The not-so-far-fetched science-fiction series, Wisdom of the Crowd exploits the most sensational benefits of real-time crowdsourcing platforms like RealtyeVest and draws parallels to the ridiculous, cringe-worthy fantasy world of The Circle, starring Tom Hanks and Emma Watson. In an industry like online real estate crowdfunding, where privacy can cost thousands upon thousands of dollars, the notion of people willingly relinquishing their data to go wild goose chasing and risking their lives seems contradictory of the ongoing battle for online privacy battles fought by men like Edward Snowden and backed by the majority of the nation. (And, frankly, the idea sounds a bit reminiscent of a little 2016 fad known as Pokémon Go, which seemingly dropped off the face of the earth as quickly as it appeared.)
Investing in real estate through a crowdfunding platform can be an exciting and lucrative endeavor. This is especially true for investors who are new to the real estate investing industry. Since the crowdfunding platform is new and unique to real estate, there are pitfalls in which investors should avoid when attempting to invest in a crowdfunding opportunity for the first time. These are the top items investors should consider before investing in a crowdfunding opportunity.
1. Experienced Real Estate Underwriters
As a real estate investor, knowing that a company has knowledgeable real estate underwriters helps ease the burden of wondering if this deal is real or even profitable. The real estate underwriter’s primary focus is to analyze the deal, identify the risks involved, determine how to eliminate as much risk as possible and structure a deal that results in the best possible outcome. This process will ensure that deals are worthy of investing in. The main focus of an underwriter is in the financial portion of the deal, it is imperative that the underwriter carefully assess all assumptions to ensure that profitability is achievable and that investors will earn a generous return on their investment.
2. Investment Returns
As a rule of thumb, if you have extra money sitting around in a retirement account or savings account earning less than 10%, it would be wise to consider real estate to help grow your retirement nest egg. Crowdfunding platforms can offer exciting opportunities to new investors that were not available to them even a few short years ago. Most crowdfunding platforms offer an annualized 10% yield per deal and some crowdfunding companies offer profit participation as an additional upside to investing in a particular deal.
3. Quality of Sponsor
Having a strong and experienced sponsor is one of the best ways to mitigate risk. A strong sponsor will understand how to value the property in the initial acquisition phase. Successful sponsors understand what it takes to run a property through the investment cycle from the acquisition, managing the asset during the holding period, then timing the correct moment for selling the asset at its most profitable. Having a sponsor that can demonstrate the qualities will help ensure that the investment is profitable.
4. Quality of Asset
A strong real estate asset is a key to profitability. Depending on the asset class, being located in a highly desirable market contributes greatly to the asset as a whole. In addition to the market, the asset’s quality can also be determined by trailing financials or rent rolls for example.
5. Cost of Entry
The minimal investment may not be important to some, but others, who just want to test the waters would likely not want to shell out, for example, $25,000 on their very first investment. Lower minimal investments allow new investors to get a feel for crowdfunding especially if they are new to the platform or crowdfunding as a whole. Ultimately, smaller minimal investments give investors a chance to find out if real estate crowdfunding is for them in the future.
In addition to having professional real estate underwriters analyze the deal, the information or data from the underwriter should be easy to follow and make sense. An investor should be able to determine if a particular deal is worthwhile or not; simply by the way the information is presented on the offering page. Advance jargon is sometimes confusing for a novice real estate investor. Real estate investing through crowdfunding should be easy and seamless, and not require an advanced degree of any kind.
7. Getting Paid and How Often
Getting paid should not be a mystery, it should be clearly stated somewhere within the deal. If you cannot find how often or when you are paid, then likely you should find another deal in invest in all together; because making money is the reason you’re investing in real estate in the first place, right?
8. Exit Strategy
Knowing how and when the investor will get their money back is imperative to any investment opportunity. A crowdfunding deal should have a clear exit strategy listed within the deal that clearly tells investors how the sponsor intends to repay the initial capital investment; best if in a sequence of easy to follow steps. If the exit is not listed, you should be able to find out relatively easy from the platform’s customer service team.
9. Crowdfunding Platform
A real estate crowdfundin platform should be easy to navigate. The platforms should be secured and offer an investor every tool they will need to make an informed decision of whether to invest in a deal or not.
A real estate crowdfunding platform is best when they do not charge the investors fees for investing. It seems kind of silly that an investor who is lending their money should pay to play twice. There are more than enough deals on different platforms that do not charge the investor asset manager or accounting fees. It would be wise to seek those out first, then fall back on investor fee-based platforms when they have an irresistible deal that would be worth paying the fee to invest in that particular deal.
As you can see, there’s a lot that goes into investing in a crowdfunded real estate deal. Following these tips will help investors land the perfect deal on any platform regardless of how the platform structures the deal.
When you are ready to invest, go through t this list to ensure that everything meets your standards as a real estate investor.
The post 10 Things to Consider When Investing in a Real Estate Crowdfunding Deal appeared first on RealtyeVest Crowdfunding News.
REALTYeVEST INTRODUCES EXCLUSIVE SINGLE FAMILY NO-LOAD PLEDGE FUND
Offers Investors Unique Opportunities in High-Performing SFR Asset Class
Jacksonville, FL, June 15, 2017 — RealtyeVest seeks accredited investors to create an exclusive $1M Single Family No-Load (1) Pledge Fund for the fast financing of highly opportunistic off-market Single Family Residential (SFRs) deals in North Florida’s profitable SFR buy-renovate-sell market. Investors in this eFund strategy will have a strategic advantage over competing non-fund investors.
“Given the number of Funds seeking capital in today’s private equity market, emerging managers often run into difficulty finding investors willing to fully commit their capital for 10 to 12 years in a traditional blind-pool private equity fund structure,” said Daniel Summers, CEO of RealtyeVest. “As a result, our clients have increasingly asked us about short-term, No-Load alternatives to the traditional private equity/debt Fund model.”
What is a Pledge Fund
A Pledge Fund is an arrangement where investors pledge a predetermined dollar amount into an investment pool with pre-disclosed parameters. Sponsors (real estate operators) have access to the pledge fund for fast financing of attractive deals, enabling them to almost always edge out the competition. Details of every investment opportunity are completely transparent, providing investors the choice, on a deal-by-deal basis, whether to participate in an investment.
Hottest Market Opportunities
North Florida is one of the Real Estate Markets in Florida and in the United States according to Forbes. Single family properties are increasingly in high-demand and selling quickly in the Greater Jacksonville area. Real estate investors who have their financing secured ahead of time stand the best chance of acquiring the hottest properties normally without layers of brokerage fees, and earning aggressive financial returns on their investment.
Pledge Fund Property Distinctions
- Located in Duval, St. Johns, Clay, and Nassau Counties
- Single Family Residences
- No Mobile or Manufactured Homes
- No Rural Areas, Located in Up-Trending Neighborhoods
- ARV (After Repair Value) Generally Between $100k – $300k
Pledge Fund Financial Overview
- $1,000,000.00 Pre-Pledged Fund
- Interest Only Loan (2)
- 10% Interest Paid Monthly
- 10% Profit Participation From Net Profits (5)
- Secured By a 1st Mortgage with 1st Lien Position (3)
- Pre-Paid Interest Will Be Held in Escrow and Drawn Upon For The Length of Term
- Loan to Verifiable ARV (4) Not to Exceed 70%
- Normal term is 6-9 months
- No-Load Fund – A no-load fund means you can invest in single-family homes shares of the fund at any time without a commission or sales charge.
Interest-Only Loan – A non-amortizing loan in which the lender receives interest during the term of the loan and principal is repaid in a lump sum at maturity.
- 1st Lien Position – A lender or creditor in a first lien position has priority in case a debtor defaults and collateral has to be liquefied to settle the debt. For example, mortgage lenders are usually in a first lien position; if a borrower defaults on his payments, the mortgage lender is the first creditor to receive remuneration from the sale of the property.
- ARV – ARV stands for After Repair Value. This is an estimated value of a property after it has been completely renovated. This is a crucial number for those flipping homes and allows you to calculate the spread between what you should purchase it for and the price you can expect to resell it for.
- Net Profits – defined as Gross sales price less any and all acquisition costs, holding costs, rehab costs, closing costs including but not limited to liens, commissions, title charges, etc.
Because RealtyeVest’s Single-Family No-Load Pledge Fund is financing properties exclusively in America’s hottest real estate market, the Pledge Fund will quickly reach it’s $1M funding goal. Accredited investors are encouraged to immediately express their interest in pledging to the fund in order to seize their spot in this unique, high-yield investment opportunity.
The post Press Release: Introducing Exclusive No-Load Pledge Fund appeared first on RealtyeVest Crowdfunding News.
It’s a challenging environment for fund managers. Investors want more control over their investment decisions and to “know” exactly what they are investing in. Investors also want good overall returns while maintaining some control over what they are investing in. For these and other reasons, the Pledge Fund is exploding in popularity over the more traditional Blind Pool Fund.
Old concepts become new again, particularly in the investment world. Pledge Funds are an old concept that is finding increased usage in the real estate investment world. Investors are embracing the control and power that Pledge Funds give them over Blind Pool Funds. To understand just why they are becoming more popular, it’s important to know what they are and the advantages they have over Blind Pool Funds.
Pledge Funds Defined
Pledge Funds are private equity/debt funds that are set up to invest in projects within a very limited set of parameters. The managers of the Fund find projects to invest in that meet the pre-determined set of parameters. Investors are given information on the project and its expected returns. Projects are funded on an individual per deal basis. If an investor doesn’t want to fund a deal, they don’t have to, even if every other investor in the fund invests in the project.
VIEW THE PLEDGE FUND!
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Pledge funds are seemingly a 21st-century investment vehicle, but a form of the pledge fund has existed for centuries. In fact, the railroads were built with a form of this fund. It was only recently that investors chose to turn over all investment authority over to fund managers.
It’s clear that Pledge Funds offer advantages when it comes to making investment decisions. These advantages are becoming even more pronounced in industries like real estate. Pledge Funds put decisions in the hands of individual investors, but the actual managing of the investment stays with the fund managers. It’s a powerful advantage for those who want an active role in their investments without the day-to-day management work.
Blind Pool Funds Defined
Blind Pools Funds for investors to investing private equity and debt fund where investors invest in the Fund and a fund manager has wide latitude in determining what investments are made and when they are made. Investors in the blind pool fund do not green light or red light investments as these decisions are made solely by the fund managers.
Blind Pool Funds became popular in the 1980’s and 1990’s with the rise of venture capital and angel investors. While they are still quite popular, some investors began to shy away from them after the dot-com bust. Many Blind Pool Funds had made investments in ideas that were never destined to earn money and some investors lost heavily. A good example is the spectacularly famous flop that was Pets.com.
