WEBINAR: Financial Freedom with Real Estate

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WEBINAR: Tuesday, January 19th at 6:30pm PST

Achieving FINANCIAL FREEDOM through REAL ESTATE INVESTING

kansas-city-4564805_1280As 2021 begins, preparing for retirement and the future is more important than ever. Today’s market offers the best opportunity to profit from real estate since 2008!

Whether you are looking to do a 1031 exchange, build a College Fund using real estate or diversify your stock portfolio by investing in affordable income producing real estate or create an additional stream of income to supplement your current income, we will show you how to get there!

Since 2008 Invest 1 Properties has been one of the nation’s leading turn-key investment property providers. Focusing on Dynamic Mid-West markets with over 900 properties sold, we have the systems in place to assure your success.

With INVEST 1 PROPERTIES:

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We include a rent guarantee and renovation warranty on every property we sell and WE PAY ALL 1031 exchange fees when you close with us!

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Join us for this informative webinar where we will show you how to build a safe, secure and predictable stream of income/retirement through conservative real estate investing.

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New Construction Loans are Back.

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Why Should You Invest in Senior Living? Discover Why Now.

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Image by Gerd Altmann from Pixabay

By: Vinney (Smile) Chopra and Jon Roosen

Key facts on the Silver Tsunami:

  • This year, approximately 23 million Americans are over 75 years old while 8.9 million are over 83. As a general rule, most Americans transition to senior housing by the time they reach 83 years old.
  • The OLDEST baby boomers will not turn 83 until the year 2029, thus allowing the floodgates to open for the silver tsunami. The senior housing industry is only beginning and is expected to skyrocket over the coming years.
  • Predictions suggest that 2 million Americans will reside in senior housing by the year 2030, which is two times the number of Americans in senior housing in the year 2016.
  • Today, 15.6% of the American population is 65 years or older. By 2050, estimates predict over one fifth of the population will be 65 years or older.

Senior living investors should understand that the senior industries profit from a huge demographic groundswell. The Baby Boomer generation will hit the 75+ age mark by the year 2021, as they begin their retirement years. As this happens, baby boomers will seek housing in an industry that is undersupplied and heavily out of step with shifting market demands and caregiving structures. For example, according to CBRE, 40,325 units must be constructed each year in order to satisfy peak demand in the years 2020-2025. When compared to the actual pace of construction in 2014 of 16,440 units per year, construction rates fall short by far. A clear trend has formed showing that despite the overwhelming growth in senior population, growth in senior housing has remained far below the threshold to keep pace.

As such, we conclude that one of the most risk-adjusted prospects in both commercial real estate and general domestic investment is the acquisition, renovation, and growth of senior living facilities. When comparing senior housing to more traditional types of real estate such as multifamily, senior housing is much more operationally complex and demanding from a regulatory perspective. Because of this, efficient execution of a senior housing deal requires an experienced and committed investment team.

Over the past 55 years, global life expectancies have risen from 49 to 72 years of age. The world population of those age 65 and older will double todays numbers and reach 1.3 billion by 2040.

profits-1953616_1920Image by Tumisu from Pixabay

Aging demographics have created five unique investment opportunities for Americans, one of which is senior housing. With the increased demand for housing created by aging demographics, the U.S. senior housing industry is prepped for a future of unprecedented growth.

According to Senior Housing Analytics figures cited by PGIM, the demand for new senior housing in the United States is expected to rise by around 850,000 units between 2010 and 2030. PGIM’s study “A Silver Lining: The Investment Implications of an Aging World” notes that lucrative investment prospects exist for independent living, RCFE, assisted living, and memory care classes.

Industry centered on senior care and housing is complex. This industry provides a broad array of services to seniors over the age of 75, and can be divided into four care segments. These segments include Independent Living, Assisted Living, Memory Care, and Skilled Nursing Care. Historically, nursing care has been provided in a hospital-like setting; however, a shift is underway to transition into a more homelike environment for nursing care. The remaining three care segments are traditionally delivered in a multifamily residential setting. These housing facilities, known as continuing care retirement facilities (CRCCs) generally provide all three remaining care segments: independent living, assisted living, and skilled nursing, in one community.

While the senior housing industry is complex and difficult to maneuver at times, there is a simple solution for investors who want a piece of the pie without the knowledge to be involved at the level of a general partner. Investors can become passive investors by buying shares in senior housing investments. Through passive investing, investors can take advantage of this exploding market without the headache of management and general partnership. We can help direct you to these high-quality passive investing opportunities.

Senior Housing Is a Recession Resistant Asset Class

A huge advantage senior housing investors have over traditional investors is the durability of the senior housing segment of the commercial market. Senior housing lacks dependence on economic and real estate climates, and this is a key component to the sector’s success. For the last ten years, senior housing has been the number one performing commercial real estate industry. This outperformance of other industries includes the era encompassing the 2007 stock market crash, in which returns dropped as much as 20 percent for other commercial sectors.

Why Is Senior Housing Recession Resistant?

grandpa-2810809_1920Image by Besno Pile from Pixabay

Econ 101: Supply and Demand

  1. Huge Demand: As discussed above, the growth of the senior communities in America is unbelievable. As our baby boomers age, the number of Americans 65 and older will grow from 47.8 million in 2015 to 79.2 million by 2035. This huge rise continues to produce higher demand for senior housing facilities.
  2. Minimal Supply: While our elderly populations increase in size, you would imagine construction in senior housing would increase concurrently. Unfortunately, that has not been the case. Senior housing construction began a dramatic decline in 2008 that continued through to 2011 followed by only moderate growth through 2018. From the years 2014 through 2019, units constructed increased sharply; however, in 2020, occupancy rates are expected to continue rising while development slows once more.

