BY BRAD BECKETT ON OCTOBER 22, 2019
We have posted a lot about the growing segment of retiring baby-boomers and where/how they’re going to live. A new report from Harvard’s Joint Center for Housing Studies (JCHS) says “housing inequality is becoming increasingly evident among older Americans as the number of older households climbs to unprecedented levels” and with that the requisite cost burden warnings. However, they also remind us that between between 2012-2017, the number of households headed by someone 65+ grew from 27 million to 31 million. And, as real estate investors know, they will all need a place to live – whether it’s a downsizing or just a relocation.
“The falloff in homeownership rates among those approaching retirement, and the elevated levels of mortgage debt among those who do own, is concerning,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “And there are significant differences in owners and renters when it comes to preparedness for retirement.”
“…homeowners have far greater net wealth than renters: in 2016, the median homeowner age 65 and over had a net worth of $319,200, compared to the same-age renter whose net worth was just $6,700…”
BY BRAD BECKETT ON OCTOBER 21, 2019
The good folks over at Realtor.com said that it seems like everyone is getting into real estate game or at least dreaming about it. In fact, they remind everyone that it’s just not as easy as it looks on HGTV and that something called reality sets in. That’s why their economics team crunched the numbers to find the hottest markets for investors – the ones with cities where the highest percentages of home sales are for flipping or turned into rentals, usually after a rehab.
“To truly make bank in the housing investment game, you need to pick your markets carefully—especially since profits just about everywhere are being squeezed by high home prices, a shortage of affordable older places for sale, and cutthroat competition from legions of buyers and fellow investors.”
BY BRAD BECKETT ON OCTOBER 21, 2019
The U.S. government is reporting that privately‐owned housing starts in September were at a seasonally adjusted annual rate of 1,256,000. This figure is 9.4% below August’s revised estimate but is 1.6% higher than September, 2018. Single‐family housing starts in September were at a rate of 918k, which is 0.3% above August’s revised figure. September’s rate for units in buildings with five units or more was 327k. Privately‐owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,387,000. This figure is 2.7% below August’s revised rate but is 7.7% higher than September, 2018. Single‐family authorizations in September were at a rate of 882k, which is 0.8% higher than August’s revised figure. Authorizations of units in buildings with five units or more were at a rate of 470k in September.
BY BRAD BECKETT ON OCTOBER 11, 2019
This week’s infographic is really a no-brainier. It illustrates just a few of the awesome benefits of joining a real estate investors association, or REIA as they’re commonly known. You really do get “a bang for your buck” when you become a part of a local community of real estate investors. Click here to find a REIA near you! Happy Friday!!!
BY BRAD BECKETT ON OCTOBER 9, 2019
We have all watched those TV reality shows….you know the ones that make it look really easy to flip an old rundown house into thousands of dollars in profits. Well, Tarek & Christina aside, the Federal Trade Commission and the State of Utah recently announced that they were charging a Utah-based company with lying to consumers in order to convince them to attend allegedly free real estate seminars across the country. HousingWire is reporting that the FTC says the company (Zurixx) promised to give away the secrets to making money flipping houses at their events, but actually charged just thousands of dollars for what they say were supposed “secrets.” In addition HW reports that the FTC says the entire operation is a scam, with the company allegedly using “deceptive promises of big profits to lure consumers into real estate seminars costing thousands of dollars.”
“…Zurixx entices people to attend its “free” real estate seminars by using HGTV stars and other TV personalities as celebrity endorsers and claims that attendees can learn how to flip houses to make money……Zurixx’s business model has come under fire in recent years, with many customers accusing the company of using false advertising to entice them to attend the company’s events…”
National REIA believes that the best place to get started in real estate investing is to attend a meeting of your local NREIA affiliated REIA (aka a real estate investor association). Click here to find a group near you.
BY BRAD BECKETT ON OCTOBER 8, 2019
According to new research from ATTOM Data Solutions, 74% of the U.S. housing markets is unaffordable for average wage earners searching for a median-priced home. So, where are the areas that are affordable for average wage earners? Using data from their Q3 2019 Home Affordability Report, they found the best and worst places for home affordability in America. They determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments (mortgage, property taxes and insurance, etc) on a median-priced home, assuming a 3% down payment and a 28% maximum “front-end” debt-to-income ratio. Indeed…
“Buying a home continues to be a rough road to navigate for the average wage earner in the United States. Prices are going up substantially faster than earnings in 2019 without any immediate end in sight, which continues to make home ownership difficult or impossible for a majority of single-income households and even for many families with two incomes,” said Todd Teta, chief product officer with ATTOM Data Solutions.
