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Recap of the March 9, 2019 ICG Real Estate 1-Day Expo

Crowd at the ICG Real Estate 1-Day ExpoOur ICG 1-Day REAL ESTATE Expo took place on Saturday, March 9th. It was a huge success; thank you to everyone who joined us. Throughout the day, we had 750+ attendees, with over 550 people in the main room at the same time. Great energy! Some of the attendees were KQED donors, who purchased the Remote Control Retirement Riches with Adiel Gorel Master Package. The donors received two tickets as part of their donation to KQED. It was an honor to have KQED members at the event, and what a thrill to explore our tried and true method with so many new folks. There was a good mix of investors: brand new investors, very experienced investors, and everything in between.

Market teams, property managers and expert guest speakers

The questions from the audience at the ICG Real Estate 1-Day Expo were excellent and I enjoyed answering all of them. I had the main market teams present, and some of the property managers within our national infrastructure there as well. Scott Webster from All Western Mortgage described regular FNMA (Fannie Mae) 30-year fixed-rate loans (some at just under 5%, which, for investors, is a low rate). He also described loans available to people who can’t get the FNMA loans, by virtue of owning more than the FNMA limit. He also outlined loans available to foreign investors. The attendees enjoyed the three expert guest speakers: CPA Joshua Cooper talked about the Opportunity Zone and other tax issues. Joyce Feldman talked about using insurance as the first and probably most important line of defense, and Lucian Ioja talked about optimizing real estate investing in the larger context of financial planning.

New offering on our website

Many new investors joined our QUICK LIST, to whom we send property sheets when we get them from the various markets. Those who joined the list will also receive event invitations and updates, throughout the year. (You can also join us, by texting QUICKLIST to 57838, or by emailing info@icgre.com and request to be added.)

I also introduced the NEW Members Area on our website. The Members Area will be an exciting treasure trove of information, offered in two tiers. It will be fully populated with podcasts, FAQ’s, and other useful information. It is a work in progress right now that we are truly excited about. There will also be webinars on specific subjects offered, as well as special one-on-one “Connect for Success” meetings with Adiel Gorel. We enabled people to join the membership area at a special discounted rate, as an “early member” which is good until April 10th only.

If you were not able to attend the ICG Real Estate 1-Day Expo you can still take advantage of our early member discount. Just use the code MARCHEXPO at checkout to receive 20% off, only available until April 10th. Also, for our early members (at either level), you will be able to attend two LIVE webinars that I will be recording before the “official” May 1st launch.

Everyone’s “membership clock” will only begin to tick on May 1st. Thus, by taking advantage of this discount you are getting a “backstage pass” as we get all our content loaded, and your payment will cover the time starting May 1, 2019. We are excited to have you join us, and will be working diligently to provide useful content to help you secure a strong financial future.

Next Expo May 18th

Many of the attendees from the March 9th Expo registered for the next 1-Day Expo, on Saturday, May 18th. We will have a new market available, three expert guest speakers, and of course loads of Q & A. You can register now for the May Expo here.

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FNMA 3% Down Loans Are Back!

FNMA, (for those of you new to this blog, Investopedia.com sites FNMA is the acronym and the stock market symbol for the Federal National Mortgage Association, commonly called “Fannie Mae.” This government-sponsored enterprise provides liquidity for the U.S. mortgage market by guaranteeing and purchasing mortgages, indirectly enabling families to buy or rent homes through access to credit) perhaps in a bid to compete with the 3.5% FHA loans, has reinstituted its 3%-down (97% Loan to Value) loans.

The loans are primarily for new home buyers, with some limited provisions for the refinancing of existing FNMA loans. The combination of these new super-low-down loans, coupled with the very low-interest rates in the marketplace, AND the new government lowering of Private Mortgage Insurance (PMI) on low-down loans, combine to make buying homes much easier for new buyers.

What does this mean for investors? A lot! Not only is this loan likely to create extra demand and contribute to home price appreciation, but when an investor thinks of selling an investment home, the pool of ready willing and able buyers will have been greatly expanded. Great news for new homeowners and real estate investors!