Where Are Senior Housing Investments Moving?

While still a relatively new phenomenon, the senior housing sector is generating talk among real estate investors. The 2021 report by PwC on “Emerging Trends in Real Estate” named senior housing investing as one of the best for years to come. The survey results showed a growing interest from investors in independent living, assisted living, nursing homes, and long-term care facilities. These opportunities will only continue to increase as we move into the year 2021.

A survey from 2019 by the CBRE titled “U.S. Seniors Housing & Care Investor Survey and Trends Report” further supports rising interest in senior housing investing. The survey indicated that 19% of respondents were already invested in the senior housing sector, and 20% were interested in pursuing such investments in the future. This data overall shows a remarkable trend that almost two-thirds of property investors surveyed were interested in the senior housing sector. This interest is backed by several key factors and benefits of senior housing investments. Further, several forecasters have predicted that the senior housing sector will continue to skyrocket in the near future.

Below, we will detail some top reasons to start investing in senior housing.

#1. Baby Boomers Are Driving the Demand

If there is one fact becoming excruciatingly clear throughout our research on the senior housing sector, it is that more and more Baby Boomers enter retirement each day, thus driving up the demand for senior housing. This trend will continue over the next many years, as Baby Boomers will continue to need housing for decades. By 2035, 79.2 million Americans will be age 65 or older. With these numbers, the demand for senior housing is massive and is just beginning.

pexels-kaboompics-com-6054Photo by Kaboompics .com from Pexels

The average senior housing resident is typically 83 years of age or older. With the oldest Baby Boomers today averaging 73 years old, the U.S. Census Bureau estimates approximately 8.5 million Americans are age 83 or older. Further, the U.S. population is growing. By 2025, the U.S. Census Bureau estimates that our population will exceed 10.2 million people. The key point from these facts is that in the coming decade, demand will rise for senior housing. This makes senior housing investing a reliable, savvy opportunity for long-term investments.

Another key benefit of senior housing is that not only is there a huge population demand, but there is a need-based demand as well. This demand is non-discretionary and merely a consequence of the chronic care issues that come with an aging demographic. This demand is unique to senior housing and does not correlate with other commercial real estate sectors such as office, retail, or industrial properties.

A further benefit of senior housing over other commercial real estate sector is that senior housing is far less affected by technological risk than other industries. This creates a more certain investment analysis for senior housing, while such an analysis of other sectors could be limited by technological changes.

While senior housing has its own business cycle similar to other sectors, the business cycle of senior housing is far less fluctuant. This is because senior housing does not depend on changes in employment rates and expansion and contraction of GNP. In today’s times, seniors are primed to live out their senior years using the alternate forms of income compared to a traditional job. These alternate income sources include retirement plans, stock portfolios, insurance benefits, and 401K programs, among others.

No industry is perfect, and like others, senior housing is impacted by severe inflation and an inability to sell. However, these impacts tend to be moderate. The benefits of social security payments to seniors and the need-driven demand of senior housing provide substantial backing to senior housing. With these benefits in mind, the senior housing industry is protected from traditional economic setbacks that take down other commercial real estate investments.

Finally, national operators have successfully maintained occupancy rates of 88% or higher in senior housing, even in markets that have reached temporary saturation.

#2. New Senior Housing Development and Supply

scale-2635397_1280Image by Arek Socha from Pixabay

The current inventory for senior housing is relatively outdated with 58% of the current housing units over 17 years old and 32% over 25 years old. As with any property, aging of these units only worsens with time. The existing units will become progressively more and more outdated as care amenities continue to improve, tastes evolve, and new regulations come to light. Additionally, as we’ve discussed previously, construction of senior housing units is not keeping pace with the aging senior demographic. These trends present both a challenge and an opportunity for real estate investors looking into the senior housing sector.

While it is still not keeping pace with the aging demographic, reports do indicate that senior housing development is increasing. The 2020 Emerging Trends Report concluded that senior housing is the top commodity for the development of residential properties and the 3rd prospect for development in commercial and multifamily properties.

#3. A Recession-Resilient Investment

When compared to other traditional real estate sectors, senior housing is exceptionally resilient. While it has its own business cycle, the cycle in senior housing is far more steady than other sectors and less affected by traditional economic changes. This is largely due to the key benefits of senior housing already discussed.

Additionally, the need-based demand for senior housing is an undeniable benefit. There will always be a need for long-term, quality medical and health care facilities for our seniors, regardless of economical circumstances. These characteristics allow senior housing investments to thrive while other industries suffer during recession times among other economic pitfalls.

Traditionally, the senior housing sector has proved itself to be resilient to difficult economic times. This should reassure you as an investor that you can rest easy with a senior housing investment. It is a low-risk and reliable investment with the potential for phenomenal returns.

#4. Historic Investment Performance

career-479578_1280Image by Gerd Altmann from Pixabay

Historically, senior housing investing has a track record of success. When compared to other major real estate investments, senior housing generally has increased income stream, appreciation, and total return on investment.

To be more specific, the National Council of Real Estate Investment Fiduciaries (NCREIF) 2018 property index results revealed that over a ten-year period, returns for senior housing averaged 10.2%. This average is well above the returns from overall property index (6.09%) and apartments (6.10%).

