Special Contribution by Kaaren Hall, CEO | uDirect IRA Services
In this article I’m going to discuss a few reasons why Sections 138312 and 138314 of the House reconciliation bill (released September 13th) threatens the investment choices of an approximate 3 Million Self-Directed IRA investors in America. It’s time to tell your Congressional Representatives, “Hands Off My IRA”!
Firstly, the proposal could make it so that you could no longer purchase private equity or use the IRA-Owned LLC. Secondly, what’s worse is that the proposal offers no “grandfather clause” and says you would have to remove those existing assets from your IRA by 2023. As a result, the implications are wide-reaching and would cause a lot of damage to IRA savers who may be forced to pay taxes on the value of those assets.
Thirdly, it could wreak havoc on asset sponsors who could be forced to look for new sources of capital.
Specifically, the proposal addresses:
Minority interests in LLCs that are 10% owned by the IRA or account-holder
Investments requiring the IRA owner to be an accredited investor
Steven Rosenthal, senior fellow at the Tax Policy Center, is quoted in MarketWatch, saying that non-public investments do not belong in retirement accounts. In his view, it’s a matter of fairness, tax compliance and investor protection when it comes to retirement tax rules that for too long, have already favored rich households.
What Rosenthal fails to see is how the proposal would impact Self-Directed IRA investors’ choices and prevent them from providing access to working capital for businesses. This then deters job creation.
Self-Directed IRA investors as a group hold some $118 Billion is retirement assets. These assets are crucial to our economy because these assets are to be used for expenses in retirement.
The proposal could decimate the nest egg of many middle-class savers. Removing the choice to invest in certain assets removes the ability for many to access the same start-up opportunities offered to the uber rich.
What Can You Do To Stop This?
Make your voice heard. Contact your elected officials in the United States House of Representatives and Senate. Tell your story. Let your Representatives and Senators know how this proposal could impact you personally.
Not sure how to contact your U.S. Congressional Representative?
Congress seems eager to have this and other matters resolved before the session adjourns December 10th.
Take action now. Call, write, email or visit the offices of your representatives in the House and Senate.
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Banks used to be the only option for real estate investors trying to take out loans. Nowadays, private money lenders are allowing investors to borrow money under more flexible conditions. Banks and traditional financial institutions can reject your loan application for multiple reasons—your credit score, your debt-to-income ratio, employment status, etc.— What private money lenders do is implement a framework that makes it easier and more conducive to be a real estate investor.
The real estate market moves fast, and it is often crucial to act quickly. But the process of getting a traditional loan through a bank can often be lengthy and complicated. Many of the solutions and loan programs from private money lenders are easier and quicker to get than through banks, which is why private money loans are often better options for real estate investors.
Making investing easier
What private money lenders like Stratton Equities do is accommodate real estate investors.
“Real estate investors, as we all know, don’t have the greatest of tax returns,” Stratton Equities’ CEO Michael Mikhail said. “They move money around, have different trusts, and have different accounts. Banks absolutely frown upon that and they actually hate it. Good luck getting a loan through a bank or mortgage company if you’re a hardcore real estate investor.”
The programs offered by private money lenders are designed for investors, who oftentimes can’t show their income and make a lot of monetary transactions. Companies like Stratton Equities have put in place certain standards that make it easier to take out a real estate investment property mortgage. These include no tax returns, no upfront fees, and no junk fees.
The closing time for loans from private money lenders is much faster. This element can be crucial for investors, as sometimes the faster you close, the better chance you have at securing a transaction. Also, the LTV (loan to value) ratio is higher with private money lenders. Loans from traditional institutions on investment properties usually max out at 70% LTV, while those from private money lender Stratton Equities can go up to 85%. You’ll likely be spending less through private money lenders too. “If you go to a bank, you’re going to have PMI (private mortgage insurance) with those loans, a few extra hundred dollars per month,” Mikhail explained.
The Loan Process
The first thing you’ll want to do to get a private money or NON-QM loan, for example a hard money loan is to contact a private money lender. As the borrower, you should be ready to provide the lender with information like the location of the property, purchase price, and estimated appraised value.
The lender will ask questions to get to know you and your borrowing history. After this, the lender will appraise the property and come up with a loan offer for you. The lender will review the documentation and complete the underwriting process for the loan. This process is usually speedy, but it varies from lender to lender.
After the loan is completed with underwriting it gets moved to the closing department. As a borrower, you’ll have to sign a variety of documents during this phase, but it is relatively straightforward. The lender will then send the funds to the title company so the deal can be completed.
Many real estate investors have found that getting loans from private money lenders is their best option for achieving their investment goals. Be it a hard money or a soft money loan, private money lenders are faster, more understanding, and more lenient than mortgage companies and banks. You have to consider that these companies’ sole purpose is to give loans to real estate investors, so naturally, they’ve found ways to make the process smoother. If you’re thinking of getting into real estate investing, you should definitely take these factors into account.
Contact Stratton Equities, the leading hard money and NON-QM lender, to speak with one of their talented and experienced loan officers at 800-962-6613, email us, or apply for loan pre-qualification today!