At our next 1-Day ICG Real Estate Expo on March 7th, we will have experts on the newest wrinkles in asset protection, how to use your IRA to buy real estate, and getting loans for IRA-bought real estate. In addition, there will be experts speaking on the newest loans available (this keeps changing for the better!), as well as an array of experts, market teams, updates, learning, and networking. Can’t wait. Call our office at 415-927-7504 or email us at info@icgre.com and mention this blog entry to attend free.
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Younger Renters Turn to Buying

In a Wall Street Journal article from May 11, 2017, by Laura Kusisto and Chris Kirkham, we read that millennials and other younger buyers are becoming much more focused on BUYING rather than renting in the past year. This trend is likely to continue.

It is not surprising with lower unemployment, still-low interest rates and FHA loans with 3.5% down payments available to home buyers (*buy to OWN, not as an investment). What effect does this have on us as investors?  Seemingly it will drain the rental pool.

In reality, however, there is a great shortage of good single family homes since housing starts have not yet made up for the gap in new construction created during the recession. Thus renters are still likely to be quite plentiful. Prices, however, are likely to get a boost from this increased buying activity. The home buyers using the 3.5%-down FHA loan are less price-sensitive and willing to pay more for a home they like (after all the difference for them is only 3.5% of the extra amount which is negligible).

Appraisals will track higher as sales prices increase, creating a virtuous cycle of appreciation, also fueled by the inaccurate, but popular sites like Zillow, Trulia (etc.) which reflect the increasing prices in their estimates.
In some of our markets, it may not be a bad idea to sell and take profits. Some markets have already appreciated quite a bit in the past few years, markets like Phoenix, Las Vegas and Dallas. In other markets, as prices increase our equity builds up faster.

Another benefit is since the younger generation of buyers seeks less expensive homes, the builders are creating more and more of those see in the WSJ (article below). Since these homes have exactly the kind of size and price we seek as investors, it will widen the inventory pool from which to buy, as investors are sometimes faced with tight selections.

 

We will discuss this issue, as well as much more, including the improvement in FNMA’s loan guidelines affecting investors, during our 1-Day Expo on Saturday, May 20th near the San Francisco Airport. Mention this blog and you can attend free. There will be market teams, lenders, expert speakers on issues critical to investors, and lots of networking. To see some detail, please go to www.icgre.com/events. To register or contact us, please email info@icgre.com

 

The Wall Street Journal article is copied in its entirety below:
 
The Next Hot Housing Market: Starter Homes
Millennials are buying homes, steering builders toward lower price points
Home buyer Darin Fredericks and his wife Summer Fredericks in the kitchen of their new home in Ontario, Calif., last November. PHOTO: PATRICK T. FALLON FOR THE WALL STREET JOURNAL
Chris Kirkham
Updated May 11, 2017 8:09 p.m. ET
First-time buyers are rushing to buy homes after a decade on the sidelines, promising to kick a housing market already flush with luxury sales into a higher gear.
Tracking home sales to a particular age group is hard, but a series of data points form a mosaic of a generation of young people ready to buy: The number of new-owner households was double the number of new renter households in the first quarter of this year, the share of first-time buyers is creeping back toward the historical average, and mortgages for first-timers are on the rise.
 “They’re crawling out of their parents’ basements, they’re forming households and they’re looking to buy,” said Doug Bauer, chief executive of home builder Tri Pointe Group Inc., which operates in eight states.
 
In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data. It was the first time in a decade there were more new buyers than renters, according to an analysis by home-tracker Trulia.
 
