I (Mark Ferguson) will hold 4 in-person masterminds in Colorado in 2024. I love doing these because it gives people from all over the country a chance to meet, learn about each other’s business, give advice, get advice, and think outside the box. I attended a mastermind like this a few years ago and loved how much it helped my business and helped me to think bigger and consider things I have never thought of. It is easy to get stuck in your business and stuck in your ways if it is only you trying to figure everything out.
Register your Mastermind seat >>
Who is Mark Ferguson?
I will be the first to tell you that I am not for everyone. I hold these events because I feel I can offer value to people well above and beyond the cost. The people who I can help the most are go-getters, are willing to take some risks, want more than the status quo out of life, and are open-minded to new ideas.
I started in real estate in 2002 after college, where I obtained a business finance degree. I started very small painting houses, doing landscaping, and running errands for my dad who was an agent and flipped houses once in a while. Eventually, I got my real estate license, started helping with the flipping business, and still made very little money. My life changed when I took control, started cold calling banks to get foreclosure listings and started my own career. I then bought rental properties, always making sure to get awesome deals. Eventually, I built up the flipping business, bought out my dad, started my own office, and began to buy commercial and multifamily real estate. In the last few years, I started buying businesses that came with the real estate like a liquor store, laundromat, car wash, and more. Through all of this, I documented my journey through social media, YouTube, and my blog Investfourmore.com. At these masterminds I am willing to talk about anything and everything that I have done, do, or plan to do.
When are the mastermind events?
I have had a couple of these masterminds in the past but this year I wanted to go bigger and better by scheduling them well ahead of time and giving people multiple dates to attend. All of these will be held in my office Blue Steel Real Estate in Greeley Colorado. We will also be taking trips to see some of my projects (rentals, files, businesses) so I can show you exactly what I do and why. We may also look at a property for sale to show you what I look for in a deal and why.
Here are the dates:
Winter 2024: January 8th and 9th
Spring 2024: April 22nd and 23rd
Summer 2024: July 22nd and 23rd
Fall 2024: October 21st and 22nd
Register your Mastermind seat >>
How intense are these events?
When I hold a mastermind it is 2 days packed full of information and interaction. You will not just be interacting with me but with other people in the group who are real estate investors or business owners as well. We spend all day talking with each other, visiting properties, visiting my staff, and going over each other’s business so that we can all help each other do better. I also give specific training on finding deals, finding financing, and repairing and maintaining properties.
Are these serious or fun events?
I am very serious about business but I am also very laid back and know that being mad or blaming others won’t fix my problems. I am also a fan of laughing and having fun. We pack a lot of information into these events, but we also have some fun, mostly making fun of myself. These events come with meals, and time to relax as well. You don’t have to worry about offending me or making me mad because that is virtually impossible.
What is the agenda for the mastermind?
The heart of the mastermind is going over each person’s current business and plans. We will dedicate a large chunk of time to brainstorming ideas, sharing experiences, and offering support and ideas to each other. We will also take a field trip to a few of my projects including flips I am working on, businesses I own and run like the laundromats or liquor store (maybe something else if I buy something new), and some rental properties (commercial, multifamily or residential). There will also be scheduled dinners and if anyone wants a house or garage tour that is in the books as well.
Are there any discounts for the mastermind?
If you want to bring a spouse or business partner I do offer a discount for the second person as long as they are sharing the same business plan. If you want to attend multiple events there is also a discount available. Please just email me below.
How do I learn more and sign up?
Learn more and register your Mastermind seat here >>
Donations
For each ticket sold, I will donate $500 to charity. I have picked out my charity and it is Get the Facts Out Organization which helps develop and recruit students to become teachers. I am on the board of this nonprofit and it is making a massive impact on the teaching industry. The world and the US need more teachers, especially STEM teachers and this group is doing a great job tackling this growing problem.
Have questions?
Check out the registration page at investfourmore.com/mastermind.
If you have questions about the discounts mentioned or any of the details, you can also contact me here.
Over the past month or two, in certain markets across the United States, bidding wars have been heating up as mortgage rates continue to march lower.
The steady drop in rates has effectively stopped the bleeding in home price declines, while simultaneously making homeownership more affordable.
[You may have missed the housing bottom…]
As a result, buyers are turning up in droves to snap up properties on the cheap, often just days after they’re listed.
While this is great for those looking to sell, and perhaps even better for the economy as a whole, it’s also making it a lot tougher to snag a desirable property.
Buyers Fighting for Properties
For those who want to “get in the game,” it’s becoming increasingly difficult, despite the fact that it’s pretty darn easy to qualify for a mortgage, assuming you’ve got decent income, assets, and credit.
Sure, it’s not 2008, but it’s still easier to get more house for your buck thanks to those low rates.
But here’s the problem. Because people actually want to buy houses again, there’s lots of competition.
And since banks are a bit more fickle about dishing out mortgages, sellers are often favoring those paying with cash or putting lots of money down.
In other words, your bulletproof offer with 20% down may not be enough these days.
To beat the competition, you may have to up your asking price in a hurry, effectively paying above-market, or come in with a lot more down.
How did the ultimate buyer’s market turn into a seller’s market overnight?
20% Down is Hard Enough
Many housing proponents have already argued that putting down 20% is too difficult for most prospective buyers, so bringing in more cash at closing is probably out of the question for most.
That said, housing may not be as accessible as it may seem, which creates a bit of a catch-22.
And the last thing homeowners want to do in an uncertain market is pay more for a property than it’s actually worth.
So it looks like real estate investors are making out like bandits in the current market, while first-time homebuyers and those with little set aside are facing new problems.
For the record, if you’re thinking about going with an FHA loan, the task becomes even more trying.
Many homes and condos aren’t even eligible for FHA financing, so many borrowers who think they’ll qualify with a mere 3.5% down may be in for a rude awakening.
This could push impatient buyers into making bad decisions, often chasing the properties no one else wants, merely because their seemingly decent offer will only be accepted when no one else is biting.
“Who closes the door when the bus driver gets off? The world is full of questions. “Why have all the predictions of lower rates been wrong?” Yesterday I was in the SF Bay Area giving a speech to a group of LOs and management and was asked, “Rob, are you hearing that lenders are requesting clients pay for the credit report(s) up front?” Absolutely I am. Lenders have grown weary of paying for the credit reports of loans that don’t fund and heaping those rising costs on the loans that do. “Rob, are mergers and acquisitions going to pick up?” Yes. We had one recent depository bank deal (Mississippi’s Guaranty Capital Corporation will acquire Lafayette Bancorp, Inc.), but we can expect continued deals in an 8 percent mortgage rate world as lenders and vendors, big and small, re-evaluate either their position in the market or even if they want to continue to exist. (Today’s podcast can be found here: Sponsored by nCino, maker of the nCino Mortgage Suite, built for the modern mortgage lender. The nCino Mortgage Suite unites the people, systems, and stages of the mortgage process. Hear an interview with nCino’s Ben Miller on the rapidly evolving digital mortgage suite of products.)
Lender and Broker Software, Products, and Services
Truv saves Lenders 60-80% over The Work Number. That’s the savings of multiple full-time employees. For example, Compass Mortgage saved roughly 60 percent in verification costs and maintained their same conversion rate. “Truv has given us the ability to lower costs, all while speeding up the verification process and providing better employment data” said Justin Venhousen, COO, Compass Mortgage. Stop wasting money. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.
