Ready to own property in Texas? We’ve owned properties in Texas for over 20 years, plus have referred millions of dollars’ worth of business to Brokerages and Property Managers in the Lone Star State. Join us for a fantastic event and tour.
Investors, Realty411 is hosting a Real Estate WEALTH Expo & Infield Bus Training in Arlington, Texas on September 16th & 17th.
It’s our first Lone Star Expo with the Bus training since 2018. Make sure to register now for both events in Arlington, TX.
The Wealth Expo is on Saturday September 16th this link will help you register and learn more about the Guest Speakers and Schedule of events. Keep in mind register now and you get in the Expo for FREE. However, that will not last long.
The Wealth Expo is on Saturday September 16th this link will help you register and learn more about the Guest Speakers and Schedule of events. Keep in mind register now and you get in the Expo for FREE. However that will not last long.
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VIRTUAL REPLAY: The Power of INC Tax Savings During Difficult Times
Did you miss our last educational webinar? Don’t worry! We now have the entire replay available for you (and your team) to watch at your leisure.
Don’t miss this insightful webinar, which will help answer so many questions about tax planning, entity selection and corporate structuring.
Watch the Replay Now: The Power of INC — Tax Savings During Times of Economic Uncertainty!
Topics for this webinar replay will include:
1. Entity selection: LLC, C Corp, S Corp – Tax implications of each 2. Is incorporating right for me? 3. How do I pay myself a reasonable salary? 4. Can I rent back my in-home office to myself? 5. Can I incorporate in a different state to save money? 6. The difference between an LLC, a trust, & an insurance policy 7. Changes in the tax code for 2022-2023 8. Plus, we will answer questions LIVE from our audience!
We encourage you to make time for this life-changing webinar replay. This information will help you understand how to form the proper structure to legally protect personal assets.
Tony Watson personally manages clients with over $350 million dollars in real estate holdings. He has spoken for hundreds of trade organizations throughout the State of California. Holding a federal license as an Enrolled Agent tax practitioner, Tony can advise, represent, and prepare tax returns for individuals, partnerships, corporations, and any other entity with tax-reporting requirements. Aside from his full-time position at Robert Hall & Associates, Tony is an active real estate investor, entrepreneur and enjoys short and long-term trading.
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“It isn’t just what you know, and it isn’t just who you know. It’s actually who you know, who knows you, and what you do for a living.” Bob Burg
Networking is such an important part of your business. You must let everyone know what you are doing. Everyone can be a “bird dog” for you – And you for them. Throughout the 30 years of owning several businesses, I can honestly say this type of marketing has been the most effective and the most fun!
A great book to read if you are uncomfortable with the idea of attending and speaking at events to network yourself and your business is “How To Win Friends and Influence People” by Dale Carnegie. It’s a great book that helps you to understand why you need to network with others as well as knowing what to say when you meet with new contacts.
Of course my belief in the benefits of networking is reflected as I founded a networking group called Women’s Success Group, (a nonprofit networking group since 1998) and now starting an Investors Network in my own town.
For the sake of this quick how-to article, I am going to focus and share all of my marketing strategies exclusively to those involved in real estate investing.
Networking Your Real Estate Investing Business
I would like to start with suggestions for some places to Network your real estate investing business.
Search Real Estate Investor Clubs in Your Area
Check meetings and trainings for local Real Estate Associations
Check meetings and trainings at local Title Companies
Check on handyman, builders and contractor associations in your area
Ask everyone you talk to for referrals for networking events that have worked for them.
Of course chamber events and networking clubs that meet at breakfast and lunch are a general source to get to know the general public.
I know the biggest fear and reason many people don’t attend networking events is they don’t know how to approach or what to say to others when first meeting them. So here is an idea – for every person you come in contact with at any type of networking meeting, your conversation might go something like this:
—–> “Hi there, my name’s __________. What’s your name?” —–> “[Say their name] – What is it that you do?” —–> “How long have you been doing this?” (Don’t be surprised most investors are part timers)
If they ask what you do for a living or about yourself, be prepared!
1) Hand them your card. 2) Summarize your business in 30 seconds or less.