Regarding appreciation, senior housing investments produced 3.73% of total returns compared to 0.54% for overall property index and 1.03% for apartments.

Another way senior housing outpaces other sectors is total income returns. Senior housing investing produced total income returns of 6.61% while property index and apartments produced 5.53% and 5.20%, respectively.

Senior Housing as an Alternate Investment

According to the CBRE, over the past 13 years, the market share of alternative investments has more than doubled. More recently, in the past five years, annual investments in specialty properties have made up 12% of all CRE investments. This accounts for approximately $59 billion in yearly transactions.

Below, we have listed the eight major alternative investment sectors along with the percent share of all alternative investments and average annual investment volume from the years 2014-2019.

  1. Seniors housing and care- 31.3%/$17.2B
  2. Medical office- 22.1%/$12.2B
  3. Student housing- 13.3%/$7.3B
  4. Life sciences- 11.8%/$6.5B
  5. Self-storage- 9.0%/$5.0B
  6. Manufactured housing communities- 6.3%/$3.5B
  7. Active adult and 55+ communities- 3.2%/$1.7B
  8. Data centers- 3.1%/$1.7B

Benefits of Alternative Investments

benefitsImage by Gerd Altmann from Pixabay

The key positives of investing in alternative investment sectors can be narrowed into five main benefits:

  1. The effects of cap rate compression from traditional assets can be offset by yield premium and higher cap rates of specialty investments.
  2. Market demand for alternative investments is rising due to fundamental structural changes in business, technology, demographics, tenant experience, and ESG criteria.
  3. Product availability is rising as developers rise to meet the demands of investors on national and international levels.
  4. Alternative investments offer a great opportunity for portfolio diversification for investors currently holding traditional assets.
  5. Alternative investments are improving in transparency of pricing, operations, and market performance, making such investments more appealing to investors.

Bottom Line

Whether you are a seasoned investor looking to diversify or just getting started investing, senior housing should be at the top of your list. The demand is undeniable as our Baby Boomers continue to age, providing a great opportunity for growth and development. Senior housing is a low risk investment with potential to provide exceptionally high returns.

If you’ve ever been interested in learning more about investing into senior housing, please visit SeniorLivingInvesting.Co or email us directly at [email protected].

Land Trust Record Keeping

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Image by OpenClipart-Vectors from Pixabay

By Randy Hughes

All you need to create a Land Trust is two documents. A Deed to Trustee and a Trust Agreement. The heart of a Land Trust is the Trust Agreement (TA). So, what do you do when you can t find your TA?

Your first phone call should be to your Trustee. She/He/It should have a copy. But, sometimes things happen and even your Trustee can’t find a copy of your TA. Your frustration mounts when you can’t locate your TA because generally you went looking for it for a reason and you need it now! Multiple USB sticks
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Image by jacqueline macou from Pixabay

Why do you need your TA? Probably because you are getting ready to sell the property out of the Trust and you need to prove to a closing agent, title company or attorney that the Trust exists. Or, you need to make a change (amendment) to the TA (i.e. change of Beneficiary or change of Trustee). First, I would suggest that you learn your lesson so this never happens again. Make sure that you keep two copies of each TA in addition to the copy retained by the Trustee. Keep a hard copy in your property files filing cabinet and keep an electronic copy on a Memory Stick in your safe at home or in your safe deposit box at your bank. Now, back to the problem. A Trust Agreement is not like a Will. By statute, Wills can be revoked by destroying it. Therefore, if no one can produce a valid Will upon the death of the testator, there is a presumption that the will was revoked. Not the case with a Land Trust Agreement. If a TA cannot be found there is no presumption that the agreement was revoked. If a photo copy cannot be found of the original TA, the Beneficiary can Restate the TA by typing up a new one! All the Beneficiary needs to do to recreate the TA is the put at the top of page one of the newly formed TA, Amended and Restated Trust Agreement. Then in the body of the TA attest to the fact that the original TA could not be found and that the Beneficiary is certifying that the is a true and accurate restatement of the original TA. So, remember. Keep multiple copies of your TA (and any amendments) in different locations. But, if all else fails you know that you can always recreate the TA, if necessary. Remember to like me on Facebook, join me on LinkedIn, and please leave me a Google Review!
Randy-Hughes

Randy Hughes, Mr. Land Trust

I encourage you to learn more by going to my FREE online training at www.landtrustwebinar.com/411 and text “reasons” to 206-203-2005 for my free booklet, Reasons to Use a Land Trust. You can also reach me the old-fashioned way by calling me at 217-355-1281. (I actually answer my own phone unlike most other businesses in America today!)

Women in Real Estate — Build the Lifestyle of Your Dreams with Real Estate Investing

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By Laura Alamery

In 1987, at the young age of 23, I had my first glimpse of a future as a real estate investor. It all started with my love of visiting open houses, which led me to obtain my real estate license to learn the industry. At the time, I lived in Hawaii where I found inspiration from the successful women real estate agents around me. After a move to the Midwest in the early 1990s, I quickly learned that the commissions and energy around real estate weren’t as inspiring. For me, this led to the transition from real estate agent to real estate investor. Over the next few years, I launched into real estate investing while managing a young family and career. After a divorce, I realized I needed to leave my corporate job and fully dedicate myself to establishing a reliable income and building long-term wealth through real estate investment.

learn-3653430_1280Image by Gerd Altmann from Pixabay

Along the way, I made mistakes, learned many valuable lessons and ultimately built a lasting and successful real estate investing business. Today, I use that knowledge and experience to help other women launch and grow their real estate investment businesses at Real Estate Investing Women, a resource for training, live events and networking in a community of likeminded women.

