Pricing, Internal Audit, CRM, Home Insurance, Lead Generation Tools; Comp Survey; MBA’s Cost Per Loan Stats
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Pricing, Internal Audit, CRM, Home Insurance, Lead Generation Tools; Comp Survey; MBA’s Cost Per Loan Stats
By: Rob Chrisman
Fri, Aug 18 2023, 10:49 AM
As numbers approaching a thousand head to Orange County, CA, for the California MBA’s Western Secondary, keeping an eye on the remnants of a hurricane, it is not an easy lending environment with mortgage rates at 20-year highs, firmly in the 7’s. Thomas Edison believed, “Vision without execution is hallucination.” Many owners of lenders and vendors had very good vision and execution some years ago when creating their companies. But thinking that 2020 and 2021 would continue indefinitely would have been classified as a hallucination, and obviously things have become much more difficult with many wondering where things go from here. I don’t have a crystal ball, but a certain percentage of those owners who deferred being serious about exploring a sale, waiting, until after the cycle was obviously on the downside, they’ve perhaps undermined an opportunity for negotiating more favorable deal terms. It can be argued that the smarter entrepreneurs engaged in company sale negotiations while industry mindset is mostly driven by prosperity. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades.)
Lender and Broker Software and Services
“No time for social media marketing? Introducing… Social Media Marketing for Busy Loan Officers. Tired of stressing over what to post on Facebook or LinkedIn? Want to grow your audience on Instagram without spending hours each week crafting the perfect post? With Be Loangendary, we do all of it for you. Here’s how: 1) Our team of mortgage copywriters and designers craft your social posts every week. 2) Once they’re perfect, we schedule and post to your social accounts. 3) You sit back, relax, and watch the “likes” start rolling in. With Be Loangendary, you get engaging mortgage content without breaking a sweat. That’s social media done for you. Want to get started? Enjoy a 14-day free trial on us!”
“Salesforce is committed to partnering with mortgage lenders to drive their technology transformation with modern solutions that are already in practice and serving many of the top mortgage lenders in the country. As part of its efforts to drive the industry forward through the adoption of a modern tech stack, Salesforce identified UMortgage to establish the precedent of utilizing its mortgage and lending software to its fullest potential to facilitate better client experiences. Using customized task management systems and automations within Salesforce, UMortgage has been able to achieve 300% year-over-year growth and near-perfect 95 net promoter score (NPS), an indicator of a best-in-class client experience. Check out the following link to learn more about the innovative technological systems that are helping UMortgage Loan Originators maximize their lead generation & conversion. With an investment in intuitive solutions, UMortgage is driving the mortgage industry towards a better future that enables brokers to thrive.”
We’re hearing that lenders are ramping up their tech stacks and (most importantly) focusing on the quality of the data powering that technology. If you’re considering taking your company’s tech stack to the next level, look for a property data provider that delivers the most comprehensive data through the best channels to meet your unique business needs. That’s why we’re highlighting First American Data & Analytics and its repository of more than 8+ billion recorded documents. First American is more than just a data provider. It offers end-to-end solutions for the mortgage lifecycle. From detecting fraud and risk to providing valuation solutions, First American powers lenders to make informed, data-driven decisions. If you’re ready to have access to the most accurate, complete, and current data, reach out to the team and get a data sample now.
“Lenders, the home insurance market is facing unprecedented volatility. We want to hear if it’s affecting your business and the closing process. Take our five-minute survey to share your thoughts. As a thank you, you can select to be entered to win a $100 Amazon gift card, compliments of Matic Insurance. Click here to begin the survey. Matic is a home insurance marketplace built for the mortgage industry. Learn how mortgage enterprises can implement a new revenue stream that helps borrowers navigate the insurance buying process. Book a demo today.
Wholesale lending is undergoing a transformation that will leave those who cling to outdated processes behind. Using bargain CRMs as electronic phone books or even worse, spreadsheets to track brokers, is a clear sign that your sales process is holding you back. Modern CRM technology like OptifiNow provides a comprehensive, out-of-the-box solution that helps wholesale lenders create a sales and marketing process that drives broker engagement and significantly increases loan volume. Download our guide to finding the right CRM for wholesale lenders to learn how to transform your wholesale business and stay ahead of the competition!
What’s an internal audit anyway and do you need one? An internal audit acts as a third line of defense for your mortgage operation. It provides comprehensive assurance based on the highest level of independence and objectivity to evaluate the effectiveness of management’s internal controls. This function should advise your mortgage operation on plans to achieve the company’s strategic, operational, financial and compliance goals. An effective internal audit should go far beyond just checking a compliance box; it should be an integral part of protecting your company. If you want to ensure you’re adhering to regulatory requirements and demonstrating good faith business practices, a Richey May internal audit is a good fit. If you’re looking to be Fannie Mae approved in the future or want to maintain your approved status, it’s required. If you’re unsure whether you need an internal audit, ask one of Richey May’s experts today or learn more here.
Pricing Products and Programs
“Lender Price introduces Composable Pricing UI, an innovative user interface that empowers lenders to effortlessly customize their pricing engine using No Code or Low Code options. With a variety of skinning options and increased flexibility, Lender Price users can now easily create a personalized pricing experience with an abundance of options to choose from. Surpassing the limitations of single UI platforms seen with competitors, the era of rigid, one-size-fits-all PPE’s is over. With a flexible pricing engine like Lender Price, users now have the ability to tailor their interface based on their individual needs and preferences. Composable UI represents a paradigm shift in digital lending technology UX, liberating both individuals and organizations from the constraints of single UI platforms,” said Dawar Alimi, Lender Price CEO. “With an abundance of options and unparalleled flexibility, users can personalize and take charge of their pricing experience.” Email us or request a demo today.”
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 like you 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 and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Check ReadyPrice out today.
STRATMOR Comp Information and Survey
Yesterday I published, “What do underwriters and processors and LOs make? STRATMOR has the information, spelled out in a recent Perspectives piece.” Several wrote to say that there is a wide disparity in pay based on experience, at every level, and that averages may not be telling the whole story. Point well taken, although the drop in volume/units has not been matched by the drop in personnel. Stay tuned…
Information is critical in making payroll decisions. STRATMOR Group’s Compensation Connection® Study provides valuable insight into compensation components, incentive plan structures, role specifics and more, aggregated by company type, annual volume, and region. Prior three-year trending is also included on most metrics. Get the compensation data you need: sign up for the Fall 2023 Compensation Connection® Study today!
Lenders can Relive the 2nd Quarter of 2023
Spoiler alert: Losses continue but at a slower pace. The MBA has crunched the numbers of those surveyed and calculated that independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net loss of $534 on each loan they originated in the second quarter of 2023, an improvement from the reported loss of $1,972 per loan in the first quarter of 2023.
Marina Walsh, CMB, MBA’s Vice President of Industry Analysis and overall good person, summed up the Quarterly Mortgage Bankers Performance Report. “After 11 consecutive quarters of increases, origination costs declined by over $2,000 per loan. Volume picked up during the spring homebuying season and additional personnel were shed. However, the substantial cost savings per loan was not enough to put the average net production income in the black… Production losses were less severe than the previous two quarters and net servicing financial income was strong. Additionally, most mortgage companies in our survey managed to squeeze out an overall profit during one of the toughest times for the mortgage industry.”
Once again, servicing income helped big time. Think about that as companies sell it off. When the MBA looked at both production and servicing, 58 percent of companies were profitable last quarter, an improvement from 32 percent in the first quarter of 2023 and 25 percent in the fourth quarter of 2022. Still, the average pre-tax production loss was 18 basis points (bps) in the second quarter of 2023, compared to an average net production loss of 68 bps in the first quarter of 2023, and down from a loss of 5 basis points one year ago. The average quarterly pre-tax production profit, from the third quarter of 2008 to the most recent quarter, is 47 basis points.
“Total production revenue (fee income, net secondary marketing income and warehouse spread) decreased to 328 bps in the second quarter, down from 358 bps in the first quarter. On a per-loan basis, production revenues decreased to $10,510 per loan in the second quarter, down from $11,199 per loan in the first quarter.
“The purchase share of total originations, by dollar volume, increased to a study high of 89 percent in the second quarter. For the mortgage industry as a whole, MBA estimates the purchase share was at 80 percent in the second quarter, with the average loan balance for first mortgages increasing to $343,386 in the second quarter, up from $329,159 in the first quarter.
It ain’t cheap to do a loan. “Total loan production expenses (commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations) decreased to $11,044 per loan in the second quarter, down from a study-high $13,171 per loan in the first quarter of 2023. From the third quarter of 2008 to last quarter, loan production expenses have averaged $7,236 per loan.
“Servicing net financial income for the second quarter (without annualizing) was $94 per loan, up from $54 per loan in the first quarter. Servicing operating income, which excludes MSR amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on the bulk sale of MSRs, was $105 per loan in the second quarter, up from $102 per loan in the first quarter.”
For all the stats, there are five Mortgage Bankers Performance Report publications per year: four quarterly reports and one annual report. Contact Falen Taylor (202-557-2771). The reports can also be purchased on the MBA’s website.
Capital Markets
At this point it can be argued that the Fed doesn’t want to see higher long-term rates. But bond yields continue to rise across the board, impacting mortgage rates of course, continuing an upswing that began nearly three months ago at the beginning of the summer. In fact, the yield on the benchmark 10-year Treasury (US10Y) closed at 4.25% on Wednesday, the highest level since 2008. The upward march this week follows the release of the latest Federal Open Market Committee minutes, which stressed that additional interest rate hikes might be needed.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy… Participants generally noted a high degree of uncertainty regarding the cumulative effects on the economy of past monetary policy tightening... and emphasized the importance of communicating as clearly as possible about the Committee’s data-dependent approach to policy and its firm commitment to bring inflation down to its 2% objective.”
