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Raleigh, NC Real Estate Market

Raleigh, NC is one to watch in 2018 and beyond. The “City of Oaks” is the state capital of North Carolina and the seat of Wake County. It’s the second largest city in the state behind Charlotte with a fast-growing population of 458,880. This puts Raleigh well-above the third largest city, Durham, which has a population around 263,016.

Raleigh is located in “the Triangle,” which also includes Chapel Hill and Durham. This area received its nickname when Research Triangle Park was formed in 1959 and it has stuck ever since. The three metro areas each have their own state college, are bustling with jobs, and share a vibrant regional tech scene.

Raleigh has all of the features we look for in a sustainable real estate market: economic growth, low unemployment, and an influx of new residents. Beyond these basic requirements, Raleigh also checks boxes for a vibrant arts scene, top-ranked public school systems, and high overall quality of life.

Raleigh’s Impressive Local Economy

Raleigh is projected to experience future job growth of 42.66% over the next ten years according to Sterling’s Best Places. Currently, the unemployment rate is 4.30% and the job growth rate is 3.48% with a median household income of $84,288. The primary industries in Raleigh are technology, healthcare, and education. The gross metro product is $72.3 billion annually, reflecting what locals already know: Raleigh enjoys one of the strongest local economies in the country.

Forbes lists Raleigh as the #2 place in the country for business and careers. The business magazine also ranks the state of North Carolina as the #1 state for business out of the entire country in 2017. While these rankings are impressive, the consistency with which North Carolina and Raleigh have found themselves in the rankings is far more impressive. North Carolina is the only state to rank in the top 5 of Forbes’ Best States for Business 12 years in a row. Raleigh is the most consistent metro area performer with a top 3 spot for the past 15 years running.

Raleigh attracts nearly 25,000 new people to the area every year. Over 189,000 people are enrolled in higher education and there are over 53,000 graduates each year in the Raleigh area. This creates one of the most educated labor forces in the country. These educated laborers are commanding strong incomes and putting down roots in the Triangle.

Arts & Culture in Raleigh

Raleigh is home to the Duke Energy Center for the Performing Arts, the North Carolina Symphony, and the Carolina Ballet to name a few. CAM Raleigh, North Carolina Theatre, NC State’s collegiate arts program, and a bevy of privately-owned galleries round out a robust downtown-centric arts scene. In fact, Raleigh is so jam-packed with arts and culture that it’s known by some as the “Smithsonian of the South.” This culture spills over into the creative community itself and into Raleigh’s most desirable neighborhoods.

In downtown Raleigh, non-profit Artspace offers a unique visual arts experience. Artspace encourages community participation through exhibitions, artist talks, open artist studios, artist residencies, and art education classes for creatives of all ages. This hub of artistic activity supports artists in the community and is recognized as a leading arts non-profit in the southeast. CAM (Contemporary Art Museum) Raleigh is another arts innovator sparking conversations about what it means to experience art. Like Artspace, CAM is pushing Raleigh’s arts and culture forward and attracting national attention in the process. The art scene is drawing in Millennials and rounding out an already hot real estate market.

Nationally-Ranked Public Education

Even though the state of North Carolina has been in the news for their slipping school rankings, the Raleigh area boasts well-ranked school districts. Wake County, Chapel Hill-Carrboro, and Durham all have strong elementary, middle, and high schools in their districts. Envision Science Academy is the top elementary school in the Raleigh area according to Niche.com. Sterling Montessori Academy, Quest Academy, and Smith Middle School are the top 3 middle schools in the area. The Raleigh Charter High School ranks #53 out of all public high schools in the country. East Chapel Hill High School and Green Hope High School both rank in the top 200.

Beyond elementary and highschool, residents are within 30 miles of three nationally-acclaimed institutions for higher learning: North Carolina State University, Duke University, and the University of North Carolina at Chapel Hill. Wake Tech Community College, William Peace University, Shaw University, Meredith College, St. Augustine’s University, North Carolina Central University, and Campbell University round out the impressive lineup of educational offerings of the area.

Raleigh, NC Real Estate Investing

The city was one of the earliest planned cities in the United States when it was incorporated in 1792. The city’s grid pattern is a result of this planning and makes the downtown area easy to navigate by city block. Raleigh has a lot of wonderful neighborhoods to choose from and we can’t possibly cover them all here! When looking at Raleigh real estate, note that neighborhoods “inside the Beltline” are located within the 440 loop. This area is filled with older homes and was once the wealthiest part of Raleigh. Homes inside the Beltline are in demand and command higher prices.

In the past 7 years, the Development Services Department has approved 653 new subdivisions, or 40,888 new homes in Wake County. In Raleigh, 279 subdivisions and 4,438 new homes have been approved. Raleigh is in such high demand that builders simply can’t keep enough homes in supply. As a result of rising home values, steady income growth, low unemployment, and above-average job growth, Zillow ranked Raleigh the #2 hottest housing market in the country for 2018.

Zillow predicts that Raleigh home values will increase 3.7% and rents will increase 1.2% in 2018. Incomes are expected to increase by 9% in the area during the same period. In December 2017, the median list price for a home in Raleigh was $335,255 according to Realtor.com. This puts the year over year growth for median home prices at a hot 6.4%.

If you are a real estate investor looking for business in Raleigh, you have your choice of real estate investing strategies. Rehabbing can help turn fixer-uppers into market-ready homes to meet demand. Wholesaling can bring properties to retail with even less investment. Renting is also viable as more and more young adults move to the area. Are you a Raleigh native or investor with experience in the area? Share your comments with us below!

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2018 Real Estate Investing Trend Report

We are now a decade out from the 2008 housing bubble. As home prices continue to rise, many are wondering if the market is signaling trouble once again. When you dig beneath the surface, however, it seems that the current home prices are the result of sustainable growth. Rather than being propped up by subprime mortgages, these prices are propped up by increased demand and a strong economy. As we look ahead into 2018, these are the top trends affecting the American real estate market.

Sustainable Economic Developments and Regulation

Mortgages are harder to access than they were in 2008 thanks to the Dodd-Frank Act. The DFA stifles risky lending by requiring lending institutions to show proof that the borrower can repay their loan. This has led to an increase in the median FICO store of home loan borrowers. Tighter lending has also kept house “flipping” under control. Inexperienced real estate investors are being replaced by more experienced and cautious investors who are thoughtfully rehabbing properties to meet demand for affordable homes.

Outside of the real estate market, additional factors are driving strong economic growth. In October 2017, the national unemployment dipped to a 17-year low rate of 4.1%. When more people have jobs, there are more buyers in the market for a home. New job growth, plus more Millennials entering the workforce, means we should see continued and sustainable demand from buyers. One thing to watch is wage growth. American wage growth remains stagnant, which means some working Americans are priced out of residential real estate in the most expensive markets.

Sellers Hold Their Advantage

The trends outlined here point to the fact that sellers will continue to hold their advantage in the year ahead. While some predict that home prices will begin to fall in the final quarters of 2018, it appears that sellers will experience a strong year. In many cities across the US, bidding wars are pushing home prices above the listing price and creating cut throat markets.

In December 2017, the median list price for a home in the US was $270,000, up 8% over the previous year. The average number of days on the market sat at 83 during the same month, a 7% decline from the year before. Active inventory at the end of 2017 was down 9% from the year before, signalling that demand is still eclipsing supply.

Supply Catches up to Demand, Sort of

Economists at Realtor.com are predicting that the current housing shortage should ease up in the second half of 2018. The improvements are likely to affect the upper tiers of the real estate market first, with homes valued over $350,000 receiving the biggest boost in inventory. Luxury home buyers can thank a wave of construction projects for the increasing supply.

This means that more affordable homes (and those hoping to buy them) are going to feel the squeeze for a little while longer. Either way, more homes are entering the market, which will help close the gap between supply and demand at some price points.

Smaller Single Family Homes

After increasing in size between 2009 and 2015, the average square footage of single family homes continues to decline. Increases in square footage are often seen after a recession as the economy recovers and the luxury home market opens up again. Square footage often decreases prior to and during an economic downtown, but that may not be the case here. The current decline could signal a shift for builders away from larger luxury homes to smaller entry-level homes.

As first time home buyers enter the marketplace, especially the Millennial generation, smaller homes are appealing to them. While this entry-level market continues to expand in 2018, we can expect square footage to continue its decline. The growth in square footage witnessed between 2009 and 2015 is consistent with what we typically see after a recession.

Millennial First Time Home Buyers

While some Millennials still can’t shake their student debt, they are maturing career-wise and starting families. As they settle down with ever-increasing disposable income, they are looking to buy their first homes. The Millennial crowd is surpassing expected first time home budgets,  with many looking at homes above the $250,000 mark. This higher than average first time home price point is partially the result of strong job growth, especially in big cities. Millennials are also waiting longer to buy their homes, giving them more disposable income than younger home buyers.

Markets to Watch

Southern states continue to top the charts for the hottest markets in the US with North Carolina cities Charlotte and Raleigh at the helm. Zillow recently published a report ranking the 10 hottest real estate marketings for 2018. Their rankings are as follows:

San Jose, CA

Raleigh, NC

Seattle, WA

Charlotte, NC

San Francisco, CA

Austin, TX

Denver, CO

Nashville, TN

Portland, OR

Dallas, TX

The second hottest market, Raleigh, has a median home value of $233,900 and a real estate market growth forecast of 3.7%. Charlotte’s median home value stands at $181,600 with a growth forecast of 4%. In Nashville, the median home value is $228,900 with a growth forecast of 3.8%.

Realtor.com issued their own hot market report, which also lists Charlotte and Nashville as markets to watch in 2018. Their report predicts a whopping 7.7% price growth in Nashville and 3% in Charlotte. According to Realtor.com’s economic team, Charlotte’s population is expected to grow by 2.2% and employment is expected to grow by 2.5%. No matter where you are looking, south eastern cities are on the list.

In their annual trend report, Realtor.com also predicts an increase in Millennial mortgages and strong growth in Southern markets. The average mortgage rate is expected to hover around the 4.6% average before reaching 5% at the end of 2018. Overall, Realtor.com is expecting a 7% increase in new home sales and a 2.5% increase in existing home sales. Home prices are expected to finally come down from 5% annual appreciation to 3.2%. This means buyers just may find some relief even as sellers continue to enjoy high home prices.

All signs point to a busy year filled with growth opportunities! What are you seeing in your market? Leave us a comment below.

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The Benefits of Wholesaling

As with every real estate investing strategy, wholesaling has its pros and cons. It’s important to understand both sides as you evaluate your options. Potential cons of wholesaling include the fact that it does not guarantee income. Unlike a traditional 9 to 5 job, wholesaling will not give you a biweekly paycheck. Wholesaling does not provide benefits either, so it’s imperative that you are a savvy financial planner who can save for leaner times. In addition to managing your money well, you need to be incredibly organized as you line up potential buyers. 