The obvious advantage of Blind Pool Funds is that decisions are made by the fund managers. The fund managers know that they can throw the weight of the fund behind any project they feel should be backed. Investors don’t need to worry about investment decisions because they are made by skilled fund managers.
Pledge Funds vs. Blind Pool Funds
Pledge Funds have the distinct advantage of putting investment decisions in the hands of the individual investors. They are not bound to invest in what the majority of the investors in the fund want to invest in. If the majority of the investors want to invest in a new shopping mall, those investors who feel there is a shopping mall surplus can choose to abstain for investing in the project.
Pledge Funds can easily limit themselves to certain real estate sectors, like single-family real estate, making the investment parameters naturally narrow. Individual investors understand what the projects are doing and what the expected returns are. They know whether an investment is a good choice or not and can choose to pledge their funds accordingly.
VIEW THE PLEDGE FUND!
Login to view details about the ReV Single-Family Pledge Fund!
Investors without the time to manage or determine what investments to make are a good candidate for a Blind Pool Fund. It’s a set it and forget it method of investing that can solely focus on fund returns. Investors may also fall into this category if they don’t have access to investment information or support.
It is possible for Pledge Funds to provide the right kind of investment information support to these investors so that they feel more comfortable pledging or not pledging an investment. Just because a fund allows an investor to make a choice, it doesn’t mean they are forced to make a choice. The fund manager can give advice on real estate investments. It’s this flexibility that is making pledge funds a popular choice.
As the real estate investment market continues to change, investors should definitely look at the Pledge Fund as a popular alternative to the traditional blind pool fund. It may provide just what investors want and need when taking control of their investment choices. With the right kind of management, they can produce above average returns while providing investors with a good choice of real estate investment vehicles.
This is why RealtyeVest has chosen to focus its first ReV Pledge Fund on single-family homes in the hottest real estate markets in the United States. In the right market, single-family investments are predictable and offer returns ranging from 10% – 14% annualized yield. The ReV Single-Family Pledge Fund focuses on debt investments with limited up-side profits participation in Northeast Florida that are secured with a 1st lien mortgage. This short-term investment fund allows investors to pre-fund quality investments, securing their position in Northeast Florida’s highly competitive real estate market. The ReV Pledge Fund was designed for both novice real estate investors looking for a simple and seamless way to invest in single-family buy-and-sell projects as well as accredited investors searching for a great starting place with quick turn arounds. If you fall into either of these categories, the ReV Single-Family Pledge Fund is a great solution for you!
The post Why Pledge Funds Are Becoming More Popular Than Blind Pool Funds appeared first on RealtyeVest Crowdfunding News.
Florida’s Space Coast, including the Merritt Island area where Cape Canaveral sits, continues to experience a booming space travel activity. As big names such as Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin set up shop in the area, more high-earning professionals continue to troop into the Space Coast, causing a real estate boom that is expected to last for a long time to come. As a result, Florida real estate investment news will be nothing without mention of space travel.
Space travel continues to attract the interest of many people, thanks to advanced technology and entry of notable private investors like Elon Musk, Jeff Bezos and Richard Branson. Perhaps, owing to the charisma of these personalities, the opening of space industry to private companies as opposed to government agencies likes NASA inspires more people. This means Florida’s Space Coast is in need of more investment in real estate to cater for demand of quality housing by the staff of these companies and the flurry of other support businesses that will crop up.
Big Investment and Job Growth due to Space Travel
The fact that the number of applicants to NASA’s class of astronauts rose from 6,300 in 2013 to a record 18,000 in 2017 asserts the growing popularity of space travel. This was apparent as Vice President Mike Pence joined NASA officials on Wednesday, June 7 to unveil 2017’s new class of astronauts. This gesture of federal support to space travel will definitely boost investor’s confidence for the benefit of Florida’s Space Coast real estate.
This comes after Space Florida approved a $5 million budget to upgrade the Cape Canaveral Air Force station’s Launch Complex 40 to support more efficient launch operations. Already, SpaceX is doing repair works on the launch pad destroyed by a rocket explosion in September 2016. Undoubtedly, these developments will see a hike in demand for housing in the Merritt Island area, signaling handsome returns for realtors and investors in the Space coast.
Elon Musk’s Space Exploration Technologies Corporation, also known as SpaceX, has found renewed energy in space travel. It has partnered with United Launch Alliance, which brings together Boeing and Lockheed Martin, and they already use launch pads at Cape Canaveral for their space travel operations.
Space Florida CEO, Frank DiBiello, said that the $5 million would be matched by over $35 million in private investment and will generate 70 jobs each attracting average pay of $80,000 per annum. “That’s a good match,” Bill Dymond, the Space Florida board chair, said. “And 70 jobs at $80,000 a year I think is worth $5 million as well.” This means that demand for high quality real estate by high-earning individuals will not be in short supply.
Moreover, Blue Origin is investing $200 million to build a rocket factory in the locality. “We’re not just launching from here,” Mr. Bezos said of the move, “We’re building here.” According to state officials, the rocket manufacturing and assembly plant will create a projected 330 direct jobs. Jeff Bezos’ Blue Origin already leased Launch Complex 36 for its space travel operations. This attests to the expected growth in demand for quality single family housing on Merritt Island.
Such an announcement by Blue Origin and the evident presence of SpaceX and NASA on the Cape Canaveral speaks volumes of renewed activity on the Space Coast. In fact, Jeff Bezos hopes to revive Launch Complex 36 that has laid dormant for a decade! Similarly, these investments are breathing a new life to real estate market around the Merritt Island area.
Space Florida Ramps up Spending to Support Space Travel
Space Florida, on the other hand, has shunned budget cuts to spur growth in the space travel industry. It is not only charged with developing aerospace business, but also with managing spaceport infrastructure in the State. Therefore, it works in close contact with organizations like SpaceX, Blue Origin, Boeing and NASA to achieve its goals. Due to its efforts, companies like Embraer, Northropp Grumman and Rocket Crafters have moved into Merritt Island or expanded their operations.
Funding for the state organization was maintained at $19.5 million in 2017, as was the case in the 2016 budget. This means it can comfortably pursue space travel business to the benefit of the economy. Consequently, real estate businesses stand to gain from the growth in space travel that Space Florida advances.
The agency is keen in offering incentives to aerospace and aviation businesses to woo more investors and boost their businesses. For instance, it allocates $20 million per annum of what is provided by the State Department of Transport to build and improve infrastructure such as launch pads at the Kennedy Space Center. After the shuttle downturn that led to 18,000 job cuts in 18 months back in the 1970s and dampened Florida real estate investment news, there is no taking chance with the new space travel economy.
Furthermore, the Space Florida has approved up to a tune of $2.75 million more in FDOT funding in order to expand roads, relocate overhead utility lines as well as access roads in Exploration Park. This is aimed at benefiting Blue Origin and other companies such as OneWeb Satellite. However, we know that good infrastructure is a catalyst for growth in real estate business and rises in house prices. Therefore, real estate investors stand to gain a lot from the infrastructure spending.
In conclusion, space travel has unleashed many opportunities for real estate business in Space Coast. Merritt Island area real estate business, due to its strategic location and hosting of the Kennedy Space Center and several launch pads, stands to gain a lot from the space business. Therefore, Florida real estate investment news will be dotted with success stories of Merritt Island real estate investors.
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CEO Daniel Summers
Mr. Summers has over 30 years of real estate finance experience. He is rapidly building RealtyeVest to the same magnitude he did with his former real estate investment firm Hastings Realty and Madison Realty Group, which he grew into a $1 Billion collection of office buildings and shopping centers.
Mr. Summers is a frequent participant on investment panels, speaks regularly at real estate and investment events, and hosts webinars about real estate investing.
Opportunities and Market Trends
Real Estate investing with Realtyevest specializes in affordable housing and low-income community properties, as well as single family residential investments and commercial real estate rehabilitation projects. New projects are added to their platform weekly. They publish current real estate market trends and financial forecasts on their blog.
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The post RealtyeVest Lowers Minimum Real Estate Investment Amount to $5,000 appeared first on RealtyeVest Crowdfunding News.
The Monroe House is an online real estate investment in the community of Carriere, Mississippi — midway through Pearl River County — located between cities Picayune and Poplarville. The area is known for its growing population, which increased by 6,600 residents from 2000 to 2014, according to the U.S. Census Bureau. From 2010 to 2015, the county also experienced an increase of about 1,500 senior citizens.
It’s important to note that there is only one identified assisted living facility within the Pearl River County primary market area (PMA) that offers assisted living services. While there are no imminent plans for senior living developments in Carriere, the area represents a large untapped market for investors.
Tesla Solar Shingles
Tesla’s announcement to start selling its long-awaited solar roofing system was met with mixed reviews last week when the automaker published a cost comparison blog on its website.
The news of the announcement follows the 2016 merger between Tesla and SolarCity — one of the largest solar energy companies in the United States — and further implements Tesla CEO Elon Musk’s vision of a future defined by carbon-free energy.
In the blog post, Tesla said the new solar roofing system will cost $21.85 per square foot for an average American home — roughly 2,500 square feet.
While the product might be pricier than a traditional roof ($4.00-$7.00 per square feet,) it will ultimately pay for itself in reduced electric bills — a process Tesla says will take about 30 years to realize.
And if that isn’t enough, in reality, the price might nearly be twice that amount.
The Real Costs
The true cost, according to the blog, will be about $42 per square feet for solar tiles and $11 per square feet for non-solar tiles. Although Tesla recommends at least 50 percent of solar coverage to meet your home’s energy needs, the automaker factored in only 35 percent of the roof being covered with solar tiles when determining the average price.
Tesla even published a cost calculator for customers to price out their own roof with coverage of up to 70 percent of solar tiles.
Regardless of the percent of coverage, costs will vary significantly depending on customer choice and the size of the roof. But one thing is for sure, the installation before factoring in the cost of energy will be much higher than a conventional roof.
Fifty years ago, the idea of building eco-friendly modular homes, using energy-efficient products, renewable materials and solar panels was impractical. Today, the momentum is with renewable energy, and because of proven tax benefits, more developers are opting to build energy-efficient homes and facilities.
For example, this assisted living facility in Carriere, Miss. will be developed as a “Green” building, which will significantly reduce its monthly utility costs.
This is all part of the global shift designed to reduce our reliance on fossil fuels, eliminate pollution and promote green energy alternatives. So, even though solar roofing isn’t cheaper than other current options, it may be a practical alternative for some energy conscious consumers.
The Bottom Line
But here’s the bottom line: although the installation includes materials and the removal of your old roof, taxes, fees and additional construction costs such as skylight replacements and structural upgrades are not included.
Even if someone decides to purchase Tesla’s Solar Roofing, most Americans live in their homes for less than a decade before selling. This means the majority of homeowners who purchase the new product will have relocated long before the investment pays for itself.
It’ll be interesting to see how much success the automaker has selling to different markets, with a price tag that can range from $30,000 to upwards of a $100,000 per installation.