Homebuilders are beginning to shift their focus away from luxury homes and toward homes at lower price points to cater to this burgeoning millennial clientele. Demographers generally define millennials as people born between roughly 1980 and 2000.
In the first quarter of this year, 31% of the speculative homes built by major builders were smaller than 2,250 square feet, indicating they were in the starter-home range, according to housing-research firm Zelman & Associates. That is up from 27% a year ago and 24% in the first quarter of 2015.
“There’s an increasing confidence level in that part of the market,” said Gregg Nelson, co-founder of California home builder Trumark Cos. “The recovery is finally starting to take hold in a broader way.”
The shift reflects a reversal of a pattern that has driven the five-year housing-market expansion.
Up until now, the luxury market has soared, while the more affordable end of the market has struggled. Tough lending standards, slow wage growth, growing student-debt obligations and a newfound fear of homeownership have combined to crimp demand among millennials in particular.
Now, the return of first-time buyers is allaying fears that millennials might eschew homeownership permanently. But it also provides an infusion of new demand while housing supply is tight and home price growth is significantly outstripping wage gains.
Home prices in February increased by 5.8% over the same month a year earlier, according to the most recent S&P CoreLogic Case-Shiller U.S. National Home Price Index.
The return of first-time buyers is accelerating. In all, they have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the past three years.
While economists and builders said lending standards have started to ease, getting a mortgage remains challenging for young buyers with shorter credit histories and, in many cases, student debt. Mortgage rates are also expected to rise further this year, posing an added challenge. Rates for a 30-year fixed-rate mortgage has risen to 4.05%, up from about 3.5% in November, according to Freddie Mac.
In Orange County, Calif., Trumark’s Mr. Nelson said he has been selling entry-level homes at nearly double the rate of his higher-end ones. He is even gaining confidence to build homes in more far-flung locations. The company is about to begin construction on a 114-home project in the Inland Empire east of Los Angeles and another development in Manteca, Calif., about 80 miles east of San Francisco. Both areas were hard-hit during the housing crash and were among the slowest to recover.
Builders largely avoided the exurbs after the bubble burst in 2006. But because the land there is cheaper, they can build lower-end homes more profitably.
“Most builders really preferred to stick straight down the fairway, right at the corner of Main and Main. They were afraid to go back into the rough where they built a lot of homes in the prior cycle,” said Alan Ratner, a senior home-building analyst at Zelman.
Outside Las Vegas, Tri Pointe has introduced a new home design that is specifically targeted to millennial buyers, featuring indoor-outdoor patios and deck spaces, as well as a separate downstairs bedroom-and-bathroom suite that could be rented out to a housemate. Mr. Bauer said the homes, geared toward first-time buyers, have been selling more rapidly than pricier homes.
Joey Liu, a 28-year-old technology worker, purchased his first home in San Jose, Calif., earlier this year. He said it is more expensive than renting but that he is getting to the stage in life where it was time to buy.
“A lot of friends of mine bought a home so I started thinking maybe it was time to buy a home and stop paying rent,” said Mr. Liu, who settled on a three-bedroom townhouse for $690,000. He plans to rent out a room to help with the expenses.
He had three housewarming parties to celebrate his newfound status. “This is my first house, so it definitely feels different,” he said.
Builders say their return to the starter-home market shouldn’t invite comparisons to the fevered construction of the mid-2000s.
“One of the misconceptions is that here we go again, this is another 2005, 2006 where all these builders are going to build hundreds of thousands of homes. We’re not going crazy,” said Brent Anderson, vice president of investor relations at Scottsdale, Ariz.-based Meritage Homes Corp. Mr. Anderson said that last year the company was building four to five speculative homes per community and is now up to 6.4 on average.

Building executives said one challenge is that many people are buying first homes later in life, meaning they have higher incomes and greater expectations molded by years of living in luxury downtown rentals. Such buyers also appear wary of driving farther out to get more space.
Sheryl Palmer, president, and chief executive of Scottsdale-Ariz.-based Taylor Morrison Home Corp., said to cater to this demographic the company is building more three-story townhouses or single-family homes on narrow lots. She said about one-third of the company’s buyers this year are millennials, up from 22% last year.

Even Toll Brothers Inc., which typically builds homes for the top end of the market, is venturing into lower price points. In Houston, the company is building homes starting in the mid-$300,000s range, while a typical Toll home in the area costs around $850,000.

Write to Laura Kusisto at laura.kusisto@wsj.com and Chris Kirkham at chris.kirkham@wsj.com
Appeared in the May. 12, 2017, print edition as ‘Generation of Renters Now Buying.’

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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The Sun Still Shines in Florida!

Florida has emerged as the “Go To” state in 2014.
 
While Arizona and Nevada are excellent; Texas, Oklahoma and a slew of other states, are relatively stable. It’s Florida that embodies the post-recession sweet spot.
 
