For professionals seeking quick and flexible financing solutions, hard money lenders are an invaluable source of opportunity in the real estate industry. While these lenders offer a lifeline for those looking to seize lucrative opportunities, navigating the terrain requires caution. In this article, we’ll shed light on common mistakes professionals make when borrowing from hard money lenders and provide valuable insights to steer clear of these pitfalls.

Mistake 1: Underestimating the True Cost

One prevalent mistake is underestimating the true cost of borrowing. Hard money loans often come with higher interest rates and fees compared to traditional financing options. Professionals must meticulously analyze the total cost of the loan, including interest rates, origination fees, and any other associated charges. By doing so, borrowers can make informed decisions about whether the investment remains profitable in the long run.

Tip: Always request a clear breakdown of all costs associated with the loan and carefully assess how they align with your overall financial strategy.

Mistake 2: Ignoring the Terms and Conditions

Another common pitfall is neglecting the fine print in the loan agreement. Hard money lenders may impose strict terms and conditions, such as short repayment periods and high penalties for default. Professionals must thoroughly review the terms, seeking clarification on any ambiguities. Ignoring these details can lead to financial stress and potential legal complications.

Mistake 3: Overleveraging Without a Cushion

One critical oversight is overleveraging without a financial cushion. Some borrowers make the mistake of borrowing the maximum amount without considering unexpected expenses or market fluctuations. This can lead to financial strain and increase the risk of default.

Tip: Build a financial cushion into your borrowing strategy, considering potential unforeseen expenses, market uncertainties, and other risk factors.

Mistake 4: Failing to Have an Exit Strategy

A crucial oversight is neglecting to establish a clear exit strategy. Hard money loans are typically short-term, and professionals need a well-thought-out plan for repayment. Without a viable exit strategy, borrowers may find themselves scrambling to secure alternative financing or facing unfavorable terms for an extension.

Tip: Develop a comprehensive exit strategy before obtaining the loan, considering potential challenges and outlining specific milestones for repayment.

Conclusion

Borrowing from hard money lenders can be a strategic move for professionals in real estate and investment. However, avoiding common mistakes is essential to ensure a positive and profitable experience. By thoroughly understanding the costs, scrutinizing the terms, being cautious about overleveraging, and having a well-defined exit strategy, professionals can navigate the terrain of hard money lending with confidence and success.

So, you’re tossing around the idea of packing up your bags and moving to Florida.

If you’re thinking about moving to the home of Disney World, the Daytona 500 and a 200-foot alligator named Swampy (yep, that’s a real thing), you’re probably wondering about the Florida housing market. Well, you’re in luck! We dug into the latest news on the housing market in Florida to give you a heads-up on what to expect in the Sunshine State.

Now, the best way to learn about Florida’s market is to talk to a real estate agent who actually lives in Florida (you can find one through our RamseyTrusted program), but these numbers and predictions will give you a good idea of what to look out for.

Ready to dive in? Let’s go!

What’s the Florida Housing Market Like?

Just like pretty much everywhere else in the U.S., housing prices in Florida went up in 2023—though not by a whole lot.

Here’s a look at Florida’s numbers from Q4 2023 compared to Q4 2022:

Florida Housing Market*	October 2023	October 2022	Percent Change
Median Sale Price**	$410,000	$401,990	+2.0%
Inventory (Active Listings)	74,703	68,813	+8.6%
Closed Sales	19,729	20,837	-5.3%
Median Time to Sale***	71 days	70 days	+1.4%1
Average Mortgage Rate(15-Year Fixed)	7.03%	6.36%	+10%2

_{*Numbers in this chart represent data on single-family homes only.**Median Sale Price refers to the midpoint—half the homes were sold for more, half for less.***Median Time to Sale is the number of days between the listing and closing of a home sale—half of homes selling this quarter took more time to sell, half took less.}

Florida Housing Market in Major Cities

Sometimes, looking at an entire state’s housing situation doesn’t paint a complete picture of what it’s like in individual cities. So, here’s a look at some housing market numbers in three of Florida’s biggest cities: Orlando, Tampa and Jacksonville.

	Orlando	Tampa	Jacksonville
Median Listing Price	$447,450	$425,000	$412,000
Year Over Year % Change	+0.02%	+0.02%	+0.04%3

How Does Florida Compare to the National Housing Market?

Now, let’s see how Florida’s real estate market compares to the U.S. as a whole. At the national level, the median home listing price in November 2023 was $420,000. Florida’s median listing price during the same timeframe was a bit more expensive at $462,623—9.66% higher than the typical national price.

Still, Florida’s housing prices are more affordable than what you’d find in 19 other states—including Vermont, Nevada, Arizona and New Jersey.⁴

Florida Housing Market Predictions for 2024

We’ve looked at the numbers, so let’s shift into seeing what some real estate gurus are predicting about Florida housing heading into 2024.

1. Buyers and sellers will wait patiently.

Homeownership has gotten a lot more expensive over the last few years, with prices going through the roof back in 2021 and interest rates hitting 20-year highs throughout 2023. What will that mean for potential Florida buyers and sellers in 2024? Florida REALTORS® chief economist Brad O’Connor believes a waiting game is on the horizon.