BY BRAD BECKETT ON OCTOBER 7, 2019
The free market is a wonderful thing but, as we’ve now seen in California, the politicians have put so many restrictions on providing affordable housing that a backyard shed in San Diego is renting for just over $1k per month. According to the listing on Zumper (as reported by FOX News) a 200 sq. foot “studio” (looks like a shed to us), located in one of San Diego’s most walkable neighborhoods, is renting for $1,050 per month! The rental comes with plumbing, bathroom & shower, kitchen (with a small refrigerator and stove), laminate flooring and even has air-conditioning….but no parking space. Be sure to check out the Zumper listing for more photos. Maybe this is what they call an “old school” tiny-house?
BY BRAD BECKETT ON OCTOBER 17, 2019
We have had several posts about owning vacation homes – whether to rent them out, use them as a 2nd home or both. With that in mind, a new report from the National Association of Realtors says that increased financial wealth and low mortgage rates have boosted the demand and price of vacation homes. In fact, they report that between 2013 & 2018 the median sales price in “vacation home counties” increased at a slightly higher pace than all new & existing homes sold. They used data from the U.S. Census Bureau’s American Community Survey to examine the 206 counties (out of 3,141 total) listed as “vacation home counties” to come up with their findings.
Lawrence Yun, NAR’s chief economist, says the present figures are telling, especially when compared to data from 10 years prior. “As of 2018, household net worth reached an all-time high of $100.3 trillion – that’s nearly double from a decade ago when wealth declined during the recession. Some of this tremendous growth in wealth, although concentrated, increased demand for vacation homes.”
BY PETE YOUNGS ON OCTOBER 16, 2019
- How long have you been in business in this area? This is important because you want them to be established. In many cases, you may run into a company that is new and you will have trouble getting older references and such. If they have a good history in the area, you are less likely to have someone take your money and run. I like a 5 year history or more.
- How many workers will be on the job daily? I want to make sure that there are enough bodies to do the job in a timely manner as well as not have half a crew on most occasions. If the job is small, it’s ok to have a couple of workers only. On bigger jobs, I want manpower as we know time is money. Also make sure who you are dealing with will be on the job too. If they won’t, they probably hired the work out to subs and are making money off you.
- Are they licensed, bonded and insured? I do prefer that they have this in place however, I regularly hire small jobs that the individuals don’t have it. In my SWAT system (secret ways and techniques) as well as my famous Rehab 101 system I have a 225 document forms cd. In this, I require all workers to sign my Waiver Of Liability as well as my Lien Release form to protect myself against injury or property damage. Many times I will hire workers from new home construction sites to do “side work” for me. I know that if they work for a builder full time, they must have a license and insurance or they would not be hired by them.
- Have they had any complaints locally or with the B.B.B. ? I will overlook a minor complaint or two provided that they have been resolved. When you file a complaint with the Better Business Bureau, they contact the party and give them the opportunity to make it right or work it out with the consumer and if worked out there is no need for alarm. If they have multiples and they are long lasting and not resolved, I will not use them.
- Will they supply you with 4 to 5 references? This is important because everyone will have 3 good references to give but sometimes these are friends or relatives and will say good things anyway. I want number 4 to be someone that they went back after being paid to fix a problem or touch up. This insures integrity in the company or contractor that they stand behind their work. Number 5 is I ask them who their material suppliers are. I can call the paint store or material supply yard and ask them if they have had complaints there. Like if Sherwin Williams was a supplier, I would call and ask them about any complaints and also if they would recommend the contractor.
- Can I use my contract or do they use their own? Once again, my 225 forms cd has all the contracts and such that it protects me as well as being fair to both sides. You want to spell out the pay schedule, such as paying as work is completed or “draws”. This way you are not paying for work that is not done yet. Do you need to pay a material deposit? Use the term Balance Paid On Completion to make sure all work is done. Hold back 10% until a punch out list is completed to your satisfaction. Otherwise you may end up with an unfinished job.
- Will you supply me a written warranty for labor and also a copy of the manufacturers warranty from the materials? All materials such as paint, carpet, roofing and so on have written warranties on the labels or description. Make sure they will give you this info in writing as part of your contractual agreement so if anything goes wrong you are covered. Remember to put any and all details even if as an addendum to the contractors paperwork no matter how petty it may sound. Your contract is your protection as well as the workers proof that they should be paid for their work. It works both ways so pay attention to detail. You will see many more articles and advice if you keep returning to PeteYoungs.com and research My new SWAT system and award winning Rehab 101.
BY BRAD BECKETT ON OCTOBER 16, 2019
A new startup called Doorstead doesn’t want you to miss out on a month’s rent just because you can’t find a tenant. Calling themselves a “full-service property management with guaranteed rental income,” the new company will not only manage your property but guarantee rent for rent for a certain number of days – even if it can’t fill the unit. In addition TechCrunch reports that they will handle all the algorithmic pricing, advertising, tenant screening, repairs & maintenance, leases and online payments in exchange for just 8% of the rent. Caveat emptor indeed….
“Owners just sit back and receive the money, making it much easier to profit off of distant real estate. The startup claims to earn users 3% to 9% more than other property management models.”