of course, for a lot of buyers and sellers, the sale and purchase have to happen concurrently.
The Best Time to Buy a Home Is a Moving Target
Just remember that the perfect time to buy isn’t set in stone
Nor will it be the same in every market nationwide
It can change depending on what’s happening in the economy
And the local housing market in question
Like anything else, the best time to buy (or sell) is really dependent on a number of factors that can’t be summed up by one datapoint.
The old adage says real estate is local. Today, you can add hyper to the front of local. Real estate markets are different, plain and simple. One neighborhood might be cold with days on market creeping higher and higher while a nearby pocket or street is on fire, with bidding wars the norm.
That’s why things like median sales, census bureau data, nationwide home inventory, and what the Federal Reserve is doing might not matter all that much, if at all. Who cares what the median sales price is in Orange County if you live in LA?
There’s also the practicality of timing a buy, or even a home sale. Buying and selling isn’t only dictated by price. It’s usually driven by life events, which tend not to happen at the ideal time.
For home buyers, the process is a long one that isn’t just decided on one night. You can’t say, “Honey, we should buy a home this August.”
Or, “I will sell my house in April.” That might mean you need to buy a home in April too, which could be the worst time because everyone else is out house hunting too.
Nope, it takes lots of time and research, touring, open houses, ups and downs, close calls, and more to finally snag that right property, even if it happens to take place in the worst month.
Zillow even says the average buyer spends more than four months shopping for a home, and makes at least two offers along the way.
I feel like it’s pretty rare to make one offer on one home and have that be the end of the story. Sure, it may depend on the housing market (and the buyer), but nowadays it seems you have to strike out once or twice before getting a hit.
Sometimes that could be walking away during the home inspection period, while other times you might get outbid or be unwilling to offer more than someone else looking to buy.
Whatever the case, odds are good that the home buying process will take many, many months, if not years. So if you happen to buy in August or September, great! You may have found a property with a price cut. The same might be true even if it drags into the winter months.
But telling your significant other that it’s prudent to wait until later this year probably won’t fly. You’ll at least want to get the ball rolling as soon as possible.
On top of all this, there’s a good chance Zillow will tell us that the best time to buy is a different month after more data is analyzed next year. So it’s probably best to chalk this one up to interesting, but not words to live by.
Be Proactive to Get a Lower Price
Stay on top of your own finances
While tracking the real estate market
To ensure you get approved for a home loan
At the best possible price
A smarter move might be focusing on your finances to land a better mortgage rate, which can lower your homeowner costs at any price point.
For example, instead of worrying what month it is, or avoiding the worst months to buy, worry about your three credit scores. Make sure they’re all in tip-top shape to avoid unnecessary pricing adjustments on your home loan.
Also take the time to shop mortgage rates with different lenders instead of going to one bank, broker, or credit union. And compare loan programs.
These two steps alone can make a huge difference in what you pay each month to own your home, no matter the sales price at closing.
While you’re at it, choosing the right real estate agent is also key. Find one who knows the art of negotiating to ensure you get a good deal no matter what the month.
Some real estate agents are afraid to make lowball offers, while others are willing to take chances when they see opportunities. This is another factor to consider.
Along those same lines, it’s important to get pre-approved beforehand and show the sellers you’re a serious candidate.
It’s not unheard of to show them you’ve got assets available for a large down payment to get your offer accepted, even if there’s a slightly higher offer already submitted.
Lastly, make sure it’s a good time for you personally. Are you ready to become a homeowner? Is now the right time mentally and financially? Did you do your research, set aside funds for a down payment and closing costs, learn about mortgages, etc.?
Using these common-sense tips, you can get a good deal on a home during any month of the year, even in a red-hot market, and even when it’s supposedly the worst time to buy.
LGBT couples face unique questions when shopping for a house. It is important to be happy with the community you’re in and the legal protections you’re granted.
Here are a few things to consider as you’re going through the process of finding a home:
Research legal protections: Lambda Legal is a helpful resource for learning legal protections that, in particular, affect LGBT people. Look at issues like: marriage status, adoption rights, workplace protections, hospital visitation rights, and school anti-bullying laws to get a holistic image of your rights
Read reviews: Do an internet search for LGBT community centers and businesses. Overall, search for the indicated LGBT population in order to get a sense of how accepting the community might be.
Interview school administrators: Meet with an administrator at prospective schools to assess the LGBT acceptance and safety climate of a local school. Be sure to ask questions like,
● How often do you have anti-LGBT related incidents?
● What are you doing to promote acceptance of nontraditional families?
● If a student bullied my child because of his/her family background, how would you handle it?
Legally define ownership: If something happens to you, who would be next to inherit this new property? Meet with a local attorney and make sure your partner is legally protected to stay in the home you’re purchasing, even if he or she isn’t the buyer.
We hope that these tips help you to find a state and neighborhood that work well for you and your family. Once you’ve found a neighborhood that works for you, call a CENTURY 21® Agent who can help you find your home!
Get yourself a place in the nation’s capital with the perfect outdoor spot.
There are so many great things to see in Washington, D.C., from the majesty of the monuments to the unique architecture of the everyday buildings, D.C. is filled with opportunities to soak up the sun and enjoy the great outdoors.
To ensure your search for a Washington, D.C. apartment delivers the best results, make sure you check out any and all outdoor spaces before signing your lease. A quality on-site garden or courtyard can take your time in D.C. to the next level and truly make your apartment feel like home.
To help you feel inspired, the 10 amazing apartments featured below have been hand-selected as having some of the best courtyards and gardens in the D.C. area. Find your favorite and fill out an application today.
Source: Rent. / Gables Dupont Circle
While the full outdoor space at Gables Dupont Circle is big and beautiful, this little garden-esque spot is a real hidden treasure. Fresh herbs creep up the stone flower bed, while other greenery surrounds the space. Nearby seating, under stringed lighting, gives this space a special ambiance as well.
Set in the quieter Northwest Washington neighborhood, this area boasts spectacular views while also being super walkable. It’s just steps away from great galleries and museums as well as some of the city’s best restaurants, delis, cafes and coffee shops. To keep that outdoor vibe going, there’s no shortage of parks nearby either.
Source: Rent. / The Lansburgh
An absolutely stunning courtyard awaits at The Lansburgh. This space has everything, including an eagle statue. Vibrant greenery rings the multi-tiered space with a combination of trees and bushes. At the far end, a decorative pergola also offers some shade. You’ll find a lovely fountain and plenty of seating throughout this amazing area as well.
Living within walking distance of four Metro stations makes it easy to access all D.C. has to offer from this central location. Within the Downtown – Penn Quarter – Chinatown neighborhood itself, you’re also close to just about everything, from entertainment to restaurants to historic monuments.
Source: Rent. / AVA NoMa
The courtyard is a busy place at AVA NoMa, but each section has its own special flair. For those who love outdoor games, this area features two ping-pong tables. For those who want to chill, there’s also a nice outdoor lounge with a fire pit. There’s even a small dog park for you and your furry friend to check out. Modern, metallic touches mix with hardscaping and slender trees to create a nice look and good vibes.