The home prices in Florida markets are still way below the bare construction costs. Even though there is steady price appreciation, values are still very attractive relative to new homes. We have already touched upon the reason: the foreclosure process in the state of Florida is judicial and has been extremely slow. As a result, the flow of homes into the marketplace is more steady than in Trustee Sale markets.
 
Despite the great demand, this balancing out of the supply of homes has created a more tampered growth environment for the state of Florida. Many great markets will emerge after the recession effects wear off. For now, the sun shines on Florida!
 
Don’t forget to visit us at our incredible 1-Day Expo THIS SATURDAY, March 8th, near the San  Francisco Airport. Details are on our website: www.icgre.comWe will have rare speakers, tons of education, lots of Q&A and many experts present. In addition, some of the hottest markets in the nation will be represented. A day not to be missed!
 
Looking forward to seeing you on Saturday!
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Housing Starts Up Sharply

In a Wall Street Journal article from August 19th by Josh Mitchell, it is reported that housing starts are sharply up for the year and have seen a strong uptick in July. Housing starts bode well for a general housing recovery. We have already begun to go back to our old buying style of buying new homes from developers in Oklahoma City.
I am relatively sure in the coming months we will be seeing more attractive opportunities in buying brand new products in other markets as well. It took a long time for the builders to be able to put out a competitive product for real estate investors, as they played a serious “second fiddle” to existing homes, which were priced well below what they could offer.
We are pleased to see the trend as it was always our opinion that a prudent and safe real estate investment certainly includes brand-new homes with a builder’s warranty, with a fixed-rate 30-year loan paid off by the tenant and eroded steadily by inflation (as it is not pegged to the cost of living). This mode of real estate investment serves as the foundation of building a solid financial future and achieving long-term life goals of a solid retirement and sending our kids to college.
Builders have the ability to offer the buyers many “goodies” at a cost to them- that is much lower than the retail cost (an example might be a covered patio which costs $6K but only costs the builder $2K to build). This can create an attractive package for the investor.
We will have builders and new properties available at our upcoming 1-Day Real Estate Expo near SFO on Saturday, September 13th. I am looking forward to seeing you.
I am enclosing the full WSJ article for convenience:
U.S. Housing Starts Up Sharply in July – Renewed Strength in Housing Market Could Boost Economy
By Josh Mitchell
Updated Aug. 19, 2014 11:03 a.m. ET
.

WASHINGTON—Home construction surged in July, a sign that renewed strength in the housing market could boost the economy in coming months.

Housing starts climbed almost 16% last month to an annual rate of 1.093 million units, the Commerce Department said Tuesday. That marked the highest level of construction since November, driven by a pronounced rise in new apartments.

Home construction rose 22% in the year through July, and a rise in applications for building permits last month suggests further gains this year. That could ease concerns at the Federal Reserve of a weak housing sector weighing on economic growth this year.

”With housing starts up 22% over the last year, the Fed’s concern about a ‘slow’ recovery in the housing market looks misplaced to us,” Economist John Ryding of RDQ Economics said in a note to clients. But details within Tuesday’s report raised questions about whether the construction gains will be sustained. Last month’s rise appeared to be due partly to a rebound in construction in the South after rainy weather caused delays earlier this summer.
Such rebounds are typically temporary. Also, the bulk of the increase was due to surging apartment construction, a volatile category that can mask underlying strength in the market. And it’s unclear whether the housing market will be able to maintain momentum if mortgages rates rise, as many economists expect them to as the Federal Reserve moves toward raising its benchmark short-term interest rates from near zero.
Amid the prospect of higher costs and weak income growth, Fannie Mae’s economics group downgraded its forecast for home sales and construction on Monday. It now expects construction of 1.43 million single-family units this year and next combined, down from an earlier forecast of 1.61 million units.
A measure of affordability, which takes into account interest rates, home prices and median household income, hit its lowest level in six years in June. That reflects a run-up in home prices.
Interest rates have fallen back to year-ago levels in recent weeks after rising late last year. The average rate on a conventional 30-year mortgage stood at 4.12% last week, down from 4.53% in the first week of the year, according to Freddie Mac.
But overall the report boosted hopes of a stronger housing recovery. In July, applications for building permits, a construction bellwether, climbed 8.1% to a 1.052 million rate. That suggests construction could pick up further in coming months. Sales of previously owned homes have picked up in recent months, buoyed by historically low interest rates, mild weather, and stronger job growth in the U.S. But sales of new homes have moved sideways. The latest pickup in home construction could signal builders are gaining confidence that overall sales will rise as the broader economy gains momentum.
From a year ago, home construction was up 21.7%. The home-construction market has steadily recovered from the depths of the recession but has yet to regain its strength from the levels that preceded the boom years in the 2000s.
At the height of the housing boom in 2005, just over 2 million homes were built. After the crash, housing starts fell to 554,000 in 2009, during the recession. Tuesday’s report showed that starts on single-family homes, which reflects the bulk of the market, climbed 8.3% in July from June.
Construction of multifamily units—mostly condominiums and apartments–rose 33% to a pace of 423,000 units, the highest level since January 2006. That category is more volatile. Other recent signs point to a strengthening housing sector.
A measure of home builder optimism rose two points to a reading of 55 this month, the National Association of Home Builders said Monday. Existing-home sales rose in June to the highest level since October, the National Association of Realtors said last month. The trade group is expected to release July’s data Thursday.

