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Investing in Real Estate

Tips For Investing In Real Estate Right Now 

Now that the Covid-19 pandemic is beginning to slow down a little, many are beginning to take on new business endeavors. Real Estate investments have been on the rise within the past year, especially among first-time investors. So what should you know as you enter into your investments in 2021?

Many experts believe that first-timers should always find a mentor who they can trust to guide them in their initial investments.  Realty ONE’s CEO Kuba Jewgieniew, explained how now that more individuals are opting to stay home for work, looking at trends in the market has never been more important. 

“With fewer people returning to a physical office and many more people reevaluating their life choices, we’re seeing a resurgence in cities like Phoenix, Arizona, our headquarters’ home of Las Vegas, Nevada, and even once-less-popular markets like Boise, Idaho,” Jewgieniew explained. 

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“As more people move to these metros but also out to the suburbs to get a bigger space for less money, we’ll see even these areas become more popular, driving home prices higher.”

“An area with higher property values has the potential the yield a more lucrative real estate investment. So pay attention to on-the-rise hotspots—that can be a certain city or even a specific neighborhood—when deciding where to invest,” Jewgieniew explained.

Apartment buildings and boutique hotels have been predicted to receive a slew of investments in the coming fiscal year as well, which Jewgieniew thinks will lead to a larger presence of tech giants in our communities:

“I anticipate that retailers like Amazon will buy up these malls and convert them into distribution centers, creating jobs near the former malls. I believe that a lot of these apartments near the malls are going to get converted into condos to accommodate the workforce.”

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Jewgieniew explained that it’s important to build an organized business plan before making any official decisions as well.

“It’s not just about how much money you have and what income the building creates; you’ll need to factor external factors such as interest rates, vacancy rates, and occupancy rates into the equation too.”

Finally, Jewgieniew urged first-time investors especially to not get too excited by the thrill of investing in a new property, and take their time when it comes to reading all the fine lines. 

“A year ago, I would have said something different, but do not try to get in and get out quickly. Buy it, hold it long term, and focus on cash flow. Competition for these properties is intense right now, so you may have to pay a little more than you should to acquire one—and since construction materials are also extra expensive, it’ll be harder to turn a profit.”

Overall, just be smart with your money and make sure you’re making investments that will benefit you in the future. “If you’ve got a business plan in place and have a network of resources, like a knowledgeable real estate pro, then now could be a good time to invest in a flip property.”

International Buyers Looking At US Housing More Than One Year After Pandemic Began 

During the first year of the Covid-19 pandemic, the US saw a major increase in domestic real estate transactions. International buyers took the opposite approach and avoided investing in any US properties while the pandemic continued due to the uncertainty of the world’s economy.

Sales of US homes to foreign buyers fell by about 31% from April 2020 to March 2021, according to the National Association of Realtors. 

International buyers purchased around 107,000 properties during that time, which marks the lowest unit volume and lowest dollar volume since 2011, according to NAR. 

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“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions.”

“Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly,” said Lawrence Yun, NAR’s chief economist.

China, Canada, India, Mexico, and the United Kingdom are typically the top five countries continuously investing in US property. The amount of money brought in this past year, however, was down by at least 50% for buyers from China, Canada, and Mexico. The UK was the only nation that actually saw an increase in investment this year. 

Normally, China takes the lead in terms of the most amount of US property purchased throughout a given year, however, those transactions decreased significantly during the Trump administration. Now, China buyers have been inquiring more and more. 

“There has been quite a positive impact on the demand from the Biden boost, as the U.S. is being perceived as much more predictable now, and visas are also much easier to be obtained.”

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Georg Chmiel, executive chairman of Juwai IQI, a home listing site in China claimed that “on the other side, and now that we are over a year dealing with the Covid pandemic, it has lessened the impact on the buying decisions because flights to the U.S. are possible.”

Home prices are now 15% higher than they were pre-pandemic in the US; which makes sense considering the economic impact the nation has been enduring. Chimel stated that these rising prices, however, create a new demand for international buyers who may be afraid that they’re missing out on prime investment opportunities.”

Additionally, homes in the US are much less expensive than homes in places like London or Hong Kong, where a lot of buyers inquire about US property. The number of virtual tours on almost all major real estate sites in the US have increased exponentially. 

“So if that’s an indication of the comfort, then certainly this has increased, because people are now used to do far more things online shopping, education, also working from home online, and that also had an impact on the property market,” said Chmiel.

“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate. High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers,” Yun said.

Hidden Costs That All US Homebuyers Should Be On The Look Out For This Year

According to market reports, almost half of all US homes on the market are currently selling within a week of being listed, and prices are continuing to climb in almost every part of the country. 