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Real Estate Business 30 Second Commercial
This is where spending time writing down how you want to market you and your business is important. You want to be concise and clear in describing what you do and what types of referrals would be most helpful. Try to incorporate something that differentiates you from the rest. Here is an example of a 30 Second Commercial:
“Hi my name is _________________. I consider myself the real estate investor with a heart. My passion is to work with home owners in jeopardy of losing their homes to foreclosure. If the home owner wants to keep living in their property I give them direction on how to do that or if they just want out – maybe they lost their job and can’t afford to keep it any longer, then I offer to buy their property. My goal is to create a win-win-win. Win for the home owner/seller, win for me the buyer/ investor and win for the bank when I take the house off their hands. If you know anyone that can use my help I pay a $1000 referral fee to you when I buy their property.”
Here is my personal 30 second commercial to everyone:
“I enjoy buying and selling real estate having closed on over 500 properties in the past 5 years. Some people call me the Flipping Queen because as you know, flipping is another term for contracting to buy and then selling real estate quickly for a profit. Or as I say Flipping it. I look to invest in residential real estate at a discount through Pre-Foreclosures, Short Sales, REO’s, Bankruptcies, Probate, as these are the usual reasons a seller is motivated to sell a property at a discount. After I am in contract to buy, I will often “flip” or turn the contract or property to an end buyer at a discount too. Are you interested in buying and/or selling discounted residential real estate?”
Real Estate Investing Networking Questions
Now What? Listen – Listen -Listen to their response or their own commercial. The important thing is that you are interested in what they do for a living. Don’t talk about yourself or again until asked. Ask them questions about their occupation and how you can be of support to them in their line of work. If this person is a potential power team member for you, ask if you could contact them in the future. (You would be able to follow your list of questions for power team members and take notes when you called them back)
However, if this person is an investor, you might want to ask some of these questions:
“Do you buy, fix and sell or do you buy and hold?”
“How many properties do you own and/or have you sold?”
“What part of town do you invest in?”
“Really, why that area?”
“What do properties cost in that area?”
“Do you pay cash for them or what banks do you use that are investor friendly?”
“What title company do you enjoy using the most?”
“Do you know any of the other people here?”
“Who are the big investors in this area?”
“If you ever come across some good deals and you don’t want them let me know.”
“By the way, do you have any property you want to sell?”
“We sometimes have properties for sale as well, if you’re looking to increase your inventory.”
“Well, Mr. /Ms. Investor based on what you told me and where you prefer to buy; if anything comes along I’ll make sure to call you first.”
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What To Do “After” a Networking Event
Make sure to collect everyone’s card, email address, fax, cell, and correct spelling of first and last name. Write a note or 2 on the back of their business card helping you remember the next steps you will want to take with this contact in the future. Just a “nice meeting you” card in the mail or email is often a memorable gesture encouraging future communication regarding each other’s business needs.
Networking should be a part of everyone’s marketing plan. Attend, join, participate – whatever you want to call it – your local REIA or REI clubs and real estate networking events. The important thing is to get in front of people!
Tamera Aragon
Tamera Aragon is a professional online entrepreneur and has bought and sold over 300 properties, establishing her as an expert in the real estate investing field. Since 2003, she has purchased over 10 million dollars in real estate and currently holds properties all over the world. Tamera’s focus is on the booming Foreclosure market, buying Pre-foreclosures, REOs and Short Sales. Tamera who is a noted Author, Success Trainer, Speaker & Coach, shows her passion for helping others with the 17 websites she has created and several specialized products to support fellow investors throughout the world. When Tamara is not busy running her website, she is very involved with her Fiji joint ventures and investments. Tamera Aragon is one of the few trainers and coaches who is really “doing it” successfully in today’s market. Tamera’s experience has earned her a solid reputation in the industry as well as the respect and friendship of many of the top national real estate investment and internet marketing experts. Tamera Aragon believes her success has garnered her the financial freedom to fully enjoy her marriage and spend quality time with her children.
Learn live and in real-time with Realty411. Be sure to
register for our next virtual and in-person events. For all the details,
please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
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The financial news headlines are enough to cloud the mindset of any real estate investor wondering if the space is still a viable one — ongoing bank failures and interest rate hikes, recession fears, lingering supply chain issues and a stock market that reflects both unease and uncertainty. What should you do?
If you’re smart during this period, look for opportunities to grow your portfolio rather than cashing it out or just sitting on the sidelines. So-called safe havens might be right under your nose – if you do your homework first.