I guess the market niche for Tesla’s solar roof product is that it turns sunlight into electricity, while maintaining the appearance of a traditional shingled roof. Nowadays, some solar panels cost less than $3 per watt for installation, and can pay-off in more than half the time (7-10 years) than the projection for a Tesla solar shingles roof.
Made with tempered glass, this product, unfortunately, will likely be limited to the more affluent suburb market.
So far, other companies have had little success incorporating solar technology into roofing tiles or shingles. As for the bigger picture, it remains questionable if the automaker’s newest gimmick will appeal to consumers as much as its vehicles do.
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The Monroe House to Draw Seniors from Mississippi, Alabama, Louisiana to the Growing Community
CARRIERE, Miss., May 16, 2017 — RealtyeVest announced today capital raise plans for brand new construction of The Monroe House, an assisted living and memory care facility in Pearl River County, Mississippi. The beautiful, spacious facility sits on 4.4 sprawling acres, less than four miles from the new state-of-the-art Highland Memorial Hospital in Picayune. The Monroe House promises to attract seniors from nearby areas of Louisiana, Alabama and Mississippi.
“We are excited that this project offers amazing high-yield returns to our investors, and a much-needed facility for the local Carriere community.” said Dan Summers, CEO of RealtyeVest. “With access to private deal flow and unique investment mechanisms, RealtyeVest offers affordable real estate opportunities that investors would otherwise not be able to access.”
The Monroe House will be a 40,000 square-feet single story building with 60 one-bedroom, one-bathroom living quarters. Pearl River County has enjoyed consistent population growth over the past several years, where almost 20 percent of the residents are over 55 years old.
RealtyeVest has opened its online platform and social network to provide accredited investors unprecedented access to professional-grade real estate. Unlike competitors, RealtyeVest vets each offering through an extensive due-diligence process and remains actively involved through completion, investing side-by-side with investors. Investment opportunities on the RealtyeVest debt platform offer a 10 plus 10 reward program (10 percent annual return plus 10 percent profit share, while being secured with a first lien position on the asset).
The Monroe House offering sweetens investor enticement as an opportunity to immediately engage in.
“Our sponsor, longtime local banker Paul C. Monroe, wanted to kick off this program by aggressively offering a 12 percent yield and 10 percent participation on the first $1M,” said Summers.
Construction has been approved by the planning and zoning commission, and the board of supervisors. The building will feature large, modern community areas for residents. The rooms are approximately 20 percent larger than other assisted living facilities in the area. Each room will be equipped with a computer, high-speed wi-fi access, a television and telephone capable for video conferencing with family and friends.
“Until now, 13 million accredited investors in the country only had access to a fraction of the real estate opportunities on the market,” said Paul C. Monroe, project sponsor. “As a leading real estate investment management company, RealtyeVest has created a marketplace that allows investors to curate a profitable portfolio, while also expanding their network of other like-minded investors.”
Mr. Monroe has deep experience in real estate development as a co-owner and manager of multiple developments around Alabama and Mississippi, such as the Turnberry Condominiums, a 200-unit development, and the Bella Luna, a 128-unit high-rise with a 50-berth marina. He has also held various board and civic positions, including commissioner of the Mississippi Motor Vehicle Commission and Director of the Pascagoula Chamber of Commerce.
Income for the project is projected to reach stabilization within, or fewer than, 12 months, generating approximately $1.5M in gross revenue and netting an income of $168,746 by the end of its first year of operation. By the fifth year, it is projected to net an annual income of $733,000. Check out The Monroe House for more information.
As the percentage of retired Baby Boomers is expected to explode over the next decade, the demand for assisted living and long-term care facilities will naturally have a parallel effect.
Today, the senior housing industry is considered one of the fastest growing real estate investment opportunities in the national housing market.
In 2003, Warren Buffett proved to be way ahead of the curve, when he purchased Clayton Homes — now the largest builder of mobile homes — for an estimated $1.7 billion.
The senior housing industry has an estimated market value of more than $300 billion annually. And the PEW Research Center has shown that the average return on investment for the senior housing industry, significantly outperforms all others within the real estate sector.
In the past, senior housing has been a very resilient part of the housing demand, with occupancy rates trending around 90 percent. Even during the recent “Great Recession” occupancy rates in the senior housing industry remained consistently above 85 percent.
On average, assisted living homes costs between $3,000 to $5,000 per month, per tenant, and can accommodate from 8 to 16 residents per unit, depending on state regulations.
But even with their generally higher education and income levels, many of these future residents will be unable to afford the luxury of paying for quality assisted care.
The average Baby Boomer household, ages 56-to 61-years-old, has about $164,000 saved for retirement, according to a report by the Economic Policy Institute. That amounts to around $8,200 a year, or only $680 a month, to supplement Social Security or other retirement income.
However, the median Baby Boomer retirement savings for the same age group is only $17,000, which is far less than the average household. So in reality, the future for many Baby Boomers approaching retirement is much more grim.
In the same report, an estimated 41 percent of households (ages 55-to 64-years-old) have no retirement savings set aside, whatsoever.
Although the Boomers approaching retirement are generally too young to need assisted-living, (the average resident age being 84) they are already having an impact on that market.
“Assisted living facilities have a projected 30 percent growth rate over the next 10 years, and are selling 18 percent faster today due to a lack of inventory,” said Daniel Summers, CEO of RealtyeVest, a real estate investment company that specializes in raising capital for assisted living and affordable housing.
While the above average income Baby Boomer will continue to push the assisted living capacity demands through 2030, the remaining will be searching for an alternative to assisted living by downsizing to affordable homes.
“Developers are recognizing the growing demand for affordable housing, and have begun aggressively acquiring and upgrading communities across the United States,” Summers said.
“And many retirees are trading in their homes for RVs and moving into 55-plus mobile home communities.”
“If you’re a Baby Boomer on a fixed or limited income you can rent or sell your larger site-built home and purchase an RV or mobile home and move to the retirement location of your choice,” Summers said.
The post Baby Boomers Nearing Retirement Drive New Markets in Affordable, Assisted Living appeared first on RealtyeVest Crowdfunding News.
Dr. Kenyon Meadows is a radiation oncologist from Youngstown, Ohio. He completed his residency in 2006 at the University of Florida and has been practicing medicine at the Southeast Georgia Cancer Care Center since 2008.
In addition to saving lives, Dr. Meadows is a published author and successful real estate investor, with an interest in residential properties in Jacksonville, Fla. Since 2013, he’s invested in approximately 35 deals on RealtyeVest, formally IHT Realty Crowdfunding, and similar crowdfunding platforms.
We recently sat down with Dr. Meadows to discuss his new book, “Alternative Financial Medicine: High Yield Investing in a Low Yield World” and his thoughts on real estate investing and the crowdfunding industry as a whole.
Q – How did you get started in real estate investing?
Dr. Meadows: I got “prepared” after enduring some stock market pain. Like everyone, I got hit pretty hard with the financial crash of 2008. But, after rebalancing into what I thought was a stable sector — oil and gas — I took another big decline. Soon after, I began to try to learn in earnest about alternative assets, such as real estate. Those efforts paid off after I met an investor who provided private money to a rehabber that was flipping about 15 houses per year in the Jacksonville market. After learning about the attractive yields and relatively passive nature of private mortgage lending, I took the plunge.
Q – Why do you primarily invest in the single-family market?
Dr. Meadows: While there are certainly advantages of scale when it comes to investing in commercial real estate properties, such as multifamily, there are a few factors that make single-family homes a more attractive investment. For instance, single-family homes attract small, working class families, who tend to rent for long stretches and hence minimizes what is often the largest expense associated with income property ownership: vacancy.
Also, in contrast to apartment tenants, they tend to feel more of a sense of “ownership” toward the property and therefore take better care of it on average. Both of these factors help to contribute to more stability, which translates into a more passive ownership experience for me. And should I ever chose to exit my portfolio, I like the option of having both an investor and retail buyer pool to potentially sell to.
Q – What initially peaked your interest in crowdfunding?
Dr. Meadows: Right around the time following my first few successful projects, some of the crowdfunding sites were coming online. This was really appealing to me because it allowed me to invest small amounts of money into real estate projects, which was more of what I was already doing. and I only invest in first-position debt. Also, the opportunity to invest in properties across the country that otherwise would be out of reach was an intriguing concept. However, I probably would have been more afraid had I not had the prior experience with private lending.
Dr. Meadows explains his method in this short video
Q – What are the best practices for a crowdfunding company?
Dr. Meadows: I love repeat sponsors with a track record of paying investors back. I am willing to sacrifice a little lower return for the chance to participate in their deals, but I only invest in first-position debt. I also like platforms that prefund the deals they list, which serves to align their incentives with the investors. Additionally, prompt communication in the event that there are any hiccups along the way is greatly appreciated. Out of the 35 or so crowdfunding deals I have done, only three are in some stage of the foreclosure process. Some sites have been better than others with respect to updates, but they all seem to be optimistic that there will be full principal recovery. That’s another reason why I only invest in first-position debt.
Q – What red flags about an investment offer have you encountered?
Dr. Meadows: If I see a deal with outsized returns my caution flag goes up. For instance, in the earlier stages of real estate crowdfunding, you could routinely see debt deals in the 14-15% range. As the space has matured and more investors are comfortable with the asset class, returns have compressed to the 9-11% range.
Q – Tell me about your most successful real estate crowdfunding deal.
Dr. Meadows: It was a unique hybrid fix and flip deal in Los Angeles that had both first position debt, as well as a percentage of the profits from the sale. The loan was at 11% and the profit percentage was capped at an additional 8%. So, 19% when it was all said and done! That was back in 2015 and I haven’t come across anything that attractive since.
Q – Do you have any advice for sponsors/developers on how to stand out in the crowdfunding industry?
Dr. Meadows: Most crowdfunding sites lead with the deal terms and numbers – I would like to see more emphasis on the sponsors track record featured more prominently.
Q- Lastly, why did you choose to write this book?
Dr. Meadows: I got tired of explaining all of the benefits of alternative assets on a one-on-one basis to people, and I figured I could reach more people with a book. In my opinion, real estate is the best, but there are certainly other investment opportunities that are appealing as well.
RealtyeVest formerly IHT Realty Group Simplifies Real Estate Investing
Jacksonville, FL, May 1, 2017 — RealtyeVest, formerly IHT Realty Group, officially unveiled their new brand and optimized website. Destined to become one of the largest real estate crowdfunding platforms in the U.S., the new RealtyeVest website (realtyevest.com) provides a simple, secure and transparent platform for accredited investors, real estate developers and owner-operators.