Many buyers, especially first-time buyers, need to be aware, however, of the multitude of costs that can build up during the final discussions of finalizing a home purchase. Experts claim that all prospective homebuyers should have a separate fund on hand specifically for closing costs. 

These costs typically include things like appraisal fees, property taxes, real estate agent commissions, homeowner’s insurance, title insurance, and more. Jessica Menton, a personal finance and markets reporter, recently discussed the best ways homeowners can plan for their future when it comes to looking for a home. 

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“Generally financial planners say that you should expect to pay somewhere between 3% and 5% of what your mortgage account is, give or take. So for a $300,000 mortgage that means setting aside $9000 to $15,000 for closing costs.”

Bill Gassett, a real estate agent in Massachusetts, stated that when you take out a mortgage, your lender will provide a document that details all of the closing costs involved in the property you’re interested in. Gassett recommends reading this document very carefully, because in some cases a buyer can ask the seller to cover some of the items listed. 

Menton claimed that usually most sellers will pay about 5% of the total sale price in real estate agent fees, commissions, and other expenses, and with most homes now selling well over their asking price, it’s likely more sellers will be less willing to budge on these listed fees. 

“I do sometimes recommend buyers hire an independent inspector, even though sellers will hire one to look for major issues, it can give buyers that extra security.” 

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“When making an offer, buyers typically submit 1% to 5% of the home’s value in earnest so the seller feels comfortable pulling the home off the market. That fee is usually held in escrow and applied to closing costs,” Menton says.

Gassett also warned that if you’re buying a home that’s a part of any sort of association, you need to get details in the beginning about special assessments that will appear down the line of owning the property. 

“Most people know that there’s a condo fee or an HOA fee, but they may not notice a special assessment coming up, where all of the sudden there’s a big extra expense. As part of closing, lenders get the home’s value appraised, because home prices are rising so fast, the difference between asking price and appraised value can now reach into the tens of thousands.That difference can put ardent buyers in a conundrum,” Gassett explained.

“The bank’s not going to do the loan unless the buyer puts more money down, so a lot of buyers are being forced to actually bring more money to the table than they thought they needed.”

Menton also suggests buyers hire a lawyer to get them through the closing period if they’re really nervous about additional costs. Don’t be afraid to pay an expert for their services so that you know the place you’re going to be living won’t end up costing thousands of more dollars than you expected. 

Real Estate Technology

New AI Tool Writes Real Estate Descriptions Without Ever Stepping Inside A Home 

A Canadian startup called Listing AI is using new cutting edge artificial intelligence technology to write up computer-generated descriptions that can be surprisingly compelling. Users simply tell the AI software some key details about their home and the technology does the rest. 

According to Listing AI co-founder Mustafa Al-Hayali, the technology isn’t meant to do all the work for real estate agents, otherwise there would be risk of this technology fully replacing us. Instead, Al-Hayali claims the technology is meant to do about 80% to 90% of the work.

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“I don’t believe it’s meant to replace a person when it comes to completing a task, but it’s supposed to make their job a whole lot easier. It can generate ideas you can use.”

Al-Hayali said he and his co-founder, Corey Pollock, a Shopify senior project manager, came up with the idea for Listing AI after both became new homeowners in Toronto. “As we each navigated that process, we noticed property descriptions that were inaccurate or even copied from a previous time the property was up for sale. I bought my condo in March 2020 — just before Covid forced many people to start relying on virtual visits and other ways of learning about properties remotely, which made thorough descriptions that much more important.”

They built the website within the past month and launched it publicly this week. Listing Ai simply asks that users provide all manner of data about the house, and then the software polishes it so it can better be used by the AI. 

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According to Al-Hayali, “after that, the information is processed by GPT-3, an AI model from nonprofit research company OpenAI. GPT-3 was trained on text from billions of web pages so that it would be adept at responding to written prompts by generating everything from news articles to recipes to poetry.”

Users are currently able to sign up for a free trial that allows them to generate several listings. For unlimited access users can pay $9 a month, or $84 a year, although the website claims that these are launch prices, and regular prices will be $12 a month, or $105 a year. 

Scott Ward is a traditional real estate agent who recently spoke with CNN about the future of the industry and this type of AI technology being implemented. “I had a few issues with Listing AI’s word choices, like I’d never describe the Oakland house that I put through it as ‘rustic-chic’, and I hate the word ‘boasts’ in property descriptions.” 