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In 2023, well-informed individual investors are looking to diversify their portfolios even during this time of turbulence and trepidation. While some are buckling down or momentarily bowing out, savvier investors are still pursuing a diverse mix of investments to position themselves to do more than just weather the storm. One ally in the battle can be private real estate investment offerings or alternative investment syndicates (alts) for accredited investors working with registered investment advisors (RIAs) or family offices. Private multifamily housing investments in particular are worth a closer look.
Alts, RIA, REIT and Multifamily Home Projects
Why alts, RIAs and multifamily? Because according to new research trending from AltExchange, nine in 10 advisors intend to increase alts allocations over the next two years, and because other financial advisors might not have access to for their clients or may get wrong. The nice thing about these investments is that they are non-correlated to the stock market. And they don’t come with the extra layers of management and other fees frequently found in traditional REIT (real estate investment trusts) or funds.
In many such REIT scenarios, they can be filled with basket-type portfolios – you have to invest in office, shopping centers and other property mixes that you might not be interested in, investment-wise. But select firms offering direct real estate exposure can offer a sound alternative to a REIT by offering investors the ability to decide which single projects to fund, thereby lessening their exposure to broader and more volatile product types. This is one advantage to working with an RIA connected to a private firm like the one I represent — Roers Companies — where we can offer direct investment in specific multifamily properties to accredited investors through the advisors they know and trust.
Multifamily housing demand remains high, and the housing crisis in major cities is widespread. Single-family homes are becoming increasingly too expensive to buy or build for the current and next generation of housing seekers. Single-family home construction is generally slowing, and interest rates are pricing out many potential homebuyers, which creates sustained demand for rental housing. So multifamily investing can be an ideal hedge in the current environment — again if you do your due diligence.
Check These Boxes: Scoping, Transparency, Frequent Reporting and Fast Lease-Up Rates
Eleven years ago, Roers Companies’ co-owners (and brothers) Kent and Brian Roers began developing multifamily properties in the Midwest. Now, the business they founded includes 10,000 apartment units and $2 billion in development across 14 states — proof, perhaps, that its one-stop business model is thriving. The leaders and their team have weathered more than a few storms, and they readily attribute tenacity during downturns and diversification as key to their sustained growth and success. But don’t just take my word for it.
According to Kurt Durrwachter, founder and CEO of the 13-year-old Ledge Wealth Management in Sartell, Minn., with nearly $400 million under management, Roers Companies has successfully differentiated itself. He says, “Their one-stop business model with development, construction and property management is very attractive. And their regular reporting of construction and other information offers the kind of detail we rarely see in this business. I think they’re pretty unique, and they have a highly successful leadership team that has done an impressive job of growing the company in just 11 years.”
Roers Companies reached that milestone largely on the strength of “friends-and-family investors” based primarily in Minnesota. That strategy helped them become a top-three Twin Cities developer, Minnesota Real Estate Awards’ 2023 Developer of the Year, and even rank among the Top 25 Developers of multifamily housing in the country, according to the National Multifamily Housing Council.
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Now their new initiative, working with RIAs and family offices, will allow Roers Companies to expand into additional markets where multifamily housing is needed and market fundamentals are solid. This next chapter in their story is also helpful in understanding the current and future opportunities that exist for anyone considering what the multifamily niche has to offer — even in a downturn.
One longtime Roers Companies investor notes how the company has done a superior job of checking all the key boxes investors look for.
“They have been very successful in just 10-11years’ time,” observes James Lee, “because they’re doing projects and making site selections in cities with projected job growth and housing shortages, especially in multifamily housing — and their fast lease-up rates are twice as quick as the industry average!
“The critical research, scoping and planning Roers Cos., does — plus the construction and leasing updates and quarterly reporting to their investors that offer true transparency — are often missing with larger investment firms. The returns,” he adds, “can be significant.”
Jeffrey Grant, Senior Managing Director, Capital Markets, leads the RIA initiative for Roers Companies, whose development pipeline is likely to include new ground-breaks in North Carolina, South Carolina and Tennessee in 2023.
Learn live and in real-time with Realty411. Be sure to
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please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
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Did you miss our in-person Investor Summit in Philadelphia? No worries, we are now bringing our Philly / Clubhouseevent back ONLINE for everyone around the country to enjoy.
We will share wonderful resources and guests will have direct access to private capital, plus business and commercial funding as well. Now is the time to grow your real estate business to new levels!
