In a Fortune Magazine article by Chris Morris, published in February, it is reported that in January 2019, there was more inventory available and houses sat on the market about a week longer than in January 2018.
As of January, there was an available inventory of 1.59 million homes overall, versus 1.53 million in December 2018. Of course, the article is lacking by treating the entire country as one monolithic real estate market. Needless to say, there are hundreds of markets, and they don’t always perform in lockstep.
Nevertheless, there is a subtle shift, even in mentality, that is more favorable to buyers as opposed to sellers, who until recently reigned supreme. Since we are primarily buyers (and then we hold for the long term), a buyer’s market is a positive for us.
It is interesting to note, and one of the reasons I am posting this blog based on an article several weeks old is that while in January 2019 sales were flat, in February 2019 sales surged up, but then dropped only slightly. This is likely to continue to lower rates and sellers having to adjust expectations. Overall, we can see that while there is a shift towards buyers in many markets, the market is still hovering near a relatively stable point. With the low-interest rates and more friendly sellers, this becomes a positive for the investor.
We like to buy brand-new homes. Clearly, the sellers for us are builders. Some builders don’t want to sell to investors. Our market teams successfully convince the builders that it pays to work with our investors, as they get good volume from us. As the mood changes, these very builders may become more receptive to working with buyers, and perhaps even offer more incentives.
This will be discussed in more depth in a podcast on our Premier Members area soon. We will also talk about this during our next ICG Real Estate 1-Day Expo on May 18, 2019
Many would-be rental home investors waste years before getting started. Some of the reasons for that are: too busy, fear of the unknown, the all-too-known paralysis of over-analysis, and lack of information. Conversely, the notion that they might never have enough information or money, and need to spend more time researching and studying before they act. Exacerbating this phenomenon, many new investors make what we call “rookie” mistakes when they finally do get going.
The most typical rookie mistake is believing that low-quality homes in bad areas in lesser cities will provide better “cash flow” (foreigners like to call it “yield”). While cash flow may appear to be better ON PAPER for such lesser properties, life doesn’t happen on paper. In real life, these bad properties usually end up wasting even more years of the investor’s time (and also the investor’s money).
Get started on the right foot
There are ways to get started fast (and correctly). They are: buy the right type of property (s), get the right (type) of financing, and use the proper management. Using these simple steps, the new investor can get off to a good start regardless of how much time or knowledge they have.
Remote Control Retirement Riches
On my Public Television special titled “Remote Control Retirement Riches with Adiel Gorel”, which will be airing through the weekend and into early September on Public Television stations across the country (KQED-TV in the San Francisco Bay Area, for example) this coming weekend, August 24th and 25th, I cover these points. Of course, I cover many other important related topics as well.
In the package I have created for the people who pledge to help Public Television, I have included two newly-written books, an extensive video course complete with motion graphics, three booklets, a quiz, and a newsletter. The package also comes with the DVD of the show, as many may miss the showtimes.
One of the booklets I have written Is called “Making it Happen”. It targets the exact barriers preventing an investor from getting started correctly. This booklet also contains a self-quiz defining your readiness.
This booklet, coupled with all the other extensive information, and the PBS Special itself, which hits the important points, should get anyone up an running in no time. I will also happily support any investor, as we have already changed the lives of thousands, and I believe in continuing to change lives for the better.
For a partial list of the Public Television stations’ showtimes, please click here.
Media headlines have been a pretty good gauge on the overall mood and trends in the real estate industry. During the big boom of 2005 and 2006, the headlines were screaming, “When is the bubble going to burst?” (A sage point to ponder as it turned out.) During the dark ages of 2008 – 2010, the media headlines took pains to emphasize just how much prices were down in so many markets – a good tip for the savvy buyer.
What does it look like these days?
Within the past couple of months here are a few headlines: October 20th in the Wall Street Journal, the headline to an article by Jeffrey Sparshott says, “Builder Optimism Hits 10-Year High.” I believe you can guess what the article is about. In any case due to the blessed internet – you can just look it up. Another headline, again from the Wall Street Journal, by Anna Louise Sussman and Laura Kusisto, says, “Home Sales Head for Best Year Since 2007.” Again pretty self-explanatory.
The above two articles convey good optimism and strong home sales. For real estate investors this may not always be the best news, as naturally, they hunt for bargains. Nevertheless having a strong real estate market in many cities lends itself to strong occupancy, builder (built) homes (always an attractive investor buy due to builder incentives, and new homes bode well for a long hold with minimal potential repairs, and usually the best financing). Having solid real estate markets is a strong backdrop for our tried-and-true-buy-and-hold-with-a-30-year-fixed-mortgage strategy. Add this to low rates still existing today and you have some very good opportunities to expand your portfolio, lock in super low rates forever and change your financial future.