Lessons for New Real Estate Investors

Looking back at how I built my real estate investing business, I now have the wisdom to see the ways I would change my strategies to avoid mistakes and build wealth with fewer risks. One of the big lessons I like to share with new female investors is to trust your instincts. The ability to tap into our gut feelings to make decisions is a benefit that makes women a natural fit for real estate investing.
Another piece of advice is to use money from your real estate investments to buy more real estate, instead of putting all your personal money into investments. The challenge is finding the money to start out. The mistake I made was purchasing too many buy and hold properties too quickly. This led to unnecessary risk and eventual burnout. I now tell new investors to start with one buy and hold property and grow slowly.
However, unlike my path into real estate investing where I dabbled in fix and flip, moved on to buy and hold and then finally figured out how to work wholesale deals, I suggest new investors start with wholesale deals. Wholesale isn’t easy and requires work. Yet, wholesale real estate investing has lower risks than other investment strategies. real estate womenWith wholesale investing, you learn while making money. In fact, wholesale investment is a great way to delve into the details of real estate investing without taking possession of properties. Set aside the money you make money through wholesaling to build the financial foundation of your real estate investment business. Not only does wholesaling produce quick profits, it also establishes a portfolio that you can use to attract private money. Creative financing with private money gives more control over your real estate investing business. Private money safeguards against the volatility of the market.
As your business grows, you then have the money, knowledge and reputation to tackle larger-scale investments with bigger risks. Ultimately, this is how you build a viable business and path to long-term wealth and the lifestyle of your dreams.

Three Keys to Success in Real Estate Investment

success-3195027_1280Image by Gerd Altmann from Pixabay

While real estate investment offers many different strategies and paths to wealth, the keys to success come from your determination to make it. When I finally became serious about real estate investment as my career, I was newly divorced with three small children. I gave myself six months to build a business that allowed me to walk away from my corporate job.
Looking back, the three keys to my success were focus, consistency and time management. These areas were critical to get me out of my comfort zone and take real estate investing from a hobby to a true business.
women in real estateOften when I talk to women interested in real estate investing, the barrier they struggle with most is the confidence to take the first steps. Men historical dominate the real estate investing industry, which makes trusting your abilities as a female investor even more intimidating. However, with these keys to success and the support of other successful female investors you too can create a prosperous business. Focus – A serious approach to real estate investment requires focus. This means you create actual goals for your business. For me, my goal was to quit my corporate job within six months. This meant I needed to close at least one deal per month, which required willpower fueled by my excitement and inspiration. My eyes stayed on the prize. Consistency – You cannot build anything without consist dedication. To exceed my goal of closing one deal per month, I had to work daily toward that goal. Remember, I was a working, single mom, yet I put in time daily to find, connect and close deals. It was this consistent effort that led to achieving and surpassing my goal. Time Management – Life is busy. This is true of almost everyone I meet. The difference in the people who grow a sustainable business that produces wealth and those that don’t is good time management. During my six-month transition, I realized that a little sacrifice could change my life. Good time management means you don’t waste your time. Instead, you find those pockets of time to dedicate to your goal. For me, this meant working on weekends and evenings until I had the money to quit my corporate job.

Identify Your Dreams and Go After Them

shield-1519642_1280Image by photosforyou from Pixabay

Over the course of my life, my dreams have changed. Yet, the basic dream has remained. I desired to have financial freedom and independence. I achieved that dream through focus, consistency and time management. I continue to use these tools today in my new ventures.
For me, my dreams included taking care of my family, a flexible schedule, world travel and helping others. One of my passions is helping other women identify and go after their dreams by building successful real estate investing businesses. You don’t have to let a lack of confidence stifle your dreams. Instead, tap into your natural instincts to create a path to your dreams.
women powerWomen benefit by helping other women. In real estate, I’ve never feared scarcity. There are more than enough deals for everyone. My dream now is to leave a legacy by empowering other women. My work at Real Estate Investing for Women is one way I work toward this goal. Through mentoring, community building, live events and online resources, like podcast, articles, eBooks and more, women have access to unprecedented knowledge and encouragement. As I look back over my more than 30-year career in real estate investing, I see a story of hard work and determination. I also see the gift of my dream lifestyle that real estate investment empowered. You too can find the lifestyle of your dreams through a focused, consistent and well-managed real estate investment business.

Laura and Elizabeth

To Learn More about Real Estate Investing for Women:

Laura Alamery and Liz Klingseisen are a mother and daughter team, who are real estate investors and mentors to other women. Their goal is to empower and help women, who want to learn about real estate investing through a supportive and experienced community of women investors. We offer training and live events nationwide. You can learn more at www.realestateinvestingwomen.com

Is REIT a good option for earning passive income?

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Image by Tumisu from Pixabay

By Phil Bradford

The year 2020 has made us realize that you need an extra income avenue to sustain yourself. Apart from your regular income, if you can earn passively, then you will be one step ahead to make yourself financially stable.