“In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders—all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.”
Sierra Pacific Wholesale has completed the first phase of its pricing integration on the ARIVE platform! Sierra Pacific-approved Brokers and Non-Del Correspondent lenders can access their pricing seamlessly through ARIVE. “ARIVE truly is the best solution for third-party originators looking to save time and money in order to maximize their success,” says Rob Saunders, SVP, Western TPO Sales. This strategic partnership emerges at a pivotal time, as the Wholesale Channel continues to experience unparalleled growth. “We look forward to working with the broker community to help you scale your business and reach your peak performance,” shared Cindy Ferrentino, SVP – Eastern TPO Sales. To learn more about this exciting new partnership, read the full press release. Third-party originators interested in learning more about Sierra Pacific’s full-service experience can connect with an Account Executive here.
Get the income and employment records you need with the new Mortgage Flex™ View from The Work Number®. Inaccurate or incomplete applicant employment and pay information continues to be a challenge in the loan process. Automating the income and employment verification process with The Work Number can help reduce potential errors associated with hand-keying or relying on consumer-provided information. With 631M employment records, The Work Number can help lenders get a holistic view of an applicant, but there may be times that lenders are looking for one specific employment record. Introducing Mortgage Flex View – a new addition to The Work Number suite of solutions, which enables lenders to order just the verifications of income and employment that they need. Lenders can instantly purchase a preview of available employers prior to selecting and purchasing the full verification. Learn more about the new flexible solution from The Work Number: Mortgage Flex View.
With one of four homes being sold to real estate investors, it’s clear there’s an enormous opportunity to work with these borrowers. That’s why on the next National Mortgage Professional Webinar, Navigating Experienced Real Estate Investor Needs, they show you how to step up your game with these serial borrowers. While homeowners in normal market conditions will get a mortgage every five to seven years, many individual real estate investors are purchasing and refinancing properties several times a year. On this webinar Sam Bjelac, VP of TPO at LendingOne will discuss, types of real estate investors and their financing needs, learning how to understand property cashflow, understanding and optimizing the BRRRR strategy plus a few strategies you can easily implement to find real estate investors. Join NMP and Sam on Thursday, November 2, at 2PM ET / 11:00 am PT by registering here.
“Newrez Correspondent says, ‘THANK YOU PHILADEPHIA!’ What a great MBA Conference in the City of Brotherly Love. We want to thank the over 100 customers along with several industry partners that we were able to have serious discussions with around products, pricing, and what it will take to navigate this market over the next six months. If you aren’t a current customer, you need a Trusted Advisor during these challenging times, which is why Newrez Correspondent is the right investor for you. The time to align with us is now, so click here to join our team. We hope you enjoyed the conference, look forward to our continued partnerships heading into 2024 and to meeting you next May in NYC at the MBA Secondary.”
Capital Markets
Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.477 trillion in September, including $36.6 billion of total MBS issuance, leading to $19 billion of net growth. Issuance for this month was less than $38.1 billion in August and $38.0 billion in July. For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 466,000 first-time homebuyer loans. For full story, read October 5 Ginnie Mae press release.
As I wrote yesterday, we received a lot of housing data this week. Existing home sales during September showed that the housing market continues to cool due to the recent run-up in borrowing costs. Sales declined 2.0 percent to a 3.96-million-unit pace during the month. That marks the fourth straight monthly drop and the slowest pace of resales since 2010. Sales are down 15.4 percent from one year ago.
Fed Chairman Powell delivered remarks at a luncheon hosted by the Economic Club of New York yesterday, saying that progress toward the Fed’s dual mandate has been made but that resilient economic growth raises the prospect of renewed inflationary pressures that could warrant additional rate hikes. He repeated that the Committee will depend on data in guiding policy decisions. The fed funds futures market has seen a downward shift in rate expectations with the implied likelihood of a January hike falling to 37 percent from 48 percent on Wednesday.
There is no market-moving scheduled news today. Two Fed speakers are also scheduled, Philadelphia’s Harker and Cleveland’s Mester, who are expected to continue the narrative that we’ve been hearing from Fed Presidents for months. Around the close, markets will receive the September Treasury Budget. We begin Friday with Agency MBS prices better .125-.250 and the 10-year yielding 4.94 after closing yesterday at 4.99 percent; the 2-year is at 5.14.
Employment
DocProbe, a leading post-closing service provider for mortgage lenders, is seeking a dynamic and tech-savvy sales representative with deep expertise in the mortgage industry. The ideal candidate will have a proven track record of building and maintaining strong relationships with top mortgage lenders and a deep understanding of the mortgage process from origination to post-closing. If you have a successful track record of selling to mortgage lenders and a passion for innovative technology solutions, we encourage you to apply. Don’t miss the opportunity to join a rapidly growing and innovative company. Confidentially apply today to become a part of the DocProbe team!
“Evergreen Home Loans is set to return as the title sponsor for the 26th annual KZOK “Rock the Harvest” event, benefiting Northwest Harvest. This 12-hour radiothon and online auction aim to support those experiencing food insecurity in Washington. With over $1.4 million raised since its inception, it highlights the ongoing struggle of 1 in 10 Washingtonians and 1 in 6 children in the region. The Evergreen Cares Foundation encourages and supports our associate’s compassion for giving while improving lives through wellness and housing programs. If you are looking to partner with a company emphasizing community involvement, visit our careers page to explore the newest opportunities at Evergreen.”
AmCap Home Loans has made a significant stride in bolstering its leadership team by appointing Caleb Mittelstet as SVP of Sales. Mike Johnson, President of AmCap Home Loans, expressed enthusiasm for this pivotal addition, stating, “We’re thrilled to welcome Caleb Mittelstet as an integral member of our team. His wealth of experience along with his industry contacts will undoubtedly propel our sales team to another level. With Caleb on board, we see immense potential to expand our market share and further solidify our position as an industry leader.” Caleb cited the company’s culture and people as driving factors. He emphasized, “AmCap’s inclusive culture and the accessibility to colleagues with decades of experience are unparalleled. You can pick up the phone and call any department, and that’s a testament to the collaborative spirit here.” Mittelstet’s appointment signifies a promising chapter for AmCap Home Loans as they continue to thrive and innovate. Click here to see why Caleb Mittelstet chose Amcap and so should you!
“Independent Mortgage Banker owners: If you are uncertain how you will survive this winter if rates remain higher, please contact us directly to discuss a win-win opportunity. We are a very well-established and privately owned mortgage banking company that has been in business for 30 years, a direct seller with Fannie and Freddie, issue our own government securities, and service the majority of our closed loans. We offer a full marketing team, social media team, and a media/video production team to provide best in class support to our loan officers and referral partners. Our history and culture are exceptionally important so let’s have a conversation to see if we may be a fit. We are large enough to offer exceptionally sharp pricing, products, a dedicated marketing team, and an exceptional operational team, yet, we have a boutique feel where you may talk to the owner of the company at any time. Partner with a company where your voice and input is valued! We have a successful history of incorporating other companies into our model. For a confidential conversation please contact Anjelica Nixt and specify this opportunity.”