Providing you with easy access to downtown, finding a home in H Street-NoMa must mean food is on your mind. This is thanks to the neighborhood’s Union Market, which is within walking distance from AVA NoMA. Here, over 40 local vendors show off their culinary creativity to satisfy any palate.
Source: Rent. / Capitol View on 14th
Even if it’s not huge, most people can use a Zen garden in their lives, especially one with a trickling fountain. At Capitol View on 14th, this little pocket of relaxation comes with shaped greenery, nice seating and a multi-tiered fountain trickling down into a tranquil pool. The sound will instantly relax you and let you transition from your busy day to a chill evening.
The rest of the amenities in this Northwest Washington community don’t disappoint either. First, there are the views. You can see the Capitol building as well as other monuments from the rooftop, which is also where you’ll find the pool. There’s a great open-air kitchen up there as well and a year-round fireplace. Between these two areas, it may be hard to find a reason to come inside when the weather is nice.
Source: Rent. / Camden South Capitol
Bright yellow umbrellas add a happy pop of color to the courtyard at Camden South Capitol. They also ensure you’ll always have a shady spot to hang out in if you need it. Underneath one umbrella is a great lounge space with ample seating. The other shades the outdoor dining area, should you want to dine al fresco. This partially grassy area is also nicely landscaped.
For sports fans, living in Southwest – Waterfront has the added benefit of keeping you close to the action. You can easily head to Nationals Park for some baseball and Audi Field for some soccer. If you’re already out and exploring, make sure you head down to the waterfront for some excellent views of the Potomac River as well.
Source: Rent. / Camden Noma
Looking down onto the courtyard at Camden Noma is the best way to see just how impressive it really is. Altogether, this is a huge space, with sectioned-off areas for chilling, playing, food prepping and relaxing. A close-clipped lawn meets bushy patches of robust trees to create an inviting space whether you’re playing table tennis or grabbing a lounge chair to curl up with a good book.
You’ll find Camden Noma in the H Street – NoMa neighborhood. It’s a stress-free, luxurious community that uses modern elements to help residents feel right at home. Living here puts you near the highway, a number of parks, shops and so much more, making it an ideal spot for young professionals.
Source: Rent. / The Flats at Dupont Circle
With green space and a brick walkway both contained in the courtyard, The Flats at Dupont Circle has ideal hangout areas for everyone. For those who want to grab a lounge chair or slide into a hammock, stick to the manicured green space. For friends who want to gather and socialize, grab a cushy seat on the fringes. This is also where you’ll find the grill and outdoor eating space.
Another Northwest Washington community, living here means the luxury extends far beyond the courtyard to include an outdoor pool with sundeck and a state-of-the-art fitness center. There are even personal TV’s at each exercise machine and a separate pilates/yoga studio. The clubroom takes the fun from the courtyard indoors with its TV and kitchen to keep things popping.
Source: Rent. / Waterside Towers
For the perfect garden to walk through, make a date to explore Waterside Towers. The winding green space is full of grassy spots and excellent landscaping. Trees, bushes and small plants come together to make this whole space pop, giving you an outlet for a relaxing stroll whenever you need it. Benches throughout give you the opportunity to sit and absorb the natural beauty all around as well.
This Southwest-Waterfront community also has an impressive pond right nearby, complete with sprouting fountains, mature, bushy trees and an easy path to walk on. Living here also puts you close to all the waterfront fun beside the Potomac River where there are great restaurants and shopping right at The Wharf.
Source: Rent. / AVA H Street
A roaring fire draws the eye into the courtyard at AVA H Street. Covered to keep the flames contained, this funky and modern fire pit will keep anyone warm on a cold D.C. night. Part of the area’s lounge space, the courtyard is also where you’ll find a dual grilling station with a built-in bar and eating space. Additional groupings of seats enable a variety of large groups to gather here and enjoy themselves simultaneously.
A busy area, full of great bars and cool places to eat, Near Northeast is a neighborhood that combines culture and history with lots of shopping and fun. Living here, you’re close to the Smithsonian’s National Postal Museum, the Atlas Performing Arts Center and plenty of shopping. It’s also worthwhile to swing by the famous fountain in Columbus Circle for a photo op.
Source: Rent. / Alban Towers
A classic building with access to a wonderful green space, living at Alban Towers mixes old and new together in just the right way. The park-like garden features a rectangular strip of grass surrounded by a pebbled hardscape. Mature and lush trees line up around the edges to create a calming and isolated space for a little meditation. Additional landscaping keeps the area green and happy.
Keeping with the green theme of moving out into the Northwest Washington neighborhood, this community is close to Rock Creek Park. Another great outdoor space to explore, this 1,7540-acre city park provides a peaceful refuge as well with more beautiful trees, recreational activities and even a little wildlife. You’ll also find varying historical remnants from Civil War fortifications to colonial houses.
Grab an apartment with one of the best gardens in D.C.
There are so many special facts locals know to be true about Washington, D.C., one of which is knowing how to pick the right place to live. You need the right combination of amenities and location, and that should always include a usable outdoor space. No matter where you live in Washington, D.C., you can count on a sweet courtyard or garden if you pick an apartment from this list.
Featured Image Source: Rent. / The Flats at Dupont Circle
The mortgage space is unique from a lot of other businesses in that the customer isn’t always right.
And special offers are typically few and far between. This is mostly because of the complexities involved with closing a home loan.
For example, it’s pretty easy to find a promo code when booking a hotel, or snag a sign-up bonus for opening a credit card.
But when it comes to a home loan, you typically aren’t offered much other than perhaps speedy service, or a money-back guarantee if things go wrong and it’s entirely their fault.
Price-matching is also pretty hard to come by, though Chase has just launched such a deal.
Get $200 If Chase Can’t Match or Do Better
In honor of National Homeownership Month, Chase has rolled out some new offerings in their home loan department.
This includes homebuyer education resources, a Closing Guarantee, and as mentioned, a price-matching pilot program.
The way it works is fairly straightforward – Chase will give home buyers $200 if they can’t match or beat a competing loan offer.
To be eligible, you need to complete an initial purchase loan application with Chase by September 30th, 2023.
And you must provide an official Loan Estimate (LE) from another licensed lender that includes the same loan term, purpose, product, and loan type.
Assuming Chase can’t match or beat it, they’ll provide you with $200 within 30 days of withdrawal of the Chase application.
At the moment, this is only available to customers purchasing properties in the states of Arizona and Ohio.
And the following counties in Texas: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller.
It’s also only valid for customers who hold an active Chase personal deposit account opened on or before May 1st, 2023.
Your loan scenario has to be pretty vanilla, meaning no investment properties, 2-4 unit properties, second homes, home equity loans or second mortgages.
Chase $5,000 Closing Guarantee and Lock and Shop
Aside from the new price match offer, Chase has a Closing Guarantee that provides $5,000 if they’re unable to close a home purchase loan on time.
As always, you need to hold up your end of the bargain by getting income/asset documents and signed disclosures to Chase in a timely fashion.
And the contract closing date must be at least 21 calendar days after receipt of a completed home loan application for conventional loans (30+ for FHA/VA).