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A large number of real estate investors and would-be investors live in high-priced markets. Large cash downpayments are necessary to make a purchase, and even more cash is required to achieve a positive cashflow. This can be discouraging.
One alternative that many in this position consider is “Turnkey Investing”, usually in rental houses in distant locations with local real estate support. This involves locations, companies, persons, and properties that are not well-known or familiar, and which might, or might not, work out. For sure, the investor has only limited control over their investing fate. Then, if a problem arises, the investor has to jump in to right the situation to protect their investment. “Passive investing” this is not.
Investing Locally With Partners
It is not necessary for an investor to send their money thousands of miles to unfamiliar people to invest for them in unfamiliar neighborhoods with properties of uncertain condition and rental prospects. It is definitely possible to invest locally in high-priced properties with a high degree of control by the use of partners.
There are three kinds of partners: 1) a “money partner”, 2) the seller as a partner, and 3) the tenant as a partner. In each case, the approach is to set up the transaction so that the partner contributes in such a way that the investor profits, and the partner receives their benefit from the arrangement.
Partnering With a “Money Partner”
The principle here is for the “money partner” to bring in the funds necessary to make the purchase and set up a reserve to ensure success. There are four investing structures that are attractive based on the interests of the parties:
1) Limited Partnership (LP)2) Joint Venture (JV)3) Tenants-in-Common (TIC)4) Limited Liability Corporation (LLC)
The partnership should be designed so that the “money partner” receives about an 8% annual cash return plus an “equity kicker” upon liquidation of the investment. The investor needs to provide for themselves, as well, even if it means profiting only at the end. Obviously, the better the deal, the more the investor will profit and be able to compensate the “money partner”. Investors are encouraged to use a real estate attorney to draw up customized documents for the partnership rather than doing it themselves “on the cheap” with internet “pdf. documents”. This is not a place to economize! (Hint: You can draw up internet documents, then have an attorney review them. That should save some money.)
As an example, three brothers pooled their funds to purchase a 3-bedroom, 2-bath rental house in Hayward, near Oakland, in March, for an LLC that they had created. They put down $178,750 (25%) on a purchase price of $715,000, with a new 30-year first loan of $536,250 (75%) at 3.1%. They paid “market price”, but the house was being sold by a retiring corporate facilities manager for a national company who had maintained and upgraded it impeccably. They rented it out for $3,500/month in the Bay Area’s ultra-tight housing market. Their overall return is 2.7% on their downpayment, but since all three brothers are in the top federal and California income tax brackets, and “starter homes” in the Bay Area appreciate strongly, and will for the long term, the brothers will see a nice after-tax return.
Partnering With The Seller
There are two major occasions of partnering with sellers. The first is when builder/developers or sophisticated investors enter into a joint venture with the owner of developable land. Typically, the owner contributes the land while the investor obtains the necessary financing, performs the construction, and does the marketing. Then the parties split the profit according to their joint-venture agreement. This is a sophisticated partnering method.
The more accessible partnering method with an owner/seller of a property is to use a lease-option. Here, the buyer/”lessee” leases the property on agreed terms and simultaneously negotiates an option to purchase the property in the future at an agreed price and terms. Usually, the buyer/”optionee” pays some “option consideration” for the right to purchase during the term of the lease. This is paid either up-front or on top of the lease payment. It is important to keep the lease and the option separate but attached because judges in disputes have been known to interpret the documentation unfavorably to the investor. Advice from local real estate counsel is important initially when employing your first lease-option. On-line and Realtor® forms can be used, but an attorney should review the first one.
Another accessible partnering method is to negotiate a “shared-appreciation mortgage” to be carried back by the seller as “owner financing”. The idea here is to structure the note such that positive cashflow to the investor is the result. The seller is usually given some cash flow, but not a lot. Then the seller participates in the profit when the property is eventually sold. This works well with motivated sellers in high-priced areas. Again, legal advice is recommended for the first time.
Partnering With The Tenant
The first method where the tenant is essentially a partner is to use a lease-option, to sell this time, rather than to buy. The idea here is to use the lessee/optionee’s “option consideration” to help pay for the purchase of the property. It can be used as part of the monthly loan payment, or as part of the downpayment. Either way, since it is not a rental security deposit, it will never need to be refunded.
A second method of partnering with a “tenant” is known as “Equity-Sharing”. Here, the parties purchase the property together on the market. One party, the “resident co-owner”, resides in the property, maintains it, usually makes the entire loan payment, pays taxes and insurance, and might get the income tax benefits. Those are negotiable, as are the percentage of ownership. The IRS allows taxes to be allocated as the parties decide, as long as they are deducted only once. The “investor co-owner” typically makes the downpayment and pays the purchase closing costs. This is all done with extensive documentation, but it is particularly useful for helping first-time buyers get started while allowing investors a high-yield, relatively-passive investment. The author represented one unmarried engineer who set up seven of these to help his relatives get started in homeownership while he grew his retirement plan.
Getting Started
This article presents nine different methods for investing with partners in high-priced markets. It is not necessary to wire funds out-of-state in order to make a profit! Find an expert in the application of these, and get started. Good luck!
