A recent deep-dive survey by RealtyShares found that over half of millennials they polled were interested in investing in real estate. The data also found that the public generally lacks awareness regarding the potential of real estate investing, however the findings of this poll suggested that a real estate investing resurgence may be on the horizon. Happy Friday!!
BY BRAD BECKETT ON JULY 28, 2017
BY BRAD BECKETT ON AUGUST 7, 2017
A recent Housing Perspectives from Harvard’s Joint Center for Housing Studies says that even though overall construction is down, construction of smaller homes (under 1,800 sq. feet) has actually increased 20% in 2016. They say this is significant because 1st-time and lower income buyers tend to purchase smaller homes – which tend to be less expensive. They suggest that continued increases in the supply of smaller homes, as well as townhouses and condos, could help meet the demands of those first-time and lower income homebuyers. Sounds like a good play for investors.
“Increased demand for entry-level housing and the corresponding uptick in smaller housing construction have already contributed to the growing number of first-time homebuyers in 2016.”
The Lexington (KY) Herald-Leader is reporting that a group called American Farm Investors is buying up tracts of farmland in central Kentucky which they lease back to tenant farmers, who in turn farm the land and pay rent from their proceeds (not sharecropping). Interestingly, the corn and wheat grown on these farms is sold to big name whiskey distilleries like Jim Beam, Makers Mark and others. The Herald-Leader also reported that roughly 40% of AFI’s investors live in Kentucky while the rest are from out of state. The bottom line; it’s all about diversification.
“AFI leases its land to tenant farmers who pay labor and other costs to grow the crops. The tenant farmers pay rents to AFI, which then pays dividends to the investors.”
BY BRAD BECKETT ON JUNE 13, 2017
Various indicators are coming out that suggest America’s cities are trending towards renting – including a post we had back in March showing that over half of the nation’s largest cities are majority renter. With that in mind, CNBC’s Realty Check with Diana Olick recently reported on yet another study that supports that emerging trend as well as showing where home prices are so high it may be smarter to rent rather than buy.
BY BRAD BECKETT ON JUNE 12, 2017
According to the latest U.S. Home Flipping Report form ATTOM Data Solutions, over 43k single family homes & condos were flipped nationwide in the first quarter of 2017, down 8% from the previous quarter and down 6% from one year ago, to the lowest number of homes flipped since Q1 2015 — a two-year low. However, when it comes to financing said flipping, an estimated $3.5 billion was spent – the highest level since Q4 2007 and a 9-year high. In addition, home flips in the first quarter were 6.7% of all single family home & condo sales, up from 5.8% in the end of 2016 and unchanged from one year ago.
“The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.
BY BRAD BECKETT ON APRIL 19, 2017
Is a lack of having a down payment holding back renters from buying a home? A new survey from Zillow found that nearly 70% of renters in 20 U.S. metros said that was the case. When you consider that the U.S. homeownership rate hovering near an all-time low, rents at record highs, and mortgage payments cheaper than rent in all but two of the 35 largest U.S. metros, the findings certainly seem to make sense. Zillow’s Housing Aspirations Report (ZHAR) also found that:
- Millennial renters are more confident than any other generation that they will be able to afford a home someday.
- The majority of respondents (66 percent) believe owning a home is necessary to live The American Dream, and 72 percent believe owning a home increases your standing in the local community — millennials believe these two statements more than any other generation.
- About half of renters surveyed said debt and qualifying for a mortgage were barriers to homeownership.
- A 20% down payment on a typical U.S. home costs more than two-thirds of the national median annual household income. In pricier markets, it can cost more than 180% of the average annual income.
BY BRAD BECKETT ON APRIL 14, 2017
The folks over at FortuneBuilders remind us that there are number of benefits to owning rental properties – from preparing for a financially stable future, tax deductions, property appreciation and to having a reliable cash flow. To those ends, they recently put together this handy infographic with the Top 10 Markets for Owning Rental Properties…..Happy Friday!!
Whether you are just launching your real estate career or you’re already a seasoned professional, owning rental properties is a great way to accumulate long term wealth, prepare for retirement, and diversify your investment portfolio. Than Merrill
BY BRAD BECKETT ON MARCH 15, 2017
A TV station in Richmond, Virginia is reporting that a family’s home was recently foreclosed on and sold at auction after a bank invoked a “death default provision” on the loan even though the mortgage was kept current by the family – months after the death of their father. Apparently, when the family patriarch signed the mortgage agreement (decades ago), it included a rare death default provision that called for full payment of the balance of the loan, in full, upon his death. The family says they were unaware of this clause and kept paying the mortgage over a period of at least 10 months totaling more than $8,500. There are a lot of lessons to be learned in this situation, not least of which is all-around due diligence.
“The mortgage lady said there was a death default on the promissory note he signed and that means when he died the entire balance was due upon his death….No one told me that for about 10 months after he passed away….They accepted every payment.” Said daughter Peggy Stroud as reported by WTVR.
BY BRAD BECKETT ON MARCH 13, 2017
According to the Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI), mortgage credit availability increased 0.4% in February 2017 and reached its highest level since 2007. The MCAI measures the quantity and quality of mortgage credit supplied to the market over time and for different segments of the market. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
“The increase in February was the net result of two countervailing movements. There was an increase in the supply of credit, as more investors offered affordable low down payment mortgages and streamlined documentation for loans guaranteed by the Federal Housing Administration and the Veterans Administration.”
BY BRAD BECKETT ON MARCH 13, 2017
You read that headline right…..Flipping is back and it’s at a 10 year high. According to ATTOM Data Solutions’ 2016 Year-End U.S. Home Flipping Report, 193,009 single family homes & condos were flipped in 2016. That number is up 3.1% from 2015 and is the highest level since 2006 – which saw 276,067 flips. Overall, home flips accounted for 5.7% of all single family home and condos sales in 2016 – up from 5.5% from 2015. In addition to all that, homes flipped in 2016 sold for a median price of $189,900, a gross flipping profit of $62,624 above the median purchase price of $127,276 and representing a gross flipping return on investment (ROI) of 49.2%.
“Home flipping was hot in 2016, fueled by low inventory of homes in sellable or rentable condition along with a flood of capital — both foreign and domestic — searching for the returns and stability available with U.S. real estate….Investors in search of flipping returns are increasingly willing to move to secondary and tertiary housing markets and neighborhoods with older, smaller properties that are available at a deeper discount.” Said Daren Blomquist, senior vice president at ATTOM Data Solutions.