If you aren’t thoughtful and intentional with your offerings and your pricing, you can quickly earn a bad reputation and lose credibility. Finally, wholesaling depends on finding a buyer. If you don’t find a buyer for your property, you are on the hook. The most successful wholesalers are tapped into their local real estate community and regularly attend real estate investment events like the Deal Maker Sessions.

Misconceptions About Wholesaling

Before we discuss the benefits of wholesaling, it’s important to differentiate our wholesaling strategy from what we consider “predatory wholesaling.” We do not recommend building your wholesaling strategy on a framework that primarily entails posing as a buyer and then reassigning the contract at closing. In this “strategy,” the seller shows up to their closing to find someone they’ve never met buying their home, which they thought was under contract with the original “buyer.” This does not foster positive relationships and instead breeds confusion and distrust. This form of wholesaling also places the power in the hands of the final buyer, meaning your profit can easily vanish if the end buyer decides to change their offer or pull out at the last minute.

In our HomeVestors® businesses, we engage in wholesaling predominately by purchasing homes at a low cost and then take them directly to the market using the MLS. The strategy hinges on an in depth knowledge of the local market and strong real estate investing relationships. We are able to find houses that never make it to market through our national “We Buy Ugly Houses®” branding and reputation. In most cases, we purchase the house out right, perform minimal repairs or clean out, and then list it on the real estate market. In a form of wholesaling we call “wholetailing”, we undertake larger non-cosmetic repairs before wholesaling the property. These two types of wholesaling methods require a constant flow of high quality leads.

The Benefits of Wholesaling

In most cases, the potential cons can be mitigated by careful planning, organization, and management. When done correctly, wholesaling can help you build a house buying business. This is not a guarantee of success, but rather an observation of how a savvy investor can use wholesaling as their investing strategy.

The primary benefits of real estate wholesaling include:

You will learn A LOT, in a relatively short amount of time

It can help you build a strong home buying business

You can opt to buy properties and perform little to no fixing

The process, when done correctly, is quick

You will engage with your local investing community

The first benefit of wholesaling is that you will learn so much about real estate investing. Wholesaling is hands-on and you will be connecting with sellers, evaluating properties, signing contracts, closing on deals, and then securing buyers over and over again. If you dive in with both feet, you can learn the ins and outs of wholesaling in a matter of months. If you are ready to learn and accept guidance, you can use wholesaling to lay the foundation of your home buying business and for maintaining cash flow.

If you stick to a tested system, you can wholesale houses like clockwork. HomeVestors offers a tested system for running an efficient wholesaling operation. Wholesaling also forces you to engage with your local investing community. This exposure to peers, mentors, and experts will provide boots on the ground training that no seminar or DVD package or guru can ever replicate. For all of these reasons, wholesaling is a beneficial strategy to use if you are new to real estate investing.

The Real Estate Wholesaling Strategy

When you wholesale a property, you must first purchase the property at a margin that is below its current as-is value.  The goal is to negotiate a deal with the seller that helps them solve their desire to dispose of a real estate problem that is acceptable for both you and them. You need to build in enough room to increase the price fairly, giving yourself a modest fee while still giving your buyer a great deal.

Pure wholesaling is purchasing the house for a short period of time and reselling as-is to the investor rehabber. Time is of the essence. When you wholesale, you will steer clear of full renovations involving contractors and subs! The amount of work you take on is minimal. In most cases, you will perform light cleanup and make minor repairs.  Just enough for the buyer rehabber to see their canvas.  With wholetailing, you might fix a foundation, roof, or other major scary stuff and leaving the cosmetics for the next person before listing the home on the MLS.

Most wholesalers have a percent rule, or formula that they will follow. This means that a wholesaler shouldn’t pay more than a certain percentage of the After Repaired Value (ARV), minus the repairs. This provides the cushion we mentioned earlier and allows a margin for you, while still passing on an attractive deal to your investor buyers.

The fee you make for finding and purchasing a property, getting it ready for market, and then selling it is usually modest. This means a wholesaler needs to find and sell a considerable number of properties each year. Again, this is where having a proven business system in place is invaluable. You need to operate like a well-oiled machine, adhering to your formula, and staying engaged with your market. The best wholesalers understand the selling landscape and stay up to date on what their favorite investor buyers are looking for so that they can make productive and mutually beneficial relationships.

Tips For Real Estate Wholesalers

Wholesaling is a great strategy for novice real estate investors. Like all real estate endeavors, wholesaling requires discipline, time, energy, and resources. If you are looking to start a wholesaling business or improve your current one, keep these tips in mind:

Attend your local Deal Maker Sessions and investor club meetings

Find a real estate investing mentor

Assemble a strong real estate investing team

Avoid real estate gurus selling weekend seminars and DVD box sets

Know your strengths and weaknesses

Always have an exit strategy in place before you begin a project

Browse our blog for more information on real estate wholesaling, top real estate investing strategies, and the HomeVestors system. If you have any questions, drop us a line in the comments below. Happy wholesaling!

*This blog is not an official recommendation of the wholesaling real estate strategy. Every investor must evaluate his or her own position, goals, and skills before selecting a real estate investing strategy.

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The Hidden Costs of Rehabbing

If you are a DIY-minded individual, rehabbing properties is an appealing real estate investment strategy. For novices, however, the hidden costs of rehab projects can quickly chip away at profits. From acquiring permits to securing financing, it’s important to understand the nuts and bolts of rehabbing. Each of these costs will encroach on your bottom line. The good news? If you know what to plan for, you can keep the costs under control and build your real estate investing business.

Costly Financing

The longer you own a home, the more interest you will pay on your loan. Pretty obvious, right? When it comes to rehabbing, time is of the essence. You will want to evaluate your personal financial situation and choose an option that suits your needs. Make sure you budget for appraisals and home inspections, which are often required by lenders (and just good practice for anyone purchasing property). Don’t forget that you may also need to pay a lawyer as you move through the financing process.

Carrying Costs

When you renovate a home, you have costs associated with holding onto the home or “carrying it.” These are known as carrying costs. Your carrying costs include all of the bills associated with the home like electricity, gas, and water. You will also need to purchase insurance on the home to protect yourself from unexpected damages and liabilities. In addition to these bills, you will have to pay property taxes for the duration of time that you own the home.

Make sure you calculate these up front and factor them into the mortgage payment. Beyond these set costs, you may also have to pay condo and/or neighborhood association fees. Map out every cost before you start your project and do your research. If you plan ahead, these costs are complete manageable and just part of the job!

Unexpected Repairs

Before you purchase a rehab property, a full property inspection is a must. Of course, surprises still pop up and put a wrench in the best laid plans. Often, rehab properties are a little older and so you will run into issues with the current building regulations, known as code. As you remodel spaces like kitchens and bathrooms, especially, you will find yourself bringing your property “up to code.” The older the home, the more code violations you will likely have to remedy.

This shouldn’t deter you from bringing an older home back to life! Just be aware and always use a trust home inspector to help you understand as many of the potential risks and costs up front. Set yourself up by acquiring the proper permits up front and address code violations head on to avoid fines or issues down the road. The more houses you rehab, the more you will be able to gauge what it takes to bring the property up to code. If you are renovating bathrooms and kitchens, make sure you allot extra money and time for code violations. Some are simple, like adding more outlets to a room, while others are more complicated and expensive, like redoing plumbing or swapping out appliances.

Landscaping & Extras

As you remodel the interior of the home, don’t forget the exterior features and landscaping! Giving your property curb appeal will make selling it so much easier. Often, a yard clean up and some fresh plants can do the trick. If you have issues with the driveway or stone work, you will need to know those up front. If the house has leaks, make sure you account for the cost of a drainage system should the yard require one.

As you clean out and demo the property, you will need a place to put all of that trash. If you make your own runs to the dump, make sure you account for your time and gas expenses. If you opt for convenience, you will need to factor in dumpster costs and trash services. Finally, when your home is ready to be sold, you will pay a commission to a real estate agent (if you take that route!). These final costs can add up and surprise you at the end of a successful project. Make sure you think through every single step up front and keep track of your budget as you go. If something unexpected goes up, your budget and plan will help you see if there is an opportunity to save money in another area.

Remember to always, always add 3-5% on top of the estimates you receive for repairs and remodeling. This will help you budget for unexpected expenses and protect your bottom line. Have questions or want to share a recent experience? Drop a comment below.

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Real Estate Trends in the Final Quarter of 2017

It’s time for another “check-in” on our national real estate market. 2017 continues to bring strong growth for real estate investors and the current trends present plenty of opportunities. A growing economy and shrinking unemployment rate are boosting real estate investment activity. An influx of new home buyers, slowly increasing housing supply, and access to financing are also fueling positive trends in the real estate market.

Home Prices Still Rising

Home prices continue to rise and the rate of growth picked up in July after slowing down in the previous months. Increased demand and low supply are the driving force behind the price increase. In August 2017, the median price of a new home was $300,200 and the average price was $368,100. This is up from $298,900 and $355,100, respectively, in August 2016. A “used” home was slightly more affordable in August 2017, sitting at a median price of $253,100 and an average price of $294,400. At the end of August 2017, there were 1,870,000 homes on the market in the United States.   

As home prices rise, finding affordable housing is becoming increasingly difficult. Low mortgage rates are partially responsible for rising home values, which translate into higher home prices. Even though the mortgage rates are rising, they are still sitting at historical lows and are not discouraging buyers from entering the market. While some fear a major correction on the horizon, JPMorgan released a low risk assessment after analyzing historical data.

According to their research, JPMorgan found that there is a historically low likelihood of dramatic price correction, even after a prolonged period of steadily climbing prices. In their research, JPMorgan analyzed data from 14 developed countries dating back to 1950. This revealed that sharp price corrections are relatively uncommon. That doesn’t mean, however, that they can’t happen.

Demand Continues to Grow

Demand is climbing for several reasons. As lending remains fluid, potential home buyers have easier access to the funds they need to mortgage a home. Access to lending and historically low mortgage rates are making it more desirable to purchase a home. As rental costs continue to rise, many people are opting to take advantage of these favorable conditions. One group, in particular is finally entering the housing market. Millennials are purchasing homes after a slow start, creating a spike in demand.

Furthermore, as the economy continues to grow and jobs are created, more people feel comfortable spending money on a home. Analysts do not expect demand to taper off any time soon. At the same time, inventory continues to decline. October 2017 marked the 27th consecutive month that housing inventory has decreased. We can expect the time a home stays on the market to remain short and for prices to continue to respond to this supply and demand imbalance.

Inventory Stays Low

According to Zillow’s analysis, the current number of homes in the U.S. is equal to the number of homes that existed in the U.S. in 1994. Now, 23 years later, 63 million more people live in the country. This imbalance between supply and demand is affecting the market from the top to the bottom. The majority of owned single family homes are occupied by baby boomers and available inventory is sitting at an historical low. This low inventory is a driving factor for all of the other current residential real estate trends discussed in this blog. It’s why houses don’t stay on the market for long and it’s why house prices continue to climb.