“Our decision to rebrand from IHT Realty Group to RealtyeVest was a result of listening to feedback from our strategic partners and observing best practices in the industry,” said Daniel Summers, CEO. “We believe our new name better represents the essence of our business, and we are excited about the innovative technology that powers our new online marketplace. We spared no expense in the new build, providing a win-win to our investors and Sponsors.”
With over 40 years of experience in the commercial real estate industry, Summers is a thought-leader in the real estate crowdfunding space. He frequently speaks at real estate conferences, investment conventions, and is scheduled to present at the upcoming 6th Annual Global Crowdfunding Convention in Las Vegas, Sponsored by Microsoft.
The distinguishing descriptions of the RealtyeVest brand are: Simple, Secure and Transparent.
Simple: RealtyeVest is an online marketplace that connects investors and Sponsors (real estate owner-operators) to crowdfund exclusive real estate investments. Their platform allows its members to browse, research and make informed investment decisions on these exclusive properties.
Secure: Investors can sleep soundly knowing their money is well invested. RealtyeVest uses the highest cyber-security measures to constantly monitor and maintain the safest online marketplace.
Transparent: Investors have at their fingertips an online dashboard where they can conveniently monitor the status and track the growth of their investments. The average real estate investment offering on the platform yields a 10% return and, oftentimes significantly more.
Investment opportunities with RealtyeVest are available only to accredited investors.
Today, real estate is considered one of the most popular forms of investing in with a self-directed IRA. This is because it is a simple way for investors to grow their personal wealth and diversify their portfolios.
But when it comes to your retirement plan there are hundreds of self-directed IRA companies to choose from and making a decision can be difficult to say the least.
It’s best to think of an IRA as a trust and the custodian as a trustee, so when making an investment the trustee is the one who actually carries out the transaction.
Important Rules to Know
First, it is important to know that your IRA is the owner of the property so the title of the asset must be in the name of the IRA administrator.
Second, you’re not allowed to invest in a property for personal use. This means that the real estate you’re purchasing using your IRA is for investment purposes only. In addition, you must be careful you are not doing business with “disqualified parties,” such as your spouse or family members.
Third, since the sdIRA is the owner of the property it must pay the bills and collect the income. For instance, if the investment is in a rental property than all rental income should return to your IRA account. Also, any bill payments including property taxes or renovations must be paid with the cash in your IRA.
How to Start Investing in Real Estate
- You’ll need to set up a self-directed IRA account with one of the companies listed below we have provided a short self-directed IRA review for each of the custodians.
- Fund the account by either making a contribution, transfer or rolling over your funds from an old 401k, 403b or pension plan.
- Select the real estate investment you want to purchase and one of the companies will guide you through the process.
Best Self Directed IRA Companies
Advanta IRA is a self-directed IRA retirement plan custodian serving clients nationwide. Advanta provides their clients exceptional personal service, experience and knowledge that is paramount in administrating self-directed IRAs. Advanta IRA allows their clients to take full control of their investment retirement plan as well as provided education on using their retirement plan to grow wealth through providing helpful webinars, alternative investments and support. Advanta has been providing self-directed IRA services for over 20 years.
A CamaPlan self-directed IRA account is the faster, safer way to true financial freedom. Grow your wealth and secure your future by deciding what types of investments you want to hold in your individual account. Camaplan IRA provides exceptional service to its clients while allowing Self-directed IRA holders the freedom to grow their retirement plans as they see fit. CamaPlan considers itself in a “unique position of being a nimble, responsive player among the larger financial firms that are beginning to enter the self-directed IRA market.”
NuView IRA joins several organizations to better service the community, including investor clubs, professional associations for attorneys and tax planners and the Better Business Bureau. NuView IRA has over 10 years of experience managing self-directed IRA accounts. They are highly recognized among the industry leaders of self-directed IRA custodians.
New Direction is a trusted provider of Custodial and Administrative services for traditional and Roth IRAs, HSAs and other tax advantaged plans. Physical custody and administrative oversight in provided by Mainstar, in Kansas. The office of the State Bank Commissioners of Kansas regulates Mainstar and its oversight extends to New Direction’s accounts. New Direction IRA custodian is a growing company. They have managed millions of dollars in their client’s assets, and are eager to help clients find new and exciting opportunities to invest their self-directed IRA
As you can see, any of these provides would be a good choice if you choose to start investing in real estate using a self-directed IRA account. Defining the best self-directed IRA custodian would be a hard task unless you signed up and starting investing. Before you select any of the above IRA custodian, be sure to get them to disclose their fee of service.
The post The Best Self Directed IRAs for Real Estate Investing appeared first on RealtyeVest Crowdfunding News.
IHT Realty Crowdfunding has rebranded itself as RealtyeVest.
Assisted living has recently become a desirable asset for many new and experienced investors.
With waves of Baby Boomers reaching retirement, assisted living is rapidly moving into the spotlight of real estate investing.
It’s no surprise that the target demographic for the business platform has grown exponentially, with more than 10,000 Baby Boomers hitting 65 every day until 2030, according to a study by The Pew Research Center.
The study found that 76 million people were born in the U.S. between 1946 and 1964. If you factor in the influx of immigrants and the amount of people who passed away during that same period, there are about 79.6 million seniors in the United States. If you divide that number by 19 years and then again by 365 days, you’ll find there are about 11,476 Boomers turning 65 each day.
All the same, over the next 20 years, the amount of seniors moving into assisted living homes is projected to rise. This is expected to increase demand for assisted living services and facilities, and provide an exciting opportunity for entrepreneurs and on-trend investors.
In a blog post on Tony Robbins’ website, Ajay Gupta, Robbins’ personal advisor, lists senior housing as the No.2 safest place to invest right now — “meaning they’re not as susceptible to the fluctuations in economic conditions,” Gupta said.
“We are currently facing the largest demographic shift we’ve ever seen — a tidal wave of demographic inevitability as Baby Boomers reach their Golden Years,” the article said.
Today, there are 45 million Americans that are 65 years or older — a number that is projected to grow to 80 million over the next 25 years. And with life expectancy continuing to increase, seniors will have to decide where to spend their remaining twenty or more years.
“It doesn’t matter if interest rates go up or down, it doesn’t matter who the President of the United States is, or what is happening in China or Greece; every single day, 12,000 Americans are turning 65 years old,” Gupta said. “So, if you can own real estate that is catering towards this demographic, you are almost guaranteed (high) occupancy over the next 25 years.”
RealtyeVest is a real estate crowdfunding company that offers investors the opportunity to capitalize on residential, multifamily and on-trend properties across the United States.
The post Why Assisted Living Is the New Investment Opportunity of 2017 appeared first on RealtyeVest Crowdfunding News.
IHT Realty Crowdfunding has rebranded itself as RealtyeVest.
JACKSONVILLE, Fla., March 21, 2017 — Park Place Communities (PPC) is taking a major step toward growing the stock of affordable homes in the United States.
PPC, a national real estate investment company that specializes in affordable housing, is seeking $1 million in capital to facilitate a large-scale affordable home project.
The company plans to take existing mobile homes, renovate them and sell them to qualified buyers using five-year amortized mortgages. The buyer will make monthly payments for five years at 12 percent.
“This allows buyers to purchase the mobile home for about the same monthly cost of renting,” said CEO Andrew Lanoie of Park Place Communities.
IHT Realty Crowdfunding, a real estate company that helps sponsors raise capital for their acquisitions, will be assisting PPC in securing funds as it looks to expand its operations and acquire an additional 15,000 to 20,000 mobile homes over the next few years.
“There is a huge demand for affordable housing right now and there are not enough parks to fill that void,” Lanoie said. Right now, there are roughly 50,000 affordable housing parks in the United States.
And with housing costs projected to rise by 5.4 percent from July 2016 to July 2017 — according to a study by CoreLogic Home Price Index — mobile homes are becoming a practical alternative.
“As the wage gap in the United States widens, there has been a shift towards lower paying jobs, which leads to an increase in demand for affordable housing,” Lanoie said.
According to the most recent report by the Social Security Administration, 36 percent of U.S. wage earners make less than $20,000 per year and 50 percent earn less than $30,000 per year.
“With 10,000 Baby Boomers retiring every day, 47 percent of which don’t have any retirement savings, affordable houses are their last opportunity of home ownership,” said CEO Dan Summers of IHT Realty Crowdfunding.
PPC, a national Top 100 owner-operator of mobile home parks, currently owns 13 affordable housing parks in eight states with nearly 1,000 total homepads.
The company is looking for a $1 million mortgage pool to issue fixed-rate mortgages to buyers. It is offering a debt investment opportunity secured by a first lien, which is also backed by a corporate guarantee with a 10 percent interest rate paid to investors.
The first step will be to renovate more than 125 units, Lanoie said.
Contrary to popular belief, mobile homes are not really mobile. It costs over $3,000 for a resident to move their home out of a park, Lanoie said, which is the reason 98 percent of mobile homes will remain in the same location.
“Mobile home parks are one of the most stable and predictable investments during a recession and recovery,” Lanoie said.
RealtyeVest is a real estate crowdfunding company that offers investors the opportunity to capitalize on residential, multifamily and on-trend properties across the United States.
The post IHT Realty: One Man’s Plan to Grow Affordable Housing by Crowdfunding appeared first on RealtyeVest Crowdfunding News.
IHT Realty Crowdfunding has rebranded itself as RealtyeVest.
JACKSONVILLE, Fla., March 10, 2017 — IHT Realty Crowdfunding announced on Thursday a new program that will offer investors a guaranteed six-month return regardless of how early the property sells.
This new program comes following the company’s latest investment offering of a duplex property at 3730 Lehigh Street. The investment is being sponsored by Lenger Financial, Inc., which seeks to raise $80,000 in funds for renovations to the Brentwood property.
Lenger Financial is a Jacksonville-based capital management firm that specializes in asset management, investment advisement and financial architecture. The firm’s primary real estate focus areas include single- family, mid-to-small multifamily, manufactured homes and boutique structure ventures.
Built in 1944, the two-story brick building sits on a quarter-acre lot and includes two bedrooms and one bathroom per unit, which equates to about 900-square-feet per apartment. The building is structurally sound and includes a newly installed roof.
Additional upgrades and projected renovations include a new HVAC system with ducting, new flooring, an updated kitchen and new appliances, a new fire escape and entrance stairway, exterior painting, as well as landscaping and fencing.
Lenger Financial is offering a strong debt coverage ratio of 1.28 with an excellent after repair value (ARV) of 74 percent. The sponsor is projecting a gross annual income of $15,590 and a projected net operating income of $10,443.
RealtyeVest is a real estate crowdfunding company that offers investors the opportunity to capitalize on residential, multifamily and on-trend properties across the United States.
Jacksonville is listed No.1 in Trulia’s “10 Hottest Real Estate Markets to Watch in 2017” due to its growing job market. Jacksonville posted a 3.8 percent job growth in 2016, making it one of the top markets for employment in Florida. Trulia noted a heavy influx of citizens contributing to the city’s very high ratio of inbound home searches versus outbound searches from locals wanting to leave. These factors show a trend toward long-term stability in addition to great schools, fantastic weather and a close proximity to the Atlantic Ocean.