Join renowned companies and professionals from across the nation this Friday and Saturday, May 12th and 13th as we dive deep into real estate investing. It doesn’t matter where you are based, the strategies we will share can be applied to any market across the country.
Saturday, September 16th in Dallas / Ft. Worth featuring a Special Networking Breakfast
Celebrate Real Estate Investing with Realty411 – Join Us for Our In-Person Event in Texas.
We have exciting news regarding our In-Person Event in Arlington, Texas. Our special one-day conference will host incredible educators from around the country, who are ready to share their valuable insight.
Be sure to join us in person. While General Admission is complimentary, please consider purchasing a VIP ticket to join us for a SPECIAL INVESTOR NETWORKING BREAKFAST to start the day off right. Next, you’ll discover just why we have owned rentals in Texas since 2006 (and so has our network).
Plus, a special PROPERTY TOUR will take place the next day. This guided tour will educate our guests about the local DFW market. If you want to invest in Texas or want to grow your holdings here, don’t miss this insightful tour. We will be sharing a link to register for this soon.
Don’t miss this amazing opportunity — the chance to network with sophisticated real estate investors joining us from throughout Texas — as well as from around the nation!
The educators who we will be speaking for this event all have properties in Texas and beyond…In fact, they are top leaders in their niche.
This is an incredible opportunity for skilled professionals who want to work with a company that guarantees abundant direct organic daily leads, hands-on management training and support, niche mortgage loan programs with competitive pricing, and advanced mortgage technology.
Mortgage Loan Officers can expect to close their first loan within four to six weeks after the completion of their initial training.
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Mortgage Loan Officers who join the Stratton Equities team can expect the following:
Competitive compensation: Stratton Equities offers a highly competitive compensation plan, potentially allowing Mortgage Loan Officers to earn their first year $110,086.26 – $190,677.36.
Strong resources: Stratton Equities’ interest rates are some of the lowest nationwide in private lending, starting at 6.75%, and can pre-approve a loan in 24 hours.
Room for growth: As a rapidly growing company, Stratton Equities offers ample opportunities for advancement and career growth. With a focus on promoting from within, Mortgage Loan Officers who join the team will have the chance to take on new challenges and responsibilities as they progress in their careers.
A dynamic work environment: At Stratton Equities, Mortgage Loan Officers will work in a fast-paced, dynamic environment focused on innovation and results. As a part of the loan officer team, you can work directly with prospective real estate investors, entrepreneurs, and borrowers on their real estate endeavors.
If you are an experienced Mortgage Loan Officer looking for an exciting new opportunity to grow your career or a licensed Mortgage Loan Originator that is new to the industry and needs help finding business, then Stratton Equities is the place for you to earn a great income.
This is an incredible opportunity to join a leading nationwide mortgage lender and build a bright future with a company that values its employees and their contributions.
Learn live and in real-time with Realty411. Be sure to
register for our next virtual and in-person events. For all the details,
please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
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Princess Margaret of Denmark was the fifth child of Prince Valdemar of Denmark and his wife Princess Marie of Orléans. Extensively connected to European royalty, she was a cousin of Queen Elizabeth of England, as well as rulers of Russia, Greece, Hanover and Orléans. She married Prince René of Bourbon-Parma, with whom she would have four children. The couple resided mostly in France but were forced to flee the Nazis during World War II. Escaping through Spain to Portugal to New York, the princess worked making hats while her husband worked at a gas company and her oldest daughter as a shop clerk to make ends meet until the war was over and they were able to return to Paris.
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The Côte d’Azur estate where Princess Margaret and René made their home has recently been listed for sale at a no-reserve auction on May 16th. Overlooking the French Riviera, the one-of-a-kind residence is known as La Carriere. It dates back to the 1920s, a majestic manor house built into the stone walls of a fortress. The stunning villa melds rustic charm with modern luxury, while the walls provide the ultimate in privacy and security. The list price, prior to auction, was $12 million.
Arched windows-and-stone accents give the villa a unique and enduring style. Warm colors on the walls provide an inviting atmosphere. Antique high-beamed ceilings and a majestic fireplace add grandeur to the living room. Five bedrooms and six bathrooms offer plenty of room for family and guests. A spacious kitchen and gorgeous formal dining room are perfect for entertaining. Multiple terraces offer generous views of the Riviera, the Villefranche Bay and the impressive local Cap Ferrat, plus the turrets and ramparts of the castle-like surrounding fortress. The rooftop deck includes a built-in Jacuzzi. The landscaped grounds include lush lawns, mature trees, beautiful gardens, plus a pool surrounded by a stone grotto. The pool complex includes a detached studio.