Of course, delays caused by third parties or due to force majeure events won’t result in compensation.
This is kind of one of those things where if you’re using Chase anyway, keep an eye on it as you might be compensated if they don’t close on time.
Additionally, Chase launched a new “Lock and Shop” option that lets you lock in your mortgage rate for 90 days before finding a home to buy.
That way you have assurances that your mortgage payment won’t go up if mortgage rates unexpectedly rise during the home search.
And there is no upfront fee for this option when using Chase Homebuyer Advantage, which is their conditional letter of approval you can obtain upfront.
You get 60 days to find a property to purchase, and a one-time float down option will be available if mortgage rates improve during that time.
This can be combined with the Closing Guarantee as well.
Chase Offering Grants of $2,500 and $5,000 in Select Areas Nationwide
Lastly, you can search for down payment assistance and other grants via Chase’s Homebuyer assistance finder.
Simply enter an address and it will show you matched programs that might be available.
In select areas, the Chase Homebuyer Grant provides $2,500 or $5,000 toward a new home purchase.
The company notes that a $5,000 grant is available to eligible home buyers purchasing a property in majority-Black and Hispanic neighborhoods throughout the United States.
Chase was the fourth largest mortgage lender in the U.S. in 2022, per HMDA data. They funded about $99 billion in home loans last year.
Only three lenders originated more mortgages, including United Wholesale Mortgage (UWM), Rocket Mortgage, and Wells Fargo.
As always, be sure to look at the big picture when comparing mortgage offers. This includes the interest rate, lender fees, and the company’s overall competency and service.
It’s almost mid-December, which means it is time for another round of mortgage and real estate predictions for the upcoming year.
I think it’s safe to say that 2021 has been another stellar year for both the mortgage industry and the housing market.
But it’s going to be hard to top or even match what we’ve experienced this year in terms of mortgage origination volume and home price gains.
However, the party might not be over yet, with additional home price gains on the horizon due to similar factors in play.
Let’s see what 2022 might have in store as we once again look into the crystal ball.
1. Mortgage rates will go up, but only slightly.
Experts have been calling this for years to no avail. We have been told year in and year out that the low mortgage rates are leaving the station.
But year after year, they remain. In 2022, I do expect them to rise somewhat, but not by a meaningful amount.
Sure, your 30-year fixed rate may go from 3% to 3.5%, but that’s not a huge jump. And any 30-year fixed in the 3s is generally very favorable.
It will put pressure on prospective home buyers who also have to grapple with rising home prices and a lack of inventory.
And it will certainly dent mortgage refinance demand, as most existing homeowners have already locked in a lower rate.
However, as I said in my 2022 mortgage rate predictions post, there will likely be opportunities during the year to snag a very low mortgage rate.
Why? Because the economy continues to be a bit of a mess and we’re still sorting out COVID. Until we put that stuff behind us, interest rates could swing in both directions.
2. Home prices will continue to rise a lot
Don’t be fooled by the old mortgage rates up, home prices down fallacy. There’s not a negative correlation, despite what everyone plainly assumes.
Both can go up at the same time, and that’s exactly what I expect to happen in 2022. Granted, mortgage rates will probably only rise slightly, while home prices will continue to surge.
For some reason, a new year gives folks new hope that a trend will simply come to an end.
But why would home prices just stop going up because it’s a new calendar year? The answer is they won’t.
As I’ve said before, the same fundamentals that have been at play for some time, continue to be in play.
There’s a severe lack of inventory and a surplus of would-be home buyers out there. It doesn’t take a genius to figure out what happens with prices.
When there’s a shortage of something people want/need, a premium must be paid until production ramps up.
Unfortunately, production (new home building) is still way behind and won’t catch up for a while.
In the meantime, expect more of the same, and higher 2022 home prices across the board.
The only difference is that estimates are all over the place, with some calling for just a 2.5% increase (CoreLogic) and others saying 11% (Zillow) or even 16% (Goldman Sachs) .
Personally, I’m bullish and going with the higher figures out there, but recognize gains will probably be lower in 2022 than they were this year.
3. Cash out refinances will finally get hot
Housing pundits have been talking about the massive pile of collective home equity we’ve been sitting on for years now.
And it has only grown even larger since then, with equity levels the highest on record.
In short, American homeowners have a ton of equity in their properties that is ripe for tapping via a cash out refinance or a second mortgage, such as a HELOC.
But we have yet to see a massive cash out boom like the one experienced in the early 2000s housing market.
I expect cash out refis and HELOCs to have their day in the sun in 2022 as more and more homeowners realize how much their properties have appreciated.
Per Freddie Mac, about 42% of refinances resulted in cash out this year, which is up a bit from prior years, but nowhere close to the 80%+ share seen in 2006 and 2007.
Despite slightly higher mortgage rates, it may still be worth unlocking this valuable equity to pay for upgrades, college tuition, and other expenses.
After all, a 3% 30-year fixed rate is still phenomenal, and many homeowners can take out a large sum of money while keeping their loan-to-value (LTV) ratio very low.
And you can expect mortgage lenders to aggressively pitch this product now that rate and term refinances have mostly been exhausted.
4. The bidding wars will remain (and may even worsen)
It won’t get any easier buying a home next year. Even if mortgage rates are slightly higher, this won’t “bring prices down to earth.”
I keep hearing that line and it just doesn’t make any sense. Financing has never been the problem here. It’s always been a lack of supply.
And there will continue to be a lack of supply well into 2022, so why should competition be any less?
If anything, I could see more desperation fueled by these expected higher interest rates as buyers won’t want to miss out on their low rate too.
If you think about the last few years, at least mortgage rates were rock bottom. Now that you’ve got to worry about a rising rate and finding a home, the panic could be even more pronounced.
As always, prepare yourself adequately, start looking for a home immediately, and be aggressive if you want to win the bidding war.
Oh, and make sure you use an experienced real estate agent who knows how to get the job done.
5. Home sales volume will be flat or even lower next year
While Redfin believes new listings will hit a 10-year high next year, I’m not so sure.
As much as there is motivation to sell a home due to sky-high asking prices, there remains the dilemma of where to go next.
Sure, you might be able to move to a different state, but those “cheap states” aren’t so cheap anymore.
At the same time, supply chain issues and a lack of workers is making it hard for home builders to ramp up supply of new homes.
Collectively, this will make it difficult for home sales to increase next year, as much as we all want to make a mint selling our homes.
This also reinforces the idea that home prices will continue to go up, and that the housing market will remain super competitive.
That being said, it will be a very lively housing market in 2022, just not one that necessarily sees a lot of growth.
6. Home buyers will continue to flock to new states
Yes, the cheap states aren’t so cheap anymore. But that won’t stop people from getting out of town.
Many young, prospective home buyers have been priced out of their local markets in California and other hot spots.
This, combined with the work-from-home new normal (sprinkle in some politics), will fuel a continuation of migration seen in recent years.
This means more folks from the Golden State will make the move to nearby states such as Arizona, Idaho, Nevada, Texas, and Utah.
While more affordable for them, it will exacerbate those local markets and make them more expensive for the people who already rent there.