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Image by Gerd Altmann from Pixabay

When you are thinking about passive earning, REIT (Real Estate Investment Trust) is a good way to earn passive income and you can trust it. Real Estate Investment Trust or REIT manages commercial real estate properties. The REITs are publicly or privately traded companies and with the money taken from the investors as an investment, they run the commercial real estate properties. The benefit of investing in REIT is they are designated to pay 90% of their taxable income to the investors and the 90% return signifies the dividend is higher than other stock investments.

Now, you can take a look that REITs invest in what kind of property

REITs are attractive for the investors because the investors don’t have to take any burden like buying any property directly. REITs are dividend-generating passive income avenues where investors do not have any tension of buying any property.

Have a look at REITs usually hold what kind of properties:

  • Office buildings.
  • Retail buildings such as shopping malls.
  • Hotels and resorts.
  • Healthcare facilities.
  • Apartment complexes.
  • Warehouses.
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Image by Jason Goh from Pixabay

You can depend on REITs to earn passive income if it has a good management team and if there are some good properties in its hold. Then you can relax and watch the growth of your investment.

The 11 points that describe REITs is an ideal passive earning avenue

The REIT works in the same way as the stock market or the mutual fund. You will receive dividends from the company and make a profit from REIT stocks when you will sell them.
  1. The high dividend returns are the special feature of the REITs. No other investment can provide you such a high return.
  2. The upfront fee of REIT is not very much.
  3. For a newbie investor, REIT is the easiest way of starting an investment. You have to only use a brokerage account to buy REIT stocks.
  4. The investment range of REIT is comparatively lower than other investments if you make a comparison. The investment range of REIT runs from $100 to it can stretch upto several thousand dollars. REITs are an easy way to build your wealth.
  5. REITs are usually liquid investments. You will be able to buy and sell the REITs in the open market.
  6. The dividends you will earn from REIT can be increased from time to time when the asset value of REIT’s properties will increase gradually.
  7. Investing in REITs is a good option to diversify your portfolio and it can help you to reduce the volatility of your portfolio.
  8. REITs are the best alternative for those people especially the retired persons and the newbie investors who do not have adequate capital to buy and manage their property.
  9. The real estate market is usually dominated by larger corporations but REIT is giving the chance to small investors to invest in commercial real estate. Generally, REIT is the collective trust among the multiple investors that non-accredited investors can invest with minimal dollars.
  10. This long-term investment in REIT is profitable for its liquidity.
  11. Indeed, the historical performance never guarantees the future performance of REIT. Though REIT data reveals from 1977, it has earned 12% on average annually.
One important point to remember is that your income from REIT will never be taxed by the IRS as passive income. Rather the earning from REIT is considered as portfolio income and they will be taxed based on the capital gain tax rate.

Can you depend on REIT amid this uncertain time?

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Image by anncapictures from Pixabay

In this devastating 2020, where everything is uncertain, people are almost dependent on stimulus packages, the question will come to mind that is it a good time actually to invest in REITs? Well, financial experts are saying that if you have money in hand now then the better option for you is to invest in REITs than the stock market. With REITs, your investment will grow in less-volatile conditions and in a stable and balanced way. It is only REIT investment that is providing you an opportunity like you can deduct up to $3000 from your taxable income if you suffer any loss. But REIT experts are saying that you can avoid three types of REIT investment now and they are the hotel, hospitality, and retail. The hotel and hospitality business is in its bottom level currently due to tour and travel is at its lowest strata. The same thing happened with the retail stores. Due to lockdown, nearly all the retail stores are closed so retail REITs are not much profitable now. So, if you keep these points in mind even in this uncertain time, you can depend on REITs to earn passive income.

Can you depend on REITs during an emergency?

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Image by Peggy und Marco Lachmann-Anke from Pixabay

Average Americans tend to use the ‘quick-money-way’ for fulfilling any emergency. For Americans, quick-money means either high-interest credit card loan or a payday loan. But both are not good for your financial health. The minimum interest rate of a payday loan is 391%. For a small loan amount, you have to pay off a ballooning interest rate. Rather than this option, during any emergency, if you sell your REIT stock, you can get a lump sum amount most safely. However, if you are already entrapped in payday loans then you can choose the consolidate payday loans option for now. Eventually, REIT is more dependable to you as an option to get out of any financial emergency.

Final words,

After reading the article, you may have understood that to earn passive income and for your emergency-money-requirement, there is no substitute for REITs. To invest in REITs means you will gain some tax advantages. Due to the reason of avoiding corporate tax, REITs distribute 90% of their income to the shareholders. The net result of this is higher earnings for REITs investors. In brief, if you want to earn a passive income without taking much hassle or risk, you can depend on REITs. That is why REITs are the dependable income avenue for you even for your after-retirement-phase or if you are a rookie investor.
Phil Bradford

Phil Bradford

Phil Bradford is a financial content writer and an enthusiast. He has expert knowledge about personal finance issues and he is a regular contributor of Debt Consolidation Care. His passion for helping people who are stuck in financial problems has earned him recognition and honor in the industry. Besides writing, he loves to travel and read books.

Trust Deeds: The Investment You May Be Missing

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As an investor, having many different investment opportunities at your fingertips is both a blessing and a curse. It means more opportunities to make money but can make choosing which one to pursue tedious and difficult. With the stock market so often erratic and unpredictable, now more than ever people are looking for other ways to intelligently invest their money and diversify their investment portfolio. Real estate is one of those investment vehicles that investors are turning to for those high returns. You may be thinking to yourself that real estate is not a realistic investment for you. Rental properties and fix-and-flips are time intensive and require a hefty amount of available cash, and many real estate “crowdfunders” have high minimums and financial requirements you have to meet to invest with them. If this is you, then you may want to consider investing in Trust Deeds. Investing in Trust Deeds with a company like Ignite Funding can help you break down those barriers to real estate investing, and help you earn the returns you deserve.