The luxury home market has the most inventory since more expensive homes tend to stay on the market longer. Builders are also focusing their energy and resources on the luxury market where profits are higher. Coastal areas tend to have lower inventory, although the actual inventory level varies by region and city. It is worth noting that recent hurricanes will likely divert building resources towards rebuilding existing structures, away from building new homes. This is a trend to keep an eye on as we move into the fall and winter months.

Funds are Flowing Even As Rates Increase

Even as mortgage rates creep up slightly, the funds are still flowing for real estate investors and residential home buyers. Several regulations are also helping make money available. Fannie Mae introduced new policies in April to make it easier for borrowers with student debt to qualify for a home loan. Policies like this bring new homebuyers into the market who previously might have continued renting. Millennials with student debt are taking advantage of this change, partially spurring their generational entrance into the housing marketing.

For residential real estate investors, a new company is shaking up the hard money lending space. Residential Capital Partners offers true no money down financing for qualifying properties. Experienced real estate investors in select US markets can apply for pre approval to have funds lined up before their next rehab project. Residential Capital funds 100% of deals with 10% interest and 3 points. That’s it. No hidden fees or caveats. If you are an experienced investor, check out their services for qualifying properties.

What are you seeing in your market? How is your real estate investment business capitalizing on these trends? Share with us in the comments!

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Building Your Rental Strategy

A rental real estate strategy is often called a “buy and hold” strategy. This is because you buy the property and thenhold itfor years, decades even. Rentals are not a get rich quick strategy, they are a long game for building sustainable income. To build your rental portfolio, you will invest capital, time, and resources. If you enjoy working with rental properties and you are patient, however, this is a wonderful approach to building a real estate investing business. Before diving in, it’s important to carefully consider the different aspects of your renting strategy.

Pick a Type of Rental Unit

When you decide to build a rental portfolio, your first decision is which type of rental property to purchase. You can buy a single family home, a duplex, triplex, or larger multi family unit. For the sake of this article, we will consider single family homes and small multi-family (1-4) homes. Single family homes are the easiest to finance, manage, and then sell later on down the road. They also attract longer term renters than multi family properties. Less tenant turnover means more profit. For these reasons, they are the most popular type of residential rental unit.

Small multifamily properties offer the same simple financing since most banks assess multifamily properties with 4 units or less using the same guidelines as single family homes. This means your single loan can deliver the cash flow of up to 4 units. When buying a multifamily unit, you are also likely to face less competition than in the single family home market. Having more tenants under one roof does, however, increase the time and money you will spend on the unit. A duplex or triplex can also be more difficult to sell when the time comes to fully cash out of the investment.

Remove Barriers to Success

Profitable rental properties share certain attributes. You can remove the most common barriers to your success by selecting a property that has these characteristics. When it comes to choosing a neighborhood, look for one with low crime rates. Since property taxes will eat away at your bottom line, always pull the tax records before making a purchase and choose properties with moderate to low tax rates. Since most rental properties are eventually sold, you want to acquire properties that are desirable to home buyers. This means searching out properties that are in good school districts and growing job markets. Both of these factors drive up monthly rent and home values.

If you can, buy in neighborhoods with “extras” like playgrounds, parks, and walking paths. These amenities will make the property more desirable to both renters and buyers. Gyms, public transportation, walkable mixed use districts, and public spaces are also a major draw for renters. In addition to these attractions, spend time looking at the hard numbers. What is the vacancy rate in the neighborhood? How many homes are listed on the market? What is the average rent, average home sales price? Connect this data to the qualitative factors. Is the vacancy rate due to seasonal fluctuation or is the neighborhood on the decline?

Finally, consider the physical environment of the property before you buy it. Does it sit on a floodplain? Will it require hurricane insurance? These natural events can chip away at your cashflow and suck up your time. Gather all of the facts you possibly can and then connect the dots. If the property doesn’t have any major barriers and has many positive factors working in its favor, then it’s worth your consideration.

Understand the Tenants in Your Market

If you plan to buy and hold property in a neighborhood next to a university, then your tenant pool is going to include a lot of students. If your rental properties are located in a neighborhood with an excellent elementary school, then you can expect young families. Understanding your market is the first step in a buy and hold strategy. Choose a location that matches your ideal tenant. Hey, if you aren’t afraid to rent to college kids, they can be lucrative.

Keep in mind that the type of tenant you have will also affect your vacancy rate. College students tend to leave campus during the summer, bringing more vacancy and turnover to your property. There is no right or wrong answer. No tenant is perfect… But if you understand your own strengths, goals, and resources you can set yourself up for mutually beneficial tenant-landlord relationships.

Decide How to Manage Your Rental Properties

If you are new to investing or still investing “on the side,” keep in mind that managing your own properties requires a lot of time. If you have a full time job that requires you to be in an office 9 to 5, running your rental portfolio will quickly eat up your mornings, nights, and weekends. Slowly building a rental portfolio part time is also going to slow down your business growth. It will be hard to massively increase your cashflow if you add just one property a year.

In order to really maximize your investments, it’s a good idea to run your rental portfolio like a business. That means eventually running it full time. If you want to scale your investments, you will need to create business systems and build a team of real estate investing experts. Eventually, you will reach the point where you may need to hire a property manager or management company. Carefully take the “pulse” of your rental business every quarter and make sure your current system is working.

Know Your Exit Strategy From the Start

The promise of rental properties attracts novice investors, corporate executives, and experienced full-time real estate investors alike. People rely on rentals to diversify their income, protect themselves against economic downturns, and for tax benefits. Sounds pretty great, right? The most important thing to understand is that no one strategy is perfect for everyone. Get rich quick schemes are just that, schemes. In order to build a real estate investing business, you must first have a firm grasp on your strengths, weaknesses, and your financial situation.

When you start acquiring rental properties, form a plan for “getting out” right at the beginning. Map out your goals and set benchmarks. Make sure you stick to your plan and exit when the numbers indicate that it’s time for you to sell the property.

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5 Things to Do Before Your Next Rehab

Most property rehabbers will agree: it’s addicting. Once you’re bitten by the rehab bug, you won’t be able to find enough properties to satisfy your appetite. And even if you do find the right properties, access to financing can slow you down. The Cornerstone Group has purchased over 600 houses collectively and this is our advice for real estate investors who are actively looking for their next rehab property.

Before your next rehab project:

Secure Financing Before You Find the Deal

Make an Informed Decision

Estimate the Costs and Rely on Experts When Possible

Use Trusted Contractors, Plumbers, Roofers, etc.

Create a Plan: Map Out Logistics and Know Your Exit Strategy

Secure Financing Before You Find the Deal

If you don’t have your financing lined up, chances are that many great deals will slip through your fingers. The time to secure financing isbeforeyou find the deal, not after you find it. In today’s competitive market, you need to be ready to purchase a property right after you have finished thoroughly vetting it. How can you line up financing? There are several ways to do this, but we only know of one way to secure pre-approval for no money down financing for qualifying properties.

Residential Capital Partners formed to solve the very problem you are facing: too many deals, too little funds. For experienced investors looking to fund qualifying rehab deals, Residential Capital is the perfect ally. Their hard money lending program is only available in select markets across the United States. Click here to check if yours is one of them.

The lenders at Residential Capital are able to offer this exclusive financing because they have “boots on the ground.” Residential Capital only lends in areas where they have experienced “Partners” nearby and local.  Each deal is reviewed locally before funding is approved. The loans offer an advance rate with 100% up to 65% of ARV. The interest rate is 10% and the 3 points are rolled into the loan. There is no penalty for advanced payment and the loan terms are 9 months. Learn more about the process and see if this loan can help you fund your next rehab on the Residential Capital website.

Make an Informed Decision

Investing in property is not something you should do on a whim. Quite the opposite. Investing in real estate requires careful planning and analysis of your own goals before you even add a property into the mix. After you take careful inventory of your financial situation, your goals, your skills, and your schedule, you are ready to look at properties.

When it comes to purchasing properties, you should go in armed with as many facts as you can find! This may include general market data and an analysis of the neighborhood. Your research should also include a top to bottom analysis of the property itself. Complete a home inspection and do you due diligence. Never go in blind. Surprises are bound to pop up (Hey, they keep us on our toes!), but the more you know, the better.

If you’re in doubt, rely on a real estate investing mentor or coach to guide you. No, we don’t mean a guru! Most people who sell seminars and DVDs promising to give you their secret won’t actually roll up their sleeves and help you build your business. They are offering a quick overview of their system (and more often than not, their real system is hidden behind even more pricey event tickets and upsells). To make an informed decision, you need some allies with real experience – and a willingness to share this experience with you!

The Cornerstone Group is a collaborative effort between 4 seasoned real estate investors. We have seen it all… including our fair share of “less than ideal” rehab projects. The network of HomeVestors® franchisees we support enjoys access to this huge knowledge bank. We share our experience and provide guidance so that our mistakes (and our successes!) can help others build their home buying businesses.

Estimate the Costs, Rely on Experts & Use Trusted Contractors

We rolled these into one topic because the three are truly intertwined… Once you’ve rehabbed about a dozen or so properties, you will be able to accurately “eye ball” project costs. But even then, you will likely miss something a trained home inspector, plumber, or electrician will catch. Stay in your swim lane and rely on a team of experts to help you estimate costs and repairs. Your team will help you accurately estimate costs, stay on schedule, and eliminate avoidable headaches along the way.

Building a team of trusted professionals and contractors will set you up for scalable success in the long run. Together with your team, you can hammer out a rhythm for each project that keeps you on track, within budget, and under deadline. Your team will also help you find creative solutions for problems that arise along the way. When you undertake a larger scale project or find yourself with a more complicated property, you will be so happy you have your team to see you through it!

Create a Plan: Map Out Logistics and Know Your Exit Strategy

One of the biggest mistakes we see first time rehabbers make is to bite off more than they can chew. Don’t go into your first project thinking that you need to undertake some huge renovation and make huge profits. It’s (probably) not going to happen like that. Start small and build up from there. The same applies to veteran real estate investors. Buy properties that are within your capabilities and keep building from there. Different projects will push you to grow as an investor, even if they seem easy or boring up front.

As you continue to rehab properties you will learn the value of a plan. Before you purchase a property, use your experience and current situation to map out logistics and formulate a plan. This plan should always, always, always include your exit strategy. When you walk through the process from start to finish, you will catch things that would have popped up to surprise you later on in the rehab. You can also flesh out your budget, lineup contractors, and schedule your own time. As you rehab more properties, you can create a template that you use for every project. Refine your processes, learn from mistake, and gain insight from your most profitable and easy rehab projects.

Share your tips or any “lessons learned” with us in the comments below!

The post 5 Things to Do Before Your Next Rehab appeared first on Homevestors Franchise.