“Inventory is increasing, which has helped slow price growth,” O’Connor said. “Many buyers and sellers are on the fence now, waiting to see what happens to mortgage rates.”⁵

That sounds about right. After all, the sky-high interest rates we’re seeing right now are keeping a lot of folks from being able to afford buying a home, and many would-be sellers don’t want to move if it means losing a low-interest mortgage they locked in before rates went through the roof.

Find expert agents to help you buy your home.

So, the best move for plenty of people heading into 2024 is sitting on their hands—at least until we get a clearer picture of what interest rates will do moving forward. Speaking of interest rates . . .

2. Interest rates should start going down.

So, what should you expect from mortgage interest rates in 2024? Most likely, rates will finally stop climbing and start dropping. That’s what National Association of REALTORS® (NAR) chief economist Lawrence Yun is predicting.

“I believe we’ve already reached the peak in terms of interest rates,” Yun said. “The question is when are rates going to come down?”⁶

While Yun is right that it’s hard to know exactly when rates will begin decreasing in 2024, virtually everyone agrees that they will at some point. How much will rates go down? NAR’s economic outlook from October 2023 predicts that the typical interest rate for a 30-year fixed-rate mortgage will drop from 7.5% at the beginning of the year to 6.3% by December.⁷

A drop of just over 1% wouldn’t be a game changer, but it would make buying a home a bit more affordable for Floridians by the end of 2024.

3. Inventory will still need a boost.

When supply is low and demand is high in the housing market, prices go up. That’s why they increased so drastically a few years back, and it’s why those high prices have held steady ever since. Even though inventory has steadily gone up since 2021—both in Florida and across the country—it hasn’t grown fast enough to keep up with increasing demand.

Will that trend continue in 2024? Almost definitely. Take it from Ken H. Johnson, an associate dean at Florida Atlantic University’s College of Business. He believes that South Florida could really use 200,000 new housing units per year, but the numbers say the area is currently only getting a tenth of that.

“We are having trouble building homes fast enough,” Johnson said.⁸

Even though Florida’s housing inventory is increasing, it’s not happening fast enough to have a major impact on price or to keep up with the state’s crazy population influx. After all, Johnson also predicts that all nine of Florida’s largest metro areas will see a population growth of 10% or more over the next 10 years—with Orlando and southwest Florida potentially growing at twice that rate.⁹

Moral of the story: Just like every other state, Florida could use a lot more homes on the market in 2024.

Will the Housing Market Crash in Florida?

If you’re concerned about a housing crash in Florida or anywhere else in the U.S. in 2024, you can take a deep breath. That’s because home prices aren’t going to drop substantially in 2024. In fact, prices are actually more likely to go up.

For example, NAR predicts that existing home prices across the U.S. will grow by 2.6% in 2024.¹⁰ Freddie Mac expects a 0.8% bump during the same timeframe.¹¹

So, if you’re waiting on home prices to come down drastically before you buy, you’re going to be waiting for a while—it’s not happening anytime soon.

Is It a Good Time to Buy or Sell a House in Florida in 2024?

Alright, we’ve looked at a whole lot of stats, trends and predictions for the Florida real estate market. As we wrap up, you probably have one important question on your mind: Should I buy or sell in Florida this year? Let’s talk about it.

Here’s the deal: You shouldn’t let the housing market control your decision on whether to buy or sell right now. It’s important to understand real estate trends so you have some context, but you should base your decision on your individual situation.

For example, if you’re buying a house, you need to make sure you’re financially prepared. That means being debt-free with a full emergency fund worth 3–6 months of your typical expenses, and having enough cash saved up to make a down payment of at least 5–10%. (By the way, a 20% down payment is best because it means you won’t have to pay for private mortgage insurance.)

And if you’re selling a house, you need to make sure you can afford the move and that doing so won’t hurt your financial situation. It also wouldn’t be a bad idea to line up a new place to live—though you never want to buy a new house before selling your old one.

Bottom line: You are in control of whether it’s a good time to buy or sell a house in Florida—not the market.

https://www.ramseysolutions.com/real-estate/florida-housing-market

When it comes to living a healthier lifestyle, the little things can add up and make a considerable impact! It’s not just about hitting the gym or eating right – it’s also about creating a healthier home environment and adopting habits that promote overall well-being. To help you on your journey, here are some tips that will contribute to a more holistically fit lifestyle.

Purify Your Air

Minimizing indoor air pollution can affect how you feel, from reducing asthma triggers to creating a better sleeping environment. Because of this, ensuring good air quality in your home is something you should prioritize. One easy solution is to invest in an air purifier, which can help eliminate many common indoor pollutants. And if you live in a region that gets smoke-filled air from frequent forest fires, an air purifier is a must in the summer and fall months. Additionally, regularly changing your furnace filters can substantially improve your indoor air quality.

Adopt Some Green Friends

Plants don’t just make your home prettier – they also offer some serious health benefits! Certain types, like the snake plant, aloe vera and peace lily, are well-known to clean the indoor air, increase humidity and release oxygen. Plus, introducing plants is a great way to add a relaxing dose of nature to your living space, along with enhancing the air quality.