Bruce Kellogg
Bruce Kellogg has been a Realtor® and investor for 40 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches.
He writes and edits copy for Realty411 and REI Wealth Monthly magazines.
Mr. Kellogg is a recipient of an Albert Nelson Marquis Lifetime Achievement Award, listed in Who’s Who in America – 2019.
Mr. Kellogg is available for consulting about syndication, “turnkey” investments, joint-ventures, and other property purchases nationally, and other consulting assignments. Reach him at [email protected], or (408) 489-0131.
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Nationwide during the first quarter of 2021, homeowners with mortgages saw their home equity jump by a staggering 20% as compared to one year earlier. The dollar amount gains for the first quarter (January 1st – March 31st) alone for homeowners across the nation amounted to a whopping $2 trillion in total homeowner value gains, according to CoreLogic.
The average US homeowner gained $26,300 in additional home equity over the past year. According to Experian and CNBC, the average Generation X consumer had $32,878 in non-mortgage related debt such as credit cards, student loans, and car loans. When equity growth exceeds debt in just a few months or within one year, this is usually a positive for homeowners.
In California, the average homeowner gained $11,000 per month in equity during the first quarter of 2021 ($33,000 in three months) as the average statewide home appreciated 39% in just 12 months ending in May 2021 to reach $818,000 per California home.
In April 2021, the top three metropolitan regions for year-over-year home price gains were Phoenix, San Diego, and Seattle. The median sales price for the Southern California region in the same April month reportedly appreciated at a pace of $1 every two minutes, according to DQ News/CoreLogic. Each day has 1,440 minutes (24 hours x 60 minutes), so this would be equivalent to a price gain of $720 per day and approximately $21,600 per month over 30 days.
Values for products or services usually fluctuate up or down based upon supply and demand. When demand is strong and home listing supplies are low, then home prices rise.
Let’s take a look next at some of the primary factors for these suppressed listing supplies and why there’s so much demand in spite of an ongoing pandemic designation:
1. Near record low mortgage rates: Most buyers need mortgages from third-party lenders or mortgage brokers. The lower the interest rate, the more affordable that the monthly mortgage payment is for the borrower.
Many younger Generation Z or Millennial buyers or tenants have seen incredibly low mortgage rates for the past 10 years, so they may not remember that mortgage rates in the 2% to 3% rate ranges are shockingly low as compared with previous decades.
To better understand how low mortgage rates have become in recent times, let’s review the average 30-year fixed mortgage rate by decade dating back to the 1980s:
● 12.7% in the 1980s
● 8.12% in the 1990s
● 6.29% in the 2000s
● 4.09% in the 2010s
● Near 3% in 2020 and the first half of 20212. The CARES Act and foreclosure and tenant eviction moratorium: The CARES (Coronavirus Aid, Relief, and Economic Security) Act was passed on March 27, 2020 by Congress as an attempt to minimize the economic hardship for homeowners and tenants nationwide. These moratoriums or legal postponements included within CARES prevented lenders from foreclosing on delinquent borrowers and stopped landlords from evicting tenants for missed rent payments.
In addition, the CDC (Center for Disease Control) also issued their own guidelines which prevented landlords from evicting tenants or landlords would face both significant civil fines and criminal prosecution. As a result, the foreclosure inventory dried up as well because there were so few foreclosure auction sales or tenant evictions which would’ve allowed investors to sell their properties to new buyers and the overall supply of distressed homes for sale plummeted.
3. Declining home construction numbers: Freddie Mac, one of the largest national secondary market investors along with Fannie Mae, had claimed last year that there was a new home supply shortage of 2.5 million units as compared with the estimated buyer demand. Yet, the US hasn’t surpassed more than 1 million units, or 40% of this 2.5 million unit number, since 2007 when 1.046 million new single-family home units were built.
During the depths of the Credit Crisis meltdown, new housing units declined to 430,600 in 2011. The Mortgage Bankers Association (MBA) did forecast that 2021 might finally break 1 million units again nationwide by reaching a projected 1.134 million unit number.
California’s new housing start numbers, however, are not as positive as the rest of the nation. Back during the peak of the previous housing market boom in 2005, there were 150,000 new single-family home units built. In 2020, there were only 59,000 new single-family homes developed for a state with a population trending towards 40 million residents.
Some key factors why there are so few new homes being built in California are related to rising and unaffordable prices for land, lumber, steel, appliances, building permits, and environmental-impact or “sustainable living” fees. If a home builder can’t make a profit, they aren’t very likely to take a risk to develop a new housing community.
Multiple Bids and Quick Sales
As per the May 2021 Zillow Market Report, the average time that a listing took to sell, or days on market (DOM), was just six days in spite of home prices reaching all-time record highs in most US regions. The National Association of Realtors defines days on market (DOM) as the number of days the property is listed for sale on the local multiple listing service (MLS) up until the day that the buyer and seller have mutually agreed to the terms signed in the sales contract.