What is Trust Deed Investing?

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Investing in Trust Deeds essentially means you are loaning your money against real collateral. The collateral is real estate, in this case, which serves to protect the lender’s investment. This leads us to one of the most important considerations in Trust Deed investing: the true value of the collateral. It’s very important that Trust Deed investors consider the size of the loan they are making in relationship to the real estate collateralizing the loan. This is one reason why Ignite Funding uses a detailed underwriting process to help justify the value of the property, evaluate each piece of collateral at hand and ensure the borrower is accountable for what they are borrowing.

Who is Ignite Funding?

Founded in 1995, Ignite Funding has evolved with the changing real estate landscape. Our original business model began as a traditional home mortgage lender providing lending to home buyers. The demand for lending from homebuilders and developers reshaped our business in 2011. Since that time, Ignite Funding has funded over half a billion dollars in loans with investor capital. Ignite Funding is well respected throughout the western United States as a reliable resource for lending. When banks are not lending, Ignite Funding is. We pride ourselves in working with a handful of borrowers with a proven track record. We follow a strict underwriting process when evaluating our loans before they are presented to our investors on a matrix that includes, but is not limited to; location, market conditions, various valuation methodologies, borrower track record and financial condition, and exit strategy. These projects can include the acquisition of land, development, construction of residential and commercial properties, and the refinancing of the aforementioned.
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At Ignite Funding, we work as a team to ensure you experience the same level of professionalism throughout the entire process. We do not believe in outsourcing. The loan underwriting and origination, capital fundraising, loan servicing, investor relations, tax reporting and statements, foreclosure process (if required), property management and sale of property are all conducted by us. You will never be passed on to someone else.

Do I Qualify to Be an Investor?

You do not have to be an accredited investor to invest with Ignite Funding. Ignite Funding is licensed with the Mortgage Lending Division of Nevada, which requires investors to meet the following suitability requirements; the investor’s household net worth is more than $250,000, excluding their primary residence; and/or their household net annual income was more than $70,000 for the previous two years with the expectation they will continue to earn that income.

How Are the Projects Funded?

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Companies like ours (Ignite Funding) use a type of “crowdfunding” method to aggregate capital from multiple smaller investors and pool the investor’s capital to directly fund real estate projects. This allows Ignite Funding to implement a minimum of $10,000 to invest on a single loan. The loans are also short term, ranging from 6 to 18 months in duration. During that time, you are earning a monthly fixed income of 10% to 12% annualized interest.

What’s the Risk?

Depending on which company you invest with and the structure of the investment, the risk you take on as an investor can be crucial to your capital investment. For example, if the borrower defaults on the loan, the servicer could pass the loss directly to you as an investor. At Ignite Funding, that is NOT the case. Ignite Funding will work on the behalf of the investor with the borrower to resolve any default issues that may occur. In some cases, a foreclosure may be the best option in order to help mitigate the loss of capital to investors. To learn more about how Ignite Funding handles default situations, click here.

I’m Ready to Invest, How Do I Become an Investor?

The first step to make real estate investing a reality is by contacting one of our Investment Representatives. Our expert staff will fill you in on our investment options, the type of projects our borrowers need financing for, on our rigorous underwriting standards, and how we mitigate risk. Our Investment Representatives can be contacted via phone, email or in person at our office.
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The next step is to fill out an application online to create your free account. Without an account to facilitate transactions and paperwork, you cannot make any investments. After your account application is submitted, our Loan Processing Department will ensure all required paperwork is completed. Lastly, you will be provided with the information necessary to make a confident decision about which one of our many available investment projects best suits you. Now that you have decided which project to invest in, you’re probably thinking, “When will I start to see a return on my investment and how often will I receive payments?” You start accruing interest on your investment the day the loan is funded. Interest payments are paid in the arrears and disbursed directly to you on the 15th of each month. Once the loan is paid off, your capital is returned to you. It’s common to see an annual double digit return on your investment. For investors who want control over their own real estate portfolio, Trust Deeds are a great option. Investors can browse and pick individual opportunities based on location (including across state lines), project type, risk and return profiles. They can manage and track investments through an online client portal on the Ignite Funding website, automate incoming or monthly income and access investment financial records. For more information about Trust Deed investments or if you wish to schedule a FREE consultation with an Investment Representative, please click here.

Ignite Funding, LLC | 2140 E. Pebble Road, Suite 160, Las Vegas, NV 89123 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | AZ CMB-0932150 | Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.

Homeowners’ Financial Solutions for 2021 and Beyond

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By Rick Tobin

Between 2006 and 2014 during the depths of the Credit Crisis, there were 10 million Americans who lost their home to foreclosure over this 8-year span. Within just a few months in 2020 (March to May), we’ve seen almost 50% of that 10 million foreclosure number with at least 4.7 million mortgages delinquencies. For most Americans, the vast majority of their family’s overall net worth is tied directly to the equity in their home rather than in any stocks or other investments.