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Real Estate Investing Spotlight on White Plains, NY

Welcome to another one of our real estate investing spotlights. When it comes to choosing a place to invest, there are so many factors to consider. We find that it’s always helpful to start with a high level overview of the market in question. You should consider economic activity, school rankings, quality of life, and job opportunity in the area before moving into the nitty gritty of your investment strategy. Here is our overview for White Plains, NY to help you kick start your research.

Investing in White Plains, NY

White Plains, NY is a city of just under 60,000 located 25 miles from downtown Manhattan. White Plains is situated in Westchester County, an affluent region of suburban New York City. The city boasts a daytime population of around 250,000 and the county itself is home to roughly 1,000,000 people. White Plains ranks in the top 10 places to live in New York,  according to Movato, and serves as the commercial hub for Westchester County.

White Plains has a rich history and was first settled in the 17th century when a group of people from Rye, New York purchased 4,435 acres of land from the Weckquaeskeck Indians. In the early 20th century, White Plains began its transformation into a suburban shopping district with branches of popular New York City shops popping up in the downtown area. In the 1960s and 1970s, White Plains underwent an urban renewal process of its own design.  Construction of residential, commercial and mixed-use redevelopments extended into the late 1970s.

White Plains as we know it today is one of the most affluent areas in the entire country with a median home value approaching $500,000, over twice the national average. As of August 2017, the median listing price on Realtor.com is $490,000. This is a 24% increase over the median home price 3 years ago. The average listing price per square foot in May 2014 is recorded at $255. In May 2017, this price is up to $285 per square foot.

The rental market is also growing, with an average monthly rent in the area of $2,299  according to Neighborhood Scout. High and appreciating home values mean that the city and its surrounding county of Westchester are ripe with opportunity for real estate investors. In 2016, the surrounding Lower Hudson Valley (including Orange, Rockland, Putnam , and Fairfield Counties) experienced the busiest year for residential real estate transactions since 2011.

White Plains Emerges as a Business Hub

Commercial activity in the area can be traced back to the 1950s when several New York City corporations relocated to suburban White Plains. These major businesses included General Foods, IBM, Snapple, PepsiCo, Hitachi USA, and others. The 1980s were a heyday for commercial activity in the area. In the 1990s, corporate mergers and downsizing led some of these companies to leave the area.

In the present day, White Plains is attracting big business, from regional to international, to its suburban perch outside the Big Apple. Nine West Group, Nokia, Heineken USA, AT&T, and Verizon all have a home base in White Plains. As a result, the work force of White Plains is primarily white collar. In fact, close to 90% of locals are professionals, service providers, salespeople, and office workers – with over 10% in management positions. The workforce relies heavily on public transportation for their commutes, which reduces traffic and air pollution.

White Plains is currently undergoing another economic and development boom. There are 7 large scale building projects. in progress in the area in 2017 . The new projects are primarily residential in nature, bringing jobs and employers with them. Residential projects also drive demand for restaurants, retail spaces, and service-oriented businesses. The projects will bring more people downtown and stimulate the city’s local economy. Downtown living also attracts young professionals, widening the available talent pool for corporations with local headquarters.

 Arts, Culture & Quality of Life in White Plains

A recent state grant is funding bike and pedestrian infrastructure in White Plains. The city is adding $300,000 to the state’s $1,200,000 contribution for a total of $1.5 million in investment. The improvements will center around theTransCenter, improving accessibility to public transportation and enhancing daily commutes. A secure bike storage corral near the station will make it easier for those who prefer to bike to the train rather than drive. All in all, these improvements will encourage alternative transportation and support the public transportation experience.

In addition to strengthening its infrastructure, the City of White Plains is committed to promoting the arts and nurturing its local culture. The Arts Exchange Building in White Plains is the headquarters of the Westchester Arts Council. Many visual artists, performance groups, cultural organizations, and creative businesses hold studios and offices there. Westchester County also boasts fine arts museums, a chamber orchestra, and a center for clay arts.

The arts round out a wide range of factors that make White Plains a top place to live in the United States. Easy access to the outdoors, a strong healthcare system and efficient public transportation are a major draw for people who choose to live in the area. White Plains is ranked in the top 4% of school districts in the U.S. and in the top 50 school districts in New York.

What’s driving people to move to White Plains? As renters are priced out of Manhattan, they are looking to the north for places to live. In addition, New York home owners are cashing in on sky high prices and reinvesting their profits in suburban areas like the Lower Hudson Valley. These factors are driving renters and buyers to the area, creating a wealth of opportunity for real estate investors. If you are considering investing in Westchester County, make sure to conduct more in depth research on your specific area of interest. And don’t overlook the neighboring counties! From there, you can determine which real estate investing strategy is best for your goals and your market.

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A Day in the Life of a HomeVestors® Business Owner

Technically speaking, becoming a HomeVestors business owner means that you have purchased an independently owned and operated franchise. What does that mean? Well, it means that you have purchased the proven HomeVestors system with access to their massive lead generation machine, as well as extensive real estate investing tools, training and resources to help you.

Your house-buying business is yours and you run it as your own venture, but you have a network of veteran mentors and proven business systems at your disposal.  How is this different from a 2-day real estate guru workshop? The support doesn’t end – this is an ongoing system for success.

What It Means to Be a HomeVestors® Business Owner

When you become a HomeVestors business owner, you get:

Immediate access to motivated seller leads…  They call you!

Funding for your purchases – 100% of the purchase price + repairs!

One-on-one coaching with your local Development Agent

The proven HomeVestors system for real estate investment

Proprietary software for analyzing properties and deals

Access to a nationwide network of coaches and peers

National branding and visibility through AdVestors®

How is HomeVestors qualified as an authority on real estate investment? HomeVestors was founded in 1989 and has been selling franchises since 1996. In the past 20 years, our business owners have purchased over 80,000 homes – that’s a lot of houses!  This extensive experience has helped us hone our system and develop proprietary software to help our business owners evaluate properties.

In 2016, HomeVestors won several franchise awards and designations recognizing its growth and sound business practices. Military Times named us a Best for Vets franchise and Entrepreneur Magazine named us a top 100 franchise. Learn more about HomeVestors from co-president David Hicks in his Insider Interview.

A Day in The Life of a HomeVestors Business Owner

Here is a peak inside an actual day from one of our amazing franchisees! Enjoy this firsthand account of what a day can look like for HomeVestors business owners:

7:30 AM: Each morning I check the HomeVestors lead database management tool called MAPS. It’s a CRM for managing my seller leads. When my phone rings, or I receive an email from a seller, the lead automatically populates in MAPS. It’s important for me to maintain the status of every lead I receive. Many of these sellers are not always ready to sell immediately, so we use MAPS to create follow-up campaigns. In fact, most of the houses we buy are purchased weeks, months and years after they initially contacted HomeVestors.  MAPS helps me organize leads and buy more houses!

9:00 AM: I am preparing a loan request from HomeVestors for a house I put under contract yesterday. I am using the ValueChek app provided to me by HomeVestors to evaluate the house and submit a loan request. I will also ask my Development Agent for a DA Review prior to submission. My DA will help confirm my repairs and comparable sales on this deal.  It’s nice to have someone in my corner to confirm numbers!

10:00 AM: I just received a call from a seller that has a house just north of town she wants to sell. She says there is a substantial mortgage balance left on the house. I scheduled the appointment anyway because my DA tells me to attend every appointment I can. You see, I have learned that it’s not about the house, it’s about helping the seller.  And sometimes when we just can’t buy the house, but can offer suggestions or alternatives to the seller, this can really go a long way!  

In fact, three months ago I bought a house from the sister of a guy named Brad that I could not help.  When Brad called he told me he had a double-wide trailer he wanted to sell.  I don’t buy double-wide trailers, but I went anyway to offer Brad some suggestions.  I gave him the name of a guy I know that does buy double-wides.  Brad was so appreciative he told his friends and family about me.  And that’s how I met his sister and ultimately bought her house.  I’ve learned that I should always come from a place of abundance (“how can I help you?”) and never operate from a position of scarcity (“I have to buy a house!”)

12:00 PM:  I’m having lunch with a local real estate investor I met at the Deal Maker Sessions last week.  He’s been trying to buy houses off the MLS without much luck.  Says he keeps getting outbid.  When I told him that I wholesale many of the houses that I buy, he wanted to get together.  He is hoping I can bring him better deals that he is seeing on MLS and other competitive venues.  Since I only meet directly with sellers, I’m sure I can!

2:30PM: I called my DA because I’m not sure what to do with a house I have listed on MLS. I bought the house last week. I cleaned it out, cut the grass, and listed it with my RE agent. My agent called me this morning to say that she has three cash offers from other real estate investors. Two are above my asking price. Not a bad problem to have, but I would like get some guidance from my DA.  

5:00PM: This evening is our monthly Ad Council meeting for my territory. I think it’s really cool that all the HomeVestors business owners meet every month to discuss their advertising and marketing. Each of us decide how much we would like to contribute. Then the Ad Council president places the order for all of us. This works out very well because our leads are distributed equally based on shares.

The more I contribute to the monthly advertising fund, the more shares (and leads) I receive. Ad Councils are also great for sharing resources such as contractors and other local vendors. And, since we work as a “team” we collaborate with each other on our deals. We even buy and sell houses to and from each other!

Sneak Peak Inside Our Twice Annual Conventions

 Each year, HomeVestors® of America hosts it’s Annual Convention in December, and the Mid Year Summit in June.  Last week I attended the 2017 Mid Year Summit in Dallas, Texas.  And I can report it was a good one!

These events hosted by HomeVestors are training heavy, and are critical to the success of our HomeVestors® franchisees.  In addition to the essential training, updates and announcements are revealed. Every part of the events are designed to help the business of the franchisees.

How Our One-On-One Coaching Works

Our team of Development Agents (Real Estate Franchise Coaches) prides ourselves on mentoring the business owners we support.  Our coaching services are included in the HomeVestors franchise model and are a feature that is provided to the franchisee for the life of their business!

We truly partner with our franchise owners, working together as a team.  Our model fosters results and a positive, productive atmosphere.  Our core team, the Cornerstone Group, has more than 60 years of experience so can confidently explain the ups and downs of real estate investing.  We will readily tell you everything we know and all of the lessons we have learned, because we truly want you to find success with your house buying business.

Working with HomeVestors franchisees, we regularly attend what we call the “Buy Call Appointment” and help with making offers to buy houses.  We are also there to train on proper repair analysis.  Not knowing or missing repair items can be very costly!  Together, we will tackle any problems or obstacles that arise and find workable solutions to keep you moving forward.  We are happiest and most effective with our feet on the ground, working in the field with the people we support (Not exactly what the “Gurus” do!). New franchisees joining the HomeVestors team can rest assured that they will find success in their real estate investment businesses the old fashioned way, with consistent hard work and a strong support team at your side.