Because it’s very likely that a listed home for sale will probably have multiple offers, sellers can pick and choose between the best offers that may include all cash offers, 7 to 14 day closings, waiver of all third-party reports such as appraisals and home inspections, and even the option for the seller to remain in the home for another 30 to 60 days rent-free so that the seller has enough time to find a new place.
Most buyers usually need a mortgage to purchase a property. In today’s hot housing market world, buyers and their advising buyer’s agents don’t have much time to get pre-approved from their local bank or mortgage broker. Some lenders may need a few days to a few weeks to formally pre-approve a borrower, depending upon how complete the original loan application package is at time of the loan submission.
Fewer sellers in multiple bid situations will even consider accepting a purchase offer from a buyer who is not formally qualified before the buyer writes up the offer. This is why it’s so important to get pre-approved first before going out with a knowledgeable real estate licensee who understands the local housing trends and searching for properties. If so, you’re much more likely to be successful as a buyer, seller, tenant, landlord, or advising real estate licensee.
Rick Tobin
Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.
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Today we will discuss everything you should know about the triple net (NNN) lease. Gross and net lease arrangements are the two most common types of commercial real estate leases. In a gross lease, the tenant is responsible for paying the base rental sum, but the property owner is responsible for all running expenses.
As a result, the rental rate is usually greater for the owner to recoup some of their contribution to operational costs. A Full-Service Gross Lease or a Modified Gross Lease are two of the most frequent Gross lease structures.
The net lease is the opposite of a traditional lease. Depending on the parameters of the net lease arrangement, the tenant is responsible for a base rental payment as well as a share of the property’s running expenses.
The renter pays rent and property taxes under a single-net lease. The renter is responsible for the base rent, property taxes, and insurance in a double-net lease. Then there’s the triple-net lease, which is popular with a certain type of investor.
Triple Net Lease
The tenant is responsible for paying their base rent, as well as property taxes, building insurance, and common area maintenance, in a triple net lease. Absolute net leases shift all duties to the tenant, including structural building maintenance, leaving the landlord with nothing save the responsibility of cashing the checks.
Triple net leases are significantly more appealing to landlords because they will have fewer duties and will be able to pass all costs on to the tenant. That implies a renter can negotiate down from a triple net lease to a single or double net lease, however, these forms of net leases are more frequent among landlords and tenants with little experience.
How You Can Invest in Triple Net Lease?
There are many steps to invest in Triple Net Lease. Here are some basic and important steps to start investing in Triple Net Lease:
1. Figure out what kind of investment returns you want
Depending on the tenant, location, remaining lease term, landlord duties, year of construction, and other factors, triple net lease investments can and will yield a wide range of returns. As a result, two ventures with the same tenant and guarantor could have drastically different cap rates.
You should do your market study to discover where cap rates are landing before calling a specialist to assist you in finding an investment.
2. Find an Advisor of Triple Net Lease
Once you have a broad concept of what you want, talk to triple net leasing experts to discover who would be the greatest fit for you and your team. A triple net lease advisor is a commercial real estate broker or firm with NNN investing experience.
3. Fix your tenant and terms criteria
Not all triple net leases or renters are made equal. Some NNN investment prospects may appear to have a very good cap rate, but as you dive deeper into the property, you discover the existing lease only has three years left.
Every tenant has a different credit rating based on their financial health, the number of locations they have, the sort of business or industry they are in, and other factors. You must specify your tenant and term criteria upfront so that you can focus your search.
4. Find the Right lending Partner
While triple net investments might be enticing all-cash bargains, it’s a good idea to start talking to lenders as soon as possible to assess where your loan terms will wind up.
Because you can discover equally appealing investments in Nevada and Georgia, you’ll need a lender that can go with you across the country. If your local bank is willing to help, it could be a nice option.
5. Examine your options and make a proposal
It’s a good idea to keep a Google Drive or Dropbox folder with information on the many sites you’re underwriting once you’ve begun receiving prospective investment opportunities.
You won’t be able to keep up with every property, especially since you won’t be touring them in person, but having everything in one spot where you can quickly examine it if you’re discussing a project with your team, partners, or investment advisor is helpful.
6. Conduct a thorough due diligence investigation on the asset and the tenant
It’s time to do your due diligence on the asset and the renter after your offer has been accepted. You’ll want to find a good local inspector to assess the property and create a report for your evaluation because you won’t be physically present (unless, of course, you opt to travel out and see the property).
7. Take a seat and wait for the checks to come in
The most effort you’ll have to do after you’ve closed on the property is to cash those cheques. The advantage of NNN investing is that you have little to no obligation aside from collecting rent and projecting tenant vacancies. Your tenant will continue to make monthly payments toward your mortgage, increasing your equity in the property, while you pocket the profits.
Advantages of Triple Net Lease
Landlord responsibilities are limited: Apart from the structural components, landlords are often not obligated to maintain or care for the property.
Lower likelihood of turnover: Many renters who lease these types of residences aim to stay for an extended period.
Potentially perfect location: These tenants want to be where their customers will find them, therefore it may be easier for you to discover them.
Because they are frequently leased by investment-grade tenants, they are a low-risk investment. Rent and expenditures are paid every month, ensuring a consistent cash stream.