Make a Shoes-Off Policy

Keeping your shoes at the door is a simple practice that can keep your home cleaner and healthier. Shoes can track in germs, dirt and other outdoor pollutants, not to mention allergens like pollen. Adopting a shoes-off policy can significantly reduce this influx of unwanted substances into your home, improving the overall living environment and potentially contributing to a decreased risk of allergies and illnesses.

Regularly Deep Clean Carpets

Carpet maintenance is not just about keeping up the aesthetic appeal – it’s fundamentally a health measure. Carpets can act like a filter, trapping various airborne particles, including pet dander, dust mites, pollen and other allergens. Although vacuuming helps, it often isn’t enough to remove all these contaminants deeply embedded in the carpet’s fibers. A regular deep clean is necessary to extract these allergens and pollutants fully. Experts recommend a professional cleaning every 12 to 18 months, depending on your carpet’s usage level.

Filter Your Water

Filters can remove contaminants from your water, providing safer and often better-tasting H2O. Clean, fresh water is vital in maintaining good health, so it’s well worth the investment. A reusable pitcher is also a greener and more economical choice than buying plastic bottled water. Plus, there are fantastic pitcher options, from the downright luxurious to the no-frills model.

Room to Exercise, Destress & Create

Repurposing space in your home and creating dedicated areas for physical activity, relaxation and hobbies can significantly influence your health journey. Make a quiet corner ready for workouts, even if it’s just enough space for a yoga mat – it can motivate you to stick to a regular exercise routine. Exercise not only boosts your physical health but also acts as a natural stress reliever. In addition, having a place to unwind and disconnect can considerably improve your mental health. This could be a reading nook, a meditation corner or somewhere to engage in your favorite hobbies and crafts.

Establish a Tech-Free Zone

Consider a kitchen or dining room charging station to keep phones out of bedrooms at night. A tech-free bedroom can help improve sleep quality and promote a better sleep routine and a healthier home. Tempting as it may be, instead of using your phone’s alarm to wake up in the morning, pick out one of these top-rated and stylish alarm clocks.

Remember, living a fit, healthy lifestyle is more than the big gestures – it’s also about the little steps you can take daily. Pick a few from our list and start 2024 off on the right foot!

When it comes to living a healthier lifestyle, the little things can add up and make a considerable impact! It’s not just about hitting the gym or eating right – it’s also about creating a healthier home environment and adopting habits that promote overall well-being. To help you on your journey, here are some tips that will contribute to a more holistically fit lifestyle.

Purify Your Air

Minimizing indoor air pollution can affect how you feel, from reducing asthma triggers to creating a better sleeping environment. Because of this, ensuring good air quality in your home is something you should prioritize. One easy solution is to invest in an air purifier, which can help eliminate many common indoor pollutants. And if you live in a region that gets smoke-filled air from frequent forest fires, an air purifier is a must in the summer and fall months. Additionally, regularly changing your furnace filters can substantially improve your indoor air quality.

Adopt Some Green Friends

Plants don’t just make your home prettier – they also offer some serious health benefits! Certain types, like the snake plant, aloe vera and peace lily, are well-known to clean the indoor air, increase humidity and release oxygen. Plus, introducing plants is a great way to add a relaxing dose of nature to your living space, along with enhancing the air quality.

Make a Shoes-Off Policy

Keeping your shoes at the door is a simple practice that can keep your home cleaner and healthier. Shoes can track in germs, dirt and other outdoor pollutants, not to mention allergens like pollen. Adopting a shoes-off policy can significantly reduce this influx of unwanted substances into your home, improving the overall living environment and potentially contributing to a decreased risk of allergies and illnesses.

Regularly Deep Clean Carpets

Carpet maintenance is not just about keeping up the aesthetic appeal – it’s fundamentally a health measure. Carpets can act like a filter, trapping various airborne particles, including pet dander, dust mites, pollen and other allergens. Although vacuuming helps, it often isn’t enough to remove all these contaminants deeply embedded in the carpet’s fibers. A regular deep clean is necessary to extract these allergens and pollutants fully. Experts recommend a professional cleaning every 12 to 18 months, depending on your carpet’s usage level.

Filter Your Water

Filters can remove contaminants from your water, providing safer and often better-tasting H2O. Clean, fresh water is vital in maintaining good health, so it’s well worth the investment. A reusable pitcher is also a greener and more economical choice than buying plastic bottled water. Plus, there are fantastic pitcher options, from the downright luxurious to the no-frills model.

Room to Exercise, Destress & Create

Repurposing space in your home and creating dedicated areas for physical activity, relaxation and hobbies can significantly influence your health journey. Make a quiet corner ready for workouts, even if it’s just enough space for a yoga mat – it can motivate you to stick to a regular exercise routine. Exercise not only boosts your physical health but also acts as a natural stress reliever. In addition, having a place to unwind and disconnect can considerably improve your mental health. This could be a reading nook, a meditation corner or somewhere to engage in your favorite hobbies and crafts.

Establish a Tech-Free Zone

Consider a kitchen or dining room charging station to keep phones out of bedrooms at night. A tech-free bedroom can help improve sleep quality and promote a better sleep routine and a healthier home. Tempting as it may be, instead of using your phone’s alarm to wake up in the morning, pick out one of these top-rated and stylish alarm clocks.