The post IHT Realty Seeks Crowdfunding for Jacksonville Multifamily Deal appeared first on RealtyeVest Crowdfunding News.
What is Crowdfunding?
Crowdfunding is a marketplace with a transactional platform.
For instance, imagine sitting at a table in a Golden Corral restaurant and the buffet is filled with platters of colorful food of virtually every type. Well, crowdfunding is much like a buffet for investors. Instead of ordering off the menu, the buyer or “investor” goes to where the “food” is and selects what he wants.
Unlike the traditional way of investing – when the sponsor (real estate developer or entrepreneur) sought out the investor for funding – investors can now log into a network and view a vast selection of real estate sponsors seeking funding. This allows investors to select from deals that catch their interests and fit in with their investment portfolios.
The Benefits of Investing in Real Estate Crowdfunding
Investing in crowdfunding for real estate is a safer and smarter approach for those looking to diversify their portfolios and grow wealth. This is because the real estate market has less volatility than the stock market and offers higher rates of return than government bonds and savings accounts. Combine that with the tax advantages, and it becomes an essential part of any smart investment strategy.
Since the JOBS Act of 2012, real estate sponsors have been able to successfully crowdfund their projects by raising capital in small amounts through a broad number of individuals that provide access to a wider pool of potential investors. Likewise – with the buffet example – investors have the opportunity to mitigate the risk and invest in several deals in lieu of a single opportunity.
Due to advancements in technology, self-directed IRA investors are able to participate in real estate crowdfunding with their retirement accounts and at the same time realize significant tax advantages.
“Those who want to be more in control of their financial future and enjoy more flexibility in the investment types, use self-directed IRAs.” – Dan Summers, CEO at RealtyeVest
Investing with a Self Directed IRA
Investing with a self-directed IRA is not overly complicated.
To make an investment using an IRA, you’ll need a self-directed IRA custodian who can hold the new property as an asset in your account. Once you’ve found a custodian, you open a new account and transfer your retirement funds into it. There are no tax penalties involved in the transferring of funds to the account.
A self-directed IRA can be structured as either Roth IRA or traditional IRA and allows the owner to invest in alternative assets such as real estate crowdfunding. As an investor, you can have a much more diversified portfolio than those invested exclusively in publicly traded securities.
Self-directed IRAs are also protected under federal bankruptcy laws, plus, real estate investments are insurable, which means they cannot disappear into thin air like some traditional Wall Street investments.
The real-estate crowdfunding platform is predicted to reach $150 billion over the next five years.
How to Invest
Although a self-directed IRA involves more of a hands-on approach, if you do your due-diligence and partner with a reputable crowdfunding company, the rewards can significantly outweigh the risks.
Investing with a self-directed IRA with RealtyeVest is as easy as four steps.
- Register to view investment offerings.
- Choose investments that suit your preferences.
- Invest with as little as $5,000 per deal.
- Receive scheduled payments.
The post How to Use a Self Directed IRA to Invest in Real Estate appeared first on RealtyeVest Crowdfunding News.
Jacksonville, Florida is topping the list of several recent surveys predicting the hottest real estate markets for 2017.
In an article published by Forbes online magazine titled the “10 Hottest Real Estate Markets To Watch in 2017,” Trulia ranked Jacksonville no.1 on their list.
According to a survey on Realtor.com called “The New Hot Spots Where Americans Are Moving Right Now,” Jacksonville came in second for cities gaining the most residents as well as the no.2 destination for millennials.
Jacksonville continues to show a strong job market with growth of 3.8 percent in 2016. This has led to a low unemployment rate of 4.4 percent and a larger amount of inbound searches on Trulia.com, versus outbound searches of locals leaving the area. Jacksonville also offers a year-round economy and is the only Florida city with four different company headquarters on the Fortune 500 list. The city has seen a 20 percent population growth over the past decade and its workforce is expanding at twice the national average. In 2013, Forbes ranked Jacksonville as having the second fastest growing technology services base in the nation in a survey titled “The Cities Winning the Battle for America’s Biggest Growth Sector.” Other notable industry sectors include finance and healthcare.
A strong healthcare industry leads to a better quality of life and makes Jacksonville a magnet for senior citizens. Five of the city’s top ten private companies provide, or are affiliated with, healthcare services, such as Baptist Health — Jacksonville’s largest private employer. It is also the home of one of three Mayo Clinics in the United States.
Seven of Jacksonville’s high schools have appeared in Newsweek magazine’s top schools in the nation including Stanton College Preparatory School and the Paxon School for Advanced Studies. The area is also home to several universities/colleges including the University of North Florida, Florida State College of Jacksonville, Jacksonville University, Florida Coastal School of Law, the Art Institute of Jacksonville and Edward Waters College. Nearby, Saint Johns County has been ranked the no. 1 school district in Florida for the past 10 years.
Jacksonville’s cost of living ranks below the national average, making it more affordable than many other American cities. Housing, healthcare and groceries all cost less than the national average. The local housing market is still recovering from the recent real estate market collapse, making it a great place to find homes for personal purchase and investment.
The city has an average of 221 days of sun and a close proximity to beaches and the Atlantic Ocean — two reasons Sperling’s Best Places gave Jacksonville a score of 77 out of 100 on its comfortable year-round climate index. The U.S. average for the comfort index is 54.
Trends indicate that Jacksonville will continue to benefit from strong population and economic growth, and a growing demand for real estate. This makes it a great location for investors who will likely see larger returns on their investments. Crowdfunding has made it easier than ever to invest in profitable real estate properties.
RealtyeVest is a real estate crowdfunding company headquartered in Jacksonville, Fla. The company offers investors the opportunity to capitalize on residential, multifamily and on-trend properties in Florida and across the United States.
Visit the company’s website to see how they can help you invest in real estate today.
The post Why Florida’s First Coast Is Ranked the No.1 Real Estate Market appeared first on RealtyeVest Crowdfunding News.
If you are searching for the best real estate markets to invest in, you may want to consider Florida. In a recent report on Forbes.com, the online real estate site Trulia ranked the top markets for real estate investing based on the following criteria:
- High Affordability
- Strong Job Growth
- Low Vacancy Rates
- Number of Home Searches on Trulia
- A Large Population of People Satisfied with the 2016 Presidential Election Outcome
Five out of the ten real estate markets mentioned in the report are located in the Sunshine State.
Coming in at No.1, this northeast Florida city of 1.3 million residents along the St. Johns River showed an impressive job growth rate of 3.8 percent in 2016, leading to a high ratio of inbound home searches on Trulia versus outbound searches by people wanting to leave. In addition to strong economic stability, the area also benefits from great schools, beautiful weather and close proximity to the Atlantic Ocean.
2. Cape Coral/Fort Myers
It wasn’t only the 80 degree weather that made this city along Florida’s southwest coast rank No. 2 on the list. The area has also had the fourth highest job growth in the nation. Another contributing factor was the sharp drop in vacancy rates over the past year.
3. Daytona Beach/Deltona/Ormond Beach
Due to a low unemployment rate of 6.2 percent and predicted job growth of 36.96 percent over the next ten years, this area of northeast Florida ranked No. 3 on Trulia’s list. The area benefits from some of the best weather in the country.
5. Tampa/St. Petersburg, Florida
Strong job growth with a large number of education related jobs propelled the Tampa market to No. 5 on the list. Of course, much like the other locations, the beautiful beaches and weather didn’t hurt.
10. Bradenton/North Port/Sarasota, Florida
Rounding out the list at No. 10 were these beautiful beach communities along Florida’s southwest coast. Unlike other Florida communities, this area is not a vacation-driven community. “Not only does it deliver on the natural beauty of its beaches and weather, but it also has the critical infrastructure — the arts, great schools, small to medium-size companies, small universities — that is critical to making a great community,” the study said.
Investing in Florida Real Estate
Crowdfunding is a simple way for investors to grow their personal wealth and diversify their portfolios.
RealtyeVest is a real estate crowdfunding company based in Jacksonville. Being in the heart of one of the fastest growing real estate markets in the nation, the company has the advantage of being close to its sponsors and investment opportunities.
1. AVOID INFLATION
Inflation and Appreciation
Cash is considered by many experts in the field to be the safest asset. Your earnings won’t lose value if it’s in a safety deposit box at your local bank, or hidden under a mattress. However, your capital actually does lose value each year, particularly if you don’t invest it. It’s the result of this perpetual issue called inflation. Average annualized inflation for 2016 was 1.3%. Meaning, if you sat on your cash that whole time its purchasing power would decline by that amount each year. This is one reason why people choose to invest in the first place.
Average annualized inflation for 2016 was 1.3%
2. ACTIVE INVESTING VS. PASSIVE INVESTING
There are many ways to choose a real estate investment and they generally can be divided into two categories: active or passive.
An example of active investing is the buying of real estate properties, fixing them up and selling them, or acquiring apartment buildings and managing the tenants. While this strategy can be lucrative, it can also be time and labor intensive. Many potential investors are ill-equipped, or simply do not want to take on these burdens. This is where choosing a passive real estate investment comes in.
Real estate property values tend to increase, which allows owners to increase the rent for their buildings. This protects investors against inflation.
With passive investing, rather than purchasing a property that needs a lot of work, you provide the funding for real estate companies to purchase larger commercial properties for which they maintain. Crowdfunding allows various ways for you to invest in real estate on a passive basis. You can contribute to a loan, which entitles you to a fixed, regular interest payment. Or, you can provide the equity to own a small piece of the investment.
3. THE REAL ESTATE MARKET
Real estate accounts for a substantial part of wealth creation in the world. It encompasses a wide array of property types, including apartment buildings, office buildings, the strip mall that houses your favorite restaurant and the hotel you frequent on the Florida coast. Real estate has long been a means by which some investors have generated cash flow and built value for the future. Thanks to changes in the regulatory landscape and the emergence of crowdfunding, passive real estate investments are now more accessible than ever before.
Become a Passive Investor
Signup and view our real estate investment marketplace!
Many investors allocate their money across a number of different asset classes including cash, stocks and bonds. Some of those monies could be very liquid, like cash and stocks, while others are less liquid, such as investments in private funds. Adding real estate can further diversify your investment portfolio. The benefit of diversification is that you don’t have all of your eggs in one basket.
4. DETERMINING THE RIGHT INVESTMENT TYPE
Determine the type of investment that is right for you by understanding your investment horizon and your risk aversion.
If you are considering investing in real estate, you need to be comfortable with the investment horizons. This is the length of time that an investor expects to hold a security or a portfolio. While stocks and other exchange-traded instruments are generally viewed to be liquid and can be exited at any time, private real estate investments are illiquid. This means the asset cannot easily be sold or exchanged for cash without a substantial loss in value. Most RealtyeVest investments are estimated to last two years.