Long-term tenancy: NNN tenants frequently sign seven- to ten-year leases.
Due to the extended period of the leases and the landlord’s modest financial responsibility, there is the potential to generate equity.
Disadvantages of Triple Net Lease
Returns on investment are capped: Because there is usually no room to increase value in some shape or manner during the initial term, your returns are set by the lease.
Higher vacancy risk: Because these buildings are sometimes built with a single tenant in mind or a certain location, re-leasing them can be difficult or costly.
Conclusion
The greatest triple-net investments are those that meet your requirements. That’s why it’s crucial to do your homework on the various tenants and lease agreements available so you know what you’re getting yourself into.
Note: click the link below to find how to deal with bad tenants https://www.webuycaliforniahousesforcash.com/blog/bad-tenants-your-ultimate-guide-to-dealing-with-them/About AuthorA good writer is known for his or her work so is Rachel Maisen. Rachel Maisen is an author, known for her amazing articles regarding Real Estate World. She outreaches information on Real Estate Investment, methods, business and many more. She wrote many articles for a better understanding of beginners as well as investors. Her main focus is to provide information to the readers about Real Estate Investment in the simplest way even a beginner can understand very well. By reading her articles one can understand how to invest, where to invest and when to invest in Real Estate.
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As a realty investor or developer, urban properties probably comprise a significant portion of your bread and butter. Why was urban development so lucrative for so long? Big cities were magnets for people looking for more work opportunities and higher incomes. As a result, large city populations have been steadily increasing for the past 70 years, making them a good bet for investment dollars until the recent pandemic changed the landscape.
Population trends were expected to continue rising steadily until at least 2050. However, the past two years have brought unprecedented change to the real estate market. With so many disruptions, it may be time to rethink your real estate investment strategies. In fact, according to the latest trends, you should probably consider putting your money to work in smaller, less populated cities.
If you’re considering a switch to smaller cities, keep reading for the three top reasons why the landscape is changing the way we invest in real estate, where to invest, and expert advice on completing a cross-country move.
Getting Personal Space
Social distancing mandates brought a new awareness to the concept of personal space. However, in a densely packed city, personal space has always been hard to come by. No matter how you slice it, city life means smaller spaces for living, working, shopping and even walking. It isn’t easy to maintain a six-foot distance in a city like New York or Los Angeles.
In addition to social distancing, it is harder to quarantine in a small apartment than in a large house with a yard. Although a family in the city would typically have access to the outdoors, city spaces remain congested and may negate social distancing precautions. One example of this is the widespread outbreak in New York City early in the pandemic.
Although the pandemic wasn’t cited as the primary reason that influenced people to move, the experience was an opportunity to re-evaluate their needs. For many who have lived in a densely populated area during these times, making a move to a less populated city has become an enormously attractive idea.
The Allure of Outdoor Space
Sure, city dwellers have parks and sidewalks for outdoor living. But, as recent times have demonstrated, nothing beats having a yard of your own. The pandemic has highlighted this need. Many of today’s movers are looking for some space to stretch out and maybe even visit friends without risking infection.
For young families and retirees alike, the backyard is a haven for outdoor activities. They can build a pool, install a trampoline, do some gardening or have a barbeque. Whatever their interests, having a backyard means that they can quickly and safely access the activities they love without worrying about social distancing or virus outbreaks.
Less Money, Better Life
Less densely populated cities have much to offer. Smaller cities often have many of the same advantages as larger ones, with less congestion and more open spaces. For families, the benefits can include less crowded schools, less competition for extracurricular activities and the chance to be a part of a close-knit community. For retirees or singles, many of these cities still have great restaurants, a plethora of outdoor activities and exciting nightlife.
Living in a less-populated city can also improve health markers due to less stress, less pollution and more access to recreational activities. For many, the additional land means a chance to grow an organic garden for food or set up an outdoor fitness area.
Making the Switch
So, where are people moving to when they decide that big-city life isn’t a good fit anymore? The top areas in the United States are:
Naples, Florida
Myrtle Beach, South Carolina
Venice, Florida
Hilton Head Island, South Carolina
Avon Park, Florida
Bluffton, South Carolina
Prescott, Arizona
Shelbyville, Tennessee
Although on the surface, it may seem like some of these cities have little in common, they all offer a relaxed and friendly vibe in beautiful natural surroundings.
Expert Advice for Cross-Country Moves
Moving cross-country to a smaller locale is no easy feat. Eugene Tolk, CEO of Verified Movers, a review site designed to help families and businesses find reputable cross-country moving services, said there are several things those eyeing a cross-country move should keep in mind.
“Shopping around for the best prices is the key element to making a cross-country move go smoothly,” he said. “It’s inevitable that there are going to be unexpected costs when moving, so keeping your known prices low is essential.”
Getting creative when packing – using towels for padding to save on bubble wrap and using suitcases instead of cardboard boxes – is another pro tip, Tolk said. And when hiring movers, be prepared to do the one thing you might not want to do.