The good news is that national existing home sales climbed an all-time record +20.7% month-over-month increase between May and June 2020 partly due to fixed mortgage rates repeatedly reaching all-time record lows. In spite of record unemployment claims filings, home prices are still at or near all-time record highs in most major metropolitan regions.
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Photo by Burak K from Pexels

In spite of one of the most chaotic years ever in world history, national home equity grew $1 trillion in value due to the combination of historic all-time low 30-year fixed rates and unusually low home listing inventory. For example, there were 1.42 million existing homes on the market nationwide at the end of October 2020, which was a 19.8% drop compared with one year earlier. Some analysts claim that the median home price nationwide increased by a 16% year-over-year growth during the same October 2019 to October 2020 time range. In many metropolitan regions, listed homes are selling within one to two weeks.
The primary difference between now and the last negative economic time period is that more homeowners today have much more equity in their homes than back in the 2008 to 2012 years. As such, any distressed homeowners who need to sell should be able to do it rather quickly due to the strong buyer demand and record low mortgage rates.

Homeowners, Tenants, and the CARES Act

Back on March 27, 2020, the CARES (Coronavirus Aid, Relief, and Economic Security Act) was passed by Congress as a response to the worsening US and global economy due to the fallout from the ongoing virus pandemic designation. Subsequent to the passage of the CARES Act, governors in states like California and elsewhere signed mandates or legal orders that attempted to prohibit lenders from foreclosure on delinquent homeowners and landlords from evicting tenants through the end of December 2020 or January 2021 (dates subject to change).
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Additionally, the CDC (Center for Disease Control) issued their own guidelines that referenced the possibility of civil fines and/or criminal prosecutions for any landlord who attempted to evict a delinquent tenant before the end of December 2020 partly due to claims that it may increase potential health risks for the general public. In US history, this may be the very first time that the CDC has claimed authority to directly affect landlords and tenants. In recent times, these foreclosure or eviction moratoriums have been extended to January 2021 or beyond. At a later date, these moratoriums may continue to be extended, but few people are fairly certain at this point.

Risks and Financial Opportunities

Let’s take a look below at the potential risks, market changes, and financial solutions for homeowners, landlords, tenants, and real estate professionals due to Covid-19’s impact on the economy: * Adverse Market Fees: As of December 1st, 2020, the largest secondary market investors, Fannie Mae and Freddie Mac, are scheduled to assess a 0.50% “adverse market fee” to at least all refinance (and possibly purchase) loans that are designated as “conforming” fixed mortgage rates. Generally, these are some of the lowest 30-year and 15-year fixed mortgage rates in the nation for the most creditworthy borrowers with usually very solid FICO credit scores. This market fee adjustment may increase the overall 30-year fixed rate by anywhere between .125% and .25%, depending upon the lender. * Non-conforming mortgage loans: Borrowers may consider easier qualifying non-conforming loans that aren’t purchased in the secondary markets by Fannie or Freddie which include: FHA (FICO credit score allowances in the 500 range), VA, Non-QM (Qualified Mortgage), and Private Money that may allow much higher debt-to-income ratio allowances and/or no formal income documentation requirements such as with Stated Income products (bank statements or profit and loss statements in lieu of W2s or tax returns). * Forbearance agreements: The lender agrees to postpone or delay their foreclosure actions with the delinquent borrower. Sometimes, these foreclosure postponements may last months or years.
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* Deferment: The lender agrees with the borrower’s request to delay or defer their delinquent payments until a later date. In some cases, the late payments and penalties are added years later when the loan may become all due and payable. * Loan modification: The lender or mortgage loan service company agrees to reduce the existing interest rate and/or monthly payment amount so that the mortgage is more affordable as a way to avoid foreclosure. * Loan repayment plan: Both the lender and borrower mutually agree to add unpaid delinquent payments and late fees to the existing mortgage which may slightly increase their monthly payments or increase the loan term to give the borrower more time. * Reinstatement: After the borrower and lender agree to modify the monthly payments to avoid foreclosure, the loan is removed from foreclosure status and reinstated in “good standing.” * Seller-financed sales: If the homeowner needs a quick sale to a new buyer who can effectively take over his monthly mortgage payments and give the seller some much needed cash, the seller may consider creating some type of wraparound mortgage {i.e., contract for deed or all-inclusive trust deed (AITD)} or “subject-to” property transfer in which the buyer receives the deed to the property that is “subject-to” the existing mortgage still secured by the property. * Short sale: If and when the mortgage debt is greater than the current market value for the property (aka “upside-down” mortgage), the homeowner may consider contacting an experienced local Realtor who can help negotiate a discounted mortgage payoff with the lender when they find a qualified new buyer.
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* “Cash for Keys”: During the depths of the last major national foreclosure crisis between 2009 and 2013 especially, lenders were offering delinquent homeowners upwards of several thousand to $25,000 + to vacate the home while not damaging it or removing appliances. Quite often, the homeowner hadn’t made a mortgage payment for months or years up until this “Cash for Keys” offer. For many lenders, this cash payment to struggling homeowners was considered more affordable for the lender than fighting the homeowner for months or years longer. * Bankruptcy: For homeowners who are days or weeks away from losing their home at the final lender auction sale, they may consider filing Chapter 7 (complete liquidation of most debts) or Chapter 13 bankruptcy (a longer term workout payment plan) either on their own with online companies for just a few hundred dollars or with the assistance of an experienced bankruptcy attorney. The bankruptcy filing could delay the foreclosure auction date by weeks, months, or longer. Please seek quality legal assistance first. * Foreclosures: Please note that the typical foreclosure date timeline is close to four months from the start to finish. In California (a trust deed or non-judicial foreclosure state), the lender may first issue some warning letters to the delinquent mortgage borrower up to several months. The lender will then file a Notice of Default to start the foreclosure process. Ninety (90) days later, the lender will file a Notice of Trustee’s Sale while advertising one day a week in a local legal newspaper for three consecutive weeks. If the loan hasn’t been cured or paid with some new installment or workout plan, the lender could hold the final Trustee’s Sale (or auction) approximately 120 days (4 months) after the Notice of Default was filed.
In other states that are considered judicial foreclosure states, the foreclosure timelines may be similar or much longer, depending upon the caseload for nearby local courtrooms.

