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More Home Buyers Flocking to Florida

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By Stephanie Mojica

Five Florida cities have become the new hotspots for home buyers sick of historically high mortgage rates and housing prices, according to NewsNation. In Realty411’s analysis, this also opens opportunities for investors.

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Redfin created a list of the 10 cities most popular for real estate searches, also taking into account the number of people trying to leave a city. While Sacramento, California grabbed the top spot on that list, here are the rankings for the Sunshine State of Florida.

3. Miami

5. Tampa

7. Cape Coral

8. North Port-Sarasota

10. Orlando

These are recent rankings, meaning that Hurricane Ian’s effects on Florida in September did not dampen people’s enthusiasm for moving there.

The rest of Redfin’s top 10 list is as follows:

2. Las Vegas, Nevada

4. San Diego, California

9. Phoenix, Arizona

10. Dallas, Texas

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The cities that people most want to leave, according to a Redfin “net outflow” report, are:

1. San Francisco, California

2. Los Angeles, California

3. New York, New York

4. Washington, D.C.

5. Boston, Massachusetts

From the report, it appears that investors can buy homes in Florida, rent them out, and sell them in the future if that is part of their strategy. As always, do as much research as possible before making any type of investment.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

These Three Real Estate Trends Have Potential in 2023

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By Stephanie Mojica

The talk about rising costs of living has seemed endless in 2022, but real estate investors shouldn’t lose hope just yet. Several real estate trends have a lot of potential for gains in 2023, Yahoo! Finance reported. Three of these seem like excellent options for Realty411 readers.

New construction is making a comeback.

COVID-19 regulations, supply chain disruptions, backlogged governmental entities, and labor shortages all but stalled new construction. However, these problems are greatly reduced nowadays. Also, cheaper land prices are a boon for companies wanting to build new houses.

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“Starter” homes and condos still have appeal.

Older homeowners are selling their small single-family homes and condos to upgrade their lifestyles. This trend opens opportunities for investors and traditional buyers alike. As always, read the fine print for fees and community rules when buying a condo.

Multiple offers from buyers are still common.

Many houses and condos will still get three to five offers from buyers. This is helpful for investors looking to sell, but something to be mindful of when looking to buy a property. However, even when there are numerous offers, few residential properties sell for more than the listed price.

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Accredited Investors: Learn About the Croatan Access Fund

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Please review this sponsored post.

Dear Investors,

CityVest is pleased to offer our final investment of 2022 for accredited investors: Croatan Access Fund. We have been watching and waiting for the right time to make our move. Given current dynamics of interest rates and cap rates in the real estate investment market, we are now excited to make an opportunistic investment. Having a pool of capital to take advantage of buying opportunities will result in attractive acquisition valuations.

Now is the time to invest! Consider these investment sages:

   “Be Greedy When Others are Fearful” – Warren Buffet
   “Buy When There is Blood in the Streets” –Baron Rothschild

Our unique Croatan Access Fund will allow you to participate in the $150 million institutional investment fund named Croatan All-Weather Fund II.

The Croatan All-Weather Fund II (Croatan) has the following attributes:

  • Proven Track Record. Croatan’s investment manager has achieved a 32.7% net IRR * and a 2.8x Equity Multiple on realized multifamily investments.
  • Strong Targeted Return Croatan Fund is targeting an annualized net IRR of 17%.
  • Higher Negotiated Returns The Access Fund has negotiated to receive a 12% preferred return from Croatan, as compared to an 6% preferred return for direct investors into Croatan. In addition, the Access Fund has negotiated to receive 80% of profits after the 12% preferred return has been achieved.
  • Desirable Investment Niche Croatan specializes in multifamily rental housing throughout the south from Maryland to Arizona. Croatan will make direct and co-investments, with the Croatan Fund participating in “Promote Sharing” of 10% to 35% on so-called GP co-investments.
  • Attractive Portfolio Acquisitions Already Closed Croatan Fund has already concluded 9 property acquisitions composed of 2,765 units with a total capitalization of $444 million.
  • Skin-in-the-Game Croatan’s investment manager and general partner will invest approximately $7 million into the Croatan Fund.