“When hiring professional movers, the best thing to do is get out of their way,” said Tolk. “I know it’s in a lot of people’s nature to hover and try to manage, but cross-country movers know what they’re doing and how to do it best. You’ll only slow down the process, so kick back, relax, let them do their job, and get on your way to your new home.”
About Verified Movers:
Verified Movers is a trusted review platform that publishes reviews, customer testimonials and experiences with moving companies. Verified Movers is dedicated to helping people find the best moving services solutions for their needs. Whether people plan to move down the street or across the globe, Verified Movers is here to provide them with the best choice of professional moving companies to get them there. The platform offers the option to both research and share reviews for different professional movers country-wide. In addition to this, it also provides the options for those same moving companies to create their own profiles and promote the services they offer to clients. To learn more, please visit: https://verifiedmovers.com/.
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In the world of private lending, real estate entrepreneurs are building strong careers investing in real estate utilizing asset-based loans.
An asset-based loan product is based on the value of the available equity in the property, it closes faster than a traditional mortgage, and requires less paperwork.
One of the most common asset-based loan products are bridge loans and they are quickly becoming a perfect solution for real estate investors who are looking to grow their investment portfolio.
What are bridge loans?
A bridge loan is defined as a short-term (12-24 months) real estate loan that closes faster than term loans or conventional loans. Real Estate Investors work with lenders who offer bridge loans, because not only do they close quickly, the guidelines are more lax, therefore there is less underwriting and documentation needed.
Real Estate Bridge loans are temporary loans, secured by the asset (real estate), the typical property bridge loan has a term of 12-24 months, although many bridge loan lenders will grant the owner the option to extend his loan for six months to one year.
Why should you get a bridge loan?
There are more benefits than you can count for with bridge loans. The greatest benefit is the speedy approval process. As a real estate investor, with a simplified approval process, it becomes quick, which is key to getting a great real estate property before someone else does. However, as a result of the faster process, they have higher interest rates.
If you are a real estate investor that does not have a stable cash flow or if you are self-employed, this is perfect for you. The private lender does not look at your salary or tax returns so you don’t need to worry if you do not have a stable income. Another benefit is how the loan is utilized. It doesn’t need to be solely purchasing a specific property but can be used for a variety of purposes. For example, it can be used for Cashout or Rate & Term programs.
Since it’s a bridge loan, it can give you the flexibility you need to stay afloat and let your real estate business thrive.
It’s Straightforward & Easy : This type of loan has short-term financing (12-24 months) for real estate investors, who prefer to finance the purchase and/or rehab of their investment property, with a Fix and Flip loan (also a Bridge Loan) or a Cash Out Refinance loan.
Quick Access to Funds: With conventional loans, there are qualifications that restrict you from getting access to those funds. With a Bridge Loan, there are less guidelines, underwriting, and restrictions that will provide you with quick access to financing.
For Every Type of Real Estate Investor: A Bridge Loan is a great solution for any real estate investor – at all experience levels.
Options for all types of Properties: At Stratton Equities, we have Bridge Loans that are tailored to your investment needs. Here are some of our Bridge Loan options for Real Estate Investors; Fix and Flip, Cash Out Refinance, or Purchase Money.
If you need a quick streamlined process with a repayment phase of 12-24 months, with less underwriting and documentation, these loans can be approved quickly and even extended if you wish. There is also no minimum FICO requirement. These are great loans for real estate investors with any experience level. They also work for the majority of investment properties.
Call us at 800-962-6613 or contact us at [email protected] and apply now at https://www.strattonequities.com/loan-pre-qualification to find out whether you are eligible for loan pre-qualification!
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Special submission by Michael Mikhail, CEO of Stratton Equities
If you’ve ever considered looking into purchasing real estate, it can almost be daunting to decide what time of property to purchase. The most common real estate investments are multi-family properties. These types of buildings, investment homes, and apartments/condos are ideal assets for their ability to increase cash flow for the property owner.
Once you’ve found the multi-family property you’d like to purchase, you can begin the loan application process to determine which type of private money loan program is right for you.
In the world of private money lending, there are several loan programs for multi-family properties, including multi-family bridge loans and NO-DOC multi-family loans. However for self-employed real estate entrepreneurs, NO-DOC multi-family loans have become the ideal choice.
What is a NO-DOC Multi-family Loan?
A NO-DOC multi-family loan is a type of term loan program that does not require a verification of income or tax returns from the borrower. This type of loan product is beneficial for multi-family borrowers who do not have the ability to go to the bank due to their documented income, closing timeline, and employment history.
NO-DOC Term loans are defined as non-qualified (NON-QM) mortgages and are long-term (5/1 ARM, 7/1 ARM, 30 Year Fixed) real estate investment programs.
Unlike conventional investment property loans that max out at 70% LTV, a NO-DOC Multi-family Loan Program maxes at 85% LTV and with no PMI. This allows the borrower to put less money down on their purchase.
Only Real Estate Investors with high credit scores (over 650) are eligible for a NO-DOC Multifamily Mortgage Loans.