Write to Josh Mitchell at joshua.mitchell@wsj.com
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How to Create Multiple Income Steams to Secure a Strong Financial Future

Exploring this and other avenues for finding financial real estate success during our 1-Day Expo. 
As many of you know, we are holding our 1-Day Expo on Saturday, June 14th from 10:00-6:30 p.m. Even though we have been holding these events for over 20 years, I am always excited before we hold them. I know I will learn so much from the expert lecturers, the market teams who bring information straight “from the trenches” and from all of YOU who attend.
Just the Q&A sessions are so informative, I have yet to partake in one of our events and not learn a tremendous amount of valuable information during these sessions.
The networking is also so valuable, bringing new connections and new synergy.
This time we have three expert lecturers:
Attorney Brett Lytle on Asset Preservation & Protection. Brett always sees the smallest details, which stay hidden from most observers. He has led countless people to create a safer, more secure way to hold assets and will teach all of us how to do this.
Lucian Ioja uses his vast experience and knowledge to show us how we can create multiple streams of income and plan our financial life in a proactive, fruitful way. He also teaches us to utilize many different avenues to create these income streams; from using insurance in a sophisticated manner to real estate and other vehicles that we will explore.
Roger St. Pierre will teach us about getting non-recourse mortgages to buy real estate, with financing,  from our IRA accounts. A lot goes into this and that is why we invited Roger to instruct us.
There will be lenders with new types of investor (and homeowners) loans to tell us about.
We are bringing in three new markets with exciting deals at attractive price points, including brand new homes, as well as low-cost turn-key homes with tenants AND easy special financing even to investors who had been spurned by the banks.
Updates from the existing markets are always so fascinating. The work and preparation that goes into these refresher points from the markets always amaze me. There is so much to learn and so much to feel the pulse of what goes on nationally.
I’ve been asked to do something special for the blog readers, and we will give everyone who registers and mentions this blog, a free copy of my book Remote Controlled Real Estate Investing which goes into the details of buying properties far from home. So, register today to secure your spot and as an added bonus receive my book. For free.
Create Remote Controlled Real-Estate Riches - The Busy person's guide to real estate investing - Adiel Gorel
 
I am excited and very much looking forward to seeing you at our event. The 1-Day Expo will take place near the San Francisco Airport, at the South San Francisco Conference Center. We set the Expo time so people can fly in and fly out on the same day if they are not from the San Francisco Bay Area – the day starts at 10:00 AM and ends at 6:30 PM, providing attendees from Los Angeles, San Diego, Portland, Seattle, Phoenix and wherever it is that you call home to arrive and leave on the same day.
Of course, for Bay Area residents it is an easy drive and everyone appreciates the ample free parking at the conference center.
To register online through Eventbrite: http://bit.ly/1kk2she  and use the code: BLOGBOOK
 
or
 
Email us at info@icgre.com or call us at 415-927-7504 and mention you read about the expo on my blog.
 
 
 
Best,
Adiel

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