Remember, living a fit, healthy lifestyle is more than the big gestures – it’s also about the little steps you can take daily. Pick a few from our list and start 2024 off on the right foot!

US commercial real estate prices have fallen this year for the first time in more than a decade, according to Moody’s Analytics, heightening the risk of more financial stress in the banking industry.  What property types are declining? (hint not just office properties).  What is the only property type that held in positive territory?  Is the recent drop in prices just a blip or the start of a bigger trend?  Why are prices falling now while the economy continues humming along?

What was in the most recent commercial data?

The recent CoStar report, the leading aggregator of commercial data,  showed declines in Office, retail, and apartments.  CoStar has some of the best insight into commercial property values as they also track heavily via Loopnet (largest commercial MLS)

1. THE PRIME INDUSTRIAL INDEX LED GROWTH AMONG THE FOUR MAJOR PROPERTY TYPES. The Prime U.S. Industrial Index was up 2.5% in the first quarter of 2023 and 10.8% in the 12 months ending in March 2023. The equal-weighted U.S. Industrial Index, including a broader mix of asset qualities, underperformed the Prime Index with a modest decline of 0.1% in the quarter. The Prime Industrial Index was the only Prime property type index to hold in positive territory in the first quarter. 
2. MULTIFAMILY INDEX DECLINES. The equal-weighted U.S. Multifamily Index fell by 2.4% in the first quarter of 2023 and dropped 2.2% in the 12 months ending in March 2023. The U.S. Multifamily Index showed the sharpest annual decline in values since the interest rate hiking cycle began in the first quarter of 2022. Debt for multifamily transactions was plentiful and drove investor demand in the sector. The index appreciated by 2.8% in the 12 months ending in March 2023 in Prime Multifamily markets but fell 2.8% in the quarter.
3. OFFICE PRICE DECLINES CONTINUED IN THE FIRST QUARTER. The U.S. Office Index sagged 2.4% in the first quarter of 2023, taking its cumulative decline to minus 5% during the previous three quarters. Office prices were down 1.4% in the 12 months ending in March 2023, marking the first annual decline since the second quarter of 2012. In addition, pricing growth in the Prime Office Index advanced at a negligible pace of 0.4% in the 12 months ending in March 2023 while slumping 2.8% in the quarter.
4. RETAIL PRICING FOOTED SIDEWAYS IN THE FIRST QUARTER. The U.S. Retail Index rose just 0.2% in the first quarter of 2023 and 3.3% in the 12 months ending in March 2023. The tendency of high-profile pair trends to swing the data around at the top end of retail space can lead to strong quarterly fluctuations. The U.S. Prime Retail Index dipped 2.6% in the first quarter while appreciating 12.3% over the year prior. The three-quarter trend in the Prime Retail Index saw values surge 9.9% in the third quarter of 2022 before giving back 2.8% and 2.6% in the fourth quarter of 2022 and the first quarter of 2023, respectively.

Why is multifamily declining as rents are staying high?

Below I put together a hypothetical analysis of what is occurring in the multifamily sector.  Multifamily was trading at insanely low cap rates while at the same time banking on appreciating rents.  As rents have stagnated or even declined in some markets and interest rates have basically doubled, many apartment deals no longer cash flow and are in trouble.  Furthermore, it is more than likely that a bank holds the note below and that note is now a  big problem for them.  Here is a great article in the Wall Street Journal that shows how this is playing out in real life.

Remember most commercial loans are fixed for 3-5 years and then the rate resets to the market rate (typically 10 year treasury +).  This scenario below is especially difficult:

1. LTV using new cap rate is radically different: No lender today would provide a new loan with the cash flow basically at break even due to the higher rate.
2. Cash flow underwater based on new rate: Assuming the note is current and the lender sold the note, a substantial discount would have to be given to compensate for the ultra-low rate.
3. Even if note is held and renewed a substantial loss would have to be taken by the bank for impairment

Pre Covid
Net Operating Income	$    300,000.00
Value	$ 7,500,000.00	assume a 4 cap
Debt service	$         210,000	5.25m (70% LTV at 4%)
Net Cash Flow	$      90,000.00
Today
Net Operating Income	$    300,000.00
Value	$ 5,454,545.45	assume a 5.5 cap
Debt service	$         315,000	5.25m (70% LTV at 6%)
Net Cash Flow	$    (15,000.00)

Is the recent decline in commercial property values a blip or a trend?

“Lots more price declines are coming,” Mark Zandi, Moody’s Analytics chief economist, said.

The danger is that will compound the difficulties confronting many banks at a time when they are fighting to retain deposits in the face of a steep rise in interest rates over the past year.

Excluding farms and residential properties, banks accounted for more than 60% of the $3.6 trillion in commercial real estate loans outstanding in the fourth quarter of 2022, with smaller institutions particularly exposed, according to the Federal Reserve’s semi-annual Financial Stability Report published last week.

“The magnitude of a correction in property values could be sizable and therefore could lead to credit losses” at banks, the report said.

Summary

The recent declines in commercial properties are not a blip.  They are the beginning of an upcoming cycle with huge resets in prices.  These prices will be most profound in office with big impacts also being felt in larger multifamily.