Some of the hottest housing markets of 2022 include Salt Lake City, Utah, Boise, Idaho, Spokane, Washington, Indianapolis, Indiana, and Columbus, Ohio.
Basically any metropolitan area that was/is considered cheap and desirable will be less so next year as the out-of-state home buyers storm in.
So no matter where you happen to be, expect a fierce seller’s market.
7. First-time home buyers will purchase a second home or investment property (first)
This is an interesting one that I’m borrowing from Zillow because it’s seemingly odd, yet kind of savvy. And so 2021 and beyond.
Typically, a first-time home buyer will purchase a home to live in nearby where they work.
But because the real estate market is so hot and in such short supply, high-earning, cash-rich Millennials and Gen Zers may actually buy a second home or investment property instead.
The thinking is that they can get in on the real estate market by making an investment, even if it’s not in their overpriced backyard.
For example, a well-earning Gen Zer who lives in Santa Monica that may be priced out there could purchase a more affordable second home in Phoenix, Arizona, or an investment property in Las Vegas, Nevada.
Of course, this isn’t necessarily for the faint of heart, and this is exactly the type of thing that leads to trouble down the road.
But as long as mortgage lenders don’t get too careless with underwriting standards, it doesn’t signal the start of a housing crisis.
It does tell you just how crazy real estate has gotten though.
8. Home buyers will return to the city
While the suburbs have been hot in our post-COVID-19 world, I do believe more buyers will start to consider the city life again.
We will get through this pandemic, and once life returns to mostly normal, lots of folks will wish they owned in an urban center.
Prices in many once-hot areas close to lots of cool restaurants, bars, etc. have been deflated, but I expect that to reverse course in 2022.
The urban living trend isn’t going to disappear, even if more people work from home, or desire abundant outdoor space.
So look out for condo prices to see more price gains in 2022 and beyond, and play catch up with single-family residence gains.
There’s already proof in data here – Redfin noted that users filtered searches to single-family homes only (excluding condos/townhomes) in just 28% of searches in September.
That was down from a high of 37% in July 2020, when living in a city seemed unthinkable.
Condos also tend to appreciate the most at the tail end of a housing boom, which we could be approaching, so it all kind of makes sense.
9. There will be more layoffs, closures, and mergers
While there is some hope that cash out refis and home purchase loans will keep mortgage volumes afloat, it won’t be enough for all mortgage lenders out there.
For example, Freddie Mac is forecasting $2.1 trillion in home purchase origination in 2022, up from $1.9 trillion this year.
But also expects refinance origination volume to fall from $2.5 trillion to $995 billion. That’s gonna be a problem for the shops that specialize in refinances.
Ultimately, total volume dropping from $4.5 billion to $3 billion will be an issue and there’s no way around it.
As a result, you can expect more mortgage layoffs, similar to the Better.com layoffs, along with some outright closures.
I also believe there will be more consolidation in the fragmented mortgage market, with bigger banks and lenders swallowing up smaller ones.
10. The housing market won’t crash in 2022
I already said home prices will go up, but I’ll reiterate that the housing market won’t crash in 2022, either.
There is a large group of people who believe the housing market is due for a correction, mostly just because home prices have gone up a ton.
Sure, it’s easy to raise eyebrows these days when looking up what your house is worth, or your neighbor’s.
But that alone isn’t enough to make them reverse course, especially when there is a continued, historic lack of supply.
Additionally, mortgage lenders have yet to return to the loose underwriting that dominated the space in the early 2000s, and ultimately created the mortgage crisis.
For me, that means another year of strong housing appreciation, and another year without a housing market crash.
At the same time, it does mean we will be one year closer to a crash, which as history tells us, is inevitable.
Home mortgage rates are lower than they’ve ever been right now.
A lot of people are thinking about refinancing their home in hopes of dropping their rate and payment significantly.
I’m one of those people.
If you’re in the middle of the process of trying to find a good rate on a mortgage, one thing you’re probably doing is staying on top of your credit score. If you want to get the best rate possible it’s important to keep tabs on your credit score and make sure that it’s as high as possible because if it’s not, it can cost you thousands of dollars in interest via a higher rate.
Not sure what a good credit score is?
To get the best possible rate you’ll most likely need somewhere in the range of a 750-850 credit score.
Use The Credit Sesame App To Check Your Credit Score
There are several ways to check your credit score for free right now, and one of my favorites is Credit Sesame.
I wrote a review of Credit Sesame a while back where I gave several reasons why I like using their site, including:
Free credit score! You can get your Experian credit score for free once a month. Better than paying to get your FICO score!
You can check your score regularly: Since they update your score every month, you can check it every month and see how your credit trends using their pretty graphs.
Better mortgage options: Credit Sesame will look at your loans and search for better deals. You can apply for a new mortgage or a refinance right through their site.
Now with the new Android credit score app from Credit Sesame, it’s easier than ever to stay on top of your credit score.
Credit Sesame Mobile Credit Score App
The new Android Credit Sesame credit score app is a great way to stay on top of your credit while on the go (The iOS version has been released for a while).
If you’re in the middle of trying to refinance like we are, it’s an easy 2-3 click process to check your credit score before you send in a mortgage application. Here’s a quick look at the app itself on my Android phone:
So what are some things you can do within the app? Let’s take a look.
Check Your Credit Score On The Go
The first and main thing you can do with the app is check your credit score on the go.
You just open the app, login with your 4 digit pin or fingerprint login, and then click on the “credit score” button.
Within the app you’ll see what your credit score is, the last time your credit score was updated (it updates once per month), and then it will show you a trending graph showing you how your credit score has trended the last few months.
If you’ve been making changes to try and improve your score, this would be a good place to go and see if the changes are having an effect.
The credit score section will also show you how much of your credit you’re utilizing, and show you the trend on that as well so you know how much you’ve used over time.
Check Your Credit And Total Debt
The second page in the app is the “Analysis” section where you can view your “My Credit” tab, or your “My Debt” tab.
In the “My Credit” section you’ll see your credit history, and a credit score breakdown.
The “My Debt” tab will show all your loans and debt that you currently have. It will show your credit cards, your home loans and any other debt that you’ve incurred.
In addition to the total debt number shown it will also give you an indication if your debt is going up or down.
Within the total debt section there is also a “total monthly payment” screen where it will show you your total monthly minimum payments on your debt. For me that mainly just includes our home mortgage. For others that have credit card debt, student loans and more it will show one large number for all of those, and then break it down by the individual debts. Nice way to keep track of your debts and stay on top of them.
Home Value And Equity
The third tab in the app is for the “home value” section. When you click into that screen it will show you the value of your home, based on an automated valuation pulled from DataQuick.com. If you’ve entered your own manual home value within the Credit Sesame website (or from within the app) that will show here as well. I entered my own value as I felt the estimate was off by a good $30,000. You can then also see the trend of your home’s value over time. Ours unfortunately has gone down quite a bit.
In the second section of the home value tab you’ll find the “home equity” area. This will show you how much equity you’ve built up in your home since you bought it. Our number is pretty low since values in our area have dropped significantly since we bought.
