• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
REI WEALTH MONTHLY

REI WEALTH MONTHLY

Your Digital Guide to Real Estate Wealth

  • Home
  • About Us
  • News
  • Contribute
  • Events
  • Contact Us
  • SUBSCRIBE

news

Young California Homebuyers Are the 3rd Most Likely to Need a Co-signer

May 19, 2022 by Realty411 Team

Image from Pixabay

By Lauren Thomas

After two years of high competition and fast-rising prices in residential real estate, the market is at last seeing signs of cooling off. Amid higher prices and recent interest rate hikes, demand is leveling out. Pending home sales have begun to decline, online searches, showings, and mortgage applications are down, and many experts anticipate a rebalancing in the market over the next year.

While many buyers may be starting to feel relief, younger buyers have had an especially difficult time in this market and may continue to struggle. The Millennial generation—Americans aged 26 to 41—are currently in their peak homebuying years, representing 43% of buyers according to recent data from the National Association of Realtors. Because they are earlier in their working lives, young shoppers may have less saved up to put toward a home, and they also tend to be first-time buyers, which means they do not have existing home equity available to help finance a purchase. While the market was at peak competitiveness, this made it harder to outbid buyers who had more resources at their disposal. Now, with home prices at historic highs and interest rates increasing, many young buyers are being priced out of the market altogether.

To overcome these challenges, some young buyers have relied on older friends and family members with more financial resources to support a home purchase. This can happen informally, like with gifts to put toward a down payment or closing costs, but support can also come in the form of a co-signer on a mortgage loan. Co-signers are people who agree to be responsible for loan payments if the primary signer defaults. Because co-signers’ financial resources and credit history are also evaluated as part of a loan application, this helps buyers with low incomes, more debt, or a patchy employment history increase their likelihood of qualifying for a loan and receiving lower interest rates or higher approval amounts.

Young buyers appear to be relying on older co-signers simply to enter the housing market, rather than using co-signers’ financial assistance to purchase more expensive homes. This is evidenced by similar property values and down payment amounts across young buyers with and without older co-signers, according to data from the Home Mortgage Disclosure Act. The median property value and down payment for young buyers with an older co-signer is $295,000 and $40,000, respectively, compared to $285,000 and $30,000 for all young buyers. But both groups of buyers lag behind typical figures overall: for all buyers, the median property value is $325,000, and the median down payment is $50,000.

Co-signers are especially helpful to young buyers in markets that tend to be more expensive for housing. There is a positive correlation between median home price in a state and the percentage of young buyers with an older co-signer. The three states with the highest percentage of young buyers who have a co-signer—Hawaii, Colorado, and California—respectively rank first, fifth, and second in the U.S. for overall home prices.

Due to the relationship between home prices and the presence of a co-signer, states in the West and Northeast that tend to be more expensive also tend to have younger buyers relying on co-signers more often. In contrast, more affordable states in the Southeast and Central U.S. have fewer young homebuyers with a co-signer.

To determine the states with the highest percentage of young homebuyers with an older co-signer, researchers at Porch analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. The researchers ranked states by the percentage of young homebuyers (34 years old or younger) with an older co-signer (55 years old or older). In the event of a tie, the state with the higher median property value for young homebuyers with an older co-signer was ranked higher.

The analysis found that in California, 1.358% of young homebuyers have an older co-signer on their mortgage loan, compared to 0.915% at the national level. Out of all states, California has the 3rd most young buyers utilizing an older co-signer. Here is a summary of the data for California:

  • Percentage of young buyers w/ an older co-signer: 1.358%
  • Median property value for young buyers w/ an older co-signer: $535,000
  • Median property value across all young buyers: $545,000
  • Median down payment for young buyers w/ an older co-signer: $100,000
  • Median down payment across all young buyers: $100,000

For reference, here are the statistics for the entire United States:

  • Percentage of young buyers w/ an older co-signer: 0.915%
  • Median property value for young buyers w/ an older co-signer: $295,000
  • Median property value across all young buyers: $285,000
  • Median down payment for young buyers w/ an older co-signer: $40,000
  • Median down payment across all young buyers: $30,000