Stronger-than-expected economic data continues to pour in, helping stock market prices, especially if you think the Fed to end its hiking cycle soon. Others say 10-year yields above 4 percent still present a good buying opportunity, in contrast to the potential rewards from pricey stocks and multiples that might not be as appealing. But it seems that bond investors have shifted to a “higher-for-longer” narrative coming out of the Fed, causing nominal rates and real rates to keep moving higher. Not good for housing affordability.
Strong economic data continued yesterday with initial jobless claims -11k and Philly Fed beating expectations by 22 points. That helped to lift benchmark 10-year U.S. Treasury yields above 4.30 percent as MBS once again sold off across the coupon stack. The recent surge in U.S. mortgage rates to anywhere between 10-month and two-decade highs, depending on who you ask, has pushed housing affordability to the lowest level in nearly four decades. Yesterday also brought another troubling sign for the Chinese economy as Beijing authorities are said to have told state-owned banks to step up intervention in the currency market in a push to prevent a surge in yuan volatility.
With no major data releases or Fedspeak today, the market will be left to its own devices. We begin the day with Agency MBS prices better from Thursday afternoon by .250, the 10-year yielding 4.22 after closing yesterday at 4.31 percent, and the 2-year at 4.91: yield curve inversion is alive and well without a recession.
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The Community Home Lenders of America (CHLA) this week submitted a letter to the Federal Housing Finance Agency (FHFA) in response to a recent request for input (FRI) on GSE single-family pricing framework. Its message? The trade group asked the regulator to “make no further changes for an extended period of time.”
The original RFI published in May was designed to gather public feedback on goals and policy priorities the agency should pursue in its oversight of the pricing framework.
CHLA says that its recommendation comes from the idea that “Enterprise pricing changes can create short term transition risk for lenders as they approach dates where prices change and that frequent pricing changes can pose a cost and resource burden on lenders, particularly with respect to necessary IT changes,” the letter said.
Because of this, CHLA says it would be “comfortable” if guarantee fees and loan-level pricing adjustments (LLPAs) remained at current levels for a “significant period of time,” which they define as through the end of 2024.
CHLA, which represents smaller lenders, said it continues to be “extremely critical” of a move by Congress at the end of 2021 to renew a 10 basis point increase to mortgage fees that Fannie Mae and Freddie Mac indirectly charge to consumers. The additional revenue generated by these fees was allocated for infrastructure spending.
The organization is critical of the move because “the proceeds of such fee collections [are] being used solely to pay for non-housing federal expenditures under the federal budget process,” the letter said. “This is a much broader concern than just Enterprise loans. CHLA has long been a vocal critic of budget and appropriations actions and rules under which federal agency mortgage loan fees are diverted to pay for non-housing spending.”
Because of that, CHLA is renewing its request to rescind the 10 basis point increase.
After expressing appreciation to FHFA for Preferred Stock Purchase Agreement (PSPA) changes that established guarantee fee parity, CHLA requests that such parity be extended to mortgage insurance pricing, and that a recent 400% increase by FICO for its credit scores should be scaled back to align more consistently with inflation.
“[FHFA] should direct FICO to eliminate the preferential pricing it arbitrarily gave to a select group of 54 lenders,” the letter said. “It is reasonable for FHFA to take such action, since FHFA requires a credit score on all Enterprise loans.”
Proposed LLPA changes to conventional mortgages initially announced in January have been a source of controversy. The mortgage industry itself expressed nervousness at the prospects of the changes, and an uproar eventually led to a sustained front of opposition by lawmakers in the U.S. House of Representatives which introduced a bill designed to block such changes from going into effect.
The changes specific to conventional borrowers with debt-to-income (DTI) levels at or above 40% were ultimately rescinded, but not before House Republican lawmakers took aim in a House Financial Services subcommittee hearing and an additional hearing with FHFA Director Sandra Thompson as a witness.
“I want to be very clear on one key point, and one that bears repeating: under the new pricing framework, borrowers with strong credit profiles are not being penalized to benefit borrowers with weaker credit profiles,” Thompson said during the hearing. “That is simply not true.”
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When I became an accredited investor, I found myself among an elite group with the financial means and regulatory clearance to access investments that many couldn’t. This opened doors to exclusive realms like hedge funds, venture capital firms, specific investment funds, private equity funds, and more.
Even though I had this “exclusive access” it took me awhile to start investing in alternative asset classes.
The Securities and Exchange Commission states that as an accredited investor, I possess a level of sophistication that equips me to craft a riskier investment portfolio than a non-accredited investor. While this might not be universally true for everyone, in my case, I had demonstrated the financial resilience to bear more risk (see barbell investing), especially if my investments took an unforeseen downturn.
One of the intriguing aspects I discovered was that investment opportunities for accredited investors aren’t mandated to register with financial authorities. This means they often come with fewer disclosures and might not be as transparent as the registered securities available to the general public.
The underlying belief is that my status as a sophisticated investor implies a deeper understanding of financial risks, a need for less disclosure on unregistered securities, and a conviction that these exclusive investment opportunities are apt for my funds.
On a personal note, as a practicing CFP®, I hadn’t always worked with accredited investors. Early in my career, I didn’t quite grasp the allure. But as time went on, I began to see the broader spectrum of investment options available to accredited investors.
As I learned more the clearer it became why this realm was so sought after. The variety and potential of these exclusive opportunities were truly eye-opening, reshaping my perspective on the world of investing.
Introduction to Accredited Investors
An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access because they satisfy one or more requirements regarding income, net worth, asset size, governance status, or professional experience.
The concept of an accredited investor originated from the idea that individuals or entities with a higher financial acumen or more resources are better equipped to understand and bear the risks of certain investment opportunities.
Historically, the distinction between accredited and non-accredited investors was established to protect less experienced investors from potentially risky or less transparent investment opportunities.
Regulatory bodies, such as the U.S. Securities and Exchange Commission (SEC), have set criteria to determine who qualifies as an accredited investor, ensuring that they have the financial stability and sophistication to engage in more complex investment ventures.
Criteria for Becoming an Accredited Investor
To be classified as an accredited investor, one must meet specific criteria set by regulatory bodies:
Criteria
Description
Income Requirements
An individual must have had an annual income exceeding $200,000 (or $300,000 for joint income with a spouse) for the last two years, with the expectation of earning the same or a higher income in the current year.
Net Worth Requirements
An individual or a couple’s combined net worth must exceed $1 million, excluding the value of their primary residence.
Professional Credentials
Recent updates have expanded the definition to include individuals with certain professional certifications, designations, or other credentials recognized by the SEC. Examples include Series 7, Series 65, and Series 82 licenses.
Business Entities
Entities, such as trusts or organizations, with assets exceeding $5 million can qualify. Additionally, entities in which all equity owners are accredited investors may also be considered accredited.
Best Investment Opportunities for Accredited Investors
Here’s a rundown of some of the top investment for accredited investors…
1. Fundrise
Minimum Investment: $500
Best for: Newbie Investors
Fundrise has revolutionized the real estate investment landscape. By democratizing access to real estate portfolios, it allows individuals to invest without the complexities of property management or the need for vast capital. The platform’s innovative approach provides exposure to a traditionally lucrative, yet often inaccessible, sector of the market
Through Fundrise, investors can access a diversified range of properties, from commercial ventures to residential units. The platform’s expert team curates these portfolios, ensuring a balance of risk and reward. With its user-friendly interface and transparent reporting, Fundrise has become a top choice for many venturing into real estate investments.
How it Works: Investors start by choosing a suitable investment plan on Fundrise. Once invested, the platform pools the funds with other investors and allocates them across various real estate projects. As these properties generate rental income or appreciate in value, investors receive returns in the form of dividends or appreciation.
Pros:
Diversified real estate portfolios.
User-friendly platform with transparent reporting.
Cons:
Limited liquidity compared to public markets.
Returns are dependent on real estate market performance.
2. Equitybee
Minimum Investment: $10,000
Best for: Experienced Investors
Equitybee offers a unique platform that bridges the gap between private companies on the cusp of going public and potential investors. This innovative approach provides a golden opportunity for investors to tap into the potential of startups and other private firms before they make their public debut.
The platform’s primary focus is on employee stock options. By allowing investors to invest in these options, they can potentially benefit from their appreciation as the company grows. With a vast array of companies, from emerging startups to established giants, Equitybee presents a diverse range of investment opportunities.
How it Works: Investors browse available stock options from various companies on Equitybee. Once they choose an option, they invest their funds, which are then used to purchase the stock options from the employees. If the company goes public or gets acquired, the investor stands to gain from the increased value of these stocks.
Pros:
Access to pre-IPO companies.
Diverse range of startups and established firms.
Cons:
Platform fee of 5%.
Potential risks associated with private market investments.
3. Percent
Minimum Investment: $500
Best for: Novice Investors
Percent stands as a beacon in the vast sea of the private credit market, illuminating a sector often overshadowed by traditional investments. This burgeoning market, valued at over $7 trillion, consists of companies borrowing from non-bank lenders. Percent offers a unique vantage point into this market, allowing investors to diversify their portfolios beyond typical stocks and bonds.
The allure of Percent lies in its ability to offer shorter terms and higher yields, combined with investments that are largely uncorrelated with public markets. This makes it an attractive proposition for those looking to step away from the volatility of traditional markets.
How it Works: Upon joining Percent, investors are presented with a plethora of private credit opportunities. After selecting an investment, funds are pooled with other investors and lent out to companies seeking credit. As these companies repay their loans, investors earn interest, providing a steady income stream.