And about those rates – isn’t the Fed just about to raise rates? Let’s look at this headline from November 24, 2015, San Francisco Chronicle article by Kathleen Pender, “Rate Hike Won’t Hit Too Hard – At First.” I concur—rate hikes will most likely begin by ¼ of a point for short term debt. In addition, this anticipation may already be baked in the current mortgage rates. It will most likely be a while before the needle moves on mortgage rates in a significant manner.
With that being said the Fed’s intention highlight yet again that we operate within a “golden window” of super-low mortgage rates. For new investors, this seems like the norm. For veteran investors, we recognize these rates as the lowest in decades. If anyone has the ability to fix these rates forever in a loan that never keeps up with inflation – now may be the time.
During our quarterly 1-Day Expo THIS SATURDAY – December 5, 2015, we will have a sophisticated asset protection attorney—back by popular demand—Brett Lytle, who will speak on asset protection. Brett always has the most cutting-edge information on protecting our assets and the pros and cons of the type of entities we form. Ron Stempek, MS-Tax, CPA, will speak on optimizing your taxes for reporting 2015—important must-know information for optimizing tax dollars, and actions to take going into the new year. Christopher Orr, Director of Institutional Products at PENSCO will be speaking on retirement savings goals by using self-directed IRAs, buying properties from a self-directed IRA, and using this vehicle to further your wealth. As always, we have cutting edge market teams, lenders, networking and lots of Q&A time.
Anyone contacting us and mentioning this blog can attend free (email to firstname.lastname@example.org or call us at 415-927-7504). If you email us, put in the subject “I read your blog on Blogger” and give us your name and phone number so we can confirm with you.
Looking forward to seeing you, and Happy Holidays!
The WSJ reports (in an article on Saturday 10/18 by Joe Light), that Fannie Mae, Freddie Mac, and mortgage lenders are in discussions to ease lending standards; including loans with 3% down to homeowners and allowing people with weak credit access to home loans.
Apparently, an agreement is in sight to enact these measures.
Even if none of this trickles down to investors (which I doubt), this is great news. As more people qualify for loans, greater demand for homes is likely to help push values up in many markets. It will also be easier to sell investment homes due to the larger pool of potential homeowner buyers.
I suspect that, as usual, the more lax lending standards will reach investors in one form or another; making investors able to increase their portfolio at the current incredibly low rates (from a historical perspective). We are already seeing a local lender in Oklahoma City lending to foreigners at good investor rates (albeit at 50% down), as well as to investor purchases for investors owning between 10-15 financed properties (also with 50% down. In fact the loan is identical to the foreign investors’ loan). This lender has already agreed to lend in Atlanta and may soon expand to other states as well.
This is positive news for investors, no matter how you slice it.
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.
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.
I encounter many investors still tempted to get some flavor of an adjustable loan when using their available investment loans. There are extremely low-interest rates being offered on many shades of variable interest loans such as 1/1, 5/30 and so on.
Given that there is a virtual consensus among economists that we are headed to a high inflation period, it would not be the wisest move. When inflation is looming the need for fixed rate loans becomes even greater than it usually is. Fixed-rates are still very low, not far from the lowest rates in over 50 years. At this point, and before inflation rears its ugly head, it is definitely the time to lock in a rate forever.
Once you have locked in your 30-year fixed rate loan, inflation actually becomes your ally. It erodes the real monetary value of your loan, which never changes with inflation because it’s, well… FIXED! In a way, the very process of inflation will hasten the real-life pay down of your loan balance.
Many of you are eligible for a lot more investment loans than you might think. We will talk about this in detail, and also share strategies to increase the number of investment loans you can get at our incredible Real Estate 1 Day Expo on Saturday, December 7, 2013, near San Francisco Airport. More details can be found on our website www.icgre.com. We have been producing these events for over 20 years, and we always have the most useful experts to assist you.
This time there will also be a discussion of the new Affordable Care Act (Obamacare) and strategies on what to do, credit enhancement and repair (to be able to get all these loans), and an amazing lawyer battling the banks in court to share his insights and wisdom. In addition, market teams from the most relevant markets in the US will be there. Looking forward to seeing you!
ICG uses single-family home investments, bought in advantageous locations and the best U.S. markets. We enable you to enjoy the clout that comes from purchasing a multitude of houses, even if you only buy one.
165 N. Redwood Dr. Suite #150 San Rafael, CA, 94903