Risk – Debt vs Equity
Like with the time horizon of an investment, you need to understand and be comfortable with the risks of the investment. There are two main types of real estate crowdfunding investing: debt and equity.
Debt: When making a debt real estate investment, the investor is in the position of a lender. Investors receive a fixed rate of return that is determined by the interest rate on the loan, which is secured by the property itself. Debt investments place the investor at the bottom of the capital stack, which gives the investor priority when claiming a payout from the property.
Some Other Risks: 1.) Vacancies 2.) Unexpected Maintenance 3.) Decline in Property Values
Equity: In terms of investments, equity is the appreciation of the value of a property over a given period of time. In some cases, the investor participates in this increased value. An equity investment generally does not have any collateral, such as with a secured loan, and therefore pays a higher rate of return.
Become a Passive Investor
Signup and view our real estate investment marketplace!
5. REDUCING RISK WHEN INVESTING IN REAL ESTATE
Beware of Too Much Leverage
One of the most important metrics in real estate investing is the loan-to-value ratio (LTV). Banks typically will not loan more than 80% of the value on a residential home. In the event home prices drop, maintaining a limit on LTV gives lenders a cushion if they need to foreclose on a property. Look to invest with sponsors who have enough invested in their own deals to weather unforeseen changes in the economy or in the property that would cause the property to drop in value. To help keep our member’s investments secure, RealtyeVest.com does not support any investments with a LTV greater than 75% on its platform.
Check on Reputations
As mentioned earlier, you want to be comfortable with the investment. Look for information about the sponsor’s (aka real estate developer/entrepreneur) background and previous projects. Check the property types, the history and successes of their current portfolio and make sure that they have been fully vetted for any legal issues.
Investors tend to appropriate their capital across many different asset classes including cash, stocks and bonds. Some of this capital could be liquid, such as cash and/or stocks, while others are less liquid, such as private fund investments. Adding real estate might further diversify your investment portfolio.
6. THE BENEFITS OF PASSIVE INVESTING
With passive investing, nearly all the administrative functions are handled by other people. Unlike active investing — where you must find investment properties, monitor the property and deal with tenants, toilets and trash — the passive investor works with a partner and allows them to do the dirty work. While there is a fee for this service, there is also a promise that you will never get a broken toilet call at 3 a.m.
Additionally, due to crowdfunding, individual, smaller investors can now participate in much larger passive commercial investments, so your $10,000 investment could conceivably contribute to the acquisition of a $20 million building.
If you’re interested in passive real estate investing, the first step is to find the right partner. At RealtyeVest, we offer access to pre-vetted real estate investments. We conduct the due diligence on hundreds of properties and focus that energy by closely examining investments that have already been reviewed by our active real estate investors or sponsors. We also give you access to a personal investor dashboard so you can watch how your money grows.
With RealtyeVest, you have the resources, guidance and opportunity to become more invested in the real estate market. Now, you can take control and become a real estate investor!
House flipping can be a very lucrative side gig. If you do the legwork ahead of time, you can minimize the risks and maximize the odds of making good money in a relatively short period of time. In real estate, good information and good ideas are worth good money.
1. REAL ESTATE MARKET RESEARCH
Some homes sell better than others. There are some general rules of thumb, such as:
- Three bedroom homes sell better than two bedrooms.
- Homes in a good school district are a hot commodity.
- Homes in family-friendly neighborhoods sell better.
However, the general rule of thumb can be wrong in certain instances. This is why it is important to know the neighborhood and research the local market.
Retirement communities have different standards and expectations than family neighborhoods, and city neighborhoods will be different from suburban ones. As the old saying goes: It is all about location, location, location.
When house flipping, it pays off to be knowledgeable about local housing trends. This can inform renovation efforts and reduce the odds of a misstep.
It is better to be more observant regarding local trends rather than national trends. Paying too much attention to national trends can lead a potential house flipper down the wrong path. Real estate is very much about local market conditions, while national averages can be misleading.
People can start by reading local listings, driving around local neighborhoods and simply paying attention to local information about the housing market. Is a big employer coming to town? Is it an area that attracts “snow birds?” Is it a tourist attraction or a vacation spot?
Demographics are another thing to research. Knowledge about population characteristics, such as age, ethnicity and lifestyle are very useful when thinking about what kind of real estate sells better in a particular area.
2. PICKING THE RIGHT HOME
The right home is one that can be sold for a profit. But you must take the purchase price, renovation and carrying costs into consideration. The larger the profit margin, the better the sale. Some general rules:
- It is better to buy the worst house in a good neighborhood than the best house in a bad neighborhood.
- Houses that need more “curb appeal” are more profitable than houses with serious structural issues.
- Fancy additions, such as swimming pools, are often not profitable.
A house with “good bones” that needs to be updated is a good bet. A house with a solid structure, but an outdated kitchen and bath is also a good bet. Bringing a house up to a community’s standards can mean more bang for your buck. For instance, purchasing a house with one bathroom and then adding a second makes a significant difference, especially if it is in a neighborhood where two-bathroom homes are considered the norm.
It is also a good idea for house flippers to buy and renovate homes near where they reside. Not only does this increase the odds of being familiar with the local market conditions, but it also cuts down on the commute to the job site. This can be a significant factor in making the project work, especially for those looking to earn a supplemental income.
Although there is a time and place for pulling out a calculator and crunching some numbers, there is a danger that number crunching alone can lead people astray. It is a bad idea to buy a “bargain house” sight unseen. The low upfront cost of purchasing it likely means there are hidden costs down the road. In this business, it is important to be hands-on and to check things out personally.
The renovations are where the magic happens. Staying on budget while creating something attractive to buyers is how house flippers turn a sow’s ear into a silk purse full of money.
It is important for house flippers to develop the right mindset. When people renovate their own home, it is often a labor of love and all about getting what they want out of life. This can torpedo the initial intended budget.
While that might sound OK for one’s personal residence, house flipping is a business. If it isn’t profitable than there is no point. So, it is important to keep the project under budget.
Following one’s heart can lead to better results in terms of making an attractive property sell quickly. As long as the renovations are handled in a budget-minded manner, with an eye on the bottom line, it is fine for house flippers to use their intuition and personal sense of taste to guide their decisions.
One way that most house flippers stay on budget is by investing sweat equity. In other words, they do as much of the work as possible themselves. It’s more economical to contract out certain jobs that require specific trade skills, such as plumbing and electrical work.
Another way is by picking the right house to begin with. Picking houses that need some polish, but are structurally sound, is one of the best ways to stay on budget. Foundation problems, black mold and other nightmare scenarios can easily eat all potential profits.
Some areas that typically pay off:
- Update the kitchen
- Update the bathroom.
- Add a second bathroom or a half-bath.
- Add curb appeal or generally freshen up the appearance and/or landscape.
4. TIME IS MONEY
There will be carrying costs. There will also be interest on capital borrowed to invest in the project. One of the secrets to making money when flipping houses is simply finishing the project in a timely manner.
Again, it can help to buy a house close to home. It helps to have a solid plan of attack in place. It helps to devote as much time as possible on evenings and weekends to the project.
But it’s also appropriate to be aware that time is of the essence and that this is a for-profit venture.
The other big area where time is of the essence is when it comes to actually selling the house. An empty house sitting on the market will bleed the owner for carrying costs, including mortgage, insurance, taxes and maintenance. Plus, the longer it sits on the market, the less attractive it will look to potential buyers.
That said, another secret to making money by flipping houses is knowing how to effectively price the house according to the current market. Overpricing a house can be a big mistake that costs money. It is better to pick a price point that will help the house sell more quickly.
If the work is exceptional, the final selling price can be bid up above the asking price. Even if a bidding war does not happen, it is better not to have profits eroded by the cost of carrying the house for several months.
It isn’t absolutely necessary to have money in the bank to flip houses because there are many ways to raise the capital needed for every project.
As long as there is enough time to do the legwork, this is a solvable problem. Real estate is one of the most solid and lucrative investments. So, as long as the renovation plans aren’t overly complex, there are some means to finance the project.
Knowing that we cannot turn back time — at least in this day and age — growing old is inevitable. So, how would you feel about investing in your future retirement before you reach that point in your life? Investing in retirement means more than securing a large IRA. It means putting that hard earned savings to work.
Growing your savings within the assisted living sandbox will help you reach your retirement goals faster and with ease.
The first members of our Boomer Generation started turning 65 in 2011. A report released by The Pew Research Center found that over the course of the next 19 years, Boomers will account for 79 million retirees, which equates to over one-fourth of the total U.S. population. Research also shows that every day about 4,000 retirees will be turning 85 and an average of 70 percent of those seniors will need roughly 3.5 years of assistance for daily living. In 2005, the assisted living industry was worth $139 billion. By 2020, it is projected to reach $207.3 billion. Assisted living services and nursing homes will account for more than two-thirds of revenue.
The growing industry of assisted living creates great opportunities for investors, as well as for those that require special services. Most people are willing to pay whatever it takes to remain in their comfort zones. Assisted living provides such care as semi-independent living, transportation and, best of all, peer-to-peer relations. Additionally, the opportunity for investors to take part in this industry is phenomenal. Currently, operating a small assisted living facility can have a potential gross income of more than $300,000 in its infancy.
You might be asking: “What is the difference between an assisted living facility and a nursing home?” Sure, they both offer the same benefits: taking care of loved ones. But nursing homes are more like hospitals, designed to focus on those that cannot function independently.
Assisted living facilities focus more on helping elders enjoy their lives and independence. Not to mention, rental rates at assisted living facilities are generally lower than nursing homes because they do not provide the comprehensive care that nursing homes are permitted to manage.
So, what does this mean for an individual looking to invest in an assisted living facility?
It means that it’s a great time to capitalize on this growing market. With the improvements in technology and science, people are living longer and shying away from traditional retirement facilities.
Assisted living facilities allow retirees in reasonable shape to socialize and maintain their independence with minimal supervision. The untapped market is “not” the retirees themselves, but their children. In most cases, the children are the first to recognize when a family member(s) can no longer live without assistance. The willingness to seek help completely changes the dynamics of assisted care. This affords the industry further expansion and larger investment opportunities.
Growing your investments within the assisted living industry is likely to propel an investor’s portfolio to new heights, creating new opportunities and stable incomes. This industry is growing rapidly and will continue to grow over the next 20 years. Do not hesitate to invest in this revolutionary opportunity.
Those new to the real estate investment field are typically excited when they close escrow on their first property. However, that feeling can quickly turn sour due to unforeseen changes.
Nevertheless, real estate investing can be a great way to improve long-term wealth.
Below are a few items to consider when preparing for the future as a real estate investor.