For more information, a detailed methodology, and complete results, you can find the original report on Porch’s website: https://porch.com/advice/young-buyers-relying-older-co-signers-buy-homes

https://porch.com/advice/young-buyers-relying-older-co-signers-buy-homes

Filed Under: news Tagged With: Lauren Thomas, real estate investing, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth

Join Us for a LIVE & INTERACTIVE Virtual Investing Summit on Saturday, May 21st

May 18, 2022 by Realty411 Team


Dear Savvy Investor;

Did you register for Realty411’s complimentary investing summit this Saturday? This is the place to be to learn from TOP experts sharing important insight to help readers grow their investment portfolios.

Our NEW VIRTUAL Investing Summit on MAY 21st, begins at 9 AM PT. Event guests can engage with all of our speakers and ask questions in real time. You simply can’t afford to miss this online event.

Our mission is to educate and empower individuals to invest in real estate. Our virtual events have united thousands of both new and sophisticated investors from 47 states so far — in total representing 375 cities across the United States.

Join us for an amazing day of real estate education. Every online event we produce is unique, and video replays may not be made available later. So be sure to reserve this day for REI learning at its best.

WHAT CAN YOU EXPECT?

  • Learn from Leaders & Industry Pros
  • Chat with Investors Across the Country
  • NON-Stop Tips for Real Estate Success
  • Learn with Long-Term leaders in the REI Industry
  • REI Knowledge from Real and Active Investors
  • Discover the Power of Leverage with OPM
  • Save money with Realty411VIP.com, Learn More
  • Gain Access to Realty411’s Private VIP Network
  • Sharing Life-Changing Information for 15 Years!

Be sure to register now for our NEW VIRTUAL Investor Summit on Saturday, May 21st, 2022 – 9 AM to 4 PM PT.

Invest ONE DAY to learn online with top experts who are ready to share their insight and success tips. This event is Live and Interactive.


advertisement


Need help with your investing? Get mentored with Realty411. Along with mentoring, a VIP membership also includes access to Realty411 VIP discounts, plus access to our online VIP network, as well as other perks.

To learn more, CLICK HERE. After registering for an annual membership, we will contact you with details about the next session.


Filed Under: events, news Tagged With: interactive virtual investing summit, real estate investing, real estate investing summit, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth, virtual investing summit

Focus and You Will Succeed

May 16, 2022 by Realty411 Team

Image from Pixabay

By Tamera Aragon

“Success is a tireless expenditure of narrowly focused energy”
– Author Unknown

The definition of Focus: A condition in which something can be clearly apprehended or perceived.

Do you agree that it can be very difficult to get focused on what it is you would like to accomplish in this life? Do you get pulled this way and that depending on which way the wind is blowing that day? This may be because you are not “narrowly focused”.


ADVERTISING


In working with so many students for real estate training and coaching, I have found the lack of ability to focus and stay on task to be the number 1 reason for not just failure, but also for some not even getting to the point of doing the real estate investing business. They don’t even get to the point of trying to invest in real estate because they stop. People often lose focus.

For example, a student, (lets call him Johnny), commits to coaching with complete confidence. His personal goal is to make $10K in the next 60 days in real estate investing. Johnny starts listening to the trainings and going through the motions, focusing on his goal for maybe a week or 2. Then Johnny hears about a great training on how to buy Silver for cheap (or some other investing strategy that is also good). So Johnny buys that training and starts listening to that training too. Buying that training has now taken the focus of the real estate training, committing him to failure in both goals!

Image from Pixabay

Focus is crucial to success.

“Always remember, your focus determines your reality.”
Qui-Gon to Anakin, Star Wars Episode I

It’s so easy to blame external circumstances for failure, when in reality the reason for our failure is this missing link; Narrowly focus energy on a single goal. People get too spread out trying to accomplish too much for too many. The only blame for lack of success is that someone went on to something else by their own choosing and decision. Focus is a choice.

Not only is focus important, but focusing on only one goal at a time key to your success. Trying to accomplish multiple goals spreads out your focus, and makes it less likely that you’ll complete any of them.