Côte d’Azur refers to the coastline of the Mediterranean Sea in southern France. One of the world’s first resort areas, it has long been a summer destination for Europe’s royalty, world celebrities, and artists, including Pablo Picasso and Henri Matisse. About half of the world’s super yachts visit the region every summer. With over 310 days of sunshine per year, the 71 miles of coastline and beaches are home to 18 golf courses, 14 ski resorts and 3,000 restaurants.
La Carriere is located in the town of Villefranche-sur-Mer, nestled between Nice and Monaco. In addition to sunny beaches and sparkling waters, the village is known for its well-preserved historic downtown and thriving arts scene marked by numerous galleries, museums and events. Despite all the historic charm and natural beauty, Côte d’Azur international airport is only fifteen minutes away. Other celebrities with nearby villas include Bill Gates, Elton John and Bono. Princess Margaret died in 1992.
Photos courtesy Concierge Auctions. Photos with media permission available at http://bit.ly/toptenmedia.
Learn live and in real-time with Realty411. Be sure to
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please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
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SAN FRANCISCO, May 2, 2023 — B+E Director Spencer Henderson is one of commercial real estate’s top retail influencers, as named by GlobeSt. Real Estate Forum.
“These professionals have become experts at handling lease re-negotiations and developing new innovations for touchless environments, while at the same time working tirelessly to ensure that retail properties serve and revitalize their surrounding communities,” said GlobeSt.
“These individuals have had a significant impact on the business as commercial real estate’s Influencers in Retail Real Estate.”
Spencer Henderson
Spencer Henderson is a Director at B+E who specializes in retail net lease sales and 1031 exchanges. Spencer previously worked in various commercial real estate fields with firms such as Sansome Pacific Properties. Before his time with Sansome, Spencer worked for a direct lender, performing due diligence on projected investments from seed funding to the growth stage. He is a licensed real estate salesperson in California.
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Spencer is an active member of ICSC and holds a Bachelor of Science in Business and Managerial Economics from the University of California, Davis where he played Division 1 baseball for four years.
B+E is a modern investment brokerage firm, specializing in net lease real estate. The firm helps clients buy and sell single tenant real estate. Founded by deeply experienced brokers, B+E redefines trading through an intuitive end-to-end transaction platform consisting of user-friendly dashboards and an AI-driven exchange — all leveraging the largest data set in the net lease industry.
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Complementing senior talent with exceptional technology, B+E’s proprietary process affords greater speed, unrivaled transaction efficiencies, and stronger asset value. With offices in New York City, Chicago, Atlanta, Tampa, Charlotte, Orange County, San Francisco, and Dallas, its brokers trade property for clients across the US. B+E allows virtually anyone to confidently trade net lease real estate.
Learn live and in real-time with Realty411. Be sure to
register for our next virtual and in-person events. For all the details,
please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
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Joseph V. Scorese National Sales Director [email protected] (215) 290-5108
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Why are you just searching for listed properties for sale when the number of distressed, vacant, and “shadow inventory” homes is almost 33 times larger than the national home listing inventory supply?
How is this possible with my 33 number claim? First, upwards of 16 million homes were listed as “vacant” or shadow inventory in the fourth quarter of 2022, as per the U.S. Census Bureau, National Association of Realtors (NAR), and other groups. A vacant home can be defined as a vacation home, unsold new home building inventory (near record levels of new single-family homes and multifamily apartment buildings being built in 2023), distressed or pre-foreclosure properties, or homes held by billion-dollar corporations like BlackRock, Blackstone, or State Street for the long-term that just sit there with no intent to rent it out at present.
Second, there are at least a few million distressed mortgages (FHA loans, especially) currently in forbearance agreements in order to delay the lender’s foreclosure filing actions to bring the total to more than 18.5 million properties. Frankly, I think that the number is closer to 20 million after counting VA, conforming, non-QM, and private money loans, but we’ll just focus on the 18.5 million vacant or distressed home number.