Pros:
Access to the burgeoning private credit market.
Potential for higher yields.
Cons:
Requires understanding of private credit dynamics.
Less liquidity compared to public markets.
4. Masterworks
Minimum Investment: $10,000
Best for: Novice Investors
Masterworks paints a vivid picture of art investment, blending the worlds of finance and fine art. Traditionally, investing in art was a luxury reserved for the elite. However, Masterworks has democratized this, allowing individuals to buy shares in artworks from world-renowned artists.
The platform’s strength lies in its expertise. From authentication to storage, every facet of art investment is handled meticulously. This ensures that investors can appreciate both the beauty of their investments and the potential financial returns.
How it Works: After registering on Masterworks, investors can browse a curated selection of artworks. They can then purchase shares, representing a fraction of the artwork’s value. Masterworks takes care of storage, insurance, and eventual sale. When the artwork is sold, investors share the profits based on their ownership.
Pros:
Opportunity to diversify with fine art.
Managed by art experts.
Cons:
Art market can be unpredictable.
Long-term investment horizon.
5. Yieldstreet
Minimum Investment: $15,000
Best for: Advanced Investors
Yieldstreet stands at the intersection of innovation and alternative investments. It offers a smorgasbord of unique investment opportunities, ranging from art to marine finance. For those looking to venture beyond the beaten path of traditional stocks and bonds, Yieldstreet presents a tantalizing array of options.
The platform’s allure lies in its curated selection of alternative investments, each vetted by experts. This ensures that while investors are treading unconventional grounds, they’re not stepping into the unknown blindly.
How it Works: Investors begin by browsing through the diverse investment opportunities on Yieldstreet. After selecting their preferred asset class, their funds are pooled with other investors and allocated to the chosen venture. Returns are generated based on the performance of these assets, be it through interest, dividends, or asset appreciation.
Pros:
Wide range of alternative investments.
Potential for high returns.
Cons:
Some niches may be too specialized.
Requires a deep understanding of chosen investments.
6. AcreTrader
Minimum Investment: $10,000
Best for: Newbie Investors
AcreTrader, as its name suggests, brings the vast expanses of farmland to the investment table. It offers a unique opportunity to invest in agricultural land, combining the stability of real estate with the evergreen nature of agriculture. With the global population on the rise, the value of fertile land is only set to increase.
The platform meticulously vets each piece of land, ensuring only the most promising plots are available for investment. This rigorous process ensures that investors are planting their funds in fertile ground, poised for growth.
How it Works: Investors peruse available farmland listings on AcreTrader. After selecting a plot, they can invest, effectively owning a portion of that land. AcreTrader manages all aspects, from liaising with farmers to ensuring optimal land use. Investors earn from the appreciation of land value and potential rental income.
Pros:
Stable, tangible asset.
Potential for steady returns.
Cons:
Returns may be slower compared to other platforms.
Limited to U.S. farmland.
7. EquityMultiple
Minimum Investment: $5,000
Best for: Experienced Investors
Summary: EquityMultiple is a testament to the power of collective investment in the real estate sector. By leveraging the principles of crowdfunding, it offers a platform where multiple investors can pool their resources to finance high-quality real estate projects. This collaborative approach allows for diversification and access to projects that might be out of reach for individual investors.
The platform’s strength lies in its curated selection of real estate opportunities, ranging from commercial spaces to residential properties. With a team of seasoned real estate professionals at the helm, EquityMultiple ensures that each project is vetted for maximum potential and minimal risk.
How it Works: Upon joining, investors can explore a variety of real estate projects. After committing to a project, their funds are pooled with other investors to finance the venture. Returns are generated through rental incomes, property appreciation, or the successful completion of development projects.
Pros:
Diverse real estate opportunities.
Managed by real estate professionals.
Cons:
Market risks associated with real estate.
Longer investment horizons.
8. CrowdStreet
Minimum Investment: $25,000
Best for: Advanced Investors
CrowdStreet stands as a pillar in the commercial real estate investment domain. With its vast experience and industry connections, it offers a platform where investors can tap into prime real estate projects across the nation. From bustling urban centers to tranquil suburban locales, CrowdStreet provides a diverse range of investment opportunities.
The platform’s expertise ensures that each project is meticulously vetted, offering a blend of potential returns and stability. For investors looking to delve into commercial real estate without the hassles of property management, CrowdStreet is an ideal choice.
How it Works: After registration, investors can browse a myriad of commercial real estate offerings. Upon investing in a project, CrowdStreet manages the investment, providing regular updates and ensuring optimal project execution. Investors earn returns based on the project’s performance, be it through rentals, sales, or project completions.
Pros:
Access to prime commercial properties.
Established platform with a proven track record.
Cons:
High minimum investment.
Market dependency for returns.
9. Mainvest
Minimum Investment: $100
Best for: Newbie Investors
Mainvest offers a refreshing twist in the investment landscape, focusing on the heart and soul of the American economy: local businesses. From quaint cafes to innovative startups, Mainvest provides a platform where investors can support and benefit from the growth of small businesses in their communities.
The platform’s community-centric approach ensures that investments are not just about returns but also about fostering local economies. For those looking to make a difference while earning, Mainvest presents a unique opportunity.
How it Works: Investors can explore various local businesses seeking capital on Mainvest. By investing, they essentially buy a revenue-sharing note, earning a percentage of the business’s gross revenue until a predetermined return is achieved.
Pros:
Support and invest in local businesses.
Low minimum investment.
Cons:
Risks associated with small business investments.
Returns might be slower compared to other platforms.
10. Vinovest
Minimum Investment: $1,000
Best for: Novice Investors
Vinovest uncorks the world of wine investment, offering a blend of luxury, history, and financial growth. Fine wines have been a symbol of opulence for centuries, and Vinovest provides a platform where this luxury becomes an accessible investment.
With a team of wine experts guiding the way, the platform ensures that each wine is not just a drink but an investment poised for appreciation. From sourcing to storage, Vinovest handles every facet, ensuring the wine’s value grows over time.
How it Works: After signing up, investors set their preferences and investment amount. Vinovest then curates a wine portfolio based on these preferences, handling sourcing, authentication, and storage. As the wine appreciates, so does the investor’s portfolio.
Pros:
Unique investment opportunity in fine wines.
Managed by wine connoisseurs.
Cons:
Long-term holding for optimal returns.
Market influenced by external factors like climate.
11. Arrived Homes
Minimum Investment: $100
Best for: Novice Investors
Arrived Homes offers a fresh perspective on real estate investment, focusing on the charm of single-family homes. While skyscrapers and commercial complexes often dominate real estate discussions, single-family homes offer stability, consistent returns, and a touch of nostalgia.
The platform’s strength lies in its focus. By concentrating on single-family homes, it offers investors a chance to tap into a stable real estate segment, benefiting from both rental income and property appreciation.
How it Works: Investors browse available properties on Arrived Homes. After selecting a property, they can invest in shares, representing a portion of the home’s value. As the property is rented out, investors earn a share of the rental income. Additionally, any appreciation in property value benefits the investors.
Pros:
Low minimum investment.
Quarterly dividends.
Cons:
New platform with a shorter track record.
Limited to single-family homes.
12. RealtyMogul
Minimum Investment: $5,000
Best for: Novice to Experienced Investors
RealtyMogul stands tall in the commercial real estate investment landscape. It offers a platform where diversification meets opportunity, presenting a range of commercial properties for investment. From bustling office spaces to serene residential complexes, RealtyMogul provides a plethora of options for investors to expand their portfolios.
The platform’s prowess lies in its dual approach. Investors can either dive into non-traded REITs or make direct investments in specific properties. This flexibility ensures that both novice and experienced investors find opportunities that align with their investment goals.
How it Works: Upon joining RealtyMogul, investors can choose between REITs or direct property investments. Their funds are then channeled into these real estate ventures. Returns are generated through rental incomes, property sales, or successful project completions.
Pros:
Wide range of commercial properties.
Both REITs and direct investments available.
Cons:
Market risks inherent to real estate.
Higher minimums for direct investments.
The Future of Accredited Investing
The world of accredited investing is dynamic and ever-evolving. Emerging trends suggest a shift towards democratizing investment opportunities, with regulatory bodies considering more inclusive criteria for accredited investor status. This shift aims to balance the need for investor protection with the recognition that financial acumen can come from experience and education, not just wealth.
Furthermore, technological advancements are playing a pivotal role. The rise of blockchain and tokenized assets, for instance, is creating new avenues for investment and might reshape the landscape of opportunities available to accredited investors.
xAs the line between traditional and alternative investments blurs, the future promises a more integrated, inclusive, and innovative environment for accredited investors.
The Bottom Line – Top Investments for Accredited Investors
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Understanding the role and opportunities of accredited investors is crucial in the modern financial landscape. While the distinction offers privileged access to unique investment opportunities, it also comes with increased risks and responsibilities.
As the world of investing continues to evolve, potential accredited investors are encouraged to stay informed, conduct thorough research, and seek professional advice. The realm of accredited investing, with its blend of challenges and opportunities, promises exciting prospects for those ready to navigate its complexities.
FAQs – Investment Options for Accredited Investors
Why is there a distinction between accredited and non-accredited investors?
The distinction is primarily for investor protection. Accredited investors are deemed financially savvy or stable enough to handle the risks associated with unregistered securities, which might be riskier and less transparent.
What investment opportunities open up for accredited investors?
Accredited investors gain access to a broader range of investment opportunities, including hedge funds, private equity, venture capital, certain private placements, and more.
Are investments for accredited investors riskier?
While not inherently riskier, these investments often come with less regulatory oversight and transparency, which can increase potential risks. It’s essential to conduct thorough due diligence before investing.