ADVERTISING


How To Stay Focused

Even with only one goal, maintaining focus can be difficult. Therefore, you need to find ways to keep your focus on that goal.

Some good examples that work for me:

1. Read about your goal as much as possible, on websites and blogs and in books and magazines.
2. Post up picture of what you want on your wall, refrigerator, and computer desktop.
3. Send yourself messages using an online calendar or reminder service.
4. Tell as many people as possible about your goal and post your progress on your blog.
5. Have a time each day to work on a single goal, with a reminder in your schedule each day to do only that for a period of time, no exceptions.

Maintain your focus on your goal, and you’ve won half the battle in achieving it.


TAMERA ARAGON

Tamera Aragon is a professional online entrepreneur and has bought and sold over 300 properties, establishing her as an expert in the real estate investing field. Since 2003, she has purchased over 10 million dollars in real estate and currently holds properties all over the world. Tamera’s focus is on the booming Foreclosure market, buying Pre-foreclosures, REOs and Short Sales. Tamera who is a noted Author, Success Trainer, Speaker & Coach, shows her passion for helping others with the 17 websites she has created and several specialized products to support fellow investors throughout the world. When Tamara is not busy running her website, she is very involved with her Fiji joint ventures and investments. Tamera Aragon is one of the few trainers and coaches who is really “doing it” successfully in today’s market. Tamera’s experience has earned her a solid reputation in the industry as well as the respect and friendship of many of the top national real estate investment and internet marketing experts. Tamera Aragon believes her success has garnered her the financial freedom to fully enjoy her marriage and spend quality time with her children.


Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Filed Under: motivation, news Tagged With: focus, real estate investing, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth, Tamera Aragon

Life’s busy. Save money and time.

May 12, 2022 by Realty411 Team

You need to login to view this content. Please Login. Not a Member? Join Us

Filed Under: deals, news Tagged With: deals, membership deals, real estate investing, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth, travel deals, VIP deals, VIP perks

Tresa Todd’s Women’s Guide to Real Estate Investing Without Fear of Her Future Debuts #1 on Amazon

May 10, 2022 by Realty411 Team

Special submission to Realty411.com

Tresa Todd, host of the #1 largest women’s real estate investors conference in the Nation, “WREIN Live,” and founder of the Women’s Real Estate Investors Network, proudly announced the debut of her Women’s guide to real estate investing at WREIN Live over the weekend, driving her book Without Fear of Her Future, to the #1 spot in the Real Estate Investments category on Amazon.

Without Fear of Her Future is an informative how-to, focused on Tresa’s own experiences becoming a successful investor and advocate for women in the real estate investing industry.


ADVERTISING


Tresa provides step-by-step knowledge featuring real estate investing strategies, how to find and fund your deals without using your own money, success in designing short term rentals, and so much more:

Tresa said “This book is jam packed with my experience getting into this industry later in life, my wins, my struggles and everything I’ve learned along the way to help you on your journey into the world of real estate investing.”


ADVERTISING


With the release and impact of Without Fear of Her Future, she hopes to meet professional women exactly where they are, providing them with easy to understand real estate education so they can become financially confident and create multi-generational wealth for their families.

For additional information see links below:

Book: http://www.withoutfearofherfuture.com/book

Website: https://womensrein.com

Filed Under: news Tagged With: Guide to Real Estate Investing, real estate investing, real estate investing book, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth, Tresa Todd, Without Fear of Her Future

Is It Worthwhile Investing When Interest Rates Are Higher?

May 4, 2022 by Realty411 Team

Image from Pixabay

By Adiel Gorel

Many investors are asking, now that interest rates have gone up by 2% relatively quickly, and home prices are up significantly from a couple of years ago, whether buying single-family rental investments is still something to consider.

The main point, at the heart of the matter, is that we can get a 30-year FIXED rate loan when buying single-family homes (technically 1-4 residential units) in the United States. This point is so dominant, it supersedes any other consideration. Surprisingly few investors seriously take this dominant factor into consideration.


ADVERTISING


For some who have read other materials I have written, the following is a bit of a repetition, but it’s well-worth understanding this point fully. The 30-year fixed rate loan does not usually get its due as an amazing financial tool that should be utilized by any savvy investor who can get it.