Please join me on a conference call to learn more about CityVest’s Croatan Access Fund. Here is a link to register for one of several group conference calls:

GROUP CONFERENCE CALL If you have any questions do not hesitate to contact me directly at 917-747-3091 or schedule a direct call through my calendar link.

As always, thank you for the opportunity to provide unique and successful investment services to you.

Sincerely,

Alan Donenfeld
Founder and CEO

p: 212.593.1600 c: 917.747.3091
a: 110 East 59th Street 22nd floor New York, NY 10022
w: www.CityVest.com e: [email protected]

Email sponsored by CityVest, 110 East 59th Street 22nd floor, New York, New York 10022

DISCLAIMER:
*Past results may not be indicative of future results. Please review all documents including risk factors.
This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute, or copy this email. Please notify the sender immediately by email if you have received this email by mistake and delete this email from your system. If you are not the intended recipient you are notified that disclosing, copying, distributing or taking any action in reliance on the contents of this information is strictly prohibited. The information contained in this email is a summary and is for informational purposes only. It is impersonal and not individualized to any specific investor’s financial situation, and, accordingly, does not constitute investment advice. You should always carefully consider investments in any security and be comfortable with your understanding of the investment, and it is recommended that you consult with an investment professional that knows your specific circumstances before making any investment.

© 2022 CityVest. All rights reserved.

What Are Common Plumbing Problems That People Don’t Think About?

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By Stephenie Mojica

Whether you have a residential or commercial property or plan to buy one, it’s important to ensure that the plumbing is well maintained. REALTOR.com recently published a list of six common plumbing problems that people don’t necessarily think about.

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While the fall and spring months are the best time for you (or a plumber) to check your pipes and other fixtures, any time is better than never. However, keep in mind that most plumbing issues surface during the winter. So, it’s best to get in the habit of looking for problems during the fall season.

Most landlords and other types of homeowners know the dangers of frozen pipes, water heater problems, stuck garbage disposals, and clogged drains. But what else should real estate investors keep an eye on?

1. Clogged cleanouts.

A cleanout is an outdoor pipe close to the home that usually sticks out of the dirt. This is an important pipe because it provides access to plumbing. If the cap or cover of the cleanout is open, cracked, or broken, then leaves or debris can clog it and cause a backup of water flow.

2. Cluttered gutters.

Leaves and debris are once again the typical culprits for this plumbing-related problem. Cluttered gutters can also damage your roof or foundation. Regularly cleaning your property’s gutters and inspecting them (and your downspouts) for cracks or damage will prevent most problems.

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3. Root intrusion.

If your property is in a dry climate, sudden rain causes the roots of trees to expand in search of much-needed water. These roots can crack plumbing pipes. If you own a property with large trees, have a plumber perform a camera inspection so they can identify and rectify any issues.

4. Dirty sump pump.

Once again, the leaves and other debris associated with the fall season can spark year-round havoc. A dirty or clogged sump pump filter can cause standing water in your basement or shut the pump down too early. Slowly pour a bucket of water into the sump pit to see if everything operates normally; if not, call a plumber immediately.

5. Garden hose mishaps.

Put away all garden hoses before the temperatures drop. Unless your outdoor spigots are freeze proof, use foam covers to protect them. Otherwise, you risk problems such as flooding and pipes bursting or freezing.

6. Hidden or small leaks.

It may be tempting to ignore a tiny bit of rainwater leaking from the dining room ceiling, but the risk is not worth it. Even droplets of water can get into your electrical wiring and ignite a fire. Discolored spots or high water bills could signify a hidden leak; the assistance of a plumber is necessary if you suspect hidden or small leaks.

Join REALTY411 for a VIRTUAL and/or IN-PERSON Investor Event

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INVESTORS/BROKERS/LENDERS/REI SERVICE PROVIDERS: It is time to pencil in attendance to a new Realty411 VIRTUAL or IN-PERSON Investor event for 2023.

As the company’s goal is to impact as many investors as possible, Realty411 is hosting four different events, two in-person and two virtual, to increase education and networking opportunities for investors.

One event is scheduled for January 28th in the West Coast, specifically Santa Barbara, California.