“I agree that there are plenty of poorly written home descriptions out there, and that automating the process could help some people. For example, it could be useful if people are not familiar with this kind of writing process or they’re selling a number of similar homes, such as tract housing.”

So like with most new technologies, it’s going to take some time to see how well it fits in the current way of doing things in the industry.

US Real Estate Industry

US Housing Markets Expecting To Make A Comeback In 2021

Based on current economic trends in parts of the United States, certain real estate markets are expected to thrive in the new year in what will likely be a stark juxtaposition to what a majority of the industry has witnessed this year as a result of the Covid-19 pandemic.

Real Estate Agent

What Real Estate Experts Are Predicting For The Rest Of 2020

The coronavirus pandemic has obviously flipped a lot of businesses and industries on their heads this year. One of the biggest being the real estate market in America. At the end of every year real estate experts take to MarketWatch and other reputable platforms to tell clients and investors their predictions for the new year in regards to mortgage and real estate trends in general. It’s safe to say that the predictions made at the end of 2019 likely didn’t hold up, but that doesn’t necessarily mean all the current trends are bad.

One of the biggest predictions was that mortgage rates would stable out and remain relatively the same throughout the country. Instead, once Covid-19 began infecting Americans in February, sellers began pulling their property listings and buyers began pulling out due to fears of infection. This led to a decrease in the average mortgage rates in the country, dropping nearly a whole percent when compared to last year. As of right now, real estate experts expect that percentage to continue to drop as time and the pandemic progresses.

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One prediction that is proving to be true is the low inventory rates of homes to purchase in America. 2019 already saw a decrease in the amount of properties available for sale when compared to 2018, hence the prediction that this pattern would continue. As previously mentioned, many buyers and sellers have pulled out of potential listings due to health concerns; as a lot of real estate interactions need to happen in person. While it’s predicted that this pattern will continue, social distancing measures, facial coverings, and new technology that allows prospective buyers to take virtual tours of potential properties is keeping the industry alive.

Agents also predicted that a lack of affordability in properties would cause a lot of sellers to turn away from certain deals. This prediction is also proving to be true as home prices are currently increasing at a faster rate than there are buyers in the market. Again, the lack of buyers is mainly due to the pandemic, however, the prediction that this would occur shows that the industry is already in a tough spot when it comes to pricing. Lawrence Yun is a chief economist who recently spoke with MarketWatch about how he predicts this trend to turn around by the end of the pandemic.

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“Home sales should pick up with the economy reopening. But, new home construction needs to robustly ramp up in order to meet rising housing demand. Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”

Another prediction that unsurprisingly came true was an increase in 3D/virtual home tours. Even before the pandemic became a reality, agents were predicting back in 2019 that virtual property tours and real estate deals would become more popular this year. Initially, they based this prediction on out-of-state/country buyers who were making large moves to new places but didn’t want to wait to start viewing properties. It’s predicted that this new technology will only grow to be more popular as the pandemic continues, but also after it ends.

It’s likely that once the coronavirus is no longer an issue, many industries will continue out implementing the health and safety procedures they were forced into to curve the spread due to how safe it makes everyone feel in general. The real estate industry specifically has had to deal with many national, and international, emergencies that have hindered sales and business, so when it comes to recovery, like all industries, it’s going to take time.

Millennials Buying Home

What To Do Before Buying A Home

With the current state of the world, buying a home is likely the last thing on your mind. However, with an ample amount of spare time on all of our hands, now is also the perfect time to start listing out your life goals and really break down what you need to do to accomplish them. Buying a home can be extremely stressful if you go into the process blind, so it’s important to do your research and know the basics of the industry before beginning your journey as a homeowner. 

The most important thing that you can do as a buyer is hiring the right real estate agent for you. You not only want someone you can trust, but who has experience with the housing market in the specific area that you’re moving too. Ask your friends and family for their recommendations and be sure to check as many online reviews from past clients as well, as those will offer the greatest insight. 

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The same way you want to ensure that you have a reputable and trustworthy real estate agent, you want to make sure you have the same for any builders, inspectors, and any other professional you’ll want to hire during this process. Builders especially can be hit or miss if they don’t have a lot of experience in the specific area you’re moving into. It doesn’t matter if they’ve been in the industry for ten years, every town has its own specific set of rules/regulations regarding home projects and renovations, so it’s important to hire someone who is equipped to abide by those guidelines while staying on budget; this is where customer reviews are yet again going to be your best friend. 

You also want a qualified inspector for the same exact reasoning. Especially if you’re buying a brand new home that’s never been lived in before, you want to ensure that all the inner workings of your future home is running smoothly and up to code. 