Do accredited investors have any advantages in the public stock market?
While the primary benefits of being an accredited investor pertain to private investment opportunities, the financial acumen and resources associated with accredited investors can also be advantageous in public markets, especially when considering more complex investment strategies.
About the Author
Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. He was a financial planner for 16+ years having founded, Alliance Wealth Management, a SEC Registered Investment Advisory firm, before selling it to focus on his passion – educating the masses on the importance of financial freedom through this blog, his podcast, and YouTube channel.
Jeff holds a Bachelors in Science in Finance and minor in Accounting from Southern Illinois University – Carbondale. In addition to his CFP® designation, he also earned the marks of AAMS® – Accredited Asset Management Specialist – and CRPC® – Chartered Retirement Planning Counselor.
While a practicing financial advisor, Jeff was named to Investopedia’s distinguished list of Top 100 advisors (as high as #6) multiple times and CNBC’s Digital Advisory Council.
Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.
Regions Bank is in the process of shutting down three mortgage production offices that are “outside of [its] traditional branch network footprint.”
Unlike the bank’s 1,250 full-service branches, these three locations only offered mortgage products. A company spokesperson said all branches can “refer customers to mortgage loan officers who are based in dozens of locations across [its] retail banking footprint.”
Offices set to sunset in mid-October are located in Kansas City, Chicago and Cincinnati, a company spokesman confirmed. A little over two dozen employees will be impacted.
“As a normal course of business, we evaluate our network of locations to ensure we are leveraging our resources and making investments where customers need them most,” the company spokesman said. “After careful consideration, we have decided to close three mortgage offices that are outside of our traditional branch network footprint.”
The Birmingham, Alabama-headquarted bank is also making “a limited number of reductions” in its home loan direct division corresponding with changing customer needs as interest rates have risen, the spokesman added.
Interest rates most recently hovered around 7%, which has continued to put pressure on the mortgage lending business.
Loans issued from the three soon-to-be closed branches “will continue to be serviced by Regions, and [its] digital tools, as well as [its] wide network of mortgage professionals in several states remain available to meet customers’ needs.”
In the second quarter, the bank reported its total revenue increased 12% to $2 billion on both a reported and adjusted basis, driven by growth in net interest income. Meanwhile, the bank’s mortgage non-interest income dipped by almost half to $26 million, down from $47 million in the second quarter of 2022.
The bank’s presence stretches along the Southern and Midwestern part of the country, with offices in 15 states.
Regions Bank is not the only depository choosing to downsize its presence in the mortgage market.
Earlier this year, Wells Fargo left the correspondent lending channel, North American Savings Bank Financial and its thrift subsidiary NASB confirmed that it is exiting its consumer-direct business, while Republic First announced plans to end home lending in May.
A former Christmas Tree Shops store stands empty, after the company filed for bankruptcy and closed all of its stores, in Somerville, Massachusetts, U.S., August 14, 2023. REUTERS/Brian Snyder Acquire Licensing Rights
Summary
Companies
Law Firms
Retailer has closed all stores after failing to hit revenue targets
Christmas Tree Shops reached a deal to pay more than $1 million to employees who worked during store closures
Aug 16 (Reuters) – A U.S. judge on Wednesday converted Christmas Tree Shops’ bankruptcy to a Chapter 7 liquidation, saying a court-appointed trustee should take over the bargain retail chain’s wind-down and address doubts about unpaid employee wages.
Christmas Tree Shops filed for bankruptcy in May, hoping to keep most of its stores open while addressing its debt. But the company pivoted to a full liquidation in July after its store closing sales failed to meet revenue targets and Christmas Tree Shops defaulted on a $45 million bankruptcy loan.
During a hearing before U.S. Bankruptcy Judge Thomas Horan in Wilmington, Delaware, a lawyer for Christmas Tree Shops, Harold Murphy of Murphy & King, traded barbs with an attorney for bankruptcy lender and store liquidator, Hilco Global.
Murphy said that Hilco’s store-closing sales missed revenue targets by $14 million. Hilco counsel Gregg Galardi of Ropes & Gray countered that the retailer’s management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.
“Its clear to me that there’s been a complete breakdown,” Horan said when converting the case.
Horan convinced the two sides to reach a partial deal on employee wages, with Hilco affiliate ReStore Capital agreeing to pay $1.17 million to store-level employees who worked during the company’s going-out-of-business sales.
Hilco had initially argued it should not pay any more than it had budgeted in the bankruptcy loan, saying it did not trust Christmas Tree Shops’ calculation of employee wages. But Horan threatened to withhold fees from bankruptcy lawyers and professionals if any low-level employees went unpaid.
“This case is not going to be run on the backs of employees, that’s just unacceptable,” Horan said.
The agreement does not address wages for employees who worked at Christmas Tree Shops’ headquarters or wage claims filed by 250 workers who were laid off when the company went bankrupt.
A Chapter 7 trustee will address those claims, Horan said, adding “we’re not going to forget about the home-office employees.”
The Middleborough, Massachusetts-based company had 82 stores when it filed for bankruptcy, focused on selling home decor and seasonal decoration products.
The case is Christmas Tree Shops LLC, U.S. Bankruptcy Court for the District of Delaware, No. 23-10576
For Christmas Tree Shops: Harold Murphy of Murphy & King
For Hilco: Gregg Galardi of Ropes & Gray
For the unsecured creditors committee: Matthew Ward of Womble Bond Dickinson
Read more:
Retailer Christmas Tree Shops files for Chapter 11 bankruptcy
Bed Bath & Beyond files for bankruptcy protection, begins liquidation sale
Reporting by Dietrich Knauth
Our Standards: The Thomson Reuters Trust Principles.
Congratulations! You’ve decided to share your expertise with other real estate professionals and become a coach and trainer. You may think that the greatest challenge is to create the content — but that’s just the beginning. In reality, you also need to decide where your content is going to live so that it will be seen by people interested in not only what you have to say, but who also want to learn more.
Chances are, your “GoDaddy” basic website isn’t going to support what you need. The good news is that there are several sites available designed to help — whether it’s hosting your videos or selling your added-value content.
If you just want to build up your consulting and live one-on-one business, you might need all the bells and whistles. You could host it free on a site like OnTrack Agent and create a deep link on your own website to drive traffic. Maybe you want a high-level, high-touch experience with your students instead. Then the monthly payments of an all-in-one hosting platform could make sense. Whatever the case, the amount you charge your students should reflect the value of content, not how much it costs you to host it.
Before you choose, there are several additional issues to consider when making a decision.
Do you have a prospect pipeline, or do you need exposure to agents seeking coaches?
Do you want your own white-labeled site and if so, do you have the advertising budget to drive people there?
Do you want to be included with multiple coaches and trainers to reach a broader audience?
Do you just want to share single videos, or do you have visions of creating courses and other materials such as workbooks and other materials?
Do you want to build a resume of content to book more stage presentations and keynotes?
Can you do everything yourself or do you need production and design support?
Below are three different hosting sites to help you review and assess the one that will best fit your needs.
OnTrack Agent (OTA)
OTA offers a free platform with revenue share (10%). It is free to register as a trainer. OTA enables user video uploads and copyright control, plus it has a marketplace to sell books and products. OTA enables one-on-one coaching sales for upselling and database growth along with a backend store for each user for tracking and sales. It has a network of other trainers who drive traffic to the site for you to benefit. There is complete copyright protection and free advertising for new trainers. However, there is no CRM or course certificates offered
Kajabi
Kajabi costs $149-399 per month, and it is a high-end hosting platform. Users enjoy CRM management and email marketing capabilities. Kajabi is a complete online platform where users create their own platform, website and clickable funnels for user tracking and support. The site offers all-in-one branding and the chance to remove all Kajabi branding from your site. You can track sales, but won’t have the opportunity to advertise as a part of the base cost.
Thinkific
Thinkific costs $99 per month, and it offers the best overall hosting platform service for the cost. Users get CRM management, email marketing capabilities, drip campaign functionality and customizable landing pages. Thinkific offers an online platform with an integrated site designer, back-end tracking, user testing and an easy-to-use drag-and-drop course builder.
As any long-term investor in the market can attest, stocks rise and fall — influenced by a mix of economic trends and supply and demand.
Given the inherent volatility of stock values, there are periods when the market is down, and times when it’s gaining steam. So, how low can a stock go? Well, in some cases, stock prices can fall all the way to zero.
What happens when a stock goes to zero? Watching a stock in free fall can induce fear and panic in investors, causing some to sell their holdings. While most every investor aims to buy low and sell high, timing the stock market is very challenging and doesn’t guarantee that investors will see gains.
Sometimes when a stock goes down in value it can present an investment opportunity, but in other cases the stock could fall to zero and never recover. In the latter case, it may benefit investors to sell before the stock price falls all the way down to zero.
What Causes a Stock to Fall to Zero?
When a stock falls to zero, it doesn’t mean that the company is worth nothing. Some companies with very low stock values are still earning money or possess assets. And, some investors buy penny stocks that have extremely low prices.
What happens to a company when stock prices fall to zero? If a company continuously spends more money than it earns, and investors sell off the stock, ultimately, that can lead to the company going bankrupt. Most companies file for either Chapter 7 or Chapter 11 bankruptcy before their stock reaches $0.00.
Chapter 7 Bankruptcy
With a Chapter 7 bankruptcy filing, the company must sell off its assets until it can repay lenders and creditors. The order that stakeholders get paid is: creditors, bondholders, preferred stockholders, common stockholders.
This means that if the asset sale doesn’t bring in enough money to pay everyone, it’s likely that common shareholders won’t receive a dime. In this case, stockholders lose all the money they had invested in that stock.