Since 1934, FHA (Federal Housing Administration) has insured more than 40 million loans nationwide. Today, a relatively high percentage of homebuyers still rely upon FHA to purchase their homes partly due to the much lower interest rates and easier loan qualification guidelines such as loan programs which allow FICO credit scores as low as 500, debt-to-income (DTI) ratios up to 50% or higher, and loan-to-value (LTV) options near 96.5% to 100% LTV.
As of March 2023, the national home listing inventory was listed at 562,565 by data provided by the Federal Reserve Economic Data and the NAR. Let’s do the math as follows:
18.5 million distressed or vacant homes / 562,565 listed homes = 32.885 times
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Distressed FHA Loans & Continued Forbearance Extensions
There are three to four times as many delinquent FHA mortgage loans nationwide as compared to the entire national home listing inventory with somewhere near at least a few million distressed FHA loans.
February 8, 2023: Today, the U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge announced that, thanks to Federal Housing Administration (FHA) programs, approximately 2 million homeowners with FHA mortgages were able to stay in their homes from the beginning of the COVID-19 pandemic in March 2020 through December 2022 – when doing so was often a matter of life and death. During this period of time amid the pandemic, FHA borrowers whose ability to make their mortgage payments was impaired by the pandemic were able to obtain either a COVID-19 forbearance or a more permanent solution such as a loan modification that allowed them to avoid foreclosure. Source: HUD Secretary Announces Major Milestone of Assisting Nearly 2 Million Homeowners Stay in their Homes
With a few million distressed FHA loans that they admit to and is probably undercounted, it’s no wonder why the federal government wants to keep offering FHA forbearance extensions.
Details of FHA’s COVID-19 Forbearance
Important information about FHA’s COVID-19 Forbearance:
To be eligible for the COVID-19 Forbearance or forbearance extension in the table above, you must request this relief from your servicer on or before May 31, 2023.
You can request a FHA COVID-19 Forbearance for up to 6 months. If needed, an additional 6 month extension may be requested. If you began your initial forbearance on or after October 1, 2021, you are only eligible for the additional 6 months if your initial 6 months forbearance will be exhausted and expires on or before May 31, 2023.
Additional forbearance options may be available to you after May 31, 2023. Your mortgage servicer may provide for a temporary pause or reduce your monthly mortgage payments to allow you time to overcome your financial hardship. An extended forbearance period may be provided to you if you are unemployed and actively seeking employment.
No extra fees, penalties, or interest will be added to your account during the forbearance period.
There are also a significant number of distressed VA and conforming or conventional loans nationwide which are held by Fannie Mae or Freddie Mac in the secondary market that aren’t really being “officially” counted with the most up to date numbers. FHA and VA mortgage loans have both consistently represented close to 10% each of the annual national funded loan market. As a result, these government-backed or insured loans, which typically average close to 0% to 3.5% down payments for FHA, VA, and conforming, are something to keep a close eye on as the economy continues to soften.
The 40-Year Loan Modification Program for FHA Borrowers
Good news: National mortgage delinquency rates dropped 15% in March 2023 while reaching 2.92%, which was a new all-time record low.
Bad news: Millions of distressed mortgages are not being counted as “delinquent” once they enter forbearance agreements with their lender (FHA loans, especially). The national FHA loan default rate reached 12% in February and will likely continue to rapidly increase. Distressed FHA and VA loan investments are some of the best deals out there because they usually have the lowest mortgage rates that you can take over by way of creative seller-financing techniques.
A forbearance agreement is when the lender or mortgage loan servicing company agrees to postpone or delay their foreclosure actions with the delinquent borrower. Sometimes, these foreclosure postponements may last months or years.
On March 8, 2023, HUD issued their Mortgagee Letter 2023-06 with details described as the “Establishment of the 40-Year Loan Modification Loss Mitigation Option” with a stated purpose noted as “This Mortgagee Letter (ML) establishes the 40-year standalone Loan Modification into FHA COVID-19 Loss Mitigation policies.”
Several mainstream media analysts mistakenly described this new 40-year loan proposal offered by FHA as a purchase loan as well. Yet, this is not correct because it’s only for the refinance of currently distressed 30-year FHA loans into longer 40-year loan terms in order to reduce the monthly payments for borrowers. There is no published word about whether FHA will later consider offering 40-year purchase loans for borrower prospects.
Housing and Family Trends
Real estate is a people business, first and foremost. The #1 most important factor for housing trends is related to population trends and household formations for families especially. Without people, there’s no need for housing regardless of the affordable financing offered.