The next in-person event will take place on April 1st in the East Coast. For the first time, Realty411 will host an event in Philadelphia, PA, known as the “City of Brotherly Love”.

This in-person event in Pennsylvania will add yet another state to Realty411‘s repertoire of in-person events. This visit will mark the 13th state where a live event is hosted by the California-based real estate investor’ magazine.

Realty411 in-person and virtual events are hosted to help their magazine readers and followers gain the latest insight, strategies, and techniques to grow their rental portfolios and real estate businesses.

For this new 2023 hybrid schedule, Realty411 will unite wonderful speakers and leading experts who will share their secrets of success. Plus, event guests will learn how investors, agents, and brokers can increase their income by exploring new niche strategies.

To learn more about Realty411’s 2023 schedule, please visit:

https://www.eventbrite.com/o/realty411com-1322876767

Please note this schedule is only a partial list of 2023 events and additional states and cities will be announced soon.

For the latest news and developments, visit Realty411.com and REIWealthmag.com — Join us to become informed and get engaged.

Underwater Homes and Short Sale Solutions

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By Rick Tobin

Many homebuyers who purchased their homes near the peak of the latest 7-year “boom” or positive valuation cycle earlier in 2022 now may have zero or negative equity. This is partly due to the fact that so many owner-occupied home buyers came in with very low to no down payments anywhere between 0% (VA loans) to 3% (Conforming) or 3.5% (FHA). It may cost the average seller 6% to 8% in real estate commission fees, title, escrow, and transfer taxes to sell their homes which actually makes the number of underwater (mortgage debt exceeds current market value) properties higher than what’s reported.

Black Knight’s October 2022 Mortgage Monitor report shared details about how 8% of homes purchased in 2022 were already underwater and that almost 40% of properties had less than 10% equity left in their homes. The hardest hit property owners were first-time home buyers with small down payments such as seen with FHA, Conforming, and VA. Should home values fall 5% to 20%+ next year, then the number of underwater properties will rise like the tides during a peak moon cycle.

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According to Black Knight, more than 20% of the 2022 FHA/VA purchases had negative equity as of October 2022 and a whopping 66% had less than a 10% equity stake. Black Knight also reported that excluding the time near the start of the pandemic the “early-payment default” (EPD) rate, which tracks mortgage delinquencies within the first six months of origination, hit the highest level since 2009. 

The good news is that there’s still some high percentages of equity for homes purchased prior to 2022 due to how fast those homes appreciated nationwide over the past 10+ years. For example, the negative equity rates for all properties nationwide still remains historically low near 0.84% as of the third quarter of 2022. These very low negative equity numbers may change and rapidly increase in 2023 if mortgage rates keep rising and home values flatten or decline.

The #1 reason after the loss of income for why a homeowner is likely to walk away from their home and mortgage payment obligations is when their property is upside-down or underwater with negative equity. While the homeowner may be drowning in debt with a financial anchor that takes their home equity is underwater and figuratively sinking as well. 

Maritime Admiralty Law and Money Terms

You are primarily made up of water. In fact, upwards of 70% of your body and 80% of your brain is derived from water. Iodine is the body’s natural disinfectant, so effectively you’re made up of saltwater somewhat like found in one of the Seven Seas (Atlantic, Pacific, Arctic, and Indian Oceans, the Mediterranean Sea, the Caribbean, and the Gulf of Mexico). If you’re fortunate enough to live near the sea, you probably own a much more valuable home due to the higher demand for coastal properties.

Did you know that the early origins of US law and taxation authority come from Old English Common Law and Maritime Admiralty Law? Common Law is determined by past judicial or courtroom decisions or verdicts in civil and criminal courthouses.

Maritime Admiralty Law is also referred to as the Law of the Sea. It’s a body of private international law that governs relationships between private parties or business entities which also operate ships or vessels. The law of water dominates the entire planet partly since about 71% of the Earth’s surface is covered in water.

Let’s take a look next at how money, real estate, water, and taxation share many hidden and not-so-hidden meanings or double meanings:

Merchant banker: Merchant banks were the first modern banks which evolved from medieval merchants that traded in various commodities such as cloth merchants. These merchant bankers also helped finance the sales of these goods. “Mer” is also defined as sea as seen with the word Mermaid (woman of the sea).