For many foreigners, it is incomprehensible that in the US we can get a loan that will never keep up with the cost of living for 30 years. During that period, essentially everything else DOES keep up with the cost of living, including rents. Only the mortgage payment and balance (which also gets chipped down by amortization) do not keep up with inflation.

You can talk to many borrowers who have taken 30-year fixed rate loans and after, say, 14 years, realized that although there are 16 years remaining to pay off the loan, the loan balance AND the payment seem very low relative to marketplace rents and prices. The remaining 16 years are almost meaningless, since in many cases (statistically and historically) the loan balance will be a small fraction of the home price and not very “meaningful.” Just to get some perspective, most other countries on Earth have loans that constantly adjust based on inflation. Both the payment and the balance track inflation all the time—usually with no yearly or lifetime caps as adjustable loans have in the US.

Image from Pixabay

The power and positive effect on one’s financial future gets magnified when you consider that in 2022, we are still in a period in which interest rates are very low. While investors cannot get the same favorable rates as homeowners, it is nevertheless quite common nowadays to see investors getting a rate of between 5.75% and 6.25% on single-family home investment properties. From a historical perspective, these are very low rates. Most experts think that, in the future, mortgage rates will rise further. From a historical perspective, even 7.5% is considered a relatively low rate. These days, you can “turbo boost” the great power of the never-changing 30-year fixed rate loan by locking in these still-low rates, which will never change. If in the following years interest rates indeed go up, you will feel quite good about having locked under-6% rates forever.

Once you have gotten your fixed rate loans, two inexorable forces start operating incessantly: inflation erodes your loan (both the payment and the remaining balance), and the tenant occupying your SFH pays rent, which goes in part towards paying down the loan principal every month. These two forces create a powerful financial future for you.

Many of us have been “spoiled” during the COVID Pandemic that started in 2020. The Fed lowered rates to the very lowest point in the history of the US. Homeowners could get loans at 2.75%, and even a bit less. Investors could get loans at 3.5%, 3.75% or 4%. Happy times.

Recently, rates rose quite quickly. Homeowners now get loans at 5% or slightly more. Investors get loans at about 6%, depending on credit. It feels like the sky is falling, but it’s important to retain the historical perspective. These rates are still historically very low. Recall also that currently, inflation is at 8.5%. Inflation is your “best friend” when you have a fixed-rate loan, since it constantly erodes the true value of your payment and remaining loan balance. Getting a 6% FIXED rate loan when inflation is over 8% is quite favorable.


ADVERTISING


The 30-year fixed rate loan is so meaningful in changing your future that it works well over the long-term, almost regardless of the interest rate. Obviously, the lower the rate, the better. However, by way of an example, when I began investing in the 1980s, interest rates on mortgages were at 14%. Every single investment home I bought back then (and I always made the minimum possible down payment) started out with a negative cash flow. Nevertheless, it was clear to me that since the loan was FIXED, the payment would remain the same, but everything else would keep up with inflation. That meant, to me, that within a couple of years, the negative cash flow would turn into break-even, and a couple of years after that, it was likely to turn into a positive cash flow. A couple of years after that, the cash flow was likely to be a stronger positive, etc.

Those notions came to fruition exactly as I had seen them. I started celebrating every time one of my homes got to “break-even.” I knew that from then on, the cash flow would be evermore positive, on average, as the years would go by. Even with 14% interest rate, the system worked. Those homes changed my financial life enormously.

Of course, when rates went down, I refinanced. First, I refinanced down to 12%, then came the magic “single digit” time, when I refinanced to 9.95% and was ecstatic about it.

Image from Pixabay

I have thousands of investors’ success stories that I hear all the time. One small example is the Silicon Valley engineer who bought 16 homes, then 13 years later saw his loan balances were under 30% of the home values, despite there being 17 years still remaining on the life of the 30-year loan. He sold 4 of the homes, paid his taxes, and used the proceeds to pay off the small remaining 12 loans, retiring on the strength of 12 free and clear homes. Many of these success stories, including his, are from people who started buying when rates for investors were between 7.75% and 8.25%.