Attention Loan Officers: Take your career to the next level with best-in-class Operations, Underwriting, Support and more. Find out how at the next virtual Fairway Day on Wednesday, October 25 at 3pm ET. Join Steve Jacobson, Founder & CEO and David “Laz” Lazowski, President, Retail Sales East and others from the Executive Team and the Street. Here is the registration link and participation is 100% anonymous.
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Many people are lured into the world of real estate investing by stories of millionaires who started their journey with no money down or no steady employment. But the reality is that making money in real estate isn’t easy; a good credit score, investment capital and steady income can help in the beginning.
You’ll also need to grasp the nuances of the local real estate market and learn how to manage financial aspects such as cash flow and property taxes. While real estate buying, selling, and renting may not be much like a game of Monopoly, it is possible to earn steady side income, supplement your retirement, or even build a full-time real estate investment business with the right tools, knowledge, and patience.
Unlike mutual funds, the stock market, cryptocurrency or many other investments, real estate is tangible. Real estate is a concrete asset—one can see, touch, and even reside in. That gives investors a sense of security. However, it also creates unique challenges.
Managed well, the stability and passive income from rental properties can be a safety net against more volatile investments.
This guide is here to clarify the process for beginners. It aims to empower you to make informed decisions, reduce risks, and lay a strong foundation for your real estate investing journey.
Benefits of Investing in Real Estate
The allure of real estate goes beyond the mere ownership of tangible assets. It presents a robust suite of financial benefits that have the potential to amplify wealth and provide stability in uncertain times. As we navigate the advantages, it becomes evident why many seasoned investors prioritize real estate in their portfolios.
Steady and Passive Income
Real estate investing, especially in rental properties, stands out for its potential to provide a consistent revenue stream. When you own a rental property, the monthly or quarterly distributions from tenants contribute to steady income, which can safeguard your finances against unexpected events or economic downturns.
This consistency contrasts with the often erratic nature of the stock market, which can fluctuate daily based on global events, company performances, and other factors. Additionally, for those aiming to attain financial freedom, the passive income generated from real estate can be a step closer to achieving that goal. Over time, as the mortgage payment decreases or remains static, rental rates may rise, increasing your monthly cash flow.
Appreciation Potential
Every investor dreams of their assets appreciating, and real estate often doesn’t disappoint. While there can be periodic downturns in the real estate market, historical trends suggest that properties generally gain value over the long run.
This means that not only can investors benefit from rental income, but they can also potentially see substantial gains when they choose to sell the property.
Tax Benefits
Navigating the world of taxes can be intricate, but real estate investors often find several advantages here. The ability to deduct mortgage interest and property taxes from taxable income can be a significant financial boon.
Furthermore, strategies like depreciation allow real estate investors to offset rental income, reducing their tax burden. Consulting with a financial advisor can help investors maximize these benefits and understand other potential tax advantages, such as 1031 exchanges or deductions related to property management.
Diversification
The saying “don’t put all your eggs in one basket” is sound investment advice. Diversification is a fundamental strategy to mitigate risks. By adding real estate to an investment portfolio, investors introduce a separate asset class that doesn’t directly correlate with the stock market or mutual funds. This can provide a buffer, ensuring that a downturn in one sector doesn’t wholly derail an investor’s financial trajectory.
Leverage
Leverage, in the context of real estate investing, refers to the ability to use borrowed capital to increase the potential return on an investment. When you purchase property with a mortgage loan, you’re often putting down only a fraction of the property’s total cost, while still reaping the benefits of its entire value in terms of appreciation and rental income.
This magnifies the return on investment, as the gains and income generated are based on the property’s total value, not just the down payment. It’s a powerful tool but should be used wisely. Over-leveraging or not accounting for potential rental vacancies can turn leverage into a double-edged sword.
Types of Real Estate Investments
As one dives deeper into the world of real estate, it becomes evident that this asset class is multifaceted, with various avenues to explore and invest in. The right choice often depends on an investor’s goals, risk tolerance, budget, and expertise. Here’s a closer look at some prominent types of real estate investments:
Residential Properties
Residential properties cater to individuals or families. They range from single-family homes to duplexes, triplexes, high-rise buildings with apartments, and other multi-unit properties. You may encounter the term “MDU” or “MUD,” which stand for multi-dwelling unit or multi-unit dwelling, to describe anything more than a single family home, or SFR (single family real estate).
Investing in residential real estate, especially the SFR market, is often a beginner’s first step due to its familiarity and the perpetual demand for housing. While these properties can be a reliable source of rental income, investors should be prepared for the challenges tied to property management, tenant turnover, and ongoing maintenance.
Commercial Real Estate
When one thinks of skyscrapers lining city horizons or sprawling office parks in suburban locales, that’s commercial real estate. These properties are tailored to businesses, and can include complete corporate headquarters or individual offices.
Commercial leases often run longer than residential ones, offering the potential for stable, long-term rental income. However, the entry point can be higher, with larger down payments and a more extensive due diligence process. Additionally, commercial real estate values can be closely tied to the business environment of the locality.
Industrial
Industrial real estate encompasses properties like warehouses, distribution centers, and manufacturing facilities. They’re integral to business operations, ensuring products move efficiently from manufacturers to consumers.
Investing in this sector can offer substantial rental yields, especially if the property is strategically located near transportation hubs. However, the nuances of industrial real estate, such as zoning laws and environmental concerns, necessitate a more in-depth understanding than residential or commercial sectors.
Retail
This sector includes shopping malls, strip malls, and standalone stores. What’s unique about retail real estate is that leases sometimes include a provision where the landlord gets a percentage of the store’s profits, termed as “percentage rent.”
In a thriving commercial area, retail properties can be quite profitable, with long-term leases and the potential for appreciating property values. However, investors should be mindful of shifts in consumer behavior and the evolving retail landscape, especially with the rise of e-commerce.
Multi-Purpose Commercial
A new breed of commercial real estate has emerged to compete with the growth of e-commerce. Multi-purpose commercial spaces blend housing units with office space and retail, often adding hospitality and entertainment venues.
Typically, these spaces are the domain of large real estate investment and property management firms. But if you invest in commercial office space or retail, you will be competing with these multi-purpose properties for tenants, so they are worth acknowledging.
Real Estate Investment Trusts (REITs)
For those not keen on direct property ownership, REITs present an attractive alternative. These are companies that own, operate, or finance income-producing real estate across various sectors. What makes REITs distinctive is that they’re traded on stock exchanges, similar to stocks.
By investing in a REIT, you’re buying shares of a company that manages a portfolio of properties, thus gaining exposure to real estate without the hassles of property management. Moreover, by law, REITs are required to distribute at least 90% of their taxable income to shareholders, leading to potentially attractive dividend yields. However, it’s essential to remember that like all publicly traded entities, REITs can be subject to market volatility.
9 Ways to Invest in Real Estate
Investing in real estate can seem tricky for beginners. But, with time and patience, anyone can master it. Focus on simple investment methods first to get to know your local property scene, meet experienced investors, and learn how to handle money wisely. As you learn and grow, you can dive into more complex investment options.
Here are some great ways for beginners to start in real estate:
1. Wholesaling
Acting as the bridge between property sellers and eager buyers, this method primarily focuses on securing properties at a rate below the prevailing market value. The secured contract is then transferred to an interested buyer, ensuring a margin for the wholesaler.