Flipper: The name of a beloved dolphin in a television show from the 1960s because the dolphin completed amazing flips in the air. A home flipper, on the other hand, is an investor who purchases distressed and discounted fixer-upper properties prior to remodeling and later selling or “flipping” them. A flipper who sells his rental property in less than a year will probably pay much higher tax penalties for his or her short-term gains.

Whale: A very wealthy client or organization with lots of money.

Loan Shark: A third-party lender who typically offers very expensive loans for fairly short periods of time over weeks, months, or a few years to motivated clients who may be short of funds.

Cash flow: Real estate investors strive to find assets that create positive and consistent cash flow or income streams just like they may see at their nearby river where they may fish. For real estate investors who are fortunate enough to have a positive monthly cash flow while letting their money work hard for them instead of vice versa, they will have more time to fish or go boating.

Sink: A poorly managed rental property or significant debt can sink you financially and pull you to the bottom like a falling anchor.

Float: When you’re running out of cash, a bank loan can float you like a lifebuoy so that you keep your head above the water and don’t figuratively “drown” in debt.

Liquid: A person with lots of access to money or capital is described as being liquid or having exceptional liquidity. Conversely, a person with no money is illiquid.

(River)bank: A courtroom judge rules from the bench. In Latin, bench translates as bank. Most courtroom disputes are monetary disputes, so the judge acts somewhat like a merchant banker while trying to balance out the assets and liabilities. Banks also are located on both sides of a river or riverbank.

Docs: Boat or larger ships are tied to docks when not at sea. Clients sign loan docs or documents when purchasing a property with a mortgage.

Current-sea: All nations have their own acceptable currency like the dollar. Seawater also flows via an ever-changing current.

Underwater: A property that has more mortgage debt than the current market value.

Soak: You may be familiar with the “Let’s soak the rich” phrase when some people are demanding that wealthier Americans pay their “fair share” of taxes.

Levy: For taxation purposes, a levy is the government’s right to seize your property if you don’t pay your taxes. For water purposes, a levee protects dry land from water damage that may originate from a nearby river or flood channel.

Sinking Prices and Short Sales

I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean

If you think a financial storm is coming on the horizon, you can either do nothing as the figurative waves crash over the front of your boat’s bow until it sinks or you can adjust your sails and head off towards safety, sunshine, and new prosperity. Today, you’re more likely than not to read negative news about real estate and the financial markets as we’re near the low point or trough of the economic wave or cycle.

Kieran Clancy, a senior economist at Pantheon Macroeconomics, published a recent analysis about how he thought that home values may fall 20% from their June 2022 peak wave highs. New home listings fell 19% from the 2017-2019 levels, which was the largest deficit in six years aside from the early pandemic and lockdown months in 2020.

Home delistings reached an all-time record high by November 2022 as more sellers got frustrated with fewer buyer prospects who also weren’t offering high enough purchase price offers for many of the sellers. A record 2% of homes for sale across the nation were delisted as being offered for sale every single week on average for 12 consecutive weeks through November 20 as per Redfin.

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An underwater and a potential short sale deal is a home sales situation where the mortgage debt exceeds the current market value at the time of the sale. The seller and advising real estate and mortgage licensees can assist with persuading the existing lender or mortgage loan servicer to significantly discount their debt concurrently at the payoff of the short sale. This way, the seller doesn’t lose more money, the buyer pays fair market value, and both the listing and buyer’s agents receive their commissions.

Some of our past clients who came to us for financing have worked on several thousand short sale deals, so our team is very experienced with offering solutions for all parties involved. For motivated sellers, you should set realistic home listing prices in the near term to maximize your profits or to minimize your losses. For real estate licensees, you should learn more about how short sales and creative seller-financed sales can help you and clients at a much faster pace while increasing gains or reducing losses at the same time.

What goes up must come down, but it also can build up powerful future momentum like a peaking wave crest as we “surf” or “sail through” the continuous boom and bust wave cycles!!!

Rick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.