MANAGING THE BUDGET
Spend Your Time, Money Wisely
As the closing date approaches, many first-time investors assemble a list of wanted improvements, but this can be difficult as most first-timers have an unrealistic timeline concerning the completion date. There are always unexpected shortfalls, such as upgrades, renovations and other unforeseen costs. So, it’s important to be cautious when estimating a quick turnaround at a low cost. It rarely works out that way.
Be Prepared to Make an Investment of Sweat Equity
To minimize cost overruns and become better educated, a real estate investor should plan on spending a significant amount of time onsite — from the closing date until the tenant has occupied the property for a short period. Being an investment property owner is a lot of work. The owner must get bids from contractors, wait for deliveries, review work, shop for supplies, advertise the property and review rental applications. It might start out as fun, but in the end it is a lot of work. However, real estate investing is a long-term and wealth-building proposition. That’s why it’s important for an owner to invest his energy and time at the present moment.
Don’t Accept the First Contractor’s Bid
As with other major purchases, it is important to get several competing estimates to ensure a fair price on contracting work has been agreed upon. The more costly the job, the more bids the property owner should get. The bidding process can be long and tedious, but doing research now leads to better and less expensive bids in the end.
Concentrate on Small Upgrades
In most house flipping situations, things like flooring and paint usually require some work. Luckily, these are some of the easiest and most cost-effective upgrades to make. First impressions are everything and potential renters are more likely to keep things looking nice when they see that things are turnkey ready. It costs money to make these upgrades, but it pays off in terms of charging tenants higher rents.
- Paint: Use neutral, bright colors and paint all the walls the same shade. When touch-ups are necessary — and they generally are — it’s nice to have only one color to consider. When buying paint, choose one that’s easy to clean and buy more than needed, so it’s easy to do touch-ups later on.
- Flooring: Tile, vinyl, wood laminate and carpet. Tile is great for bathrooms and kitchens due to high moisture levels, and wood laminate is ideal for other rooms for easy cleanup and durability. Carpet isn’t usually advised for rental properties as it is easily stained and every tenant will want new carpet. By shopping around, an investor can find good deals on easy-to-install laminate flooring.
Look for Electrical and Plumbing Issues
A property that’s more than 20 years old should have its electrical outlets and water valves replaced. Get bids from plumbers and electricians before the property is listed. Water lines, valves, dishwasher hoses and drains can pose the biggest threat regarding leaks and floods. Electrical outlets aren’t as big of a risk, but they can end up looking unsightly after years of being painted over. An electrician can quickly change out all of the outlets and switches in a few hours.
Don’t Base Supply-Buying Decisions Solely on Price
When an investor gets bids and review costs at home improvement warehouses, they shouldn’t base purchase decisions solely on the price. Lowball estimates never stick when it’s time to make decisions on what to purchase. If the investor ends up buying the higher-priced item, they can end up going over their budget.
FINDING THE RIGHT TENANT
If rent is any different than other monthly bills, it’s because it is the most expensive monthly bill that someone pays.
Follow Fair Housing Rules
It’s important to know that it is illegal to discriminate against rental applicants based on race, nationality, religion, gender, heritage or disability.
In addition, check to see if other states have their own Fair Housing Rules. These rules are put in place to prevent discrimination and alert landlords when leasing out properties to tenants for other reasons, such as felony convictions, income and employment or tenant history.
Perform Criminal Background Checks
It can be difficult to obtain the full story and, in some states, prevent a landlord from leasing due to a criminal conviction. That being said, it is certainly a good idea to check criminal backgrounds, which are public record and can be requested by email or at a local courthouse. Always be sure to check that an application hasn’t been falsified by verifying the person’s ID.
Look For Financial Responsibility
Also, it is important to have a tenant who shows financial responsibility. Run a credit check to see if a potential tenant appears to have trouble keeping up with car and phone payments. Moreover, it is likely that they will also have trouble paying their rent. Don’t let financial woes affect a real estate investment property. Another way to ensure that tenants will make on-time payments is to check employment history by requiring them to provide two payment receipts and proof of employment for the past six months. It is not ideal to have a tenant living above their means or one that changes jobs too often.
While this is by no means a comprehensive guide to investing in rental property, these tips provide a great starting point. Real estate investors should supplement these tips with their own investigative work, as well as guidance from other, more experienced rental property owners. Other rental property investors can be a good source of advice and they can help new buyers set their expectations to a realistic level. Being a property investor is not easy; it’s more like a marathon rather than a sprint. However, if an investor paces himself and works hard success will come.
So you found the perfect house flipping deal that you have been reading so much about. It’s exactly the kind of real estate deal you see on HGTV. You’ve called your realtor, toured the property, your neighbor who’s a contractor worked up a renovation estimate, you’ve looked at comparable properties and convinced yourself you have found the needle in the haystack. The perfect deal. Let’s look at some important factors before deciding how to finance your real estate investment.
Create A Strict Budget
The first thing you need to do is work up a strict budget. This is not something to draw out on the back of a napkin. Your potential real estate investors want to see that the investment follows a strict budget. A couple factors to consider when creating a strict budget for your new investment property are as follows.
• Closing & carry costs – insurance, utilities, interest, title insurance, survey, etc.
• Sales costs – commissions, home warranty, transfer stamps, etc. (usually they total about 8 percent).
Once you know your budget and you have made an offer and the seller accepted subject to financing, where will the capital come from?
Where Will the Capital Come From?
Will you use your own resources or will you be leveraging all or part of the project? If you’ve done your numbers, the more you finance the greater the return on every dollar you invest out-of-pocket. This example demonstrates the difference between using your own capital and financing:
Using Your Own Cash
Purchase Price: $100,000
Renovation Costs: $50,000
Cash Out Of Pocket: $150,000
Sales Price: $200,000
Profit Amount: $50,000
Return On Investment (ROI): 33%
Using 70% Financing
Purchase Price: $100,000
Renovation Costs: $50,000
Costs of Financing: $10,000
Cash Out Of Pocket: $55,000
Sales Price: $200,000
Profit Amount: $40,000
Return On Investment (ROI): 73%
In this example, while financing your project lowers your total profits, it increase your profit margin tremendously and, with only a fraction of cash invested, you are able to avoid locking your assets into individual projects and spread them across more investments.
Leveraging Your Assets
Even though you may have the ability to pay cash for your project that doesn’t mean you should. As shown in the example above, leveraging your assets increases your return on investment (ROI) and gives you the ability to spread your money and fund multiple projects, while lowering your risks.
Get Financing for Your Real Estate Investments
Banks and credit unions are on the top of the traditional lender list. Traditional lenders typically carry the best rates available but be prepared for a proctology exam. Most traditional lenders require a credit score of 680 or more, full documentation of income and debts, full appraisal and inspection reports, background check, significant “skin-in-the-game” (down-payment) and upfront fees for underwriting the deal. The process can be painful, slow, and repetitive. But, if you have your ducks in a row and are willing to put in the effort, this could be a cost-effective strategy for you.
This is an ideal scenario since very little documentation is required and it is a quick part of the negotiations. But be wary, because some sellers will offer financing only on the condition of a quick sale. This quick sale may hamper your “due diligence” by forcing a close before you can adequately perform recommended inspections. Sellers are less likely to accept this alternative unless they are either looking for an income stream, subject to taxation on the sale or simply hoping you default.
Hard money is a loan that is issued by private lenders. These loans are normally asset-backed loans that are short term and lent against the After Rehab Value (ARV). These are loan instruments that real estate investors can use to finance a quick fix and flip deal. But beware, quick and easy is not necessarily the best solution.
Hard money loans are not only expensive, but short term. You should expect fees going in and coming out as well as rates to be near usury. Hard money loan terms are short, so don’t miss a payment or you risk losing the property. There are a lot of solid Hard Money lenders available, but you need to spend considerable time underwriting the issuers.
Family And Friends
Approaching friends and family is also easy, and they need less convincing than other moneylenders. Have your plan together or, better yet, some portfolio to show and you should have little resistance building to your capital stack.
Keep in mind that family members tend to come with their own sets of complications, whereas with friends or associates, these kinds of emotional issues tend not to occur. Just know that whenever family is involved in business, things can get complicated.
Partnerships can be a great way to get started investing in real estate. Typically, a person might go to a private investor to get funding in exchange for doing the labor and management in preparation for the resale. You will end up splitting the profits in half, sometimes even more but it is a quick way to build momentum when investing in real estate.
On the upside, this type of partnership isn’t necessary to draw up any formal agreement as you can work on a deal-by-deal basis. But, on the downside you are likely to lose some of the decision making and control over renovation and deal making.
Crowdfunding is a relatively new alternative to creative financing real estate acquisitions. The SEC passed a law in 2012, which opened the floodgates for open solicitation of investment opportunities as long as the investors qualify as an accredited investor. With crowdfunding, you can expect competitive rates, underwriting and unbelievable fast turn-around time.
Real estate crowdfunding companies sprung up overnight to raise capital through online portals for investors. Because of this rapid influx of real estate crowdfunding businesses, it is necessary to exercise caution as a majority of these companies are run by technology entrepreneurs and not industry experts. Real estate professionals have the experience and knowledge to properly advise when an investment deal will be viable and worthy to investors.
Finding a company with years of real estate experience that understands the intricacies of finance, development, asset management and acquisitions is very important to successfully financing your real estate endeavors. RealtyeVest has a team of real estate professionals that will assist you in raising capital and leverage your assets to increase ROI for each property you find.
So, if you are a real estate developer interested in leveraging your assets or raising capital for your real estate investment properties, register with RealtyeVest to learn more about becoming a sponsor today.
One’s ability to seek trends, global or otherwise, is key to any prudent investing. Real estate investing supports an innate degree of risk along with an inherent level of reward. Thus, a real estate investor’s “risk aversion” is determined by the level of each of these requirements. This is considered to be a “rules-based” approach seeking knowledge to answer the question: “Why should I invest or not invest in this asset class?”
A key component in making sound real investment decisions is deciphering the misinformation from accurate statistical data. Conversations at the country club should not be a driver in the process. Investing should be viewed as a game of chess, not chance. The player/investor needs to be alert, aware of his or her weaknesses and strengths, mindful of the opposition and most decidedly enter the game with a plan.
Here is a look at some of the moving parts of the real estate investing market to help author an investment plan. Little in the U.S. macroeconomic data suggests overheating. GDP has settled in at about 2 percent and job growth is running at about 1.7 percent pace (2.5 million annually). The Fed has been overly cautious about raising rates due to volatility of data, financial markets and the geopolitical climate. Therefore, the veritable “punchbowl” remains.