2. Prehabbing
Unlike intensive property renovations, prehabbing is about amplifying a property’s appeal through minimalistic enhancements. These properties, once given their facelift, usually attract investors with a keen eye for larger renovation projects.
3. Purchasing Rental Properties
An avenue promising consistent returns, this involves acquiring properties to lease them out. For those not inclined towards the intricacies of landlord duties, there’s always the option of hiring seasoned property management professionals.
4. House Flipping
A strategy that has garnered significant attention, house flipping involves a cycle of purchasing, upgrading, and promptly reselling properties, aiming for a profit. The emphasis is on swift transactions and keen market acumen.
5. Real Estate Syndication
Envision a collective where like-minded investors come together, pooling both resources and expertise. Such collectives venture into large-scale property acquisitions, and the ensuing profits or rental incomes are distributed among the participants.
6. Real Estate Investment Groups (REIG)
Primarily, these are conglomerates that steer their operations around real estate investments. By amassing capital from a plethora of investors, they dive into acquisitions of sizeable multi-unit residences or commercial holdings.
7. Investing in REITs
Real Estate Investment Trusts (REITs) revolve around the ownership and meticulous management of properties that yield income. However, investors don’t have to handle the management themselves. Instead, participants can relish the benefits of the real estate sector without the responsibilities of direct property ownership.
8. Online Real Estate Platforms
A fusion of technology with real estate, these platforms seamlessly connect potential investors with vetted property developers. This synergy enables backers to finance promising property ventures and, in exchange, enjoy periodic returns that encompass interest.
9. House Hacking
A blend of homeownership and investment, house hacking is about maximizing the potential of a multi-unit property or a single-family home. Investors live in one segment while leasing out the remaining portions. This dual approach can significantly reduce or even negate monthly housing expenses, serving as an excellent introduction to the world of property management for novice investors.
6 Steps to Get Started in Real Estate Investing
Starting on the path of real estate investing requires careful planning, due diligence, and a methodical approach to ensure that your investments are sound and have the potential for fruitful returns. Whether you’re dreaming of becoming a millionaire real estate investor or merely looking to diversify your investment portfolio, following a structured process can be the key to success. Here’s a step-by-step breakdown:
1. Assess Your Financial Health
Every investment journey should begin with introspection. As an aspiring real estate investor, it’s essential to have a clear understanding of your current financial standing. Ask yourself questions like:
How much capital am I willing to invest?
What are my short-term and long-term financial goals?
Do I have an emergency fund set aside?
Evaluating your risk tolerance is equally crucial. Some might be comfortable flipping houses, while others might prefer the steadiness of rental properties. Consulting a financial advisor at this stage can provide insights tailored to your financial health, enabling you to make informed decisions as you proceed.
2. Dive Deep into Market Research
Knowledge is power in the world of real estate. The local market can be significantly different from national or even statewide trends. Delve deep into understanding:
The demand for rental properties in your target area.
The average property values and rental rates.
The historical appreciation rates.
Any upcoming infrastructure projects or urban development initiatives.
Furthermore, familiarize yourself with real estate terminology. Phrases like “cap rate,” “loan-to-value,” and “operating expenses” will become a regular part of your vocabulary. The better informed you are, the more confidently you can navigate your investments.
3. Assemble Your Real Estate Team
No investor is an island. Success in the real estate business often hinges on the strength and expertise of your team. Look for professionals with a proven track record and positive reviews. Your team might include:
Real estate agents who understand the investor’s perspective.
Property managers to streamline tenant interactions and maintenance.
Lawyers specializing in real estate transactions.
Accountants familiar with the tax implications of real estate investments.
4. Explore Financing Options
The path to acquiring a property is paved with various financing methods. Traditional mortgages are common, but the real estate industry offers other mechanisms like:
Hard money loans.
Private money loans.
Real estate syndication where multiple investors pool resources.
Seller financing.
Each of these has different pros and cons, interest rates, and repayment terms. Understand each deeply to determine which aligns best with your financial strategy.
5. Analyze Potential Properties
The crux of real estate investing is ensuring that the numbers make sense. Before purchasing, assess the property’s potential for generating rental income. Break down:
Monthly mortgage payments
Property taxes
Maintenance costs
Potential vacancy rates
Your goal should be a positive cash flow, where the monthly income from the property (rent) exceeds all these expenses.
6. Negotiate and Close the Deal
Once you’ve zeroed in on a property, the negotiation phase begins. Here, understanding the property’s market value, any existing damages or repair needs, and the local real estate market dynamics can give you an edge.
When it comes to closing, be aware of all associated costs. These might include inspection fees, title insurance, and escrow fees. Being well-informed can help you negotiate these fees and ensure that you’re not overpaying.
Risks and How to Mitigate Them
Like any investment, real estate comes with its set of challenges and uncertainties. The difference between successful real estate investors and those who falter is often the ability to anticipate risks and prepare for them. Here’s an exploration of some prevalent risks in real estate and actionable steps to manage them:
1. Market Fluctuations
Real estate markets can be volatile, with property values rising and falling based on a myriad of factors.
Mitigation: To protect against market downturns, it’s essential to buy properties below their market value. Conducting comprehensive research and seeking expert investment advice can help investors make informed decisions. Remember, real estate is often a long-term game, so a short-term dip can be offset by long-term appreciation.
2. Unexpected Repairs and Maintenance
Properties can often come with surprises, from plumbing issues to roof repairs.
Mitigation: Regular property inspections can catch potential problems before they become major expenses. Setting aside a buffer fund specifically for maintenance can also cushion the financial blow of unforeseen repairs.
3. Vacancy Periods
There might be periods where your property remains unoccupied, leading to loss of rental income.
Mitigation: Properly vetting and building a good relationship with tenants can lead to longer lease periods. Diversifying your investment properties across different areas can also help, as vacancy rates might vary from one location to another.
4. Legal and Tax Implications
Real estate investors can sometimes find themselves entangled in legal disputes or facing unexpected tax bills.
Mitigation: Regular consultations with a tax professional or attorney familiar with the real estate industry can keep investors informed and protected.
Long-term Strategy and Growth
Real estate investing is not just about making a quick buck; it’s about building lasting wealth. Adopting a long-term perspective and continuously refining your strategy can pave the way for consistent growth in the real estate industry. Here’s how:
1. Define Your Real Estate Identity
Are you more comfortable with a buy-and-hold strategy, where properties are retained for long-term growth and steady rental income? Or do you thrive on the excitement of flipping houses, where properties are bought, renovated, and sold for profit? Understanding your preference can help tailor your investment strategy.
2. Reinvestment is Key
For those adopting a buy-and-hold strategy, reinvesting the rental income can substantially grow your real estate portfolio. By channeling profits into purchasing additional properties, investors can benefit from compounded growth.
3. Diversify Your Portfolio
As you gain experience, consider diversifying across various real estate sectors. Branching out into commercial real estate or exploring real estate investment trusts (REITs) can provide additional avenues for income and growth.
4. Continue Your Education
The real estate industry is continually evolving. By staying updated on market trends, attending seminars, and networking with other real estate professionals, you can adapt your strategy and seize new opportunities as they arise.