Under Chapter 7, stock trading and all business activities must be put on hold.
Chapter 11 Bankruptcy
Under a Chapter 11 bankruptcy, the company negotiates loan terms with its creditors in order to avoid selling off assets. With Chapter 11, companies can still conduct business and their stock can be traded.
Once a company files for Chapter 11, it is likely that the stock will continue to fall, since many investors won’t have much faith in the business. Sometimes shares are canceled with a Chapter 11 filing. In that case, investors lose all the money they had put into the stock.
Even if a company files for bankruptcy before its stock falls to zero, their attempts to salvage the business may ultimately fail and the stock could become worthless. However, it can take a strong team and business model to go public and get listed on stock exchanges in the first place, so some bankrupt companies may have the potential to make a comeback.
Some companies with very low stock prices get acquired by larger companies before their stock falls to zero. Even a company with a low stock might have a promising product or service that a larger company is able to sell successfully. One example of this is when Alphabet acquired FitBit in 2021. 💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.
What Happens to a Company When Stock Prices Fall to Zero?
Some stock exchanges delist stocks if they fall below a certain level. For example, the New York Stock Exchange will remove a stock if its share price falls below $1 for 30 days in a row.
And, as mentioned above, if a company files for Chapter 7 bankruptcy, its stock will be delisted temporarily.
Can a stock go negative? Fortunately, it is not possible for a stock’s price to go into the negative territory — under zero dollars in value, that is.
Still, if an investor short sells or uses margin trading, they may lose more than they invested. For this reason, margin trading and short selling are risky investment strategies.
Short selling is when an investor predicts that a stock is going to decrease in value. So, rather than buying the stock, they ‘bet’ that it will go down. If the stock does in fact go down, they make money.
But, if the stock ends up increasing in value, they lose money. Potentially, an investor in this scenario could lose more money than they put into the initial short sell.
Margin trading is when an investor borrows money from the brokerage firm to trade stocks. If the investor makes a trade that doesn’t go in their favor, they can end up owing the brokerage firm money.
How Low Can a Stock Go?
Stock prices can fall all the way down to zero. That means the stock loses all of its value and a shareholder’s earnings are typically worthless. In this case, the investor loses what they invested in the stock.
Reasons for a Stock Losing Value Down to Zero
What makes a stock fall to zero? The are a number of reasons that may come into play, including:
• Losses in the company’s revenue or earnings, especially if the losses are persistent
• A perception in the market that the stock is overvalued
• Management issues, shake-ups in the company’s leadership positions, scandal, fraud — in short, anything that can make investor sentiment turn negative
For investors, these are all signs a stock is underperforming and red flags to watch out for.
Types of Stocks Likely to Fall to Zero
What is a stock that falls to zero? Every stock comes with risks, but some are more risky than others. Besides companies on the brink of bankruptcy, there are certain types of businesses that have a higher chance of becoming worthless.
Knowing what to look for and researching and evaluating stocks before buying is key to building a resilient portfolio. Some of these higher risk stocks might include:
Companies With Weak Business Models
Even if a stock is currently performing well, it may fall in the future if the business model is fundamentally flawed. For this reason, many investors prefer to research a company’s practices, team composition, and business model before investing in its stock.
Penny Stocks
Stocks that trade below $5 are known as penny stocks. These low price stocks tend to be very volatile, as the companies that issue them have low or no profit.
Sometimes penny stocks can even turn out to be scams.
Buying the Dip
Rather than selling stocks when the market declines, some investors believe it can be a good idea to buy while the market is low. By buying the dip, as it’s known, investors pay less for stocks.
And, since these stocks still have the potential to go up in value as the market recovers after the decline, they can be preferred by long-term investors who may have more time to let their portfolio go back up in value.
However, if a company is going bankrupt or otherwise likely to fall to zero, it’s unlikely to offer a strong return on investment.
It’s also very difficult to time the market, so a trader might buy in when they think the market has hit bottom, only to watch it continue to go down.
Generally, building a diversified portfolio can offer higher returns on average over time than trying to time the market based on shorter-term trends or dips.
Examples of Stocks That Fell to Zero
There are two particularly infamous examples of stocks that fell to zero:
Enron
In the 1990s, Enron, an energy company, hid massive losses by using accounting tricks. At one point, its stock price was over $90. In 2001, analysts and investors became suspicious and began asking questions. That same year, the company reported huge losses, and its stock plummeted to $0.26 right before it declared bankruptcy.
World Com
This telecom company falsely inflated its cash flow and net income by listing expenses as investments to hide losses. Its stock price fell from more than $60 a share to less than $1 before the company declared bankruptcy in 2002. 💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.
How to Prevent Holding a Stock that’s Falling Lower
While it’s true that the market is impossible to predict, there are some measures that investors can take to protect themselves from losses — especially in the case of a stock spiraling towards zero. Below are some common preventative investment measures.
Stop Losses
Knowing when to sell a stock is important. Investors can set up a trade to automatically sell shares if a stock reaches a specific price. This type of trade is called a stop loss. It’s a strategy that could help prevent losses in the case of an individual stock or overall market drop.
There are multiple types of stop losses, including trailing stops and hard stops. Trailing stops move the stop level up as the stock rises in value, but stay in place if the stock falls. Hard stops are fixed at a specific price and will execute if the stock falls to that price.
Limit Orders
Limit orders allow investors to set the price at which they want to buy a stock. An investor selects the price and the number of shares they wish to buy. In practice, the order only executes if the stock then hits that price.
This is one way for traders to step away without worrying that they’ll be buying in at a price they didn’t want.
Put Options
A put option is a type of order that gives traders the option to sell or short-sell a specific amount of stock at a specific price, within a certain time frame. If a stock decreases in value in this case, the trader can still sell it at a higher price than it previously held.
Diversifying Asset Holdings
In an effort to prevent losses, investors may want to diversify their portfolios into a mix of non-correlated assets — dividing their holdings between assets at a higher and lower risk of fluctuating in value.
In a diversified portfolio, if one asset class decreases in value, the other types may not. Over time, the ups and downs of each asset could possibly balance the losses in each.
Setting Up a Stock Portfolio
By researching companies and setting up a portfolio according to one’s personal risk tolerance, and then keeping tabs on the assets in that portfolio to monitor their performance, it may be possible to help hedge against a stock sinking down to zero.
FAQ
At what point does a stock become worthless?
A stock becomes worthless when it falls to zero and has no value. In this case, an investor loses the money they invested in the stock.
How low can a stock go before being removed?
Some stock exchanges delist stocks if they fall below a certain level. The New York Stock Exchange will remove a stock if its share price falls below $1 for 30 days in a row, for instance.
Do you owe money if a stock goes negative?
No. A stock price can’t go negative, or, that is, fall below zero. So an investor does not owe anyone money. They will, however, lose whatever money they invested in the stock if the stock falls to zero.
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Inside: Dreaming of ways to make money fast as a woman? Stop dreaming and take action. These are genius ways of making money online and at home.
Making money fast is crucial for maintaining a comfortable lifestyle, especially in the face of rising living costs. It can be the key to financial stability, providing additional funds to support and enjoy your lifestyle.
As a woman, you need to know how to make money fast.
This isn’t just about getting rich quickly. It’s about women gaining the freedom to live independently without financial constraints.
The feeling of financial security lessens stress; not having to worry over unexpected expenses plays a big role in your overall well-being.
This is what you want to do – make money fast!
Good news! You are in the right spot and I’ll show you my favorite ways to make money online.
Get into the right mindset, ladies! Making money fast isn’t just possible, but also liberating.
How can I make easy money ASAP?
Making easy money quickly can be achieved in various ways that utilize your skills and knowledge.
First and foremost, consider your own skills and expertise, and determine whether they could apply to jobs like cake baking, childcare, bookkeeping, house cleaning, or freelance writing.
This will tell you the easiest way for you to make money quickly. For me, I prefer to trade options in the stock market. Whereas someone else may choose babysitting or dog walking.
You need to find how to make money fast and we will help you with that decision.
Why Making Money Fast is Important
1. Makes it possible to live comfortably 2. Enables you to afford the best quality of life 3. Gives you the freedom to pursue your dreams 4. Gives you the freedom to live without financial constraints 5. Provides you with security and safety 6. Freedom to give back to your community 7. Freedom to choose how you spend your time 8. Opportunity to take risks and start a business 9. Provides you with a sense of power and control 10. Live without financial worry
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Are you passionate about words and reading?
If so, proofreading could be a perfect fit for you, just like it’s been for countless of readers! Learn how you can create a freelance business as a proofreader.
Check out this free workshop!
Bookkeeping is the most stable, reliable & simple business to own. This is how to make a realistic income -either part-time or full-time.
Find out TODAY if this is THE business you’ve been looking for.
How can I make a lot of money in hours?
Making income in a matter of hours for a woman is entirely feasible with a blend of freelancing, leveraging gig economy platforms, and capitalizing on your skills or assets. Here’s a quick guide for you:
Consider freelancing: Establish your writing, graphic design, or programming services on platforms like Fiverr or Upwork.
Dive into the gig economy: Sign up for TaskRabbit, Airbnb, or Turo to start earning.
Try online tutoring or content selling: Proficient in any subject or have strong graphic design skills? Go for tutoring or sell your content.
Indulge in buying & selling: If you’re good at purchasing low and selling high, then swap clothes or furniture, or even stocks.
Take online surveys or join market research groups on sites like Swagbucks for a rapid source of income.
Remember, time management is crucial for balancing multiple streams at once. Don’t forget to schedule wisely!
How to Make Money Fast as a Woman
No matter who you are, making money can be tough. But if you’re a woman, it can feel impossible.