As you consider your own options, make sure that you know the difference between a guru and a real estate investment coach when selecting your business mentor. Always ask questions before paying for someone else’s insider knowledge. Will they give you hands-on guidance? Or do they only work through paid seminars, workshops and classes? Will they readily guide you and share their personal experiences- or do they offer tiered packages, never giving you the complete package?  

We will happily recommend our favorite books for you to read as you explore starting a house buying business. We will give you every tool that we can offer to help you make an informed decision and equip you to enter the realm of real estate investment armed with the facts.  The world of real estate investment is exciting and full of opportunity, if you take the right approach and rely on a strong coach.

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Why We Formed a Real Estate Investing Team

Earlier this year, four HomeVestors® Development Agents joined forces to form a new real estate investing support team, the Cornerstone Group. Jim Wiley and Bill McKenna (in the north east) formed a partnership with Rob Caldwell and Jim Williams (in the south east). Our new entity spans the east coast to provide improved, coordinated support for franchisees along the eastern seaboard.

We have over 60 years of experience and 600+ homes purchased between us. Our boots-on-the-ground knowledge in a variety of markets brings a wealth of information to the franchisees we serve. In fact, providing more resources to the business owners we support was our top motivation for forming the Cornerstone Group. But before we dive into our “why” and explaining what we now offer, let’s introduce the team!

Bill McKenna  joined the Homevestors team 10 years ago as a corporate refugee – like so many of our business owners! Bill is happy with the balance of family and lifestyle that his real estate investing business provides, a big difference from his corporate life. This balance is top of mind for Bill, driving him to succeed. His corporate background still influences everything he does, strengthening his experience, HomeVestors training, business systems, and national visibility.

After buying hundreds of homes, Bill still has a never-stop-learning mentality that he brings to his work with new franchisees. Bill is the perfect example of a franchisee who started his business knowing very little about real estate investing, other than purchasing his own family homes. Bill has now purchased and sold over $50,000,000 worth of properties using the HomeVestors model. He is an expert in several of our core real estate investing strategies: wholesaling and rehabbing. Bill has recently added rental properties to his portfolio to build long term wealth. He has been a Development Agent for over 7 years and he thrives on the opportunity to help new franchisees succeed.

Jim Wiley  is another former corporate executive who has hit his stride with real estate investing. Prior to joining the HomeVestors team, Jim spent over 20 years as a senior corporate executive. When he realized he was no longer enjoying his career, he started to evaluate his options. When HomeVestors arrived in the New Jersey market in 2007, Jim was chomping at the bit to get started. He opened his business mid-year and says it is the best decision he ever made.

Jim’s business started with a bang and he has purchased over 200 homes since. The training and support offered by his new business was a key draw for Jim, who, like Bill, had no previous real estate investing experience. Jim hasn’t looked back since starting his business and he continues to work the training, systems, marketing, and support that HomeVestors provides. In 2010, Jim became a Development Agent. This role allows him to work alongside new business owners as they establish and build their home buying businesses.

Jim Williams  completed his first real estate investment deal in 1997. By 2000, Jim and his wife Karen were buying rentals as a part of their retirement plan. Five years later, in 2005, Jim and Karen committed to real estate investing full time. Prior to 2008, the pair spent thousands of dollars on real estate gurus (read more about this trap here), who were no help during the market collapse. Despite the economic downturn, Jim and Karen continued to manage and acquire rentals between 2008 and 2012. At this point, they were house rich and cash poor. They needed a system to help improve their liquidity and give them a consistent cash flow. The answer to their problems arrived in the form of a HomeVestors franchise, which they purchased in 2013.

In their very first year as HomeVestors business owners, Jim and Karen grew their business by 90%, purchasing 67 houses and selling 60 of them. The consistent cash flow and systems helped them take their business to the next level – and they have never looked back. Jim and Karen are natural leaders and mentors in their market, so it was a clear next step for Jim to become a Development Agent in 2014. After working with Rob Caldwell for 3 years, the pair are excited to join forces with Jim Wiley and Bill McKenna to become the 2nd largest Development team in the U.S .for HomeVestors.

Rob Caldwell  bought his first investment property in 1993, but his entrepreneurial spirit dates back to his childhood. Both of his parents were business owners, his father was a commercial, agricultural, and residential builder and developer and his mom owned and operated a flower shop. Growing up, Rob spent many evenings and weekends helping his dad organize job sites or his mom deliver flowers. As a kid, he looked forward to watching “This Old House” on PBS with Bob Villa and Norm Abram every Sunday. This entrepreneurial spirit and early love for real estate carries over into his work as a Development Agent today.

Rob joined HomeVestors in 2004 because he couldn’t find enough homes to buy on his own. The HomeVestors trademark and national “We Buy Ugly Houses” brand solved this problem for him. Rob currently works as a Development Agent, training and supporting HomeVestors business owners. This role is a perfect fit and Rob loves sharing his real estate investing experiences with the franchise owners he supports.

Back to our new partnership… 

As the Cornerstone Group, we are traveling around the eastern US to host real estate investing events and share our methods. During these events, we are presenting our proven systems for success and holding open panel discussions. Participants will learn how to access continuous seller leads and no money down financing for their qualifying property purchases. Our financing solution is open to everyone – you don’t have to be a HomeVestors business owner to access funding.

Entrepreneurs understand the benefits of a strong team and even solopreneurs often rely on a “team” of industry experts like accountants, lawyers, and business coaches. Building a real estate investment team gives you fresh perspectives on your problems and helps you move your business forward. Now, HomeVestors business owners on the east coast have an even bigger and more experience team at their disposal. We formed the Cornerstone Group because we know thatwe are stronger together.

As a real estate investing team, we offer:

A network for subject matter experts to help in every area of your real estate investing business

A continuous stream of qualified seller leads (every business person can appreciate this!)

Access to no money down financing for qualifying properties

The proven HomeVestors systems for building a home buying business

National brand recognition through the “We Buy Ugly Houses” trademark

Monthly meet ups and ongoing support and training through one-on-one coaching and training events.

Watch our Facebook page for announcements about our next real estate investing events. If you are an experienced real estate investor interested in co-hosting an event in your area or becoming an affiliate for our financing program, reach out to us directly at cornerstone@homevestors.com.

FaceBook – https://www.facebook.com/CornerstoneGroupCoaches Linkedin – https://www.linkedin.com/in/RealEstateFranchiseCoach Google+ – https://plus.google.com/+RobCaldwellRealEstateFranchiseCoach Twitter – @JoinHomeVestors

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Insider Interview: Ernie Hughes

We are excited to welcome Ernie Hughes to the blog! Ernie has over 12 years of experience with HomeVestors®, but his relationship with the company and its founders goes all the way back to 1973. Ernie currently works as a Regional Business Developer for HomeVestors and he brings valuable insight to our readers. Let’s dive right in!

How did you first get involved with HomeVestors®?

I went to work for HomeVestors of America in July of 2005, but my history with the founder, Ken D’Angelo, runs much longer and deeper. Ken D’Angelo and I started in a small East Dallas real estate agency, Ken in 1972 and me in 1973, working for 2 brokers and 8 agents total. Ken and I developed a fast friendship. In 1974, Ken started his own small real estate agency and I joined the venture as a partner in 1975.

Real estate franchising was relatively new in those years and Red Carpet Realtors was one of the early pioneers in real estate franchising. Ken had bought a Red Carpet franchise and together, we built the agency into one of the top RE agencies in the Dallas area. In May of 1978, we switched to ERA (Electronic Realty Associates). ERA was big for us at the time providing the newest technology in 1978 being able to transmit pictures with dot matrix facsimile.

Sometime in 1975, Ken and I went on a listing appointment together. We explained to the selling couple the process of listing their house, finding a buyer and closing the sale might take 4-6 months for them to get their money from the sale. The couple looked at each other and back at us and said, “But you don’t understand, we need to sell our house today. Ken and I quickly realized that we could buy houses at a discount by offering time and convenience. We purchased that house for about .60 cents on the dollar.

In 12 months from 1976-77 we purchased 88 houses at a deep discount and along the way realized the opportunity of helping people out of situations and Ken and I into the house buying business instead of working strictly for real estate commissions.

We formed a company named Equitex out of our residential real estate offices in East Dallas. By then, Ken and I had opened two real estate agencies with about 100 agents. We realized it was more profitable to buy houses at a discount and then sell them to other real estate investors. In late 1978, we purchased the ERA master franchise for South Texas at about the same time we met Ken Channell, current co-president of HomeVestors. The two Ken’s went to Houston to sell and train ERA franchisees.

In 1989 Ken started the company, HomeVestors. Ken and I had split our partnership in 1985 but remained good friends and participated in joint ventures together. Ken passed away in January 2005. Ken D’Angelo had a passion for teaching people, ordinary people how to make money investing in real estate through buying, selling and holding properties for long term wealth.

Ken’s guiding principle was helping people whether it was an investor that wanted to learn the house buying business or a homeowner that was faced with an “Ugly Situation.” There were a number of occasions that Ken would not let the seller walk away from the sale of their house without money in their pocket even though the lender or numbers would not have warranted it. Ken was a giving persona.

I was recruited by Ken Channell in June of 2005. It’s important to know something about the history of how HomeVestors started since its beginnings go back further than 1996 when it became a franchisor. In December of 2016, HomeVestors celebrated its 20th year as a franchisor, but the concept started 40 years earlier in 1976.

My current role with HomeVestors is a Regional Business Developer (RBD) working with Development Agents throughout the U.S., helping DAs recruit, sell, mentor and train new franchisees.  

How has the Development Agent evolved over the past decade?

My role started as a Franchise Systems Manager (FSM) coaching and mentoring franchisees. A franchisee would know that when the phone rang at 11 AM CST every Friday morning, it was our scheduled coaching call. It was as important then as it is today that when you schedule a call with a client, you call on time, every time. If I was going to be late, or could not make the call I would notify the franchisee in advance and they would pay me the same courtesy.

Calls were seldom cancelled or delayed. It is extremely important that you do what you say you are going to do. That’s the first step in building a relationship with franchisees. They need to know that they can count on you to keep your word.

It is extremely important that you do what you say you are going to do. That’s the first step in building a relationship with franchisees. – Ernie Hughes

The Development Agent started in 2008 but really had not gained traction or momentum until 2010 after Fred Deluca of Subway fame and his holding company, Franchise Brands provided the opportunity to Co-Presidents David Hicks and Ken Channell, which in turn guided the company to the success it has achieved today.

The big difference over the last 10 years is that the HomeVestors model has changed. The change has been very significant and is the biggest contributor to the growth and success for HomeVestors of America, Inc. as a franchise selling company. HomeVestors dramatically decreased the entry level costs and added Development Agents, local franchisees that coach and mentor new franchisees helping the new franchisee build a profitable business.