5. Scale Strategically
A real estate empire begins with just one property. With time, dedication, and a sound strategy, it’s possible to grow your holdings into a substantial full-time income. As you scale, ensure you’re not overextending; always prioritize the quality of investments over quantity.
Key Tips for Beginners
Embarking on a journey into real estate investing can be thrilling, yet the complexities of the industry can sometimes overwhelm beginners. Simplifying the learning curve is essential for novice investors to make informed decisions and find success. Here are some pivotal tips to guide those just starting out:
1. Start Small and Scale Gradually
Many millionaire real estate investors began their journey with a modest property. Purchasing a smaller, more manageable property as your first investment can help you navigate the nuances of the real estate business without being overwhelmed. As you gain confidence and experience, you can then venture into bigger and more diverse properties to scale your portfolio.
2. Prioritize Education
The world of real estate is vast and ever-evolving. Leverage online real estate platforms to learn about market trends, investment strategies, and financing options. Additionally, joining real estate investment groups can be invaluable. These groups not only provide mentorship but also offer opportunities to share resources, insights, and deals with other investors.
3. Location is Crucial
In the real estate realm, location often takes precedence over the type or condition of a property. A mediocre house in a prime location can fetch better returns than a grand mansion in a less desirable area. Research local market dynamics, neighborhood amenities, future development plans, and other location-specific factors before making an investment decision.
4. Networking is Key
Surrounding yourself with knowledgeable people can fast-track your learning process. By connecting with seasoned real estate investors, you can gain insights from their experiences, avoid common pitfalls, and even discover potential partnership opportunities. Attend local real estate seminars, join investor forums online, and participate actively in real estate conferences to grow your network.
5. Stay Updated and Adapt
The real estate industry is not static. Market conditions, property values, and investment strategies can change. Being adaptable and staying updated on industry trends will ensure you remain ahead of the curve and can capitalize on new opportunities.
6. Always Conduct Due Diligence
Before diving into any real estate transaction, thorough due diligence is imperative. From understanding property taxes and zoning laws to estimating potential repair costs and evaluating tenant profiles, leaving no stone unturned will protect you from potential setbacks.
8 Terms Beginner Real Estate Investors Should Know
Venturing into real estate can feel like you’ve entered a world with its own language. Don’t worry; everyone feels this way at the start. Knowing basic real estate terms can help you communicate confidently and make informed decisions.
Dive into these essential terms every beginner should grasp:
Appreciation: Appreciation is the increase in the value of a property over time. It’s one of the primary ways real estate investors make money, especially in growing markets. Appreciation can result from factors like inflation, increased demand, or improvements made to the property.
Capitalization rate (cap rate): Think of the cap rate as a tool to gauge the potential return on a property. It’s a percentage derived from comparing a property’s net operating income to its current market price.
Cash flow: This term captures the money dance – what’s coming in and what’s going out. In the context of rental properties, it means the rental earnings minus all the costs. Positive cash flow indicates you’re earning more than you’re spending.
Equity: Equity represents the value of ownership in a property. It’s calculated by taking the market value of the property and subtracting any outstanding mortgage or loans against it. As an investor pays down their mortgage or if the property appreciates in value, their equity in the property increases. This equity can be tapped into for various financial needs or reinvested.
Leverage: This term refers to the concept of using borrowed money, often in the form of a mortgage, to invest in real estate. It allows investors to purchase properties with a small down payment and finance the remainder. When used correctly, leverage can amplify returns, but it can also increase the risk if property values decline.
Net operating income (NOI): Simplified, NOI is the profit made from a property after deducting all operational costs. It’s your rental income minus all the expenses, showing the true earning potential of a property.
Real estate owned (REO): An REO property is one that didn’t sell at a foreclosure auction and is now owned by the bank. These properties are often sold at a lower price because banks aim to sell them quickly, making them attractive to investors.
Return on investment (ROI): In simple terms, ROI measures the bang you get for your buck. It’s calculated by comparing the profit you made to the amount you invested. The higher the ROI, the better your investment performed.
Conclusion
Real estate investing offers an avenue to diversify your portfolio, generate steady income, and potentially achieve long-term growth. With due diligence, a clear strategy, and the right team, beginners can successfully navigate the complexities of the real estate industry and lay the foundation for a prosperous investment journey. Remember, every millionaire real estate investor started with their first property. Your journey is just beginning.
The United States, as has most of the world, has made stricter and stricter building codes over the years. However, the United States does not have any national building codes the states or local cities make their own rules. I have found the states or areas with the strictest building codes also have the highest prices. The harder it is to build or repair homes, the more expensive they become because people stop building, and when they do build, they have to raise the price for it to make sense. So what areas have the strictest building codes in the US?
How do building codes change over time?
100 years ago there were basically no building codes. Anyone could build whatever they wanted, wherever they wanted with some minor restrictions. Over time, the government decided that houses and commercial properties were not safe enough and there needed to be standards set for construction and even repairs. Some cities, states, and counties choose to have stricter codes than others and the federal government has let local governments make those decisions.
You can see how building codes have changed over time by looking at houses built in different eras. 100 years ago some houses were built with amazing carpentry and we often hear “they don’t build them like they used to”. There were also many houses that were built like shacks that have since fallen down. I have bought many of those shacks as a real estate investor and am surprised many of those houses lasted as long as they did.
You can see improvements in houses by looking at houses from different eras. Houses that are 100 years old may not have any windows in the basement where egress windows are now required. Houses from 50 years ago had very little insulation whereas houses now are required to have a minimum amount. You used to be able to put three layers of shingles on a roof and now most areas only allow one. Areas close to the coast may require hurricane glass and reinforced structures.
The stricter building codes make houses safer and more energy efficient but they also make them more expensive.
What areas do not have building codes?
Believe it or not, there are still some areas in the US that do not have building codes! These states do not have building codes:
Alabama
Arizona
Colorado
Illinois
Mississippi
Missouri
North Dakota
Tennessee
Texas
West Virginia
Wyoming
While these states do not have standard building codes, the local cities and counties usually do. I live in Colorado and while there is no standard building code for the entire state, Denver and Boulder have some of the strictest building codes in the nation. Louisville, where the Marshall Fires occurred in 2021 requires fire sprinkler systems in all new houses although they did remove that requirement for houses destroyed in the fire!
Here are some counties without building codes (from https://offgridgrandpa.com/states-and-counties-with-no-building-codes/):
Delta County in Colorado
Montezuma County in Colorado
Arcosanti Urban Laboratory in Arizona
Brewster County in Texas
Wonder Valley in California
Marfa County in Texas
Terlingua Texas
Miller County Missouri
In these areas, you might be able to get away with building whatever you want as long as you are not in a city with more strict codes but remember codes can always change!
Do you need to get building permits?
What areas have the strictest building codes?
I found it interesting but not surprising that the areas with the strictest building codes tend to have the highest prices. When you look at the list below the most strict areas are definitely the most expensive as well.
You can read up on how they made the list and what the numbers mean here: https://realestate.wharton.upenn.edu/wp-content/uploads/2022/04/w835.pdf
Why do tougher building codes make it more expensive to build?