NO-DOC Multi-family Loan Overview:
• Investment Properties Only: Multi-Family, Commercial, Mixed Use
• Rates Starting at 4.375%
• $100K – $5M
• Up to 85% LTV
• Blanket Loan Options Available
• Fixed rates/Adjustable
• 5/1 ARM, 7/1 ARM, 30 Year Fixed
• Interest Only Option Available
• Foreign Nationals Eligible
• No Prepayment Penalty Option Available
Why Should Real Estate Investors Use NO-DOC Loans on Multi-family Properties?
The reason why multi-family properties are an ideal purchase for real estate investors is due to the ability to increase cash flow. Multi-family buildings or investment homes have multiple units that can easily be rented out providing passive income to the owner of the property.
If you are a real estate investor hoping to buy a multi-family property, the quick approval process (21-35 Days) of a NO-DOC Mult-family loan is perfect for real estate investing.
They’re especially great for long-term investments because borrowers do not need to show any income verification and can get a multifamily home which is a long-term investment and can provide you with long-term passive income.
How to Apply for a NO-DOC Multi-family Loan?
Although many lenders do not offer this type of loan, those that do are a great option for real estate investors who are unable to provide the stricter guidelines of a traditional loan.
The relationship between the borrower and the lender is based on the idea that the borrower will be able to afford and be able to pay the loan payments. Since they are riskier due to the fact that there is no verification of income or tax returns, you tend to get higher interest rates than other loan programs.
However, because there is less documentation and underwriting, you do get a quicker approval process and flexibility. In this type of loan, the loan heavily relies on the value of the property.
At Stratton Equities, our mission is to make private money lending easy, efficient, and worry-free. We help first time real estate investors, experienced borrowers, and professionals in the mortgage and real estate industry succeed with a simple 3-step process, including Pre-Approval, Processing & Underwriting, and Funding.
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The connection between success and cigars is an inseverable relationship. Florida happens to not only be one of the hottest real estate markets this year, but also one of the best destinations to treat your senses to some of the best cigars in America.
So, where are the best places to buy, enjoy and relax or celebrate signing some real estate deals with cigars in the Sunshine State this year?
The Free State Of Florida
Having declared victory over COVID-19, Florida’s governor has ended the state of emergency and restrictions. Including banning the use of vaccine passports. He has concreted Florida’s reputation as the more free in the nation. Where businesses are free to operate, and individuals and investors are free to travel and live as they choose.
In addition to attracting many high profile companies and investor residents over the past year, Florida has long been a favorite among wealthy investors for many advantages of owning real estate there.
Having a very similar climate to Cuba, and a long history of tobacco growing and cigar making, everything comes together to make this one of the top choices for those who love cigars, real estate and want to enjoy the most freedom this year. Whether for a short vacation or to invest or permanently relocate.
Miami
Miami benefits from great proximity to many famous cigar tobacco and seed countries. It is also synonymous with Cuba, and its legendary highly desirable and illicit cigars. This may be the closest most will get to Cuba, and the real deal.
The Little Havana area is of course a top choice for cigar aficionados and new fans in search of the best options within the US. Explore a variety of historic cigar shops, in between grabbing a strong coffee at one of the area’s famous ventanitas. Those like the Cuba Tobacco Cigar Co. have been hand rolling cigars for over 100 years, and offer some truly decadent box selections with luxury packaging that will absolutely impress.
Naples
Naples, Florida is one of the wealthiest cities in America. A strong hold second home destination for many notable individuals.
At its Mercato Mall in North Naples, you’ll find regular luxury car shows, the home of one of the world’s top coworking franchises, and Rocky Patel’s luxury cigar bar, Burn.
This is Rocky Patel’s flagship luxury lounge for fine cigars, beautiful Morrocan inspired decor, and of course top shelf drinks to accompany it all. A former LA entertainment lawyer, Rocky has made a name for himself and his brand in the cigar industry. Definitely worth checking out while in town.
Tampa
Ybor City in Tampa is one of the most iconic cigar towns in the world. Still dotted with historic cigar factory buildings, alone walkable retail streets with storefront cafes, and amidst quite a bit of modern renovation in residential real estate.
Founded by cigar makers more than 140 years ago, 7th Avenue has been ranked as one of the 10 Best Streets in America.
Definitely, one of Florida’s hidden gems, and an exciting day out for cigar fans, and real estate investors looking for inspiration.
Take a factory tour, relax at a sidewalk cafe, and then head over to the Hardrock to spend the night gaming, and be sure to check out the waterfront.
Orlando
Orlando has been trending. It has become a magnet for millennials and others seeking an alternative to Miami. It’s theme parks and hotels were some of the first in the country to reopen after COVID lockdowns. It is becoming a destination much more synonymous with luxury than ever before. It has been expanding, and adding new luxury shopping malls, with valet lines full of Rolls Royces, and the latest Ferrari and Lamborghini models.
What you probably didn’t know is that this is also home to Florida’s own cigar tobacco farming. Florida Sun Grown is a seed to finished cigar farm and company located in Clermont, Florida. Now a part of greater Orlando.
With seeds sourced from Cuba, Honduras, and Nicaragua, FSG is truly a unique operation, producing US grown cigars.