One of the main reasons why people purchase single-family homes is because they’re trying to either build a growing family or the need to house two or three generations of the family under the same roof. You can’t spell “single-family homes” without family in it.
The U.S. has the highest percentage of one-person households in the entire world. A few years ago, one-person households surpassed all other household formations in Canada.
In 2022, only 24% of U.S. households had at least one child under the age of 18. In 1965, upwards of 42% of households had a child under the age of 18.
The Decline of Family Households
Here are some of the published data numbers from sources such as the U.S. Census Bureau, the National Center for Health Statistics (NCHS), Pew Research, and numerous other data sources in regard to individuals and family structure trends:
National overall divorce rate in the USA: 50%+.
The California divorce rate is 60%.
The Orange County, California divorce rate is 72%.
41% of first marriages nationwide end in divorce.
60% of second marriages end in divorce.
73% of third marriages end in divorce.
The average length of a marriage in the U.S. that ends in divorce is 8 years.
There is one divorce every 36 seconds in the U.S. on average; 2,400 divorces per day; 16,800 divorces per week; and 800,000 to 900,000 divorces per year.
The percentage of American men between the ages of 20 and 39 who are now married has fallen by half (35% of men are married as of 2017) since the early 1970s (70% of men were married).
Unmarried parents who live together are more likely to break up than married parents, per the Brookings Institute.
Per the CDC in 2016 through at least 2020, U.S. fertility rates were the lowest ever recorded as fewer couples are having children these days. Each consecutive year over the past five or six years reached all-time record lows.
78% of all households in the U.S. contained one married couple in 1950. Today, married households are below 48%.
In 2010, the Pew Research Center reported that 44% of Americans polled in the 18-to-29 year old age range believed that “marriage was becoming obsolete.”
Divorce rates for people over the age of 50 have doubled between 1990 and 2015, per Pew Research Center.
In 1956, roughly 5% of all babies were born to unwed mothers. Between 2008 and 2016, babies born to unwed mothers were closer to the 40% range.
Upwards of 50% of children in impoverished regions of the U.S. live in homes without fathers.
46% of children live at home with a mother and father who were in their first marriage together.
The average American woman in 1970 had her first child at 21.4 years of age. Today, the woman is near 25.6 years of age.
The U.S. has the highest teen pregnancy rate in the industrialized world.
More than 50% of children are born to unmarried women under the age of 30.
Saving Equity or Creating Newfound Wealth
What are your options as either a homeowner with an ongoing forbearance agreement in place with your lender, a struggling business owner, a commercial property owner and landlord with incredibly high vacancy rates, or as an investor seeking new opportunities if and when the economy suddenly pivots and we enter a more clearly visible deeper recession? If home values are more likely to be higher today than later this year, is it now a good time to sell? If so, where will be your next destination for a home?
Generally, loss of income is the #1 reason why homeowners lose their homes to lenders or mortgage loan service companies in foreclosure. The #2 reason why homeowners walk away from their home is when the mortgage debt exceeds the current market value and it’s upside-down or underwater. This is when short sale options become more prevalent.
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The real risk associated with homes purchased in recent years is related to the relatively low down payment averages for first-time buyers and others that were leveraged between 96.5% and 100% loan-to-value at the close of escrow. Effectively, these homebuyers were upside-down with negative equity at closing when factoring in the potential 6% to 8% closing costs to resell the homes after paying real estate brokerage commissions, title, escrow or attorney’s fees, transfer taxes, third-party inspection reports, and possible seller credits towards the buyer’s closing costs.
In 2022, first-time homebuyers represented 34% of all home purchases across the nation, as per the NAR. During the fourth quarter of 2022, purchase loans comprised 78.6% of all FHA mortgages funded. With a high percentage of FHA borrowers reported as first-time homebuyers, their average down payments were likely close to 3.5% or below. What happens if home values fall 5%, 10%, or more in value over the next year?
If you’re currently in a distressed mortgage situation as a homeowner or investor or are searching for discounted off-market listings as a buyer with very creative and flexible financing solutions, I can show you effective ways to save your equity or create newfound wealth with my mortgage and investment business named Realloans (Real Estate Loans and Creative Sales) and my real estate group linked here: So-Cal Real Estate Investors.
Rick Tobin
Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details.
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