Once you have your agent, and you find a home that you’re interested in, do a walk through with your agent and make a list together of home improvements and projects that you’d like to see completed before you move in. If the current owner doesn’t want to budge on certain projects, this is where you and your agent can negotiate pricing.

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This list will also be beneficial for your home inspector, as they can enforce the current owners to complete certain projects if they’re going against any legal housing codes for the specific area. The inspector can also recommend you to reliable construction/renovation companies for whatever home improvements you may have to complete after the move. 

You can never visit a property too much, the only thing you have to worry about is someone else coming along and snatching it from under you before you even had the chance to make a decision. However, it’s important to visit a home a few times before making any final decisions. Try to do your walk throughs on days where the weather is different from your last visit. This way you can see how the landscaping fairs in different climate conditions, and also see how well things like heating/cooling in the house work. 

Finally, before you make any decisions, make sure you have a nice long talk with your agent and loved ones so that you can really break down every specific and clear up any confusion you may have. Remember, you hired your agent to be knowledgeable on all things real estate, so no question is too small or stupid when it comes to your future home.

Real Estate During COVID-19

How The Real Estate Market Is Reacting To COVID-19

The COVID-19 pandemic has been affecting multiple businesses and industries. Health and safety is obviously the world’s main concern, so make sure you’re continuing to stay informed, distant from others and are continuing to practice good hygiene. Among the multiple industries taking a hit due to coronavirus, the real estate industry is beginning to see how they might be affected within the coming months as quarantine/lockdown policies begin to be enforced.

According to the National Association of Realtors (NAR), the index of pending home sales has increased by nearly 3% in February of this year. This specific index measures real-estate transactions in America where a contract of sale was signed, but the sale has yet to be closed. 

The index itself helps provide agents with existing-home sales reports and what the coming months for their specific regional industries should expect. February’s national report in 2019 showed that pending signings were up by 9.4% nationally, indicating an obvious decrease in the buyer market, likely due to COVID-19 concerns. 

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“February’s pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown. The data does not capture the significant fallout from the pandemic or the measures taken to control the outbreak. Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage and we may get a V-shaped robust recovery later in the year,” said Lawrence Yun, NAR’s chief economist.

This time last year, Yun also noted that on a month-to-month basis, pending sales were up in every region of the nation; not entirely uncommon but definitely not common for this time of year for the market in general. The West had an increase of 5%, the midwest 4.5%, the North 3%, and in the South, a mere .1%, still an increase.

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The fact that the market/pending sales reports were much higher this time last year may seem like it should cause some major economic concerns, however, this wouldn’t be the first time the real estate industry has had to cope with a worldwide health crisis or economic downfall. Before the coronavirus pandemic hit the U.S., the market was relatively stable. Supply was a little lower than what the nation is used to, however, the demand to buy was at a relatively high position.

According to NAR, in the winter of this year, America experienced an overall low interest rate environment that began in the summer of 2019. This caused an excess in sales to occur within the past few months, and also made buying a home more affordable. 

Of course, the concern now is how much the COVID-19 pandemic will reverse the real estate market and hinder America’s economy. Based on previous widespread illness outbreaks, the NAR is not too concerned with how the market will respond to this pandemic. In the past, the real estate industry has always rebounded back to where it was in areas of the country that have had their economies affected by health crisis’. It just obviously depends on the specific job/housing market.

“Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals. Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year,” Yun said.

Yun went on to encourage any real estate clients who are currently involved in pending transactions to talk with their agency, and bank/financial advisers, about the best possible route to take for the time being. Many industries are trying to comply with the multiple ways the world is adjusting to living during a pandemic, the real estate industry included. So work with the professionals and they’ll work with you, according to Yun, eventually we will return to a place of normalcy, and the market will bounce back.

Sold Label

How To Sell Your Home Fast

The housing market is forever changing. It’s always hard to tell when the best time to sell or buy is and vice versa. However, when you find yourself in a situation where, regardless of the market status, you’re looking to sell your home and sell it fast, there’s a few key tips you should keep in mind. 

First and foremost, unless you’re an expert on all things real estate yourself, make sure you get a reputable and hard working agent to assist you on your housing journey. There are many things that you should specifically be looking for in a trustworthy agent, however, that’s a different article for a different time, now we’re trying to sell!

Assuming you and your agent are already teamed up and ready to get your house into the hands of its next occupant, here are some things to consider. According to Zillow, home properties spend, on average, 68 days on the market before it sells, so how can you cut that number way down?