Based on the current federal reserve predictions, rates will remain elevated at least until around mid-year 2024.  This will exasperate the issue new group of office and multifamily notes come due for a reset leading to cash flow issues in many cases.

The overwhelming majority of commercial loans are held by banks so at the end of the day someone will be taking a haircut that will become self-fulfilling as lenders sit out on new deals due to their own cash flow issues caused by commercial property.  I’m already seeing the credit crunch which will get amplified over the next year with higher rates.

Ever stumbled upon a quaint café in an unexpected place and thought, “How did I not know about this?” The world of real estate has its own hidden cafes—secondary and tertiary markets. But why are they like hidden gems, and how can you, as an investor, benefit from them? Let’s unpack it:

• Primary Markets: These are big players such as Dallas, LA, or Chicago.
• Secondary Markets: Cities like Austin, Nashville, and Portland, which have been gaining traction.
• Tertiary Markets: Think of areas like Bend, Oregon, or Macon, Georgia. They may be talked about less, but they’re brimming with potential.

Considering a fix-and-flip project or rental investment properties in these lesser-sung regions? Let’s weigh some of the pros and cons.

Upsides of investing in secondary and tertiary markets

Cost-efficient entry

These markets are often in regions that haven’t experienced the rapid urbanization and commercialization in primary cities. Without the hype and media attention driving up property prices, entry costs remain relatively low. This allows investors to make strategic, calculated investments without the heavy financial weight that prime markets often demand. A savvy investor can view this as an opportunity to diversify their portfolio, leveraging the affordability of these markets.

Less crowd, more space

Most often in the limelight, primary markets attract domestic and international investors. In contrast, secondary and tertiary markets remain relatively under the radar.

The charm of this understated focus is the freedom it offers. Real estate investors can take their time to understand a property, negotiate without the pressure of multiple counter-offers, and finalize deals in a less aggressive environment. This space for deliberation can lead to more informed and, ultimately, profitable decisions.

Promising returns

The untapped nature of these markets means there’s substantial room for growth. The ROI here isn’t just about immediate profits. It’s also about long-term appreciation.

As these markets mature and attract more attention, early investors can see substantial returns on their initial investments. To succeed in these markets, look for properties that can increase in value over time as the market changes.

Steady growth

Primary markets are influenced by global trends and international investments. On the other hand, secondary and tertiary markets typically experience growth as a result of local factors.

This means growth is often steadier and more predictable, grounded in local economic and infrastructural developments. For an investor, this translates to more sustainable, organic appreciation. Monitoring local news, understanding community plans, and keeping an ear to the ground can provide valuable insights into potential growth trajectories.

Challenges of investing in secondary and tertiary markets

Potentially more demanding research

The relatively low-profile nature of these markets means that traditional real estate research tools might not always offer comprehensive data. This challenge, however, is also an invitation for investors to innovate. Engaging with local realtors, joining community forums, and even connecting with residents can offer invaluable insights. Immersive research helps choose properties and understand local culture, preferences, and long-term investment viability.

More gradual appreciation

These markets are influenced by local factors. So, the speed of growth may not be as fast as the rapid increases seen in top markets.

However, slow and steady growth can be a blessing in disguise. It gives investors the time to adapt, make further investments, or even exit if they foresee a plateau. Recognizing the steady nature of these markets is essential to setting realistic expectations and crafting a strategic investment plan.

Networking nuances

The bustling real estate events and seminars are less frequent here, but that shouldn’t deter the passionate investor. Embrace this as an opportunity to pioneer. Host local meetups, collaborate with community leaders, or even establish digital forums for like-minded investors targeting these markets. By taking the initiative, you not only build a network but potentially position yourself as a thought leader in the space.

Market variability

These markets can be sensitive to local economic shifts. A significant employer downsizing or a local industry experiencing a downturn can have palpable effects.

But with challenge comes opportunity. Staying informed about local happenings can allow proactive investors to pivot strategies, hedge risks, and even identify new avenues for investment. Regular engagement with local businesses and economic forums can be invaluable.

Taking the plunge: Market research and tips for new local market investments

It’s pivotal to acknowledge the importance of thorough market research when considering investments in secondary and tertiary markets. Venturing into these lesser-known territories requires a tailored approach. So, where should you start?

• Local Expertise: Building relationships with local real estate agents or brokers can offer unique insights that standard market reports might miss. They have their fingers on the pulse of the local community, understanding the intricacies and trends that define these markets.
• Community Forums & Social Media: Engage in local online forums or social media groups. These platforms have valuable information about neighborhood developments, upcoming projects, and local events that can affect property values.
• Visit In-Person: Nothing beats an on-ground visit. Walk the neighborhoods, visit local businesses, and strike up conversations with residents. This will show you the community spirit and help you understand how many people want to rent or buy renovated properties.
• Assess Local Amenities: Look for signs of growth. Are new schools being built? Are there parks and recreational areas? What about public transport facilities? These can be indicators of a budding community, which can be especially attractive for rental investments.
• Stay Updated: Once you’ve gathered your initial insights, it’s essential to keep updating your knowledge. Markets evolve, and what’s true today might change in a few months. Set up Google alerts, subscribe to local news outlets, and keep in touch with your local connections.