Offers & Savings Advice
The last section in the app that we’ll mention is the “savings advice” tab. While I think you’re better suited to check out this information on the full website, it’s pretty simple to see here in the app as well.
Credit Sesame will look at your current financial situation and find ways for you to optimize and save money. If you have a home loan it will give you refinance offers that you can take advantage of, and you can even apply for the loans from the app. Simple.
Conclusion
I love Credit Sesame’s website and service because they make it free and accessible for most people to get a peak at their TransUnion credit score. That makes the process of searching out and finding a home mortgage or refinance that much less stressful.
Now that they’ve also got a mobile app for Android in addition to their iOS apps, it’s that much easier.
I’d highly recommend everyone to check it out, especially since it’s free. Sign up through the link below!
Get Your Free Credit Sesame Account And Mobile Credit Score App!
What are your thoughts on the app? Have you tried it, and did you like it? What things could they add to it?
Moving overseas can be daunting. However, exploring a new country offers a myriad of exciting possibilities as well, which is probably why more and more people are choosing to live abroad.
People have many different reasons for living in a different country. Some find living overseas exhilarating and consider it a great adventure. Others decide to relocate for practical reasons, like to take advantage of more job opportunities abroad.
Establishing a new home overseas can seem like a dream to most, but it can certainly be done. And there are important factors to consider (specifically, costs) before taking the leap.
General Costs Before Arrival
Visa and Immigration
It’s a given that incoming visitors will have to pay to enter a country. Regardless of what passport you hold, there are fees that come with visiting and immigrating abroad. Each country has its own rules and regulations regarding tourists and incoming immigrants. As such, the price of entering countries can vary as well.
The expenses for immigrating to a new country will depend on who is coming with you. As expected, moving solo will cost less. Bringing family with you will cost more and probably take longer to process.
Some people also want to bring their pets. There are different regulations for travelling animals. For instance, countries in the European Union issue pet passports for their furry friends.
Visits
Before the big move, visit your potential home abroad.
During the first couple of visits, you should scout the cities or towns that you would consider residing in. Below are some potential expenses you’ll accrue during your visits:
Two-way plane tickets
Food
Transportation
City Tours or general sightseeing expeditions for tourists
Temporary accommodations
Once you’ve decided on a location in a given country, your visits may become longer and more frequent since you’ll begin making the necessary preparations.
Shipping and International Movers
Once you’re ready to relocate, there will be a bunch of tasks to do before getting on that plane with your one-way ticket.
The first obstacle would be figuring out what to do with your belongings. There are two options when it comes to your possessions: leave them behind or take them with you.
You can leave everything behind, except for a few choice items (like your favorite clothes and shoes) which would be relatively inexpensive to take with you. If you decide to bring only a couple of your prized possessions, you could pack them in a suitcase and travel with this on the plane as check-in luggage.
However, bringing fewer items doesn’t necessarily lower the costs when you arrive at your destination. Since you will be staying for a long period of time abroad, you will need to purchase all the basic home items, like plates, utensils, furniture and house appliances.
The second option is to take most (if not all) of your possessions abroad. If you follow this route, you’ll need professional help. Hiring international movers will come at a cost. Besides labor, there is also moving insurance.
Potential Home Expenses
There are two ways to handle finding a home overseas. First, you could stay in temporary accommodations after you’ve moved, then find a permanent place to live in. Second, you could rent or buy a place before you arrive.
Choosing Temporary Accommodations Abroad
If you haven’t found the right place yet, staying in a hotel, Airbnb, transient, or other temporary accommodations is a good option. However, the longer you take to find a more permanent residence, the greater the expenses that will rack up.
Some of the expenses you might be faced with while staying in a temporary place include:
Cost of storage. A temporary living space is unlikely to have room for all your belongings if you’ve brought them. You might need to store some in a facility while you find your footing.
Daily payments for the space
Take-out food, if your temporary accommodations don’t have a kitchen
Transportation. Expect this to be a major expense while you look for a permanent home
Renting or Buying a House Abroad
If you decide to rent or buy a house before your final arrival, these are some of your potential expenses:
A deposit and advance, if you’re renting
A sizable down-payment, if you bought a house
New appliances and furniture, if you didn’t bring your own
Transformers, if you brought appliances from your home country
Utilities and services
Moving to a different country is a major financial undertaking, no questions asked.
If you’ve visited the country prior to taking up residence there, then you should have a fair idea of the cost of living in that location. As such, you should already have some money set aside, based on your needs, to help the transition go smoother.
Last Updated on February 25, 2022 by Mark Ferguson
Buying one rental property may not make you a ton of money right away. However, rentals can be an amazing investment when held for the long-term and when multiple properties are purchased. There is also the opportunity to buy larger commercial or multifamily properties, which can increase returns as well. With a good rental property, you should be making money every month (cash flow); you should make money as soon as you buy by getting a great deal; you will have fantastic tax advantages, you can use financing which greatly reduces the amount of cash needed; and the property value and rents will most likely go up in value over time.
Rental properties have been a great investment for me. I make more than $100,000 a year from the cash flow on my rental properties after all expenses including mortgages, property management, maintenance, and vacancies. I now have 20 rental properties which are a mix of residential and commercial. I bought my first rental property in December of 2010 for $97k. I started with residential properties but now buy almost all commercial, including a 68,000-square-foot strip mall in 2018.
You cannot buy just any property and turn it into a rental if you want to make a lot of money. You have to buy properties below market value with great cash flow to be a successful rental property owner. Not only do I make money every month from my rentals with minimal work, but my rentals have also increased my net worth thanks to buying below market value and appreciation (I don’t like to count on appreciation, but it is a nice bonus). This is not just a hypothetical article. I have owned rentals for many years, kept track of their returns, and written many articles about what I have learned.
The cool thing about real estate is while I have more than $6,000,000 worth of rental properties, it did not take millions of dollars to buy them.
Why did I choose rentals?
One of my passions is automobiles. I purchased a 1986 Porsche 928 a few years ago, and I absolutely love that car. I also have a 1999 Lamborghini Diablo, a 1981 Aston Martin V8, a 1998 Lotus Esprit Twin Turbo, and a few other cars. In my early 20s, I never thought I could afford any of these cars in my early. However, I started to make decent money as a real estate agent in my mid to late 20s. The problem was I was not saving much money. I just kept spending it. I knew if I ever wanted to get ahead in life and be able to afford these cars, I would have to invest the money I was making. I researched everything I could and decided rental properties were the best investment. I worked very hard to save money to buy my first rental.
As soon as I started buying rentals, I could see the fruits of my labor. I was making money every month from rent, I made money as soon as I bought the house because I bought it below market value, and it was forcing me to save money. I wanted to buy as many as I could, and I knew with steady money coming in every month from the rentals I could someday feel comfortable buying expensive cars.
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Why are rentals a good investment?
Not all properties are a good rental, but if you can find properties that are, they can be an amazing investment. A rental property should have a number of attributes
Cash flow
Good rentals will make money every month after paying all expenses. The expenses should include mortgage, taxes, insurance, maintenance, vacancies, and property management. The cash flow is the rent minus all of these expenses. Some people like to shoot for different numbers, but I always liked to see $400 to $500 in cash flow per property.