“SKATE TO WHERE THE PUCK IS GOING, NOT TO WHERE IT IS” ~WAYNE GRETZKY
Now, let’s drill down a bit and look at a couple of cross sections of Americana. Jobs are no longer careers and millennials are not yet looking for the commitment of owning a home. They are footloose in the job market and reticent to establishing roots in any community. Understanding this trend, developers are building “condo” quality rentals which, when the market dictates, can change in mid-stream and become a sales driven opportunity. Also being considered is the multigenerational developments that allow millennials and Baby Boomers to coexist. Both have similar amenity and size requirements, which generates huge development options.
With over 10,000 Baby Boomers retiring every day and understanding the related socioeconomics, asset classes that were once taboo are now becoming the investment of choice. Approximately 19 percent of retired Americans have more than $250,000 set aside for retirement, while 34 percent of retired Americans have less than $250,000 and 47 percent have zero savings set aside for retirement. What we have here is an aging population that will mostly be dependent on Social Security and Medicare. This opens the floodgates for interesting chess moves.
Affordable Housing is probably the last bastion of home ownership. Developers are now recognizing this option and have begun aggressively acquiring and upgrading Parks across the United States. Warren Buffet, as an example, moved into this space by acquiring Clayton Homes, the world’s largest builder of mobile homes. This type of housing is affordable, new parks are clean, safe and loaded with amenities. Most importantly, however, is the limited supply of available Parks. There are only about 40,000 such parks left because many have been acquired and redeveloped as urbanization has overtaken rural America.
As we live longer and become more dependent on others for our daily care, seniors are in greater need of assistance with daily living activities. Assisted living includes meal preparation, medication management, house cleaning, laundry and bathing. Although many seniors value their independence, they may require help with some of their daily activities. Many do not have family available to help care for them or it might be a matter of location, time and commitment.
This creates a unique opportunity to serve this age group. There is a large and growing demand for quality, comfortable residential assisted group housing for the elderly that provides caring assistance for daily living. Assisted group housing in a residential home is an emerging trend throughout America.
Many families prefer an alternative to institutional type living facilities for their parents. Many are looking for a home-style group residence that is affordable, safe and comfortable. Residents enjoy 24-hour caregiver support, private bedrooms with attached baths, fantastic home-cooked, dietitian-approved meals, housekeeping and laundry services, social activities, physical and mental exercise opportunities, as well as the optimal staff-to-resident ratios in the industry. This solution provides for a vibrant, happy community.
These are just some of the ideas behind on-trend real estate investment. Remember to look at things both from a macro and a micro level. Look for real estate segments that have reasons to exist and flourish. Pay attention to the details.
Warren Buffet provides one of the best answers as to whether investing in the mobile home community arena is worthwhile. He bought Clayton Homes more than a decade ago, seeing the housing crisis that was fixing to befall the nation. The foreclosure disaster is still affecting the market and causing former homeowners to scramble in search of affordable housing options.
Roots of the Mobile Home Market
The modern mobile home began as a travel trailer used by wealthy people to live comfortably as they roamed the countryside on family vacations. The military grabbed onto the usefulness by stationing these temporary housing units near factories that were producing products for the troops away in combat. They continued use for GI’s that returned and decided to go to college with their earned benefits. By the 1950’s, mobile housing was finding a permanent spot in the American landscape of affordable housing options.
The mobile homes of today are nearly unrecognizable to the predecessors. Most have pitched roofing, high-levels of insulation and stylish interiors. A few offer built-in storage areas, kitchen islands, fireplaces and garden tubs. They can be moved from one park to another, but it is generally cost-prohibitive to do this. Most tenants look for a great park to call home and stay planted there to avoid a $3,000 or more charge to move.
The popularity of mobile home park living has increased for several reasons. The housing bubble and foreclosure waves left many people with no housing and decimated credit scores. Those on annual fixed incomes can rarely afford the rental prices of traditional homes or apartments. Many people enjoy the feel of community and like the idea that they do not have to deal with lawn care and maintenance. The idea that once the mobile home is paid for, all they are responsible for are lot fees and utilities. This is something that is incredibly appealing for growing families. The 2013 census showed that there were 8.6 million mobile homes scattered in a variety of locations across the United States.
Who Lives in Mobile Home Parks?
Mobile home communities come in many varieties. There are more luxurious areas that offer clubhouses, pools and community centers, while there are also bare-bones parks that have been neglected and remain in poor condition. A well-managed park moves out the older trailers and sets rules and regulations to control disruptive activities or behaviors from tenants.
The primary residents of mobile home communities are those that are at or below the national poverty levels. They are generally the ones that are unable to afford down payments for traditional home ownership. The 2016 U.S. Census Bureau statistics show that 14.8 percent of Americans live at or below the poverty level of $24,300 dollars for a family of four. This translates to 46.7 million people. This leaves a lot of potential growth in the market for affordable housing options.
Benefits of Staying in a Mobile Home Park
The reasons people choose to stay in a mobile home park are individual, but most revolve around housing stability, economic factors and a feeling of community. If an individual or family has sought out affordable housing and found a solution, they are reluctant to try reaching forward to more expensive options right away. Having housing that is affordable and leaves a little money at the end of the month becomes a dependable way of life. Long-term tenancy breeds familiarity. People get to know one another and tend to look out for each other. The sense of community is tight in an enclosed park environment.
Growth Potential for the Mobile Home Park Market
With 8.6 million mobile homes in the U.S. as of 2013 and the estimated 46.7 million people at, or under the poverty level, the potential for continued growth is astounding. As baby boomers continue to age, retirement can mean living on a fixed-income, which is often shockingly low. There are plenty of available mobile home parks that are in desperate need of upgrades, whether it’s in plumbing, interior work or trailer upgrades. Creating a pleasant and affordable housing option will always bring back a great return on your investment.
There is no time like the present to get out there and explore your options in mobile home park ownership. Visit parks that are already functioning well. This will give you an idea of the goal mark to reach when purchasing ones that need a little extra TLC.
Dollar-for-dollar, mobile home parks are one of the easiest real estate housing markets to invest in, offering quick and steady returns. This is an option you should fully explore if you like the idea of a more hands-off approach to tenancy and property upkeep.
Profits can always be made with the right balance of discipline during a real estate market slowdown, stagnation or depression. This article shows you the top ten tips that real estate investors apply to ensure success from their investments.
1. Slow and Steady
Take the necessary time to learn about potential investment properties. Peruse the MLS, speak with realtors that are keen in the area you are interested in, research the comparable properties and prioritize making friends with a realtor that specializes in income properties. Spending time on research can keep you informed and ready for lucrative investment opportunities.
2. Everything is Negotiable
Remember the age-old adage: “Everything’s negotiable?” Well, there’s truth in that. Successful negotiating means being assertive enough to go after the deal you want, but insistent enough to always be willing to walk away from the negotiations that aren’t giving you those “warm fuzzies.” Make that sweetheart of a offer that the seller(s) look for in order to secure your deal. If it’s attractive to you, make it just as attractive to the seller and you will seal the deal!
3. Never Stop Learning
Investment strategies, especially in real estate are ever-changing. Market trends go up and down like a seesaw on steroids. The best way to stay ahead of the game, or at least in the game, is by staying up to date on the newest and latest tactics.
Carve out your budget. And stick to it. No matter what, a strict budget is top of the list in investing. Carefully set your parameters, do the math, research the market and set your budget in stone. Stick to properties that meet your budget and don’t compromise your budget to meet your needs.
5. Consistent Progressive Cash Flow is the Goal
Despite anyone’s best efforts, an upbeat market can take a downturn just as it did in 2007-2008, leaving an investor drowning in depreciated real estate. In this case, while a loss is inevitable, you can minimize your loss and avoid financial ruins by focusing on investing in properties that maintain a confident cash flow monthly. Optimistic or positive cash flow does not rely on rent income or market values to increase. From the start of a potential deal, if the numbers don’t add up, start subtracting by removing your interest and funds from the table. Invest elsewhere.
6. Make it Count
Starting off, be discriminating. Until your real estate investment portfolio grows, it may not be practical to purchase the distressed property in the historic area of town. You need time to gain a steady and positive cash flow on your investments. Less is not always more when starting out in real estate investing. That first property might cost a little more than what you imagined.
7. In the Beginning, One is More than Enough
In the beginning, choose a category of investing and test it for a year. For example, do you want to flip real estate and sell it? Or would you rather prefer renovating and renting? Once you have mastered that area with expertise, then start looking to take on another.
8. Don’t Try to Boil the Ocean
Start small. It’s literally an ocean out there and one wrong decision could cause you to drown before you even start to swim. You may even want to start with your primary residence and rent a portion of it in order to get some capital flowing.
9. Follow the Money
Follow the money trail. If there is a property in an area that can generate cash flow, you should jump on it like bears to honey! Whether your investment volume is big or small, get into sound investing and build your real estate dynasty one property at a time.
10. Don’t be Shy when it Comes to Taking on New Challenges
If you are already in the real estate investment game, expand your horizon and broaden your territory by taking on new and different investment opportunities. Minimize the risks, but without making any hasty investment decisions. And by all means, go for something new.
The executive team at RealtyeVest leads a group of expert analysts who acquire, manage, negotiate and purchase real estate acquisitions.
Built on a foundation of complete transparency, honesty and accountability, RealtyeVest delivers results to maintain a steady leading edge in real estate investing that yields profitable results.
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Crowdfunding for real estate is the collected efforts of many individuals to pool money to invest in a piece of property. Typically, these properties are larger buildings, such as a shopping plaza or an apartment building.
While these investments can cost a single investor an astronomical amount of money, real estate crowdfunding allows potential investors to diversify their portfolios with many smaller investments, and the benefits don’t end there.
For many choosing to participate in real estate crowdfunding, a self-directed IRA is the easiest way to go about the investment process. Traditional IRAs limit individuals on the types of investments they make, but self-directed IRAs are much different. A self-directed IRA is uniquely structured with the barrier of an LLC, where the individual is the sole managing member of the said entity. As a result, the managing member can make the decisions about where the investments are made. In a typical self-directed IRA, existing IRA or 401(k) funds roll over into a new self-directed account fully-managed by the LLC, whose sole managing member is the investor, themselves.
There are a few basic rules set by the IRS regarding the types of investments that are allowed to be made, but a self-directed IRA holder does have the ability to invest in things like real estate crowdfunding. Because one of the stipulations regarding real estate investing using a self-directed IRA involves needing the property to be a commercial building, investors are also able to see a much higher return on their investment than in personal property.
Crowdfunding With SDIRA
What does this mean in real estate crowdfunding? First of all, it means that someone investing in real estate with a self-directed IRA isn’t using a dollar out of their own pocket for the investment. Potential real estate crowdfunding investors only need to identify a custodian to make the investments for them, open a new account and transfer the funds.
Diversifying Your Investment Portfolio
RealtyeVest accepts self-directed IRAs to invest in equity and debt offerings with as little as $5,000 in certain opportunities. This is a great way to make intelligent investments in real estate without “putting all your eggs in one basket.”
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