You will find that the most expensive places in the world and the US tend to have the strictest building codes. It is not real estate investors that push up prices as many people claim, it is the government. The harder it is to build and repair houses, the more expensive they are going to be when they are built. The harder it is to build houses, the fewer houses that will be built which will also cause an imbalance in the housing market driving prices up even further. You will also find fewer investors in these areas because it is hard to build, expensive to own, and a pain to do business in those areas.
Conclusion
Building codes do make houses safe and more energy efficient but they also make houses more expensive at a time when houses are becoming less and less affordable. If you are pushing for stricter building codes and more energy-efficient homes, you are also pushing for higher prices. While homes in the US seem to be out of range for many people thanks to high-interest rates, remember the US actually has the 5th most affordable housing in the world.
Scalability, Insurance, Digital, Servicing, DPA Products; Events, Training, and Webinars
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Scalability, Insurance, Digital, Servicing, DPA Products; Events, Training, and Webinars
By: Rob Chrisman
Tue, Oct 10 2023, 10:26 AM
“I dance like people wish they weren’t watching.” Someone sure is watching, and counting, empty houses. Lack of available housing inventory has helped keep housing costs high throughout many of the nation’s big cities, but nearly 5.5 million homes sit vacant across the nation’s 50 largest metropolitan areas. The average vacancy rate across these 50 metros is 7.22 percent, with New Orleans (13.9 percent), Miami (12.7 percent), and Tampa (12.2 percent) having the highest vacancy rates. Vacancy rates are lowest in Minneapolis, Austin, and Washington, D.C., the only metros in the study with vacancy rates below 5 percent. Just because an area has a high vacancy rate doesn’t necessarily mean that there’s something wrong with its housing market. Roughly one-quarter of vacancies are due to being empty for rent, one-fifth because they’re only used part time, and one-twelfth because they’re being repaired or renovated. (Today’s podcast can be found here. This week’s is sponsored by NotaryCam, your partner for The Perfect Close! Ease of use, additional closing compliance, better borrower experience, reduced timelines, and cost savings, what is stopping you from getting on the RON train with NotaryCam? Listen to an interview with Curinos’ John Sayre on key data points from the residential lending markets and how lenders are utilizing that data to make more informed decisions.)
Lender and Broker Software and Services
“If you’ve got buyers who need just a little more cash, get to know Down Payment Resource and its nationwide database of down payment assistance (DPA) programs for FTHBs, repeat buyers, teachers and first responders to name a few. At MBA Annual, catch DPR’s Rob Chrane on a panel with loan Depot’s Mosi Gatling, FormFree’s Christy Moss, iEmergent’s Laird Nossuli and Movement Mortgage’s Montell Watson to explore DPA’s role in reaching mortgage-ready borrowers (Tues. 10/17 @ 3 pm). Need more now? Schedule a meeting with us at Annual or download this case study on how Gatling produces nine figures working with the Nevada Rural Housing Authority to assist first-time, military and low-income buyers.” (STRATMOR’s current blog is titled, “Mind the Down Payment.”)
There are banks, and there are subservicers. Much rarer is the combination: a bank subservicer, a subservicing partner that also offers the surety and stability that comes with being a depository institution. This is the unique combination that Servbank offers. The great people, great tech, and best-in-class experience that is delivered to customers and clients is strengthened by the “bank subservicer” designation. The distinguishing effect for customers and clients? The safest, most comprehensive, and truly reliable partnership the industry has to offer. Partner with Servbank today.
For more than 30 years, Clayton, a Covius Solution, has been a market leader in loan due diligence, helping mortgage and capital market clients see and evaluate risk in their portfolios. Now Clayton’s best-in-class service and expertise is supported by its new digital platform, Focus. Focus allows clients to efficiently access deal information and seamlessly upload, validate, and work exceptions, all in one place with a single sign-on. From a correspondent lending perspective, the platform offers aggregators real-time access to conditions, loan grades and documents on the loans they are acquiring. Aggregators can also give correspondents viewing and transacting rights to their specific pipelines, while monitoring performance across all counterparties. Contact Tom Coffey, Clayton VP of Business Development, to learn more or to schedule a meeting with him at MBA Annual in Philadelphia Oct. 15-18 or at ABS East in Miami Oct. 23-25.
Boo! LoanCare’s bringing all treats (no tricks) to this year’s MBA Annual Convention in Philadelphia! Join Kevin Cooke, Jr., financial industry-veteran and recently appointed Head of Strategy & Business Development, and key members of Company leadership for the unveiling of two new proprietary consumer-facing digital platforms unlike any other on the market. “I am excited to bring a best-in-class opportunity to our partners to communicate and market products to their homeowners,” said Kevin. “Reach me at Kevin Cooke and let’s see how our seamless blend of tech innovation and exceptional user experiences can serve your portfolio.” Private demonstrations of LoanCare Analytics™ will also be available to those interested.
Matic, a digital home insurance platform built for the mortgage industry, recently announced an exclusive partnership with New American Funding to extend their marketplace of 50 A-Rated carriers into New American Funding customer offerings. New American Funding joins over 100 mortgage lenders, servicers and banks, representing 20 percent of loans processed in the U.S., that partner with Matic to integrate the insurance shopping experience into the homeownership lifecycle. Now more than ever, mortgage leaders are turning to Matic to help them offer value to customers, generate revenue, and reduce costs in a tough housing market. If you’re a mortgage leader, don’t miss out: book a demo with Matic to learn how to add an ancillary revenue stream that removes friction from the insurance process and keeps customers within your existing systems.
In an unpredictable market, forward-thinking mortgage lenders are focused on what can be done now to prepare for the next market growth cycle. In a recent survey conducted by Wolters Kluwer, many lenders point to one key factor: scalability. To ensure they can scale to meet borrower needs, more and more lenders are looking at investment in innovative, flexible technology as the key to increasing ROI and stepping forward as market leaders. Read more about the survey responses today and be sure to schedule a meeting at MBA Annual to speak with an expert.
Training, Events, and Webinars
Like every other month, with roughly a third of the month over with, October if flying by. What’s happening out there? A good place to start is here, and click on “events” for conferences in the future.
Looking to learn all about DSCR loans for the rental market from an industry expert? Join LendingOne’s upcoming webinar events featuring Samuel Bjelac, VP of Third-Party Originations. He offers his valuable insight into DSCR loans, along with a comprehensive overview of how LendingOne is helping mortgage brokers and their clients succeed in the rental market. Tomorrow! Save your spot for October 11th at 2PM. DealDesk: Focus on DSCR Loans for Rental Investment Properties: Register Here. Monday, October 16th at 2PM. Register for this free webinar presentation in collaboration in NAMB: Investment Property Solutions for Mortgage Brokers: Sign Up Today. For more information about the LendingOne Third-Party Originations Channel, call us today to learn more: 866-794-0937 or visit our website.
Home ownership remains the de facto American Dream, and as a credit union you are well-positioned to help your members make that dream a reality. So why do so many members choose to finance their home purchases elsewhere? Join Mark Teteris, CMB, and John Dumonsau from Optimal Blue on Oct. 24 for an ACUMA Inside Track webinar titled “Mortgage Pricing and the Member Journey.” During this knowledge-packed session, you will hear from experienced mortgage industry professionals on how you can position your credit union for mortgage success by creating a structure that provides members with the information, tools, products, pricing, and confidence to secure their home loan with you. Save your seat today.