Venturing into a new market also means adapting your investment strategies to align with local demands. For fix-and-flip projects, understanding the local architectural preferences, popular home features, or even favored color palettes can be the difference between a property that sells instantly and one that lingers on the market.

For rentals, it’s about understanding the demographics. Are potential tenants young professionals, families, or perhaps retirees? Each group has unique needs, from proximity to schools to easy access to nightlife.

Aside from conducting market research, it is crucial to find a reliable lending partner. One that has a proven track record and expertise in the local market.

That’s where Muevo comes in

At Muevo, we’re changing the real estate financing game. Our presence in 50 states plus DC has equipped us with diverse market insights. We’ve seen the aspirations of investors in primary cities and the untapped passion of those in secondary and tertiary ones. This broad spectrum of experience allows us to offer tailored financing solutions, from Fix and Flip/Bridge Loans to DSCR Rental and Rental Portfolio Loans.

We combine the agility of technology with human expertise, ensuring you close deals faster, enjoy competitive rates and have our unwavering support in every step.

Wrapping up

Exploring secondary and tertiary markets means embracing both the challenges and opportunities they present. The key? Knowledge, diligence, and a reliable partner in your corner. As the landscape of real estate investing evolves, staying informed and adaptable can be your greatest asset.

So, whether you’re diving into the deep end or just dipping your toes, remember every market has its unique story. Happy investing, and here’s to uncovering the next great opportunity!

Dreaming of homeownership? A mortgage loan can help you turn that dream into a reality. In this edition, we’re excited to explore the world of mortgage loans and how they can empower you to purchase your dream home. Let’s dive in!

Understanding Mortgage Basics:

Begin by familiarizing yourself with the different types of mortgage loans available. Research fixed-rate mortgages, where the interest rate remains constant throughout the loan term, providing stability in your monthly payments. Alternatively, explore adjustable-rate mortgages, which offer a lower initial interest rate that may adjust periodically based on market conditions. Understanding these options will help you make an informed decision when selecting a mortgage.

Building a Strong Credit Score:

A good credit score is essential when applying for a mortgage loan. Take steps to improve your credit score to access more favorable loan options. Pay your bills on time, reduce your overall debt, and keep your credit utilization ratio low. Regularly check your credit report for errors and address any discrepancies promptly. A strong credit score can lead to better interest rates and terms, potentially saving you thousands of dollars over the life of your loan.

Exploring First-Time Homebuyer Programs:

If you’re a first-time homebuyer, explore special programs and incentives designed to assist you in the homeownership journey. Many regions offer down payment assistance programs, reduced interest rates, or educational resources to help you navigate the process. Research what options are available in your area and determine if you qualify for any of these programs. They can significantly ease the financial burden of buying your first home.

Saving for a Down Payment:

Start saving for a down payment as early as possible. A larger down payment can result in a lower loan amount, lower monthly payments, and potentially better interest rates. Review your budget and identify areas where you can cut back to allocate more funds toward your down payment. Consider automating your savings by setting up a separate account dedicated to your homeownership goal. Additionally, explore alternative down payment options, such as government assistance programs or grants.

Getting Pre-Approved:

Before house hunting, consider getting pre-approved for a mortgage loan. This process involves submitting your financial documents to a lender who will assess your financial situation and provide an estimate of the loan amount you qualify for. Pre-approval demonstrates your seriousness as a buyer and can give you a competitive edge when making an offer on a home.

Remember, buying a home is a significant financial decision, and taking the time to educate yourself about mortgage loans is crucial. By understanding mortgage basics, building a strong credit score, exploring first-time homebuyer programs, saving for a down payment, and getting pre-approved, you’ll be well-equipped to embark on your homeownership journey. Stay tuned for more insights and guidance on homeownership in our upcoming newsletters.

Wishing you success on your homeownership journey!

Spring’s Housing Market Is About To Reach a Peak With ‘Outsized Impact’ Buyers Really Need Right Now

As strange as the housing market has gotten lately, certain seasonal rhythms still prevail. And despite being somewhat dampened by stubbornly high home prices, roller-coaster mortgage rates, and an unpredictable economy, the spring homebuying season is about to reach an apex that’s well worth taking advantage of.

“We’re moving into the period of the year when the number of newly listed homes tends to peak—usually in May or June,” notes Danielle Hale, chief economist for Realtor.com®, in her weekly analysis.

Granted, this seasonal pinnacle might not seem all that noticeable, since the number of new sellers listings their homes is still lower than it was at this time last year. For the week ending May 6, 16% fewer new homeowners listed their homes for sale. Still, this annual decline has been steadily shrinking week by week.

Even though there is still a gap, it’s smaller than what was typical in most of March and April,” explains Hale.

And although new listings are down from last year, total inventory (of both new and old listings) is up 31% for the week ending May 6. In other words, there are plenty of homes for sale, although buyers might need to give stale listings a second look. This portends a potential boost to the overall housing market and offers hope to both buyers and sellers.

In short, the housing inventory is “evolving,” according to Hale. “While further moderation is needed, this is a welcome improvement that comes as new listings near their seasonal high point. Improvement now could have an outsized impact.”