From getting paid less than men for the same job to having a harder time getting promoted, the deck is often stacked against us.
Just so you know that making quick money in one day won’t happen overnight.
So, I’m going to tell you the best ways to make money fast as a woman.
1. Sell Services
Selling your skills or expertise is a fast, viable way to earn money. It’s all about utilizing what you already know to provide value to others.
Identify your marketable skills, such as cake baking, freelance writing, bookkeeping or even organizing spaces.
Brainstorm which of these services people could pay for.
Remember, you can tap into both physical tasks, like house cleaning or pet-sitting, and digital ones, like creating digital printables or offering consulting in your field of expertise.
Expert Tip: Launch your service with a few testimonials, helping to build trust with potential customers from the get-go.
2. Freelance
Freelancing is a savvy way for women to stack up earnings fast, offering flexibility and complete control over the workload. It’s a ticket to dodge conventional office politics and punch above your earning potential.
Start by identifying your freelance niche. You can be a writer, graphic designer, or anything you’re skilled at. Many people use their transferable 9-5 skills to side hustle.
Then, create your profile on platforms like Fiverr, Upwork or Guru – be sure to showcase your accolades.
Set your rates, then start connecting with clients looking for your talent.
Remember, success in freelancing is driven by quality and consistency. So, sharpen your skills and always exceed your client’s expectations.
Freelancing may start as a side gig, but with dedication, it can grow into a full-time job.
3. Become a Product Reviewer
Being a product reviewer is an intriguing job opportunity for those who enjoy sharing candid feedback about their experiences with various products.
As a product reviewer, you are required to assess products often sent to you from diverse companies.
Your role involves providing a comprehensive review that could range from making an unboxing video to writing a detailed article about the product’s features and performance.
This kind of job requires an unbiased perspective and the capacity to articulate your thoughts and experience in a detailed, user-friendly manner.
Companies value this form of direct feedback as it provides them with significant data about their product’s strengths and weaknesses as perceived by an end-user.
4. Virtual Assistants
As a woman, becoming a virtual assistant could be your fast lane to earning a substantial income.
This is especially a great option if you’re excellent in organization and time management along with the need for flexibility.
For many becoming a virtual assistant with no experience is possible. And very lucrative.
Finally, for your best shot at success in this field, taking a course to improve your learning curve is extremely helpful.
Potential to earn up to $43,000 per year.
5. Sell Your Crafts
Ladies, have you thought of turning your love for crafts into a profitable venture?
Find out what crafts are in demand. The higher the demand, the more profitable it would be to make and sell these crafts.
Remember, profitability hinges on what you sell and how much you sell. Happy crafting!
While you are limited on what you can earn by what you can make, it is possible to make money doing something you absolutely enjoy.
6. Stock Trading
Stock trading may seem daunting but it can be a quick route to financial independence, especially for women.
With the right tools, information, and mindset, you can swiftly navigate the market and amplify your earnings. In fact, this is something Teri Ijeoma did herself.
Educate yourself on the basics before you invest. This is exactly what I did and my investment has paid off.
Always be aware of the risks involved in stock trading and proceed cautiously. However, building up an investing education is a wise decision.
Learn how fast can you make money in stocks.
7. Babysit
Babysitting is a versatile side hustle offering flexible hours and good earning potential.
It’s an ideal opportunity if you’re seeking quick, extra income and enjoy children.
Obtain optional certifications like CPR and first aid to enhance your appeal. Visit platforms like Care.com, Sittercity, or Urbansitter to create your profile and connect with clients.
8. Transcriber
One field that remains highly overlooked is transcription.
A transcriptionist listens to audio files and converts them into written documents.
Gain a thorough understanding of the industry. Check out this free webinar to get the basics right.
Consider specializing in legal or medical transcription. These niches often fetch higher wages.
You could easily make $3000-$4000 monthly, working on your own schedule.
Remember, practice and precision can help you achieve a lucrative transcription rate.
9. House Cleaning
Cleaning can be a rewarding gig, especially if you like tidying spaces.
Despite recognizing the need for a clean home, many people often struggle to find the time or energy to routinely clean their homes. This is where the prospect of a housecleaning business arises.
Busy homeowners, parents juggling work and childcare, elderly individuals needing assistance, and even businesses needing regular cleaning services are all potential clients for a housecleaning business. This demand provides a consistent income flow for those offering cleaning services.
In fact, individuals transitioning into this field of work can negotiate their wages with clients, potentially earning more than $15 an hour based on the complexity and demands of the job.
10. Sell Printables on Etsy
Selling printables is an effective and lucrative method to generate passive income.
Once printables such as planners, calendars, and journals are designed, created, and listed for sale on platforms like Shopify or Etsy, they can consistently produce income without requiring continual input or maintenance.
According to several experts, one of the keys to making substantial profits from printables is to differentiate your products.
Building upon this idea of making money from printables, the free Printables Workshop by Gold City Ventures offers comprehensive insights into the process of creating and selling aesthetically pleasing printable products online. This accessible course can be an excellent starting point for beginners looking to navigate the printables market.
Selling printables on Etsy might be the perfect venture for you!
11. Dog Walking
Looking for a fun-filled way to make some quick bucks?
Dog walking could be the right side hustle for you, especially if you’re an animal lover.
Easy to find jobs for dog walking.
Suitable for people with flexible schedules.
Offers an active way to earn money.
Option to select your rates with platforms like Rover.
High demand especially due to increasing pet adoptions and busy pet owners.
You can work when you need to and not take clients when you don’t want too.
12. Make Money Blogging
Blogging is a popular and prevalent way to earn money. Many blog owners are women who want the flexibility to earn significant money at their own pace and schedule.
Earning money through blogging allows you to focus on something you’re passionate about. Any topic that can provide value to an audience can be blogged about. Targeting a niche that has been overlooked by existing blogs can increase your blog’s potential earnings.
Starting a blog doesn’t require formal training, but it does require a willingness and ability to write effectively for an audience.
By employing monetizing avenues, like affiliate marketing and advertising, a blogger can boost their earning significantly.
Despite the vast number of existing blogs, the industry is very accommodating toward new voices, especially female voices. Thus, knowing how to monetize a blog can offer women many opportunities.
Remember, blogging is not just about earning fast bucks, it also needs consistent efforts. It’s rewarding but can start slow.
13. Ride-Sharing
Ridesharing is an excellent opportunity for women looking to make fast money. With apps like Uber and Lyft, you can earn an income simply by offering transportation services.
Here are a few tips to increase your earnings:
Consider driving during peak hours, weekends, or during special events to cash in on higher demand.
Choose busy locations such as city centers and nightlife spots to increase your chances of getting rides.
Maintain good customer service and ensure safe driving to uphold your rating and receive more ride requests.
14. Office Cleaning
Considering the hustle and bustle of the daily grind, office cleaning can be an untapped treasure trove for women seeking quick cash. Given the high demand and flexible hours, it’s an ideal source of extra income.
You must identify office premises needing cleaning services. Reach out to the owners or management, and propose your services.
Think about offering your services to offices in your local area. It’s a fast way to make extra money while managing your other commitments.
15. eBay Arbitrage
Looking to earn some quick money? eBay Arbitrage could be the game-changer you need.
Aimed mostly at women who love shopping, it’s about buying products cheaply and selling them on eBay for a profit.
First, hunt for bargains in thrift stores, sales, or online markets.
Go with high-demand items; electronics, collectibles, or brand sneakers are a good start.
Then, create your eBay store and list your finds at a competitive but profitable price.
Track each item’s demand through keyword research and buyers’ reviews.
Remember to calculate potential profits inclusive of shipping costs and eBay fees.
Armed with the right strategies, you can start earning with eBay in no time!
16. Freelance Writing
Did you know your writing passion can become a quick buck-making engine? That’s right, freelance writing is a gold mine you ought to tap.
First, identify a writing niche you love. It’s easier to excel when you’re passionate about your work.
Continually hone your writing skills. The more you practice, the better you become and the more valuable your skills. Finally, don’t be shy to market your skills. Reach out to small businesses and startups—they often need freelance writers.
Remember, quality over quantity will earn you a solid reputation in the long run. Now, go turn those wordy wonders into wealth!
17. Online Surveys
Curious about making a quick buck? Engaging in online surveys can be a fast money-making method just for you!
You don’t earn a huge amount per survey but when taking multiple surveys, it will add up fast.
Here are the top legit survey platforms:
Use your free time wisely. Take surveys during work breaks or leisure hours.
Redeem points for PayPal cash or gift cards.
18. YouTube Channel Building
Building a YouTube channel can be an interesting and rewarding venture.
It provides an incredible platform to share your content, express your creativity, and engage with a global audience. Whether you want to showcase your talents, teach something unique or simply entertain, having a YouTube channel opens up many opportunities.
Effective engagement with your audience is vital.
Last but not least, patience is something you will need in abundance. Building a successful YouTube channel takes time, so don’t lose hope if you’re not seeing immediate results.
Remember, there’s no limit to what you can achieve with your YouTube channel. It all comes down to how creatively you can use this platform to engage with your audience and grow your presence.
19. Bookkeeper
In our increasingly digital age, online bookkeepers are in high demand, with more businesses choosing to move their financial operations to the online platform. This shift in business operations has created a robust opportunity for those trained in bookkeeping to tap into the market and earn income while working from the comfort of their homes.
To be successful as web-based bookkeeper, you need to be well-organized and have previous experience dealing with numbers. However, even without a formal accounting education, individuals can take advantage of online learning platforms like Bookkeepers.com to learn and sharpen their bookkeeping skills for free.