The real estate market is cyclical, prices go up and down. Prior to 2008-09, subprime lending was prevalent in all RE markets across the U.S. Subprime lending was the cause of the real estate crash. At the time, institutions were lending to many borrowers that did not qualify for loans. Additionally, real estate prices dramatically increased due to speculative buying by investors.

HomeVestors franchisees who adapted a blend of exit strategies not only survived the crash but thrived in a new real estate buying and selling environment. Franchisees and independent investors who did not adapt to the change in market conditions went out of business. Generally they were unable or unwilling to change their mind-set to meet market conditions. An extreme seller’s market morphed into an extreme buyer’s market seemingly overnight.

How has your approach to coaching evolved since you first started?

My coaching has always been straightforward and direct; I let people know what they need to do to be successful. I believe the biggest change in my coaching style is that I ask more thought provoking questions of franchisees and DAs. I work to help them discover the answers to the questions I ask, sometimes with a little guidance. I tell franchisees what they need to know and do to be successful, not always what they want to hear.

What is your preferred real estate investment strategy? Why?

I prefer the wholesale model, buying and selling with nothing more than a clean-out and clean-up of the house and sell to an investor. Exercising this model gives the investor a quick in and out with little financial risk other than the purchase and clean out costs. The key to this model is to buy at the right price and stick to the marketing plan until the house is sold. The risk to novice investors using this model is they don’t put enough effort forth to make the sale happen. They list the house in the MLS thinking that is all they need to do to make a sale and in some markets it works, depending on supply and demand.

I like this model because you can buy and sell houses in a relatively short time frame and it is the quickest and easiest way to make deposits in the bank account. Using the wholesale model allows investors to do multiple transactions monthly. Then it allows the franchisee-investor to cherry pick those houses that really make sense to rehab to retail and maximize their profit potential.

What’s the difference between a HomeVestors franchise, and just investing in real estate on your own?

There are several major differences between the HomeVestors model and being an independent investor. First, the Brand Name, HomeVestors, is trusted by sellers, evidenced by 75,000 houses bought by our franchisees since 1996. Second, the leads generated by our HomeVestors and AdVestors marketing team are by far the highest quality, according to our franchisees. Our investors say that these are the most profitable lead sources available. Third, HomeVestors has a system to follow. There are no reasons for anyone to “reinvent the wheel.” When an individual buys a HomeVestors franchise, they generally leave Success Systems Training with the confidence that they are not alone and that they can be successful following the HomeVestors system.

Being an independent investor can be very lonely and costly, especially for the inexperienced. There are many minefields and pitfalls you have to avoid as an investor. Having a local mentor and coach you can rely on makes a huge difference. You not only have the support of your local development agent and other franchisees in your market, but you also have the support of other franchisees in markets around the US as well as the corporate office.

Every month we have independent investors in attendance at our SST in Dallas. Some of these investors have been buying houses for years and state that traditional lead sources have dried up for them. MLS, REO’s and foreclosures are practically non-existent.

Is there one lesson that you have learned through trial and error during your real estate investment career that sticks out to you?

Like so many other investors, I fell prey to the “Fear of No” in the early days of my house buying career. I learned several very important things: 1) Fear is a great motivator, 2) never assume anything, 3) You can always go up on your offer but never down.

When I attend a buy appointment, I visualize making an offer, the seller accepting my offer and writing the buy contract. I use the “assumptive close” and I arrive confident in my intention that I’m there to buy the seller’s house.

What is the biggest mistake you see novice real estate investors make?

Overall, the biggest mistake you can make is not creating rules to ‘play’ by. Albert Einstein stated, “You have to learn the rules of the game. And then you have to play better than anyone else.” Since investors pay others to perform a variety of services for them, we recommend that franchisees set expectations rather accepting less than what is expected.

Exit strategies should be deliberate and you should stick with the exit until the house is sold. For example, if an investor intends to try to wholesale their house for the first 30 or 60 days, then they want to start a rehab 90 days into the loan – they are losing money by flip flopping on the strategy. Ninety days of interest and points can be costly, time is money.

We encourage new franchisees to use the wholesale model to build cash flow and reserves. They leave training saying they are going to wholesale the first year and then buy a house to rehab to take to retail. Generally, new franchisees/investors overestimate the after repair value (ARV) of a house and under-estimate repairs.

What is the most important piece of advice you have to give to a real estate investor considering a HomeVestors® franchise?

The most important piece of advice is the same advice Ken D’Angelo gave investors for decades and the same advice I give today: 1) Never stop generating leads, 2) Never stop buying houses, 3) Never stop recruiting investors, and 4) Never stop recruiting money. The other piece of advice: Follow the System.

FaceBook – https://www.facebook.com/CornerstoneGroupCoaches Linkedin – https://www.linkedin.com/in/RealEstateFranchiseCoach Google+ – https://plus.google.com/+RobCaldwellRealEstateFranchiseCoach Twitter – @JoinHomeVestors

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The State of Long Island Real Estate Investment

The Long Island real estate market continues to grow in value with development and infrastructure improvements on the horizon. “The Island” extends east-northeast from New York Harbor into the Atlantic Ocean and encompasses 1,401 square miles of land. In 2015, the population of Long Island was 7,838,722. While many consider the island to be suburban in nature, business growth and development are bringing more urban features to its residents.

Real Estate On Long Island

Long Island is home to some of the first planned suburbs in the United States. With easy access to Manhattan, Long Island is perfectly situated for professionals who don’t mind a quick commute by train into the city. As home prices in Manhattan continue to climb and squeeze out first time home buyers, many are opting to buy more house for less money – and supply is having a difficult time matching demand.

Long Island home prices rose by 7% in January 2017. This sharp increase in real estate value is the result of rising interest rates, increased demand from New York City buyers, and a dwindling supply of listings. Suffolk County homes are selling for a median price of $338,250, while Nassau County homes reached a median price of $475,000 at the beginning of the year. Let’s look at the factors affecting home values on Long Island.

Long Island Employment

Long Island enjoys a healthy unemployment rate that continues to decline. Nassau County ranked among the top 3 counties in New York State for their low unemployment rate of 3.7% in March 2017. Suffolk County had a 4.3% unemployment rate in March. New York City enjoyed a combined rate of 4.1%, down from 5.4% on year earlier in March 2016.

As unemployment declines, the private sector job count continues to climb. The state of New York’s private sector job count grew by 111,100 between March 2016 and March 2017 to reach 8,040,800. As we have previously discussed, a healthy job market is a key economic factor to consider when assessing an area for real estate investment. With many Long Islanders commuting to NYC for work, it is also important to keep any eye on the city’s job market. In March 2017, New York City’s unemployment rate was 3.6%, a full point below the 4.7% national average.

Business Growth & Development on Long Island

Long Island is already a commercial aviation hub as the home of the three busiest airports in the New York City area: JFK International Airport, LaGuardia Airport, and Islip MacArthur Airport. Two major air traffic control radar facilities are also located on Long Island.

Governor Andrew Cuomo’s proposed infrastructure developments are predicted to bolster development in the area. The outlined developments fall into four categories: expanding the sewage system, building a third rail of the Long Island Rail Road between the Village of Floral Park and Hicksville, improving current Long Island Rail Road stations and adding 2 new stations, and a new wind farm off the coast of Montauk.

By improving Long Island’s minimal sewage system, the island can welcome more business growth. The lack of available sewers has curtailed development in the past. The proposed transportation improvements of the third rail and new Long Island Rail Road stations will improve transit on the island. During his State of the State address in January 2017, Cuomo remarked, “With these projects, we equip Long Island with the tools and resources to drive commercial activity, create jobs and build a stronger Long Island for generations to come.”

$150 million renovations to the Nassau Veterans Memorial Coliseum are also expected to further boost real estate values on Long Island. The Coliseum closed in 2015 to undergo renovations and reopened in 2017 with a varied roster of events including college basketball, boxing, concerts, and a limited run of appearances by the New York Islanders. County officials are hoping to lure the Islanders back from their current home at the Barclay Center.

The Mount Sanai Health System is reportedly eyeing a Long Island expansion. The move is in line with the current trend of larger health systems partnering with local systems. In these partnerships, the local system is able to expand their services and upgrade their facilities while the larger system is able to expand their patient base.

To expand onto Long Island, Mount Sanai is seeking an affiliation agreement with South Nassau Communities Hospital. The 455-bed Oceanside facility will receive $120 million in capital support from Mount Sanai. If the agreement moves forward, the $8 billion hospital system will join the ranks of other top Long Island employers like Dealertrack Technologies and MSC Industrial Direct.

Long Island Schools & Neighborhoods

Many young families are opting to buy homes in Suffolk and Nassau Counties to take advantage of the strong public school system. In 2017, New York State took home the 12th spot in the nation and Long Island alone had 1 school rank in the top 100, 6 schools in the top 200 and 12 schools in the top 300 nationally. In addition to these national rankings, 22 Long Island high schools ranked in the top 100 among all high schools in New York State.

Long Island includes two counties, Nassau and Suffolk. These two counties are comprised of 13 towns, 2 cities, and 206 villages and hamlets. A recent report ranked the top 10 neighborhoods on Long Island for young families:

Stony Brook

Massapequa Park

Wantagh

Commack

Holtsville

Bellmore

Lake Ronkonkoma

Smithtown

Massapequa

Manorville

What do these neighborhoods have in common? Public schools rated 7/10 or higher by GreatSchools.org, access to the Long Island Rail Road, parks and green space, and the presence of young families.

It is an exciting time to invest on Long Island.  If you would like to learn how our proven business systems can give you access to continuous seller leads and funding for qualified properties, reach out today. In a competitive market like Long Island, access to leads is critical. No money down financing for qualifying property purchases can help fund your fix and flip deals.

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Renovating Foreclosed Homes and Other Investment Properties in Queens with Amenities for Families

Ever sit down with a real estate agent when looking at potential properties to buy? They show you all kinds of fancy graphs and charts to convince you of the hottest areas to invest in. They’ll probably tell you that foreclosure rates are settling into a more normalized pattern across the country, so opportunities to invest in distressed properties are becoming less plentiful. Let’s understand this from an agent’s perspective: fewer properties on the market means higher prices—and, higher agent commissions. Smart investors don’t want to pay that, right? It’s important to develop your own understanding of the market beyond price trends and turnover rates—you also need to consider relevant local government and financial policies so you can achieve the best possible return on investment.

Queens Rich With Favorable Investment Potential

In New York, for instance, where the lengthy judicial process has clogged up foreclosures availability for three or more years, banks are just recently offering up their crisis-driven backlog of properties. Queens, in particular, shows promise for investors to transform these newly available properties into family homes that can boost your bottom line.

Here’s the nitty-gritty. The combination of distressed homeowners who are still unable to negotiate manageable terms with their lenders and the December 2016 termination of the federal Home Affordable Mortgage Program (HAMP), which offered income-based modifications with rates as low as 2 percent, created a limited inventory of affordable investment properties. But, with courts now streamlining the resolution of foreclosure cases, the stock of low-investment properties in Queens has nearly doubled from last year—creating favorable investment opportunities for investors who know how to navigate the challenging system.