We’ll break down what this all means for both homebuyers and sellers in our latest installment of “How’s the Housing Market This Week?”

The latest mortgage rates and home prices

What’s not so rosy? High mortgage rates are generally holding steady. The interest rate on a 30-year fixed-rate mortgage averaged 6.35% in the week ending May 11, according to Freddie Mac. That’s a bit lower than last week’s 6.39%, but still high enough to make many buyers uncomfortable.

Further compounding buyers’ problems is that housing prices are still inching upward.

The national median list price came in at $430,000 in April, up from $424,000 in March. But for the week ending May 6, home prices grew at a rate of just 2.4% compared with last year. That’s its slowest growth rate since May 2020, when the COVID-19 pandemic was raging across the country.

While tapering home prices is a glimmer of positivity for homebuyers, it’s not enough to really temper their bottom lines quite yet.

“For potential first-time homebuyers, this means that affordability will continue to be a top concern,” explains Hale. “For potential sellers, this means equity is still relatively high.”

What the spring market’s peak means for home sellers

While sellers are understandably thrilled by higher home values, they might have to drop prices soon, since many homes have been sluggishly stuck on the market with no takers.

Home sales have slowed for the past 40 weeks, with homes spending an average of 16 days longer on the market for the week ending May 6 compared with the same week one year ago.

And home sellers might struggle as more properties hit the market in the coming weeks.

“As market competitiveness wanes, sellers may become more flexible,” says Hale. However, the “degree of slowing observed depends on your local market. For example, homes are spending a little over a week longer on the market compared to a year ago in the Midwest and Northeast, where we know housing markets have fared better as affordability keeps demand high.”

Yet in the South and West, homes spent two more weeks on the market for the week ending May 6 compared with a year ago.

The key takeaway here is that while it’s important to understand national context, what really matters are the trends in your local market,” says Hale.

Spring’s Housing Market Is About To Reach a Peak With ‘Outsized Impact’ Buyers Really Need Right Now

Real estate investing has become increasingly popular in recent years. One of the reasons for this is the ability to generate passive income. Passive income streams are a great way to create long-term wealth with minimum effort and involvement.

As someone who has invested in real estate for passive income, I can attest to the benefits of this investment strategy. I remember purchasing my first rental property and feeling both excited and nervous about the prospect of being a landlord. However, as time went on, I found that the passive income generated from my rental property allowed me to achieve financial stability and freedom. I was able to use the rental income to pay off the mortgage on the property and generate a steady stream of passive income each month. It was a great feeling to see my investment grow over time and know that I was securing my financial future.

In this article, we’ll explore how you can build passive income streams as a real estate investor.

Understanding Passive Income

Before we dive into the different ways you can generate passive income as a real estate investor, it’s important to understand what passive income is. Passive income is money that you earn without actively working for it. In other words, it’s income that you earn passively with minimal effort and involvement.

Strategies To Generate Passive Income

1. Rental Properties

Rental properties can provide a steady stream of passive income through rent payments from tenants. To generate passive income from rental properties, investors should aim to purchase properties with positive cash flow, meaning the rent income exceeds the expenses associated with the property. Additionally, investors can hire a property manager to handle day-to-day operations, freeing up their time and allowing for truly passive income.

2. Real Estate Investment Trusts (REITs)

REITs are a passive investment option that allows investors to purchase shares in a company that owns and manages a portfolio of income-producing real estate properties. The income generated from these properties is then distributed to shareholders in the form of dividends. To earn passive income through REITs, investors can purchase shares through a broker or online investment platform.

3. Crowdfunding

Crowdfunding platforms allow investors to pool their money with others to invest in real estate projects, typically with lower investment minimums than traditional real estate investments. Investors can earn passive income through crowdfunding by receiving a portion of the income generated by the property, such as rental income or profits from a property sale.

4. House Hacking

House hacking involves living in a property and renting out a portion of it to generate passive income. This strategy can be particularly effective for those looking to purchase their own home, as the rental income can offset the cost of the mortgage. To earn passive income through house hacking, investors should ensure the rental income exceeds the expenses associated with the property.

5. Short-Term Rentals

Short-term rentals such as Airbnb can be a lucrative way to generate passive income, particularly for those with properties in desirable locations. To earn passive income through short-term rentals, investors should ensure their rental rates are competitive, provide excellent customer service, and maintain a well-appointed and well-maintained property.

6. Flipping Houses

Flipping houses involves buying a property, fixing it up, and selling it for a profit. While flipping houses requires more work than some other strategies, it can still generate passive income if investors hire a team to handle the renovations and sale. To earn passive income through flipping houses, investors should aim to purchase properties with high potential resale value and minimize their time spent on the renovation and sale process.

7. Commercial Real Estate

Commercial real estate investments can provide passive income through leasing the property to tenants. To earn passive income through commercial real estate, investors should aim to purchase properties with desirable locations and solid tenant bases and hire a property management company to handle day-to-day operations.

8. Private Lending

Private lending involves lending money to other real estate investors for their projects. To earn passive income through private lending, investors should ensure the borrower has a solid track record, and the loan is secured by the property, and agree on a competitive interest rate and repayment terms.