Many investors are also taken aback by the price increases that took place during the Pandemic. They feel they are being hit by high prices AND higher interest rates.

One very important thing to remember is that while I am writing this (May 2022), inflation is at 8.5%.

Image from Pixabay

Some people are concerned about starting out with only a break-even, or a very slight positive cash flow, when making 20% down payments. They have gotten accustomed to starting out with a healthy positive cash flow, even with a mere 20% down payment, during the super-low rates era. However, the INITIAL cash flow is just that: initial!

As time goes by, the mortgage payments remain the same. However, rents rise, on average, with inflation. These days there is a huge demand to rent single-family homes in the suburbs, with a yard and room for a home office. There is more demand than supply in the rental space, and rents are going up quite furiously across the nation. Even if rents only rise with inflation, inflation these days is quite high. Either way, the cash flow gets better and keeps getting better as the years go by, while you build equity in the home, changing your future.

I look at these investments as long-term. They will very likely change your future, but they need 10, 12, 14 years to get to the desired result. At the beginning, the “cash flow” that has the most meaning is your own income: the income from your W-2 job, or your small business, in addition to what your spouse may earn as well. THAT is what pays for your food, transportation, utilities, and kids’ expenses at the present. In the future, when the rental homes can get you to retire powerfully, the equation flips and then the rental homes will provide the very meaningful “cash flow” you can retire on, as I describe in the example above.

Image from Pixabay

The mistake many new investors make is thinking that they MUST have immediate large positive cash flow at the outset, despite not really needing it, since they generate sufficient “cash flow” in their jobs. This thinking may create a situation whereby an investor never gets started. Possibly a book the investor had read might have put the idea in their head that initial cash flow is the primary thing to look for. Ten years later, I see people expressing great regret at never having started due to these notions. Some people resort to buying inferior properties in inferior locations, seeking a “better initial cash flow.” Buying bad properties usually doesn’t end up that well.

Today, as in any time I have seen, is an excellent time to acquire single-family rental homes, finance them with the astounding 30-year fixed rate loan, and then letting time pass while inflation does its thing.

We will talk about it in more detail at our upcoming quarterly event, complete with a Q&A.


ADIEL GOREL

Adiel Gorel has more than three decades of successful real estate investing experience. As the CEO of ICG (International Capital Group) Real Estate, a world-renowned real estate investment firm founded in the San Francisco Bay Area in 1987, Gorel has helped investors utilize one of the most powerful investment tools—single family rental homes. He teaches people how to have fun with a process most find complex and speaks about the importance of securing a strong financial future for retirement, business investing, and college education.

Through ICG, he has assisted thousands of investors, from novice to expert, in purchasing over 10,000 properties to date. He is also the author of Remote Control Retirement Riches, and Invest Then Rest: How to Buy Single-Family Rental Properties, which includes numerous investor reports describing their real-life investing experiences. He has also authored Remote Controlled Real Estate Riches, Discovering Real Estate in the U.S. and Life 201.

Gorel has been featured on NBC, ABC, in Fortune Magazine, the San Francisco Examiner, and numerous radio shows showcasing his no-nonsense, insightful approach to rental single family home investing. He speaks worldwide and throughout the U.S., sharing his knowledge on a variety of topics including securing a powerful financial future, investing in single-family homes, the 30-year fixed-rate mortgage, and related subjects.

ICG has established an infrastructure to support investors in many metropolitan areas in the U.S. Gorel owns many properties himself.

To this day, Gorel supports individual investors via planning, assistance in remote home buying, and property management issues resolution.

He holds a master’s degree from Stanford University. His professional experience includes being a Hewlett-Packard research engineer, as well as management and director positions at Excel Telecommunications, and several biotechnology firms. He lives in the San Francisco Bay Area.

Filed Under: investing tips, news Tagged With: Adiel Gorel, International Capital Group, real estate investing, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth

  • Go to page 1
  • Go to page 2
  • Go to page 3
  • Interim pages omitted …
  • Go to page 69
  • Go to Next Page »

Primary Sidebar


Copyright © 2022 · ReiWealth.com