Since the floodgate of homes in deferred financial distress have opened, investors can purchase a neglected home at deeply discounted prices for rehabbing then selling at a rising market value in an area that is gaining significant value and attracting families. With families being priced out of NYC and the real estate boom spilling over from nearby Brooklyn, the average home sales price in Queens has jumped by 10.8% between 2015 and 2016. And, it’s no wonder: Queens benefits from excellent public schools, great access to NYC’s transport system, and an ethnically diverse community—even for New York.

Renovating with Families in Mind

Due to New York’s lengthy foreclosure process, many foreclosed properties in Queens may have been vacant for months or even years—and they will need a serious makeover by an experienced investor. But, the most astute investor will do more than just the necessary repairs. They will target renovations toward a growing target market of families.

Whether you plan to rehab a multi-family building, a condo, or a single-family home, keep in mind that most home-buying families these days prefer more amenities over sheer square footage, according to recent research by the National Association of Home Builders. Here are some of the features that top their list:

Energy efficiency.While most home buyers do not expect solar or geothermal energy (which is often out of their price range), families across all income levels do look for long-term cost savings through Energy Star-rated appliances, low-E windows, and programmable thermostats. It’s good for the environment and their pocketbooks.

Outdoor space.Families desire some kind of relaxing outdoor space such as a deck, garden area, patio, or fenced yard. That’s why 65% of home buyers look forward to moving to attractive and affordable suburbs—like Queens.

Separate laundry room.Home buyers are still leery from the recent economic downturn. So, rather than hanging their hopes and dreams on master suites or fancy finishes, they simply want to spare themselves the time and money spent at a laundromat.

By renovating according to these key market trends, investors can save money on installing unnecessary features during the rehab process. Not only can the property be resold at the rising market value, but it also holds the potential to realize longer-term revenue as a rental.

HomeVestors can Help You Find the Perfect Property

The hardest thing about buying foreclosed properties is deciding which properties offer the best return on investment. Since the 2010 national foreclosure crisis, HomeVestorsⓇ franchisees continue to thrive while other independent investors have experienced significant financial loss. The difference? HomeVestorsⓇ franchisees learn how to leverage their investment know-how to purchase undervalued properties in prime recovery areas like Queens to help turn a profit. With the proprietary software, ValueChekⓇ, franchisees can take the guesswork out of assessing homes for purchase and renovation. Speak to a member of our team to find out more about becoming an independently owned and operated HomeVestors franchisee.

Each franchise office is independently owned and operated.

Image Source | Pexels

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Bring New Life to Your Harvey Neighborhood by Investing in Foreclosed Real Estate or Abandoned Properties

When I talk to Harvey homeowners, I find that I’m almost always talking to hard-working families who take pride in their jobs and their homes. Their houses stand as testaments to their mindful tending, but unfortunately, the value of these properties in recent years has been depreciated by factors that are often out of the hands of the city’s residents. When the housing crisis struck, a number of Harvey residents vacated, leaving behind abandoned properties to tarnish an otherwise handsome community. By no fault of their own, these empty homes have encumbered those who stayed with declining values, pests, and crime—all despite property tax hikes.

Sometimes, the best way to breathe new life into an area is by making smart investments. We hear from a lot of first-time investors that they thought they’d never be able to tackle the work involved with transforming a tricky property into something that can help a neighborhood get back on its feet. Investing in your neighborhood’s abandoned houses allows you to take the fate of your community into your own hands. Instead of these blighted properties causing more plight, you can renovate and attract more hard-working neighbors into your community. The process doesn’t have to be daunting if you follow a few careful steps and keep a couple key points in mind.

Too Run-down, Or Ready to Rehab?

Knowing all the potential issues before you purchase any property can save time trying to redress an ultimately doomed venture. To do this, hire a qualified building inspector to perform an assessment. A complete inspection should take 2-3 hours and will cost between $200 and $470, depending on the size of the house. In Harvey, these inspections will likely average around $320. While nobody likes paying out of pocket, this simple step can save you from losing tens of thousands on an investment that doesn’t generate a return.

While an inspection will determine which essential repairs are needed, such as repairs to the foundation, structure, electrical, plumbing, or HVAC systems, non-essential repairs such as new flooring, paint, or carpeting can significantly increase the value of the home, though they will require additional time and effort. HomeVestorsⓇ can help you determine which non-essential and cosmetic repairs will be most cost effective with our proprietary ValueChekⓇ software. To save time, you can load this software on your tablet and perform your assessment on the same trip as the formal building inspection. The software will help you estimate the cost of the repairs, evaluate properties similar to the one you are looking at, and estimate a price to pay. Once you identify a property that is worth your effort, you can take the next steps.

Tracking Down the Owner

There’s some legally hazy territory that exists in the realm of abandoned properties. While the previous occupants are most likely out of reach and have long relinquished their rights to the home, the bank may be keeping it at arm’s length, as well. The financial institution that provided the mortgage could be contesting ownership in court, in an attempt to push responsibility to the previous owner. This is because it keeps them from being held liable for the costly havoc an abandoned property wreaks in its vacant state, such as damage due to fire.

From fire hazards to infestations to vandalism to litter—not to mention that with so many Harvey properties built in the 50s, these houses also carry an increased risk of lead paint or asbestos fiber insulation—there are plenty of reasons for them to dodge responsibility. An interested investor may have to dig into court filings to discover precisely who holds the hot potato. This means you’ll need to visit the Cook County Recorder of Deeds—a forty-minute drive without traffic if you’re willing to pay for parking in the Loop or an hour on the train—and search for records containing the property’s address, collect all proceedings, and sift through for the current name on file.

Plan some extra time for this task. You’ll need to consult multiple career clerks who are paid by the hour, not the job, negotiate a Byzantine filing system, consult computers to find which books you need to consult in order to find which other books will actually have the records you’re looking for, decipher antique, poorly photocopied handwriting, transfer records stored in multiple formats—yes, including microfiche—then print or otherwise compile the files, which of course requires consulting additional clerks. Once you’ve tackled this Herculean task, you’ll face your next challenge: paying for necessary repairs and renovations.

Footing the Bill

If you are a new investor, the funds for the work may not yet be abundant in your savings. While some saved cash will go into the property, the bulk of it will likely be financed. Being an investment, it’s difficult to find a bank that will lend a cash out mortgage to complete the project. That’s where hard money lenders can fill in the gap.

High-interest cash loans come with the expectation of being paid back quickly, once the property has been renovated and subsequently sold. The rates may seem staggering, but that’s because the lender needs to make money faster, as the loan won’t be paying for long. It’s one ready source of funds for those without established credit lines looking to jump into housing investments. These loans are often guaranteed by the property itself, so before you buy, have a clear marketing plan to sell the property—or else you might lose the whole thing anyway. As another option, HomeVestors offers financing for qualified franchisees, often at rates that beat the bank.

Help, All Along the Way

Amidst all the work, it’s important not to lose sight of the purpose of your undertaking:

Removing abandoned properties increases neighborhood values.

Vacant homes often play host to vagrants and criminal activity.

Bringing in new homeowners or renters to your neighborhood fosters a stronger community and helps protect the local market.

The value is there when it comes to digging into a renovation project, but the workload is considerable, and having reliable support along the way can make a radical difference. HomeVestors is a national company specializing in this field, and while every franchise is independently owned and operated, the national network of resources and support is always available and ready to offer tools and expertise. This takes a huge burden off the shoulders of a first-time investor who faces a real estate learning curve. If you’re a motivated homeowner living in Harvey or a bordering suburb, and are looking to breathe new life into the abandoned properties in your community, contact HomeVestors to help get you on your way.

All franchise offices are independently owned and operated.

The post Bring New Life to Your Harvey Neighborhood by Investing in Foreclosed Real Estate or Abandoned Properties appeared first on Homevestors Franchise.

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The Trends Behind the Hottest US Real Estate Investment Markets

I spend a lot of my time speaking to experienced investors. I have to—it’s part of my job. Finding out what makes investors successful or, more importantly, what they are having problems doing helps me to improve the service HomeVestorsⓇ provides to our franchisees. Do you know what the one thing is that comes up again and again in conversations? Finding houses to invest in. Now, as you can imagine, that’s a pretty big problem for someone who’s job is to renovate and sell properties, but it’s because finding these homes with potential is so difficult, that people can earn a good living doing it.

Finding property investment opportunities is particularly hard for investors who cover large areas of the country. There are so many regions and counties out there, where on earth do you start looking? Everyone has their own tricks of the trade or “secret” areas where they think there might be a goldmine of properties with potential. But I’m going to use this article to level the playing field. I’m going to highlight three factors that you can use to help judge the likelihood of property prices rising in the near future. Then, I’m going to use those factors to highlight several cities across the country you might consider looking into to help you find your next property investment.

Look for Price Reductions

Okay, so this sounds counter-intuitive at first, but hear me out. While price reductions may signal a weak housing market, they often don’t give the full picture. Take Springfield, Illinois, for example. The state capital saw soaring housing prices in 2015 but the market fell flat in 2016. The cause? An 18-month impasse over the state budget. With many residents working for the state government, the housing market has felt the effects. Should the impasse be resolved, however, there’s no reason the housing market can’t continue the strength it showed in 2015.

The same could be said for Phoenix, AZ. After a boom and bust period following the financial crisis, the city enjoyed steady growth in 2015. But 2016 was a different story. With growth contained at around 3% for most of the year, many sellers were forced to reduce their prices. This may only be a temporary measure, however. Some forecasts predict Phoenix to be the top housing market in the country in 2017. Phoenix and cities like it demonstrate that falling housing prices don’t automatically mean a weak market, particularly for investors who have the ability to hold on to a property while they wait for the market to change—patience can be particularly lucrative in locations like these.

Keep an Eye on Population Growth

If the population is growing, demand for housing is going to rise. If demand for housing rises, property prices will rise as a result. It seems an obvious factor, but it’s often overlooked. Perhaps it’s just because it’s hard to gauge without looking through census records. Luckily, I’ve done the hard work for you. If we discount New York and Los Angeles from the list of cities with the largest numeric increase, the rest of the top ten is made up of five cities from Texas (Houston, San Antonio, Fort Worth, Dallas, and Austin), Phoenix—which we have already mentioned—Denver and North Carolina.

Texas, therefore, may be a promising location to invest this year. Not only did the state survive the recession relatively unscathed compared to the rest of the country, but job growth in its metropolitan areas is strong. Austin, in particular, is becoming a tech hotspot with Apple, Dell, and IBM all placing offices there. More jobs will always mean more movement in the housing market.