9. Real Estate Notes

Real estate notes involve purchasing the debt on a property and earning passive income through interest payments. To earn passive income through real estate notes, investors should ensure the borrower has a solid track record, the property has a desirable location, and agree on a competitive interest rate and repayment terms.

How to Choose the Right Passive Income Stream

Now that you have an understanding of the different ways you can generate passive income as a real estate investor, it’s important to choose the right passive income stream for you. Here are a few factors to consider:

1. Time Commitment

When choosing a passive income stream in real estate, it’s essential to consider the amount of time you’re willing to commit to it. Rental properties and flipping houses require a significant amount of time commitment, as they involve managing tenants, maintenance, and renovations. On the other hand, REITs and real estate notes require very little time commitment, as they involve investing in a company or debt instrument. Consider your lifestyle and how much time you have available to devote to your passive income stream.

2. Upfront Investment 

Another factor to consider when choosing a passive income stream in real estate is the upfront investment required. Rental properties and flipping houses require a significant upfront investment in the form of a down payment and renovations. On the other hand, REITs and crowdfunding require a much smaller upfront investment. Consider your financial situation and how much money you’re willing to invest upfront.

3. Risk Tolerance 

It’s important to consider your risk tolerance when choosing a passive income stream in real estate. Rental properties and flipping houses come with a higher level of risk as they are directly tied to the real estate market and require a significant amount of investment. REITs and real estate notes, on the other hand, come with a lower level of risk as they offer a more diversified portfolio. Consider your risk tolerance and willingness to take on more significant risks for potentially higher returns.

4. Personal Goals

Finally, consider your personal goals when choosing a passive income stream in real estate. Do you want to generate a lot of passive income quickly, or are you willing to take a slower approach? Do you want to be hands-on with your passive income stream, or would you prefer a more hands-off approach? Consider your goals and how your chosen passive income stream can help you achieve them. For example, if you’re looking to generate a lot of passive income (relatively) quickly, flipping houses may be a better option than REITs, which offer more stable returns over time.

Summary

Building passive income streams as a real estate investor can be a great way to create long-term wealth. Whether you choose to invest in rental properties, REITs, crowdfunding, house hacking, short-term rentals, flipping houses, commercial real estate, private lending, or real estate notes, there are many ways to generate passive income as a real estate investor. Consider your personal goals, risk tolerance, and time commitment when choosing a passive income stream, and remember to educate yourself, diversify your portfolio, build a strong team, and be patient.

As I experienced, and while risky, building up passive income streams can be exceptionally rewarding in the long run allowing you to enhance your lifestyle and provide you with financial freedom and flexibility. 

If you find yourself ready to invest in your passive income dreams, you’ll likely need some funding to turn those dreams into a reality. Well, the good news is you are already in the right place! Our team at REI News specializes in finding the most trusted and affordable lenders for real estate investors. Discover your financing optionsby speaking to us today!

NEW YORK (Reuters) – JPMorgan Chase & Co <JPM.N>, the country’s largest lender by assets, is raising borrowing standards this week for most new home loans as the bank moves to mitigate lending risk stemming from the novel coronavirus disruption.

From Tuesday, customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value.

The change highlights how banks are quickly shifting gears to respond to the darkening U.S. economic outlook and stress in the housing market, after measures to contain the virus put 16 million people out of work and plunged the country into recession.

“Due to the economic uncertainty, we are making temporary changes that will allow us to more closely focus on serving our existing customers,” Amy Bonitatibus, chief marketing officer for JPMorgan Chase’s home lending business, told Reuters.

The bank was the fourth largest U.S. mortgage lender in 2019, according to industry publication Inside Mortgage Finance.

The changes should help JPMorgan reduce its exposure to borrowers who unexpectedly lose their job, suffer a decline in wages, or whose homes lose value. The bank said the change will also free up staff to handle a surge in mortgage refinance requests, which are taking longer to process due to staff working from home and non-essential businesses being closed.

Refinancing requests jumped to their highest level in more than a decade last month as average rates on 30-year fixed-rate mortgages, the most popular home loan, fell to near record lows, according to data from the Mortgage Bankers Association (MBA).

JPMorgan would not disclose the current minimum requirements for its various mortgage products, but the average down payment across the housing market is around 10%, according to the MBA.

The new credit standards do not apply to JPMorgan’s roughly four million existing mortgage customers, or to low and moderate income borrowers who qualify for its “DreaMaker” product, which requires a minimum 3% down payment and 620 credit score.

The U.S. housing market had been on a steady footing earlier this year, but with a deepening recession and would-be home buyers unable to view properties or close purchases due to social distancing measures, the health crisis now threatens to derail the sector.

The residential mortgage market is already under strain after borrower requests to delay mortgage payments rose 1,900% in the second half of March, Reuters reported.

The National Association of Realtors last month said home sales could fall by around 10% in the short-term, compared to historical sales for this time of year. A Federal Reserve March consumer survey said home prices were expected grow 1.32% over the year, the lowest reading since the survey began in 2013.

https://www.yahoo.com/finance/news/exclusive-jpmorgan-chase-raise-mortgage-221128934.html