Today is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman, and sponsored by National MI. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode. Today you’ll hear from Michael Sarracini, the CEO of Keyspire. After building a multimillion-dollar real estate empire by the time he turned 25, he has trained more than 100,000 real estate investors to build wealth through real estate. As a young and successful investor, Michael will bring a unique perspective on how the next generation perceives real estate and the messages they need to step into the market.
Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. Tomorrow’s features Plaza Home Mortgage’s head of capital markets, Mike Modell.
ConFi Today’s third session webinar, Wednesday, October 11th 11:30 am–12:30 pm PT | 1:30 pm–2:30 pm CT | 2:30 pm–3:30 pm ET; Real Talk About Artificial Intelligence: How Will Enforcement Activity Impact the Use of AI in Consumer Financial Services, will focus on the latest issues and enforcement trends related to financial institutions using AI tools.
Friday the 13th is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT in “The Rundown”. Tom G. and I are joined by Delmar’s head of business development Victoria DeLuce.
PRMG University TPO October Training Calendar: Learn about the FHA 203(h) product, the Mortgage Insurance for Disaster Victims program. Friday, October 13th | 1:00 PM – 2:00 PM PDT. Join PRMG University to learn about PRMG’s non-QM Expanded Access product which provides options for bank statements, express documentation, assets for qualifying, reduced derogatory seasoning and much more. Friday, October 20th | 10:00 AM – 11:00 AM PDT. Join PRMG University and Essent to learn how to review short-term rental income guidelines, when you can use it as income and how to document it. Monday, Oct 23rd | 1:00 PM – 2:00 PM PDT
As we celebrate America’s independence, we have many other reasons to celebrate as well. This October 15-18, we’re taking the original gathering of real estate finance professionals to the birthplace of our country, and we’re celebrating some of the reasons you’re going to love it: MBA’s Annual Convention & Expo 2023.The largest annual gathering of real estate finance professionals, this is the one event you need to gain access to the industry’s power players and innovators. Be inspired and get informed by engaging speakers on the Main Stage. Meet with dozens of exhibitors in THE HUB and get hands-on access to the latest products and services. Dive deep into Breakout Sessions to get the insight you need on all the facets of the business.
Appraisal Buzz new course: Review Case Studies Residential. Apply the review process that you learned in Review Theory-Residential by walking through a case study that focuses on a two-stage review assignment. Day one begins with a quick refresher of review concepts. From there, you will work on an assignment that gets dropped on your desk much like it does in real life. Working in groups, as well as individually, you’ll identify and analyze the components of the case study review assignment. October 16 – 19, 10:00 AM – 2:00 PM CT. 14 Hours DE, 1 Hour exam.
Arch MI October webinars. Google CEO, Sundar Pichai says “AI is more profound than fire or electricity or anything we’ve done in the past.” If you’d like to find out how you can use this powerful tool in your business, register to attend the upcoming Arch MI webinar on Wednesday, Oct 18th. Ginger Bell, CEO, Edumarketing will be sharing how to leverage AI for your marketing. Register here.
Join CoAMP and Deephaven Mortgage as they present NON-QM Best Practices October 19th @ 2:00 PM, MDT. Discover how to incorporate Tech and Traditional Training to become subject matter experts. Cost: Member & Member Guests – $25; Future Members – $50
Join MMBBA for Lunch & Learn: New Homes & Builder Update Thursday, October 19 from 11:00 am-1:00 pm. Hear Zonda’s Nicollette Chapman deliver a powerful and impactful class about the current state of the housing market, the new construction market, local updates, and how to secure more builder business all backed by Zonda’s data.
Join Mortgage Bankers Association of Metropolitan Washington for a fast-paced, fun presentation walking through the Fed’s monetary policy, economy, interest rates and housing as we quickly approach 2024. “Reading the Markets: A Real-time Economic and Interest Rate Discussion” with Bill Bodnar, Thursday, October 19, 10 – 11 am.
Capital Markets
Rates are, at least temporarily, down this morning based on war in Israel, but we’re still talking about the jobs data. Nonfarm payrolls nearly doubled consensus expectations as 336k jobs were added in September and the prior months were revised up. 70 percent of the increase could be attributed to the leisure and hospitality, government, and health care sectors. The unemployment rate, labor force participation rate, and average workweek all remained at their August levels. A resilient labor market and rising wages put pressure on the Fed to keep rates in restrictive territory.
We also learned last week that the number of available jobs also increased unexpectedly to 9.6 million led by a sharp increase in business and professional services. It is possible that the strikes involving major labor unions will add to wage growth later this year although other non-union workers are likely to see slower wage growth this year. Elsewhere, manufacturing continued to contract for the eleventh consecutive month in September, however at a slower pace than prior months. The services sector grew for the ninth consecutive month and production increased at a faster rate. Overall, inflationary pressure remains despite certain areas of the economy having contracted due to the Fed’s tighter monetary policy.
This holiday-shortened week for the bond market brings the $101 billion mini-Refunding (e.g., the Treasury auctioning off securities) as well as updates on inflation, including PPI and CPI, inventories, and Michigan sentiment. The week is also heavy with Fed speakers, while the minutes from the September FOMC meeting will be released tomorrow. Regarding MBS and besides today’s Class A 48-hours, Class B net out is on Friday. We’ll also see bank earnings: JP Morgan, Citigroup, Wells Fargo, and PNC Financial, along with BlackRock.
Today’s economic calendar is already under way with NFIB small business optimism for September (dropped to a four-month low in September, reflecting worsening expectations for the economy and credit conditions). Later today brings wholesale inventories and sales, a Treasury auction of $46 billion of 3-year notes, and no fewer than four Fed speakers. Now that the bond market is back open, we begin the trading week with Agency MBS prices better than Friday’s close by roughly .250 and the 10-year yielding 4.70 after closing last week at 4.78 percent.
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Market trends in the past decade The white paper presented the differences between 2013 and 2023. Mortgage rates were just 3.98% back in 2013 and are sitting at 7.21% year to date. The number of new single-family homes completed in 2013 was 569,000 compared to more than one million in 2023 YTD. The average price … [Read more…]
The second way diversifying a portfolio through real estate helps is because it is in its own class when it comes to types of investments. Including real estate in an investment portfolio can provide massive benefits because of this separation. Real estate has a low correlation with other asset classes, such as stocks and bonds … [Read more…]
Buying and selling a home can be a confusing, intimidating process. From fine-tuning the initial listing to completing the mountains of paperwork needed for closing, homebuyers and sellers can find themselves juggling a wide range of issues. Real estate professionals can help by hosting educational workshops to help make the transaction easier. Here are 11 tips to make these workshops more effective.
1. Find your audience
Not every real estate transaction is the same because not all buyers and sellers are the same. Before you plan your workshop, consider who your target clients are. Do you specialize in helping first-time buyers and sellers, or are you leaning towards working with real estate investors? Maybe you are focusing on empty nesters looking to downsize or clients looking for vacation homes they want to rent out in the off-season.
Your audience will determine the focus of your workshop. It’s the first step to making your workshop a success, and also influences how you will market your event (more on that below).
2. Organize relevant topics
Your audience determines the topics you cover. Veteran investors don’t need a lecture on what to bring to the closing table, but first-time buyers do. First-time home sellers might be interested in learning how to prep their homes for sale, while rookie buyers might want a step-by-step outline of the entire process.