Becoming a virtual bookkeeper is not just a fantastic full-time job opportunity; it’s also an excellent side hustle for women and mothers proficient with numbers. It provides flexible hours and allows the freedom to work from anywhere, making it ideal for those juggling multiple responsibilities.
The financial compensation for an online virtual bookkeeper is quite significant. On average, bookkeepers can earn at least $50000 a year helping business owners manage their finance and bookkeeping online.
20. Start a Dropshipping Store
Dropshipping is a viable option with low startup costs that lets you run an online store without handling any physical products.
There is still plenty of time to get into the dropshipping business.
Start by deciding what products to sell. Find a niche you’re passionate about for a higher chance of success.
Remember, a successful dropshipping venture involves effective marketing as well. So invest time and effort into perfecting your advertising tactics.
21. Do Clerical Work
Clerical work offers flexible, remote opportunities for women to make quick money.
With adequate admin experience and internet access, you can explore roles like Virtual Assistant, Online Data Entry Professional, or Court Transcriptionist.
This is one of the best non phone work from home jobs.
Experts tip: Perfection and punctuality are key. Attention to detail and meeting deadlines can make you stand out.
22. Resell Clothes
Reselling clothes online is a savvy way to turn your clutter into cash, especially if you love digging for hidden gems.
It’s a popular method for fast cash flow, with Poshmark and Facebook Marketplace being perfect platforms. One of my friends is very successful with this!
Begin with your own closet, and sell kids clothes they have outgrown too.
Reinvest your earnings, by buying second-hand clothing to resell can boost your profits.
Don’t forget quality. Run a quick check for authenticity and brand labels.
Visuals sell. Stage items and capture high-res photographs.
Providing a great customer experience is key, ensuring prompt shipping and maintaining politeness.
Play your cards right, you could earn anywhere between $100 to $1,000 a month or even reach a six-figure yearly income.
23. Do Home-Based Child Care
Home-based child care is a viable option to earn money, leveraging the natural maternal instincts and caregiving skills of many women. It can be a lucrative side hustle and a means to financial independence.
This is especially a great avenue to pursue when you are already at home raising your own children.
Make sure to follow any state regulations about running a daycare out of your home.
Begin by determining the number of children you can handle at a time, taking care not to overbook.
24. Podcasting
Podcasting is a wonderful opportunity for delivering narratives. It enables you to weave compelling stories while inspiring, instructing, or simply entertaining your listeners.
The unique format of podcasting lets you connect with your audience on a personal level. They listen to your voice, engage with your thoughts, and feel a stronger connection to you.
By starting a podcast, you are joining an increasingly popular trend, with the global number of podcast listeners has grown to 464.7 million listeners in 2022 (source).
Podcasting also opens up doors for networking and collaboration. You can invite experts, artists, or like-minded individuals as guests on your show, thus expanding your network.
There’s a potential to earn from podcasting. With affiliate marketing, sponsorships, and advertising, the commercial possibilities of podcasting are extensive.
25. Merch by Amazon
“Merch by Amazon” is a print-on-demand service that allows you to design and sell your merchandise.
It’s a great money-making alternative as it offers massive exposure and doesn’t require any upfront costs.
One of the significant advantages of using Merch by Amazon for passive income is that you are not required to maintain inventory or deal with shipping. Amazon handles these aspects, allowing you to focus on the creation process and customer satisfaction.
Amazon’s royalty system ensures that you get paid instantly whenever your merchandise is purchased. This allows you to earn money passively with every sale.
When your designs meet the current market trends and the preferences of your customers, they are more likely to be popular, leading to an increase in sales, hence, higher passive income.
26. Become an Influencer
Becoming an influencer is a smart, quick way for women to make money. While most people just stumble upon becoming an influencer, you can decide to pursue this avenue.
With earning potential that is unlimited, this opportunity is flourishing, requiring no specific degree or job experience.
Remember, platforms like TikTok, Instagram and YouTube reward new, engaging creators.
Dedication and consistency could lead you to major earnings where you make thousands for each post.
27. Work as a Translator
Having mastery in more than one language opens up a world of opportunities, particularly in the realm of translation services. The ability to translate language effectively and accurately is a skill that’s in high demand in the current globalized world.
A top benefit of being a freelance online translator is the flexible work environment. You have the freedom to choose when, where, and how much you want to work. This flexibility for work-life balance is more appealing now than ever, especially in the unsteady job market.
Freelance translators also have access to a wider client base. Unlike full-time translators who work for specific organizations or agencies, freelance translators can work with various clients from all over the world, widening their potential income streams.
The need for translators is projected to grow substantially. In the United States alone, the U.S. Bureau of Labor Statistics reports that employment for interpreters and translators will increase by 20% from 2021 through 2031, which is much faster than the average for all occupations.
Among other freelance professions, translation can often provide a more stable income.
As most sectors including education, legal, business, medical, and technological firms continue to globalize, they regularly need translators to bridge the language gap, making freelance translation services a steady income source.
31. Become a Flipper
Becoming a flipper is a high-return, low-investment way to make money fast. It involves buying low and selling high, perfect for those wanting a profitable side hustle.
Here are actionable steps to kickstart your flipping journey:
Identify items to flip: Popular options include toys, clothes, electronics, books, and furniture. Pro-tip: Sell things you have around your house to start risk free.
Choose a selling platform: Sell locally via Facebook groups or Craigslist, use reselling apps like Decluttr, or open an online store on eBay.
Price it right: Pricing items competitively garners buyer interest and maximizes profit.
Learn more: Free webinars, like Flipper University and the Flea Market Flipper, offer insights for a successful flipping business.
Remember, flipping can be more than just a side hustle; it’s a potential full-time career.
32. Micro-Tasking
Micro-tasking offers a quick way for you to earn money by completing short and simple tasks.
As its popularity grows, so does the list of platforms where you can find micro-jobs. Here are the popular platforms.
This allows your the flexibility to work whenever you want. Plus no special skills or degrees are needed.
Just note… This is not a stable income source
Tips for Finding the Best Way for You to Make Money
As you can see, there are many different ways to make money fast as a woman.
You can find the best way for you by considering your skills, interests, and the amount of time you have available.
Here are some helpful tips to make sure you are earning money quickly.
1. Identify Your Skills and Offerings
You’re already gifted, let’s transform those skills into fast cash.
Make a list of your skills, passions, and expertise; you can tap into anything from programming to knitting.
That is where you want to start.
From personal experience, I can tell you it is way easier to work on a side hustle or business when you are passionate about the topic.
Remember, the digital world is your playground, so play, innovate and cash-in.
2. Research the Best Ways to Make Money
Now, that you know the skills and experience, look at the list above and determine which ones match up.
You will need to spend time watching a free webinar to learn more.
Compare different money-making ideas. From part-time jobs to freelancing, there’s a plethora of options. You need to pick what works best for you.
Remember, generating a consistent income requires effective strategies and the right mindset. So choose wisely!
3. Try Different Ways to Make Money – Not Just 9-5 Jobs
It’s vital to explore different money-making strategies as a woman for financial stability and independence.
Just because one avenue didn’t work out doesn’t mean you should throw in the towel.
Remember, the key to success is perseverance, so pick something you’re passionate about and stick to it. Try not to jump from one idea to another out of impatience; success takes time.
Also, as your revenue increases, start building a lifestyle business for passive income.
4. Focus on the Things You Are Good at
Unlock your financial potential by recognizing and utilizing things you’re excellent at.
To cash in fast:
Identify your standout skills. These could range from writing, fine arts, math, e-commerce to digital marketing or even passions such as sports and hobbies.
Assess the viability of earning via your skills. Research shows that the digital economy is filled with opportunities.
Exploit platforms that cater to your expertise. For freelance gigs, you can try platforms like Upwork, Fiverr, or Guru.
There are so many ways to make money online as a beginner. So, indulge in the digital playground, embrace exploration and innovation, and let your skills earn for you.
5. Find Opportunities That Allow You to Work Flexibly
You can choose when to work and when not to, rather than being constrained by a 9 to 5 workday. The flexibility to create your schedule means you can operate at your most productive times, whether that’s early in the morning or late at night.
Working from home or any location across the globe enables a better work-life balance, reducing stress and improving productivity. This is particularly beneficial for those who have families or are committed to other obligations.
When working for yourself, you may have the potential to earn more than traditional salaried roles.
Lastly, making a living from your passion is huge!
You are being paid to do what you love anywhere, anytime which is rare and precious.
6. Consider Specializing in a Niche Subject
Specializing in a niche subject can elevate your earning potential quickly, owing to smaller competition and a personalized audience.
Being a subject matter expert in a specific area can provide you with an edge over your competitors.
Specializing in a niche can help you stand out and garner a dedicated audience, ultimately leading to faster earnings.
Remember, the key to making money faster in your specialized area is persistence and patience. It may take time to build a strong following, but once you do, the financial rewards can be substantial.
Stick to your chosen area, continuously learn and improve, and consistently deliver high-quality content to make your mark in your chosen niche.
7. Take Advantage of Trending Opportunities
Jumping on trending opportunities can be a gold mine, especially for women who want to make money fast from home. These ever-evolving trends tap into various skill sets, interests, and experiences, potentially translating into a lucrative gig.
For many, it may have been TikTok when the company first started.
Remember, the digital world holds limitless potential. Just needing to innovate and execute your ideas!
8. Invest in the Right Tools and Equipment
The key to making money, either online or offline, is making an informed investment of your time into the right tools, equipment, and learning resources.
While this can initially seem like an expenditure rather than a money-making step, it is, in fact, a cornerstone of your financial growth strategy.
Investing time in learning and increasing your knowledge base is vital. This could mean spending your time reading about new insights in your area of work, attending webinars, or enrolling in online courses. The ROI of this proactive learning is immense.