Tracking Job Growth

Speaking of creating new jobs, job growth and unemployment rate is the final factor I recommend investors consider when deciding where to invest next. If a city’s economy is strong and the number of jobs is increasing, housing prices can’t help but go up. It’s the same basic economic principles I outlined above. Of course, a strong job market has a very positive effect. Not only will people move there for work, but the residents who currently live in the city are going to be better off. If there are more people and everyone is better off, house prices have the potential to skyrocket.

So which cities have the strongest employment rates? Houston is back again. The lone star city has a 3.7% unemployment rate (the national average is 4.9%) and rates second (behind San Francisco) for job growth in 2017. Denver, another top ten population growth city, is also worth considering. CBS ranks the Colorado city third with an annual jobs growth rate of 3% and an unemployment rate of 4.2%. Alternatively, there is Seattle, home of Microsoft, which has an annual growth rate of 2.92% and an unemployment rate of just 3.3%.

The type of property you should look to invest in will be determined by the types of jobs available. Take Houston for example. The largest area of job growth comes from the construction industry. Typically, construction workers moving to a different part of the country for work will be middle-aged adults with families. As a result, they’re going to be looking for family homes located in the suburbs. Seattle is a different story, however. With the growth of Amazon and other tech companies in the area, individuals moving to the city for work are much more likely to be younger millennials. Investors in Seattle, therefore, should look for apartments in the heart of the metropolitan area or properties near to the campuses of these tech giants.

Find Your Next Investment Opportunity with HomeVestors

Even if you know the best cities to look in, finding a house with potential is still tough. But it’s a little easier if you are an independently owned and operated HomeVestorsⓇ franchisee. With our proprietary software, you’ll be able to quickly and efficiently assess homes for purchase and restoration. Plus, by working under our strong, national brand name, “We Buy Ugly HousesⓇ,” you’ll be able to access a wide range of marketing and advertising materials. Contact HomeVestors today to find out more.

Each franchise office is independently owned and operated.

The post The Trends Behind the Hottest US Real Estate Investment Markets appeared first on Homevestors Franchise.

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Finding New Chicago Real Estate Investment Opportunities in South Side’s Booming Bronzeville

You’re an experienced investor, you pride yourself on spotting potential in property, and you make good buys, but you’ve hit a wall. It’s an obstacle that I commonly see seasoned investors meet—that of choice supply. You want more, but it can be hard to track the rapid market. What I often tell investors is that knowing a hot tip can hoist you over that wall before anyone else.

A location I like to use to illustrate this is South Side’s Bronzeville, a neighborhood that is very distinct from pre-established “hot” neighborhoods and has recently experienced a new influx of interest. Located between the lake and Sox stadium, it’s all set for a city-influenced rejuvenation, with new homes filling in previously vacant lots. Being both Hyde Park and Chinatown adjacent, Bronzeville’s rise will likely be expedited thanks to its prime location, and both the city and private developers are already cultivating a lot of action in the area.

Intimate knowledge of this area will serve you well. Knowing precisely where the eyes of the developers are fixed will inform what nearby properties are the smartest investments. Tracking their interest, from supermarket expansions to lakefront construction and empty lot repurposing, can help direct your interest. I’ve outlined here some of the most important developments and trends in the areas that savvy investors will want to keep an eye on.

Oasis in the Food Desert

Much has been said of the food deserts that exist in Chicago’s impoverished South and West Side neighborhoods. They arise from the unfortunate inaccessibility to fresh produce and quality groceries that exists where there’s a lack of quality grocery stores in the neighborhood. In Bronzeville, where there was once a prominent food desert, there now exists a brand new Mariano’s grocery store, as of late 2016. Situated at the corner of S Martin Luther King Drive and E Pershing, the store opened to praise from locals for both its abundant and healthy options as well as its hiring of some 400 locals.

Ending the food desert and embracing its surrounding community, the Mariano’s will prove a lasting hub for grocery shopping in the neighborhood. Houses near it will rise in value as more people move into Bronzeville, attracted to the convenience of a nearby, quality grocery store. Specifically, incoming renters attracted to the up-and-coming neighborhood will probably want to live near the new Mariano’s. Seeking out multi-unit properties will prove lucrative to renters.

Lakefront Developments

For the majority of Chicago neighborhoods, you can expect beach proximity to be an indication of higher price points. Bronzeville will prove no different, especially as the very recent 35th Street pedestrian bridge provides residents easy access to the lakefront. Crossing over Lakeshore Drive, the suspension bridge comes complete with wide lanes for both walking and biking traffic, as well as safety lights and plazas at both ends. In addition to this development, the newly opened recreation center at 35th and Cottage Grove sits just a brief walk away, sporting a pool, fitness room, and gymnasium.

These two projects that both opened late in 2016 will create a lot of interest in the streets just off those blocks of 35th St and in the surrounding area. Properties near them will see values rise as homebuyers seek houses in the neighborhood. Particularly, higher priced properties here will field a lot of attention from wealthier homebuyers, looking for a residence not dissimilar to those in pre-established lakefront neighborhoods like Lincoln Park, Boystown, or Edgewater.

Follow the City’s Lead

Much of the renewed interest in the Bronzeville neighborhood is coming at the hands of city officials, keen on its rejuvenation. In addition to big city projects, they’ve been courting private investors to take advantage of the area’s long-vacant lots, hoping to fill them in with charming new properties. One such iteration will begin on the 4500 block of S Prairie, where a pair of developers will build two model homes on city-owned lots. The plan then is to proliferate throughout the community with new homes filling in holes on otherwise occupied blocks.

Where there are new homes, the extant ones will rise in value. What begins on Prairie with two developers will continue with myriad others as the city’s one dollar lot sale comes to a close. Eager to fill the vacancies, the city has been selling them for one dollar each to developers willing to build. For investors looking for projects, it will be a good time to snatch up what homes need rehabbing near where these new homes will be erected. Now is the perfect time, while the lots are sold, but before the construction begins, and before the old homes attract the competition. If luxury lakefront property is out of your wheelhouse, this will be a smart alternative, with most houses selling south of a million.

Branding for a Jump-Start

Watching the development of other Chicago neighborhoods on the rise will prove just how quickly it can all happen. Within a short window, communities turn around from impoverished to in vogue, showcasing desirable developments and an influx of new residents excited to call the neighborhood home. It can be difficult in the brief timespan to edge out the competition for the choicest properties ripe for investments. That’s where HomeVestors’Ⓡ strong national “We Buy Ugly HousesⓇ” branding can help investors who team up with its independently owned and operated franchisees to ensure they gain peak seller awareness in a crowded market. Bronzeville is gearing up for a big few years of growth. Smart investors will be there, with all the tools at their disposal, so as not to miss their chance. Contact us today to get started.

Each franchise office is independently owned and operated.

Lead Image Source | Flickr user Ian Freimuth

The post Finding New Chicago Real Estate Investment Opportunities in South Side’s Booming Bronzeville appeared first on Homevestors Franchise.

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Investment Opportunities Arising in Chicago from Weak Buyer’s Market and High Rental Rates

One of the things that makes me proudest about my job is seeing our independently owned and operated HomeVestors® franchisees get rewarded for the hard work they put in. I see it over and over in the rental portfolios that HomeVestors franchisees establish. Time and again our investors spot a gap in the market and revamp “ugly homes” into properties that are perfect for a particular area or demographic. I’ve seen it happen all across the country, but I have a strong feeling that Chicago is the next hotbed for this kind of renovation.

Why? Because Chicago’s housing market isn’t looking great at the moment, but its rental market is booming. Rents are the 9th highest in the nation and millennials are flooding into the city. With homeowners desperate to sell to escape Illinois’ high property taxes—and millennials desperate for affordable housing—a sharp investor can spot the gap in the market and take advantage of it.

How Chicago’s Housing Market Opens the Door to Investors

Predictions put Chicago’s housing market at the bottom of the country’s 100 largest metropolitan areas. While house prices are expected to climb nationally by 3.9% and sales are projected to increase 2.6%, experts are anticipating prices to rise just 1.9% in Chicago with sales growing by 2.27%. Compare that with Phoenix, the top-ranked city in the study, where prices are expected to soar by a whopping 5.94%, so it doesn’t look good for folks in the windy city. But why is the problem so bad?

The problem may come down to slow growth in two of the most significant factors that drive home sales: population and jobs. In fact, the city’s population is set to grow by just 1% in the year ahead, and unemployment sits at 6.5% compared to 4.9% nationwide.

Any investor worth their salt will know that high unemployment and low population growth (two of the factors that have the greatest impact on the strength of the housing market) tip the market in favor of buyers. Indeed, you only have to do a quick search on Zillow and see that over 10% of listings have been reduced in price to understand the opportunities available to investors. HomeVestorsⓇ franchisees, in particular, should be expecting to see a boom in business. With high property taxes in Illinois, owners might prefer a cash sale in order to move out quickly before the market turns against them even more. If you’re an investor or HomeVestors® franchisee in Chicago, now is the time to capitalize on a buyer’s market.

Turn Properties into Rental Units for Millennials

But what do you do with properties once you have acquired them? With a weak market, even the most experienced of investors will struggle to turn a profit by renovating homes for sale. That’s why I recommend investors turn their Chicago investments into rental properties that take advantage of the city’s booming rental market.

Is the market really that good? Nope—it’s excellent. According to a report by real estate company Zumper, published at the end of last year, Chicago has the 9th highest rental rates in the country. The study found that the median rate for a one-bedroom property in the city was $1,800 a month. River North was the most expensive area with rent for a one-bed apartment costing $2,150 a month—but even this compared favorably to other cities in the top 10 such as San Francisco, where monthly rent for a one-bedroom apartment is $3,330.

If you’re going to renovate your property before renting it, it would be wise to keep millennials and young families in mind. Those aged 25-34 are now the biggest rental demographic in Cook County. Of course, much of the young workforce will be heading to multi-story apartment blocks in the city center, an area where you’re unlikely to find a suitable investment property. But that doesn’t mean you should rule out this demographic entirely. Instead, target those toward the higher end of the age range. Young professional thirty-somethings are all over the city who may be looking to move to the suburbs to start families but who either can’t afford a property or don’t want to commit to the area given the current market. Take advantage of this dilemma and deck out your rental property with amenities that millennials look for—superfast broadband, smart technology, and energy efficient appliances—and you’ll be set to take a slice of this lucrative market.

Sellers Go Directly to HomeVestorsⓇ Franchisees

This advice is all well and good if you can find the right investment opportunities—but it’s not always straightforward. In fact, many investors I speak to find it the most difficult part of their job. But it doesn’t have to be. As a HomeVestorsⓇ Franchisee, you’ll be able to take advantage of our strong, national brand, We Buy Ugly HousesⓇ, that sellers everywhere recognize as the number one home buyer in America. Our branding and marketing do the hard work to bring you the most promising leads to follow. Find out more about starting your own independently owned and operated HomeVestors franchise by speaking to a member of our team today.

Each franchise office is independently owned and operated.

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