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Understand that the mantra “location, location, location” is so commonly known for a reason. If your home is already in a desirable neighborhood near the water, you obviously will have no trouble selling. However, if you find yourself not in the most desirable location, figure out what adjustments you then need to make to your home either aesthetically or price wise to get more buyers interested. 

No one wants to change the price of their property once it’s on the market, however, you can’t change the location of your home, and if that’s what’s holding it back from selling, there’s not many options to get individuals interested. Again, this is where having a trustworthy and professional agent by your side will benefit you. They can tell you if your specific market is more hot or cold in the moment you’re selling and how to adjust either your pricing or listing itself to grab the attention of more buyers.

After a while, consider removing any online listings of your property from the internet and re posting them through the Multiple Listing Service. However, your best bet will always likely be a dramatic price drop. Think about the neighborhood you are in and what the surrounding properties would sell for. If your property is the lowest, price wise, for the specific area it’s in, it’s likely to get more offers and interest.  

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While there’s been a major emphasis on finding a solid agent to assist you, maybe consider using a wholesaler instead. 40% of all real estate transactions that occur in America are done in all cash transactions. All cash means no banks and less complicated paperwork and real estate  jargon to work through, this is especially important for the desperate seller. 

Wholesalers act more as a middleman for property improvement when compared to a traditional real estate agent. They may not offer you top-dollar, however, if you aren’t looking to dramatically drop your price, this would be the next best choice. A wholesaler will then put your house under contract, flip it for cheap, and then offer it back up to a slew of cash-buyers that they themselves have already scouted based on what the property itself has to offer each client. 

Finding a wholesaler can be quite tricky, as they often find clients themselves who are desperate to sell. However, there are a few online services that can connect you to the right people for the job; such as We Buy Ugly Houses.  

Finding the right people in the business to assist you in selling your home fast is the best way to ensure you’ll get the best bang for your buck, no matter how much you have to drop the price.

Real Estate Investing

How To Start Investing In Real Estate

Investing in real estate can be one of the most lucrative ways to spend your money, however, like most things in life it takes time to actually get good at it. If you’re a novice in the world of real estate investment but are interested in building your portfolio and ability to strategize ways of making a profit, then these basic tips will steer you in the right direction before taking the leap. 

You have to get organized, first of all. Figure out what type of investing you want to get into and hire an agent who can guide you in the right direction in terms of your investment. Unless you’re already a well-equipped expert in all things real estate, you should definitely have someone who’s actually working in the field in your corner. The last thing you want is to invest in a property only to lose everything and owe money; having an expert with you will steer you away from that. 

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Once you have an expert in your corner, create some sort of spreadsheet-like visual that can help aid your decision making process in terms of what to invest in. This is where you’re going to want to write out your general budget, the potential deals that you have in queue, current market values/stats for the upcoming months (your expert can help with these more specific ones), mortgage/rental/utility monthly costs, and any other detail you want to keep in mind before pulling the trigger on an actual investment. 

Use your visual aid to compare and contrast what areas certain properties thrive in, and are weak in. The visual element is crucial and worth repeating because if you literally see multiple red flags appearing with a certain investment opportunity as you’re writing it out, it’ll be easier to toss that one aside to make your decision much clearer.

It’s also important to remove any emotional attachment you may have with a potential property. Remember, you’re investing in the numbers of a rental property for profit, which is your end goal. It can be easy to take on a property, get passionate about whatever work needs to go into it, flipping it to fit your personal aesthetics, and thus overspending in order to satisfy your own desires. 

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This is another example of how a visual aid can assist you in remaining objective and focused on the end goals. Once you have your investment property set up and ready to put money into, list out everything that needs to be accomplished, and the predicted costs of those necessary changes. After the needs, make a separate list of a few wants that you’d like to see done to the property personally. After you do all of the proper calculations with your expert partner, if there’s room for a few of those “wants” to be checked off the list, look at how much money you’ve already spent and THEN determine if further work would be worth it or not. 

If you can, buy local. This isn’t a necessity but it can definitely make your investing process a lot easier if you’re physically close to the property itself. Then, once the property is purchased, assuming you have a life outside of this investment, consider hiring a property manager. The property manager can be the same “expert” that’s been mentioned throughout this article.

A property manager will dedicate the time, skills, and temperament it takes to run a property that another individual has invested in. They also can help you with more difficult processes that investors face, such as needing to evict certain renters if they’re late on payments. A property manager is trained and it’s their literal job to know all the ins and outs of running an investment property. 

Regardless of when and how you decide to make your investment, just make sure you’re taking the time to do it right. Do your research, do it again, and once more. Hire professionals who are experienced, knowledgeable, and want to see you succeed in your investment, and get to it!