Buy below market
I get a great deal on every rental I buy. I don’t want to pay retail when I can pay to 20% to 30% less than retail. It is not easy to get great deals, but it is possible. On almost every house I have ever bought, I got a great deal. That instantly increases my net worth, makes me more cash flow, and looks better on my balance sheet for banks.
Leverage
You can put as little down as 20 percent when buying rentals. You can put even less down when buying a property as an owner occupant and then turning the property into a rental.
Tax advantages
Most expenses on rental properties are deductible or depreciable. You can also depreciate the structure of a rental property, which means you can save thousands of dollars each year on your taxes. You can also complete a 1031 exchange on rentals to avoid capital gains taxes.
Appreciation
Many people only talk about housing prices when comparing rentals to the stock market, but appreciation is a bonus. It is not what you are shooting for when buying a rental property because no one knows for sure if prices will go up or when.
It is not easy to find rental properties that are a good investment. It takes me months to find great deals that make over $500 a month like mine typically have, and they are not available in every market. My typical rental property used to cost between $80,000 and $130,000, and it rented for $1,200 to $1,500 a month. I put 20 percent down on the properties and finance the rest with my portfolio lender. I usually end up spending $25,000 to $35,000 in cash to buy each rental property. Cash flow is not the only benefit of rental properties. I slowly pay down the mortgage every month; I have great tax advantages; and they will most likely appreciate.
I am able to save that much cash from each rental property because I make a very good living as a real estate agent as well as from fixing and flipping houses. I like to have nice cars and a nice house, but I always make sure I am saving and investing money first. There are ways to buy rental properties with little money down, but I think you will get further ahead in life by saving as much as possible and investing wisely.
How much do you need to buy a rental?
I go over the exact cost of a rental property here, but let us assume that it costs $30,000 to purchase and repair one rental. You do not have to invest $90,000 a year to buy three rentals a year because you can begin refinancing rental properties after you own them for a year and take cash out to invest in more rentals. You can also save the cash flow from your rental properties to buy more rental properties. I usually buy my properties for about $100,000, with a four percent interest rate and 20 percent down, which leaves a payment of $381 for principal and interest. Those numbers combined with rents from $1,200 to $1,500 a month leave me with at least $500 a month in income from my rental properties.
How much should a rental property cash flow?
It is not easy to make $500 a month in cash flow from a single rental property. I detail how to calculate cash flow here, and I created a cash flow calculator to help people determine cash flow. Cash flow is not the rent minus the mortgage payment: you must consider many other factors. My rents range from $1,250 to $1,600 a month, and my mortgage payments range from $450 to $650 a month. I have to account for maintenance and vacancies on my rental properties, which leaves me with about $500 in profit each month. I buy my properties for $80,000 to $130,000 and usually make quite a few repairs before I rent them out.
What are the long-term returns for someone with little money?
Investing in rental properties can provide fantastic returns when you have a lot of money to invest. Even if you have little money, you can invest in rental properties. I am going to walk through how many years it will take someone to accumulate one million dollars from investing $7,500 a year into long-term rental properties.
The more money you make and save, the easier it is to make one million dollars from rentals. However, even people who do not make a lot of money can get there, although it may take a little longer. I am going to write out this plan assuming someone has a $75,000 salary and can save 10 percent of their income a year.
When you first start out, $7,500 does not go very far, and it takes a lot of money to buy an investment property. Luckily, there are many ways to buy a rental property with much less money if you are an owner occupant or use some of the techniques I discuss here. In the first year, the best bet is to buy a HUD home or REO that needs some work but will still qualify for an FHA or conventional loan. The key to my strategy is buying houses below market value. HUD or REO houses are a great way to do that. We will assume the investor can buy a house similar to the ones I purchase in my area, which cost around $100,000. There are closing costs that the buyer is charged when they get a loan, but you can ask the seller to pay most of your costs.
Buying as an owner occupant year one
The first step is to buy a house. But you cannot buy just any house; you want to buy a house as an owner occupant that you can later turn into a rental. You also want to get a great deal on a house to gain instant equity. To get a great deal on a house, you may have to buy one that needs some repairs. With a HUD home, you can roll $5,000 of the repairs needed into the loan with the FHA escrow and only put 3.5 percent down for the down payment. If the home needs a lot of work, you could use an FHA 203K loan to roll more repairs into the loan. We will assume this house needs $4,000 in work to qualify for a loan, and you bought a HUD home with the costs rolled into the loan. With an FHA loan, you have to pay mortgage insurance every month and an upfront mortgage insurance premium (which could be $200 or more a month).
With a conventional loan, mortgage insurance is much lower than FHA, and you might be able to remove it after two years. However, you may not be able to roll the repairs into the loan, but you could get the seller to fix some items before closing. If the repairs are cosmetic items, you should be able to get a loan without making the repairs before closing. I will assume the total cash needed to close on this hypothetical house is about $5,000. Hopefully, this house was bought below market value because it needed some repairs and was a foreclosure. Once the house is repaired, it should be worth around $125,000.
Since you bought this house as an owner-occupant, you have to live in the home for at least one year.
Year two
After one year, you have gained about $22,000 in net worth; $125,000 – $100,000 purchase price – $4,000 repairs rolled into the loan + $1,000 gained in equity pay down. In year one, no rent was collected because the home was owner-occupied to get a low down payment. In year two, the house is rented out and you can buy another owner-occupied home using the same strategy. When you try to buy a home right away, you won’t be able to count the rent from the first house as income right away. It is best to buy houses priced low enough that you can qualify for two houses at once to make this work. Otherwise, you may have to wait up to a year for the rent to count as income and can buy again.
You can only have one FHA mortgage at a time, so this time you have to get a conventional loan with 5 percent down. In the second year, you have saved up another $7,500 from your job and have $2,500 left over from the first year for a total of $11,500 saved. The second home also costs $100,000, and the seller pays 3 percent closing costs. The down payment needed is $5,000, and $5,000 in repairs are needed on this second house. The total cash needed to buy an owner-occupied home is $10,000 and the repaired value is $125,000.
The first house is rented out for $1,300 a month (which I will do all the time on a $100,000 purchase), and the payment is $550 with taxes and insurance. Add vacancy, maintenance, mortgage insurance and we’ll assume $300 a month in positive cash flow.
Year Three
In the second year, you made $25,000 from buying house number two (equity) and made $3,600 from cash flow. You also made $2,500 from equity pay down on both loans (I am assuming each loan will pay down $500 more each year). In year two, all the savings was used from year one, but you saved $7,500 and made $3,600 in cash flow for a total of $11,100 savings. Buy another house using an owner-occupied loan and use $10,000 of cash. Net worth increases to $53,100 after adding the equity pay down, cash flow and equity gained in the purchase of a new home.
The second house is rented out again using the same figures, although the mortgage insurance may be less because we are using a conventional loan instead of an FHA loan.