Focus on Opportunities, Not Obstacles

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It’s your ongoing perceptions of these negative financial, health, and overall national and global situations that may best determine whether you succeed or not. “Truth” is just your personal perspectives based upon life experiences. In the well-known Five Stages Of Grief description about emotional reactions to traumatic and painful experiences which was first written by Elizabeth Kübler-Ross and David Kessler about the fear of death, the five stages are described as: ● Denial ● Anger ● Bargaining ● Depression ● Acceptance
The faster that you get through the first four states of grief, the faster that you will get to the “Acceptance” stage and your focusing on the potential opportunities and solutions.
What we tend to focus on in life is usually what we end up with later because our minds are like giant magnets, for better or worse. Please keep your eyes on your personal goals because the solutions will appear sooner rather than later if you’re willing to focus with 20/20-like perfect vision. For many real estate investors, they will find incredible buying opportunities in 2021 and beyond if they keep a positive mindset.
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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.

Trust Deeds vs Mortgages: What’s the Big Difference?

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If you are planning to invest in turnkey real estate development collateralized by real property, one of the top items on your due diligence check list should be to determine which mortgage theory the state follows per the location of the subject property. This understanding can be detrimental to your recovery strategy if your borrower is unable to uphold their end of the deal and defaults on the loan. Each state adheres to either title theory or lien theory, though there are a few states that follow both. In title theory states, Deeds of Trust are the binding agreements utilized between lenders and borrowers, and Mortgages are the agreements utilized in lien theory states. Both documents serve the same purpose in a real estate deal between a lender and borrower, but how they affect the relationship between the parties involved and the subject property is what makes the big difference.

What are some similarities between Trust Deeds and Mortgages?

Mortgages and Trust Deeds both secure repayment of the loan by placing a lien on the property, and are considered, by law, evidence of the debt as they are generally recorded in the county where the property is located. If the borrower defaults on the loan and the lien is in first position, the lien gives the lender the right to take the property back through foreclosure and sell it. In other words, both Mortgage and Trust Deed documents are used as leverage to ensure the borrower pays back the loan in full. The ability to sell the property gives real estate investors and lenders the potential to recoup the original principle lent on the loan. Depending on the value of the property, there is the potential for the recovery of back due interest, late fees, and even capital gain.
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What are the main differences between Trust Deeds and Mortgages?

Number of Parties A Mortgage involves two parties: a borrower (the Mortgagor) and a lender or investor (the Mortgagee). A Trust Deed involves three parties: a borrower (the Trustor), a lender or investor (the Beneficiary), and the title company or escrow company (the Trustee). The Trustees main functions are to hold the title to the lien for the benefit of the Beneficiary and to initiate and complete the foreclosure process for the Beneficiary in the case of default by the Trustor. Property Title & Foreclosure Processes The main difference between Trust Deed and Mortgages is who holds the title to the property encumbered by the loan for the duration of the loan term. In a Mortgage State, the borrower holds the title of the property. Therefore, if the borrower defaults on the loan, the lender must go through the courts to take back the property through foreclosure. This is known as judicial foreclosure and this process involves the lender filing a lawsuit against the borrower. This can be a costly and time-consuming process for both parties involved. In a Trust Deed State, court can be bypassed because the Trustee holds the title to the property. You would follow the non-judicial foreclosure process, which almost always results in faster execution and resolution for all parties involved, especially for the lender. The speed of foreclosure can be detrimental to minimizing carrying costs and getting the property on the market quickly to sell in what may be a more promising market than one met at a later date.

What are First Trust Deeds?

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A First Trust Deed is as it implies, is recorded first before any other financial liens on the subject property, whether they be secondary mortgages, trust deeds or even mechanics liens placed by subcontractors. This means the First Trust Deed holds a priority or “senior” position, making all other liens encumbered by the loan subordinate or “junior” to the senior loan. Obtaining first position is important because in a foreclosure scenario, all outstanding subordinate liens are eliminated. This makes it so the lender does not have to worry about reconciling those other debts on top of their own.

Why invest in First Trust Deeds?

Hard money lenders like Ignite Funding, tend to operate more in Trust Deed states. First Trust Deed investments offer an attractive yield with relatively low risk to Ignite Funding investors due to their senior lien position on the property and the foreclosure process that is more conducive to the investors who are the Beneficiaries on the loan. This allows investors to earn double digit annualized returns paid as a monthly fixed income with REAL property as their collateral. If you are interested in becoming a Trust Deed investor or want to learn more, you can schedule a FREE consultation with an Investment Representative, please click here.

Ignite Funding, LLC | 2140 E. Pebble Road, Suite 160, Las Vegas, NV 89123 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | AZ CMB-0932150 | Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.

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