Start planning your event by making a list of the subjects that might be confusing or complicated, and plan your workshop itinerary from there.
3. Choose a venue
Don’t plan to fail by failing to plan, especially when it comes to things like parking, accessibility, and capacity. The venue you select needs to be comfortable and accommodating for everyone. Consider things such as:
Parking (number of spaces and accessibility for those in wheelchairs)
Seating at the venue (tables, chairs, etc.)
Location (central to public transportation)
Some good workshop venue options include community centers, public libraries, and hotel conference rooms. If you’re hoping to reach clients who are relocating from out of state, consider hosting workshops online.
4. Market your event
You can plan a perfect event, but if your marketing strategy isn’t comprehensive, how will people know about it? Again, how you market will depend on your audience. Social media marketing is a great way to spread the word and can be coordinated so one post hits multiple platforms at a time.
Other ways to reach a wider audience include:
Posting on community bulletin boards (in physical locations or online)
Sending a note to your mailing list
Asking former clients to spread the word
Another way to market is to ask influencers on social media to help promote the event. They may also be able to attend the event, bringing their audience with them.
5. Provide take-home resources
Real estate transactions can be complicated, and some attendees may be overwhelmed by the amount of information you present. Help them better understand and retain information by providing resources they can take home.
These handouts can include:
Checklists for the buying and selling process
Definitions of real estate terminology
Outlines of how to prepare a home to sell
A basic step-by-step guide to buying a home
Lists of related real estate professionals (i.e., mortgage lenders, home inspectors, etc.)
Very few people can attend an hour-long lecture and remember everything they heard. For best results, present information in many different ways. Use short videos, slideshows, and small-group discussions and activities to deepen their understanding of the topic.
7. Highlight guest speakers
Guest speakers provide two primary benefits to your workshop. They bring specialized expertise. Real estate transactions involve a variety of professionals, each experts in their field. Inviting these experts to speak is a great way to help workshop attendees better understand each step of the process. For example, a mortgage lender can describe different types of mortgages and explain which might be best for the buyer or the type of transaction. Guest speakers can also offer a neutral third-party perspective on sensitive topics, like how to save money at closing.
They cross-promote the event. Guest speakers will promote the event on their social media platforms. This increases your potential audience and introduces you to more people you might not otherwise reach.
8. Make it interactive
Very few people enjoy sitting in a chair for hours being lectured to. Give participants a chance to engage with speakers and other attendees. You can do this by facilitating small group discussions, encouraging questions, and organizing breakout sessions on specific topics of interest.
9. Ask for feedback
Getting a real estate workshop right the first time is hard, so asking participants for feedback is key. This helps refine planning for future events and helps build relationships with attendees. Additionally, positive feedback can be used (with permission) as testimonials to promote future workshops.
10. Follow up with participants
Asking for feedback is just the first level of follow-up after the workshop. Send out thank-you notes or emails the day after the workshop. On day three post-workshop, reach out again with an invitation to engage. This might look like:
Asking attendees if they have other questions
Providing additional resources
Sending listings based on interest
Offering incentives for continued collaboration
This is not the time for a hard sell, but following up with attendees is an opportunity to develop positive relationships that might lead to more business opportunities in the future.
11. Keep the most important thing the most important thing
Homeownership remains a crucial part of what is commonly referred to as the American Dream. The primary goal of these workshops is to educate people on how they can be involved in the pursuit of homeownership. For homeowners looking to sell, your workshop can be critical in their path to building generational wealth.
The most important thing? Educating attendees and demonstrating your knowledge, professionalism, and trustworthiness. By doing this, you position yourself as a valuable resource in your community who genuinely cares about their clients and wants the best for them. Ultimately, that will build a solid foundation for professional relationships that continue to grow as your clients’ needs evolve.
Luke Babich is the co-founder of Clever Real Estate.
With interest rates rising over the last year, it has made it tougher and tougher for real estate investors and owner-occupied home buyers. People need places to live whether they are rentals or personal houses and higher rates make those properties much more expensive unless someone is paying cash. While higher rates make it tougher to buy real estate that doesn’t mean you shouldn’t be buying. It is extremely hard to time markets and usually, the best time to buy is when the time is right for you. A lot of people predicted a real estate crash which has not happened and I don’t expect one to either. There simply are not enough houses and high rates are making that problem worse not better.
Have high rates caused property values to decline?
There are some potential benefits to investing in real estate during a time of high-interest rates. For example, lower demand could lead to lower prices for certain properties, which could make them more affordable for investors. Additionally, rising interest rates usually indicate higher inflation which could mean rents rise faster than in a normal market. There is, however, no guarantee that either of these things happen.
We have seen prices drop in some markets like Austin but overall prices are higher now than ever before. High rates do not cause prices to drop significantly because while they lower the demand for real estate, they also lower the supply. People do not want to lose their low rate and builders slow down construction. I have personally seen lower prices on multifamily properties which is most likely caused by higher rates. There could be a few more deals available in that sector.
High rates will most likely make real estate more expensive in the long term because it decreases building. The fewer building there is, the less inventory there is, and eventually, that will catch up to us with higher prices. I would not bet on prices to decrease in the future, especially long term.
Should you invest when interest rates are high or wait?
I think there are many more important things to consider when investing in real estate than how high rates are. Yes, they are important but not the most important thing. After all, investors have been investing in high-rate environments for decades and making money prior to 2000.
Here are some things to consider when deciding whether to invest in real estate when interest rates are high:
Does the property make money? Just because rates are higher, doesn’t mean that properties can’t make money. There could be markets or deals where a property cash flows even with higher rates.
What kind of investment are you looking for? If you are doing a live-in flip or house hack it still might make sense to buy now since you have to pay for a place to live in whether you rent or buy.
Can you get a great deal? I get great deals on every property I buy and I would miss out on many deals if I stopped investing because rates are high. Often a great deal will make you much more money than the increased lending costs high rates cause.
Do you have the cash to wait out high rates? You might be able to get great deals that don’t cash flow now, but will in the future when rents increase or rates drop. If you are financially able to handle an asset that doesn’t make much money or even loses money for a year or two it still might be worth it to buy now.
Are you flipping or holding? If you are flipping houses the high rates may not impact you as much as landlords holding property. There is still enough demand to sell houses and flippers can continue to buy and sell.
Will rates go down allowing a refinance?
I believe that eventually, rates will decrease which could allow investors to refinance their loans and reduce their rates significantly. This could turn a money loser into a money maker or turn a single into a home run. I would not bet everything you have on rates going down but it is likely at some point. The big question is when will they go down and how much will they decrease?
No one knows the answer to either of those questions but inflation has been decreasing and the Federal Reserve should stop raising rates soon. If rates stay high it will most likely push real estate prices even higher but if they lower rates quickly it could lead to a buyer frenzy and big increases in prices. There are not too many scenarios where I see prices dropping in the long term.
Conclusion
If you can get good deals that cash flow there is no reason not to be investing in real estate right now. If you can find good deals or cannot find properties that make money then it may not make sense to invest in this market. But remember, the market may not be getting investor-friendly any time soon. If you are buying as an owner occupant, it usually makes sens to buy whenever the time is right for you and not the when the market is perfect.