Year Four
Another house is bought below market value in year four. Cash flow increases to $7,200 a year plus $1,100 in previous savings and $7,500 saved this year. You now have $17,300 cash saved up before we subtract another $10,000 for the purchase of a new house as well as cash for the repairs. Net worth has increased $25,000 on the purchase plus $4,500 in equity pay down. The total net worth increase is now $90,800 for the last four years.
You own four houses and three of them are rented out. At this point, you may be able to remove the mortgage insurance on the conventional loans that have been held for two years, but I am not going to in my calculations to keep things simple and conservative.
Year Five
In year five, we repeat the entire process again and come up with the following numbers. Cash flow increases to $10,800 and previous savings $5,800 and $7,500 saved up equals $25,600 saved cash. The investor purchases another property and uses $10,000 in cash to leave $15,600 in his cash account. Net worth increases by $7,000 for equity pay down: $10,800 for cash flow and $25,000 for the purchase of a new property. The total increase in net worth is now $133,600.
You may have noticed this investor just mortgaged his fifth house. For many people, getting a loan on more than four houses is very difficult. However, the investor is buying houses as an owner occupant, which makes it much easier to get a loan.
Year Six
The same process is repeated all over again. Cash flow is $14,400, previous cash is $14,100, savings equals $7,500 for $37,500 cash minus $10,000 for a new purchase. The investor has $27,500 left in his bank account. He increases his equity pay down to $13,500, has an increase of $25,000 in net worth from a purchase, and an increase in net worth from cash flow of $14,400. He now has increased his net worth by $186,500.
Year seven
In year seven, the seventh house is purchased. Cash in the bank equals $26,000 from previous savings, $18,000 in cash flow, and $7,500 in new savings, which totals $53,000. You are now able to buy two properties this year! Buy another owner-occupied property using $10,000 and an investor-owned property.
To purchase an investment property, we need to put at least 20% down, and we still need to make repairs. We are buying below market value still, so we are going to assume we are adding $25,000 more a year in equity and $3,600 more a year in cash flow. Estimated costs for down payment and repairs is $32,000 to buy an investment property. You have $11,000 of cash left after buying two properties this year. Net worth increased by $60,500 after adding the usual amounts to total $247,000.
Year eight
Year eight is very exciting because we get to add two properties into the mix instead of just one. With the extra houses added, increased cash flow, and continued equity pay down, our net worth increased $98,200 in just one year! Total net worth is now $345,200, and you are making real progress! You have $42,200 saved up after buying another house in year eight as an owner-occupant, so you can buy another investment property, but won’t, because our margins will be too thin with only a couple thousand in savings.
Even though you are still making only $75,000 a year, you increased your net worth by almost $100,000 a year. There are not many people who can increase their net worth by more than they make in a year!
Year nine
In year nine, you are adding $26,500 in equity pay down, $28,800 in cash flow, $25,000 in built-in equity with purchases, for a total net worth increase of $80,300. Your total net worth increase over nine years is now $425,500. You also have $60,000 saved up after paying for one house as an owner occupant, which is enough to buy another investment property, leaving $26,500 cash left over!
Year ten
In year ten, you have enough cash to buy two more properties and have $28,000 in cash left over. Net worth increases by $114,500, bringing us up to a total increase of $540,000.
Year eleven
You can buy two more properties and increase your net worth by $129,200 for a total of $669,200. Cash flow is at $43,200 a year, and there is $36,700 of cash left over after buying two more properties. You could buy a third house this year but decide not to stretch your limits. You need to make sure you have plenty of reserves for the rentals.
Year twelve
This year, you buy three houses because there is $94,600 in cash available. After buying the three houses, there is $22,100 cash left in savings, equity was paid down, and $44,500 and $50,400 in cash flow was generated. Total net worth is now $814,100! You are getting closer to making one million dollars investing in real estate!
Year thirteen
You have increased your net worth by $190,200 this year because you bought three houses last year. The total net worth increase is now $1,004,300! Your actual net worth will be higher than this because I did not calculate savings from your income into the net worth, just the gain from buying rental properties. Cash flow is now $61,200 a year, and you have paid off $54,000 of equity in one year!
You own 16 rental properties which are producing over $60,000 a year! The incredible part is we did not increase the rents at all, even though they are likely to go up over thirteen years. We assumed there was no appreciation, even though there likely will be over that time. Due to the tax advantages of rentals, you are probably taking home as much in passive income from your rentals as you are from your job.
Things we did not consider
This was a very basic calculation for how to make one million dollars investing in rental properties. It would take a book to go through all the variables and possible roadblocks that might come into play. Here are a few items we did not consider, which would have an impact on the time it takes to reach one million dollars in increased net worth.
Inflation will increase the prices of homes and wages as well as rents. While the investor has to pay more for houses each year, he will also be making more and saving more. The biggest factor is the rent increases. His rent on the first houses he buys will increase as time goes on, but his payments will stay the same. His cash flow will increase greatly as time goes on, which we did not account for.
Taxes were not accounted for either because that gets very complicated. The cash flow the investor is making would be income, but the investor could offset that with depreciation from the rental properties. I assumed those two factors even themselves out.
Investment property purchases had 20 percent down, where the owner-occupant purchases had 5 percent down. There should be an increase in cash flow on the investment property purchases because of the lower down payment, but I left them the same to make the math easier.
Refinancing was not considered either, but the investor could easily have refinanced a couple of properties to get more cash out to buy more rental properties. This would have increased cash flow and net worth due to the increased number of properties purchased.
Obtaining more than 4 or more than ten mortgages can be difficult. I am assuming the investor is able to get as many loans as possible with a lender. I can have as many loans as I want with my portfolio lender, but many people cannot. This would be a roadblock once he reached ten financed properties.
Buying owner-occupied properties each year is possible but may not be realistic. Moving thirteen times in thirteen years may put a bit of stress on the family!
I also assume the investor manages his homes himself, which is doable in the beginning but it maybe tough when he gets ten homes or more.
How Did I Build a Rental Property Portfolio
I have 20 rentals now, but I did not buy them overnight. I started in 2010 and slowly bought them over the last 9 years. I bought 1 in 2010, 2 in 2011, 2 in 2012, and kept building from there. I worked very hard to make a great living as a real estate agent, but I also used real estate to buy more rentals.
I bought my first rental by refinancing my personal house and taking cash out of it. I also refinanced some of my rentals along the way so that I would have more capital to buy even more rentals. I was lucky that our market appreciated so much, but I also bought every rental property way below market value, which allowed me to take cash out when I refinanced.
I stopped buying residential rentals in 2015 because the market in Colorado became too expensive. However, I was able to invest in commercial rentals in my area and cash flow on them. There are a lot of different ways to invest in real estate!
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How much have my rentals made me?
I put together some stats to show how much rentals made me after four years of owning them. It has been a few years since then, and things have gotten even better! At the time, I had bought 11 rental properties. After doing some calculating, I discovered my rental properties have appreciated and been bought cheap enough to produce a gain of $600,000 since December of 2010! It is important to remember that net worth is all on paper, and I would not realize $600,000 in profit if I decided to sell all of my rental properties today. I would have to have selling costs, and I would have a large tax bill if I sold my rental properties.
How much equity have I built with rentals?