Consider this an opportunity or a catalyst that speeds up your journey toward substantial income generation and financial freedom.
9. Commit to Consistent Efforts
Commitment to consistent efforts is the cornerstone of any successful endeavor, more so when running your own side hustle.
One of the fundamental principles for making money is the dedication to keep improving your craft, always learning, and always evolving.
This continual effort involves a long-term commitment to staying updated with the latest writing trends, styles, and industry standards.
With persistence and patience, the fruition of your investments will lead you toward the fulfillment of your financial dreams.
10. Utilize Social Media Platforms to Promote Your Business
Social media platforms are powerful tools for business promotion, and when used strategically, they can lead to fast monetary gains.
Understanding how to effectively utilize these platforms can drastically enhance your chances of making quick bucks.
Start by creating a robust online presence for your business on various social media platforms. Remember, consistency is key to building your brand.
Engage with your audience frequently and respond to their comments. This boosts engagement on your posts.
Post content that is engaging, relevant, and aligns with your business values.
Always monitor your performance using social media analytics to understand what works best for your audience.
Which side hustles for women have you tried?
Personally, here are the side hustles I have done or currently do:
Stock Trading as a swing trader
Online Content Creation
Social Media Influencer
Online Consulting
Pet Sitting or House Sitting
Teaching Dance Lessons
Personal Organizer
However, I know many people that have tried the ones listed above.
So ladies, which of these enticing hustles appeals to your skills and schedule the most?
FAQ
Stay-at-home moms have numerous opportunities to earn money from the comfort of their homes. Plus being able to bump up your household income while juggling parenthood is the perfect combination.
Find the best jobs for moms specifically!
Any of these opportunities requires dedication and consistent effort, but with time they can all yield substantial returns.
Thankfully, there are many ways for women to make money online.
Above we covered all of the interesting ways and many are online.
Remember, opt for an avenue that suits your skills, interests, and time availability.
Well. the answer to this will depend on who you speak with.
Personally, I find ways to build passive income with your side hustle as the best option. Then you aren’t trading your time for money.
As a woman, many opportunities are right at your fingertips. The most popular and profitable include:
Start a blog: With consistent readership, you can make thousands from ad revenue and sponsored content.
Virtual assistant: Services can fetch around $10-30/hour.
Social Media Management: Businesses are willing to pay up to $1000-2000 per month for proficient managers.
Bookkeeping: On average, freelance bookkeepers earn around $34/hour.
Selling products online: Sites like Etsy, Amazon FBA, or your own platform can earn you a substantial income with a successful shop.
Trading Stocks or Options: by improving your investing knowledge, you can quickly increase your net worth.
Remember – it all starts with a step. Your side hustle could turn into a full-time passion!
This is How to Make Money from Home as a Woman
In conclusion, as a woman, there are plenty of genius and fast ways for you to make money.
The article underlines the significance of grabbing the reins of your financial future.
Through the strategies shared – including investing in stocks, working from home, or using budgeting hacks, you can boost your income significantly.
One of the concepts, I’m big on is making sure you know how to make your money work for you.
With wise decisions and being open to possibilities, your financial independence is within reach.
Remember – the ball is in your court, so make sure to take that shot and score your financial goals. It’s high time to cash in on your potential!
Know someone else that needs this, too? Then, please share!!
The Fed recently announced yet another interest rate hike, making borrowing more expensive and pushing the prospect of purchasing a new home out of reach for an even greater share of Americans. At the same time, inflation is easing and the economy is showing unanticipated strength, with strong employment numbers and greater than expected GDP. All this means one thing for current and prospective homeowners – they shouldn’t expect the Fed to begin lowering rates any time soon.
Though this would typically signal a time for panic across the residential real estate profession, those who can focus on servicing their clients with a mind for the future will be well positioned for whenever the economics for home buying become more favorable.
Double down on relationship building
High mortgage rates mean those on the margins of potential homeownership are moved one step further away from their goal. It also means those currently in homes — some of whom purchased or refinanced through the historical low interest rate period after the pandemic — are disincentivized to buy a new home at current rates. Furthermore, for those looking for their next home, higher interest rates effectively reduce their buying power, translating literally to fewer and fewer square feet, bedrooms and bathrooms.
Real estate teams may lament homeowners’ waning interest in buying (or selling) into this market. But there are things real estate pros can do to make productive use of the moment, and double down on relationship building with new and existing clientele.
Educate and update
Stay connected. One of the biggest mistakes real estate professionals can make, regardless of the market, is not staying in touch with clients. Real estate can be a transient profession with many newcomers flocking to the industry when times are good, and falling out when times are tough. Times are decidedly difficult right now, reducing deal flow and overall revenue potential. Many will see the moment worthy of a pullback in their efforts, focusing on clients with a greater, real or perceived, likelihood of being able to transact. That state of mind is an absolute mistake.
Provide clients with market updates. Sharing recent news and its practical implications with current and prospective clients is an excellent way to check in and ensure they have a strong understanding of what impact rate increases, strong economic numbers and more will have on their immediate transaction prospects. Whether buying or selling a home, real estate pros who help their client base to have a clear understanding of what is happening, why, and what impact it will have, take advantage of a unique trust building opportunity. They provide clients with extra reassurance that they are indeed receiving good counsel on their (eventual) property endeavors.
Track and report on falling prices. High mortgage rates hurt home buying and selling prospects. However, for some, higher interest rates can bring home prices down just enough to account for the added cost of a higher interest rate. In some scenarios, if a prospective buyer can carry a more expensive rate, they may secure a home at a lower price, and then aim to refinance when rates have improved.
Understanding and activating home equity. Hikes in interest rates also affect the price of revolving debt. Most, if not all, revolving credit moves with the prime rate; meaning, it just got even more expensive to carry a balance from one month to the next.
Real estate professionals can educate clients on the prospect of leveraging the equity they have in their current home to consolidate consumer debt through home equity based products like HELOCs, home equity loans or other home equity based products, that tend to have better terms than other forms of debt. Home-equity products also provide a path to financing home improvement projects that can raise the value of a home, while clients wait for the environment for putting a home on sale to improve.
Keep the door open. Financial situations are constantly in flux. Did a client recently get a new job? Did a relative pass away leaving them with a large inheritance? Did your clients just become empty nesters? New occurrences in life bring about different new ways to view possibilities. No one wants to buy a home for more money than they have to, but new circumstances can open the door to revisiting property aspirations that weren’t reasonable conversations just moments before. Keeping an open door to those who have new circumstances will help real estate pros adjust their approach for specific clients.
Unprecedented and unfamiliar economic cycles like the one we are in today provide a great deal of room to drop the ball or lose interest. Those real estate teams that refocus on the basics of building trust through credible counsel and insight will see more deeply engaged client prospects, and eventually, transactions that can keep the business afloat during a time when the entire industry is facing headwinds.
Jeff Levinsohn is CEO and Co-Founder of House Numbers, a service to help homeowners gain financial independence by understanding and optimizing their largest asset — their home.
The mortgage industry continues to be battered by negative headlines amid the slow in demand, the challenges of housing supply, and rising interest rates. It’s no secret that refinance (refi) volumes dropped off a cliff, and the number of homebuyers in the market has shrunk since 2022. That leaves you with a small pool of prospects in a sea that used to be teeming with more volume than you could handle. The change of pace is probably off-putting in more ways than one, but a slowdown in refi and loan volume can mean a chance to build a new pipeline of revenue through the non-qualified mortgage (non-QM) market.
As a purchase product, non-QM can be a great addition to your options when it comes to serving homebuyers. Not only does it allow you to expand your pool of prospects, but it also gives you an opportunity to replace lost volume and potentially stave off that revenue compression we are seeing across the industry.
Evolving with non-QM expertise
The first step to taking advantage of this sector is continuing education on non-QM loans and their unique features. As more borrowers fall outside the conventional lending parameters, the demand for non-QM loans increases. It’s crucial to start educating yourself, your team, and your clients about non-QM loans.
In the non-QM market, there’s a myriad of product offerings tailored to serve various borrower demographics. For instance, self-employed individuals have long been underserved by traditional lenders due to income documentation requirements. We often hear stories of self-employed borrowers who get rejected by their bank because the bank doesn’t understand how to qualify their situation. Non-QM bank statement products, which verify income based on bank statements rather than tax returns, can serve this population effectively.
Education is not to be confused with complexity. These loans are not as complicated or as time-consuming as you may think. The reality is that when you work with non-QM professionals, you will find that these loans can be done as seamlessly as Agency loans. Experience will only make the process faster.
Selecting the right non-QM partners
The non-QM world is different from the conventional mortgage space, so it’s essential to have reliable partners by your side. Plugging numbers into a black box and getting a yes or no answer is not how non-QM works. As I mentioned, though, choosing a trusted and experienced lender who specializes in non-QM loans can make the difference between a deal that closes and one that doesn’t. These professionals have navigated the non-QM landscape many times over and can guide you through it, identifying and answering pertinent questions that can impact your borrower’s chances of loan approval and providing support when needed.
Non-QM as the solution to the refi vacuum
With the refi market having dried up, it’s clear that the future for originators lies in diversifying their portfolio of loan products. Non-QM loans are not just a stopgap but a long-term strategy that can redefine your business model. These loans cater to an untapped audience and can sustainably replace the volume lost to refinancing.
The shift to non-QM may seem daunting, but by marketing yourself as a non-QM expert, partnering with trustworthy lenders, and leveraging a variety of non-QM products, you can not only survive in this new landscape but also thrive. The market always moves, and the most successful originators move with it.
Tom Hutchens is the executive vice president of production for Angel Oak Mortgage Solutions.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Tom Hutchens at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]