Pick from Davidoff Coronas 20th Anniversary Edition cigars, The American by JC Newman and many others from historic US tobacco companies.
If you haven’t yet treated yourself to a cigar tour in Florida, this is probably the year to do it. Explore legendary cigar brands, iconic makers, factories and tobacco farms.
While you are there be sure to explore some of the latest real estate developments from the new Benltey condos in Miami to custom waterfront homes in Naples, and perhaps even your own future tobacco farm in central Florida.
Relax, shop, pick up some cigar gifts that are sure to wow your customers and friends, or close some deals over a cigar and Cuban coffee.
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The Chicago real estate market had another super strong month of home sales in July. Since last year was a bit funky with the pandemic we should compare it to 2019 and on that basis closings were up 23.3% despite the fact that we now have 1 1/2 years of pandemic under our belt. And just so you know, almost all that growth was in condos/ townhomes which were up like 35% in that time period.
July was higher than all but two other years in the 25 years graphed below (red points are all the Julys) – and those two years were at the peak of the housing bubble. So that’s pretty good. Also, the green moving average line tells us that the last 12 months have hit a record going back to around 2007. That is dramatically different than the downward trend we were on just before the pandemic hit.
Chicago home sales have been declining now for several years but the Coronavirus really tanked the market in May and June of 2020. The market returned to more normal levels starting in July and is now setting new records.
Chicago Home Contract Activity
But the fly in the ointment is that contract activity was down 11.9% from last year, which of course set a record as soon as people got a grip on their housing plans after the pandemic hit. So things appear to be slowing down a little but the fact of the matter is that July contracts were still higher than all other years and 14.8% higher than 2019.
Chicago home sale contract activity has pulled back a bit from the pandemic highs but it’s still higher than all the other years.
Pending Home Sales
One of the factors contributing to high sales was the fact that we went into July with a fairly high level of pending home sales to draw from but we drew down that backlog. That leaves us with 580 units below last year, although we are still higher than the previous 3 years. So the rest of the year is likely not going to be as strong as July.
After hitting historic lows the backlog of homes likely to close in the next 1 – 2 months rebounded during the pandemic but is now starting to retreat again.
Distressed Home Sales
With the foreclosure and eviction moratorium there are very few distressed homes that can be sold. Only 1.3% of July’s sales were distressed and that is another record low, down from 3.3% last year.
One would think that once the moratoria are lifted distressed sales are going to take off but that might not be the case – at least for a while. One reason is that the foreclosure process is extremely long – like 3 years – so you won’t see an immediate effect. But the other reason is that home prices have risen enough that homeowners in dire straits might be able to just sell their home and pay off their mortgage without any problems.
Since the housing crisis the percentage of home sales that are distressed has steadily declined to almost negligible levels.
Chicago Home Inventory
The inventory of homes for sale remains ridiculously low and I continue to do my own calculations to produce the graph below. The most dramatic example of course is detached homes which had only a 2.2 month supply in July, which is the same as last year – nevertheless, a record low for July.
But attached homes were also pretty low with only a 3.5 month supply, which is at the lower end of historic July inventory levels.
After a big Coronavirus induced spike in April 2020 the inventory of homes for sale dropped back down. Detached inventory keeps setting new record lows while attached inventory has dropped to the lower end of the historic range.
Chicago Home Sale Market Times
With inventory levels so low and sales so high it should be no surprise that market times have gotten ridiculously fast – at least for detached homes. They sold on average in only 42 days. That’s down from 70 days last year and keep in mind that half the homes sold in 12 days or less!
Meanwhile attached homes, despite their growth spurt, are selling on average in 66 days, which is only down slightly from last year’s 68 days.
When the pandemic first hit Chicago market times rose but now they are actually quite a bit lower than last year. Detached homes are at a record low.
Gary Lucido
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. Gary brings over 20 years of experience in customer service, finance, operations, and information services, and has an obsessive passion for getting the job done quickly and correctly. His corporate experience includes many multi-million dollar contract negotiations that resulted in wins for both parties. Prior to working with a well-known traditional real estate brokerage, Gary was President of a national concierge company, where he worked with Sari. He was also one of the founders of Shop Local, a leading provider of Web shopping services for retailers, where he served as the President and Chief Operating Officer, responsible for client services, operations, and technology. His team built the company to more than 150 employees serving most of the top retailers in the country.
Gary’s experience also includes 7 years at Circuit City Stores as Director of Inventory Productivity and Extended Service Plans, where he was responsible for the company’s $500 million warranty program and led Circuit City’s first supply chain initiatives. In addition, he was a Corporate Business Development Manager at General Electric, where he led a one-year customer service improvement study for GE Financial Services. Early in his career he worked in the strategy practice at Booz, Allen & Hamilton, and in corporate finance at Sears, Roebuck and Co.
Gary received a B.S. degree in math and physics from Duke University and an MBA from Northwestern University’s J.L. Kellogg Graduate School of Management, where he concentrated in finance and management policy. He has lived in the Chicago area for over 19 years, including Evanston, Lake View, Lincoln Park, University Village, and East Ukrainian Village.
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