One thing I have done with every rental property I buy is buying them below market value. I try to buy my properties at least 20 percent below the current value, and if a home needs repairs, I want that rental property worth 20 percent more than the price I paid plus the cost of the repairs. For example; if I buy a rental for $100,000 and it needs $20,000 in work, I want it to be worth $144,000 or more when I am done repairing the home ($100,000 + $20,000 = $120,000 * .20 = $144,000). That means I usually gain at least $20,000 in net worth on every rental property I buy. The 11 rentals I have bought have gained at least $220,000 (I buy many properties at more than 20 percent below market) just by buying homes at the right price.
I also have been lucky that prices have increased significantly in Northern Colorado in the last few years. I would say lucky for the sake of calculating net worth, but the increase in prices has made it harder to buy cheap rental properties with great cash flow. If you want to know how much my houses have appreciated, I broke down each rental and how much money it has made below.
Rental 1
I bought my first rental property for $96,900 on 12/5/2010. At the time I bought it, I knew it was worth at least $125,000, which is not a huge spread between the buy price and fair market value, but the home needed less than $2,000 in repairs.
The house is now worth at least $165,000 and most likely more. I had it appraised earlier this year, and the appraisal was $165,000 and our market values have increased since that time. If the house is worth $165,000, then my net worth increased about $66,000 after you subtract the repairs. The home was rented out for 1,050 a month when I first bought it and now is rented out for $1,400 a month.
Rental 2
I bought rental property number 2 for $94,000 on 10/5/2011. This home needed much more work than number one, and I spent about $15,000 repairing the house. At the time I bought this house, I thought it was worth $140,000 after it was repaired, and this house is now worth around $175,000. That leaves me with a net worth increase of about $66,000 on this property as well.
This house has been rented to my brother-in-law since I have owned it. The rent has been steady at $1,100 the entire time but could be $1,400 to $1,500. My brother-in-law has a house under contract and will be moving soon.
Rental 3
I bought my third rental property for $92,000 on 11/21/2011. This house needed repairs, and I spent about $14,000 getting it ready to rent. At the time I bought this house, I thought it was worth $135,000 fixed up, and this house is now worth around $170,000, which creates a net worth increase of $64,000.
This home has been rented to the same tenants for $1,250 a month, but we just raised the rent this month to $1,300 a month. It would probably rent for $1,400 to $1,500 to a new tenant.
Rental 4
I bought rental property number 4 for $109,000 on 1/25/2012. This home also needed about $14,000 in repairs before it could be rented. At the time I bought this house, I thought it was worth $145,000. This house is one of my most valuable rental properties and is worth $185,000 in today’s market. That leaves a net worth gain of $62,000.
This home was rented for $1,300 up until this year when I rented it to new tenants for $1,500 a month.
Rental 5
I bought rental property number five for $88,249 on 12/14/2012, and it needed more repairs than the others. The market had definitely begun to improve at this point, and finding a home that was under $100,000 was very tough. This home was a good deal, even though it needed $18,000 in repairs. I thought it was worth around $130,000 when I bought it, and I now think it is worth $165,000. That leaves a net worth increase of $59,000.
This home has been rented to the same tenants for $1,200 a month.
Rental 6
I bought rental property number six for $115,000 on 3/7/2013. This house needed about $15,000 in repairs, and I thought the property was worth about $150,000 after it was fixed up when I bought it. It is now worth $170,000, and that leaves a net worth increase of $40,000.
This home was first rented for $1,300 a month until earlier this year it was rented for $1,400 a month.
Rental 7
I bought rental property number 7 for $113,000 on 4/18/2013. This house needed only $9,000 in repairs, and I thought it was worth $155,000 when I bought it. This neighborhood has done great, and the home is now worth $185,000, which leaves a net worth increase of $63,000.
This home has been rented for $1,400 a month since I bought it.
Rental 8
I bought rental property number 8 for 97,500 on 11/18/2013. The home needed $15,000 in repairs, and I thought it was worth $150,000 once fixed up. It is now worth $165,000, and that leaves a net worth increase of $52,000.
This home has been rented or $1,400 a month since I bought it.
Rental 9
I bought rental property number 9 for $133,000 on 2/14/2014. This home only needed $4,000 in work before it was rented, and I thought it was worth $155,000 after it was repaired. I think it is worth $165,000 now, and that leaves a net worth increase of $28,000.
This home is rented for $1,400 a month.
Rental 10
I bought rental property number 10 for $99,928 on 4/13/2014. The home only needed $3,500 in repairs before it was rented, and I thought the home was worth $125,000 when I bought it. I think it is worth about $130,000 now, leaving a net worth increase of $26,500.
This home is rented for $1,250.
Rental 11
I just bought rental property number 11 on 7/24/2014. This house will need about $15,000 in repairs, and I paid $109,318. I think this house is worth $155,000 repaired, leaving a net worth increase of $30,000.
I think this home rents for $1,400 a month.
What is the total gain?
If you add up all these numbers, my total net worth has increased by $556,500, but these numbers do not tell the entire story. I had more costs than I listed when I first bought these houses, but I did not go back through each closing file to get those exact costs. On many of these properties, I had the seller pay some closing costs, which covered much of my buying costs. I also had some carrying costs while I was getting the properties repaired and they were not rented out yet. However, I also did not include any of my cash flow or the money I made on these properties since 2010. I used all of my cash flow to pay off rental property number 1, which added up to over $70,000. That $70,000 in cash flowdefinitely covers all the closing and carrying costs I had on each property and went directly to increasing my net worth by paying off a loan. Speaking of paying down loans, I did not include the equity I have gained over the last 3.5 years by paying down my loans. I have paid down thousands of dollars of loan balances with regular payments on my rental properties.
Net worth is not money in my pocket but what I am worth on paper. Even though it is cool to see this number increase over time, this money is not all readily available. I would have to sell my rental properties to see this money, and I would not see all of it. There would be selling costs when I sell the properties and taxes owed once I sold them. Since I am using the depreciation on the rental properties to save me in taxes, I would have a higher than normal tax bill because I would have to recapture that depreciation.
What about in 2019?
I have 20 rentals that have increased my net worth about $3,000,000 in the last 9 years. I have gotten lucky that Colorado has appreciated like crazy, but they were still awesome deals even without that appreciation. They make me about $13,000 a month after all expenses. The cool part is I have spent less than $350,000 on the properties after refinancing some to take money back out. Talk about an amazing investment!
You can see all my rentals here.
My book on making money with rental properties
I provide a lot of information on my blog and YouTube channel, but I also have written six books. My book Build a Rental Property Empire has been a best-seller for years. It goes over everything I do to find, finance, repair, manage, and even sell my rentals. I also added a commercial chapter to go over that aspect as well. You can find the book on Amazon as a paperback, audiobook, and Kindle. Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely.
Conclusion
It can take time to make a lot of money with rentals, but it is possible. Over the years I have bought a 1999 Lamborghini Diablo, a 1998 Lotus Esprit, a 1981 Aston Martin, and more thanks to the rental properties. The rentals have also allowed me to be aggressive with my house flipping business because I know I have that cash flow coming in every month. We flipped 26 houses last year!