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Spring Yard Cleanup Is a Better Investment Than You Think

Investing in spring yard cleanup for your properties can go a long way toward improving curb appeal and overall ROI. During the winter season, your properties are exposed to snow, ice and cold winds that blow in leaves, litter and other debris you don’t want on your properties. These harsh winter elements can blanket your properties and stifle your lawns’ roots from the oxygen and nutrients they need to maintain their healthy appearance and preserve curb appeal year-round. Come springtime, your properties may either come out unscathed or look like a scene from Twister. Or, they might just land somewhere in between. Regardless of which end of the spectrum they fall, cleaning and inspecting your properties in the spring is essential to fostering curb appeal, creating a satisfying experience for residents and improving ROI. Fostering Curb Appeal In situations where residents are responsible for yard care, it’s not uncommon for them to ignore their landscaping duties and leave owners with the risk and cost of neglect. HOA violations, rehab costs, decreased property value and lower rental prices are just a few of the factors that can hit your bottom line when curb appeal is overlooked. To avoid the expenses associated with turnover, preventive yard maintenance can help you catch small problems before they turn into larger expenses. Annual spring cleanup ensures that your lawns are on their way to a healthy and beautiful season and are utilizing all the care lawn products efficiently. The National Rental Home Council suggests single-family home rental operators should take preventative maintenance measures throughout their ownership to ensure properties remain in good condition. Preventive maintenance that aims to protect and improve the appearance and state of the rental home can eliminate rehab costs and fees associated with HOA violations. It can also limit the vacancy rates since a well-cared-for property leads to a more satisfying experience for residents. Researchers at the University of Alabama and the University of Texas at Arlington collected and assessed Google Street View photos and sales data from 88,890 properties and determined that homes with excellent curb appeal sold for 7%-14% morethan homes with less-than-ideal curb appeal. Creating a Satisfying Resident Experience Considering spring cleanup is your biggest opportunity of the year to get your properties in shape, it shouldn’t be left in the hands of your residents. Often, residents don’t have the appropriate equipment, knowledge and desire to maintain your investment. Provide your residents with an experience that allows them to enjoy the great amenities your rental has to offer, such as a well-manicured property. This is one thing you can do to give your residents the feeling of being a homeowner without all the added responsibility. The more your residents “feel” like homeowners, the less likely they are to rent elsewhere. The less your residents rent elsewhere, the more money you make. “Single-family rental operators should aim to provide residents with a highly satisfactory experience from the time of the first contact through the selection of their home, the move-in process and for the duration of the experience,” advises the National Rental Home Council. In addition to creating a satisfying experience for residents, cleaning and inspecting your properties throughout the year will help ensure they are well maintained. As many property owners have experienced, some tenants have a history of neglecting the yard. Regularly providing exterior services for your properties will give residents more appreciation and respect for your investment. It’s up to you to set the standards for how your properties should be maintained. Introducing your residents to your standards of yard care will lay the groundwork for how the interior of the property should be maintained, ultimately reducing your expenses inside and outside the home. Improving ROI The key to improving ROI for your properties is performing routine maintenance. Rehabilitating your properties between residents is neither cost-effective nor practical. Your properties should always be in rent-ready condition regardless of occupancy status. Spring cleanup is a vital piece of the year-round maintenance that keeps your properties in good condition. Maintaining your properties regularly will attract more long-term residents and reduce the costs associated with listing and marketing your properties. Studies show that improving landscape quality could increase rental rates by as much as $117 a month and improve turn times by as much as 30 days. Bottom line, better maintained yards translate to more money for owners. Neglecting your properties or assigning yard care duties to residents can increase your operating costs. Giving your lawns a good place to start in the spring can set you up for long-term success. Sidebar To keep up with curb appeal and protect your investment, here are a few simple and affordable landscaping tips you can implement today to yield long-term results. Maintain Bushes and ShrubsTrimming bushes and shrubs is quite possibly the easiest way to add curb appeal to your properties. It also offers the most dramatic effects. Keeping up with routine bush and shrub trimming ensures your properties always look their best without breaking the bank. The key here is routine. Bushes and shrubs can give properties dramatic effects. But, if they are neglected, they can have a negative impact. Fertilize Your LawnMaybe it’s because fertilizing doesn’t offer instant gratification like lawn mowing or bush trimming that some people overlook this necessity. Still, fertilizing is a vital curb appeal booster with long-term benefits, including attracting and keeping residents. At the very least, you should be applying lawn fertilizer two times a year. Some areas require even more applications. Check with your landscaper on how often your lawns need to be fertilized.  Use a Steel Blade Edger to EdgeLet’s face it—using a weed eater to edge along sidewalks and walkways is a rookie mistake and can be spotted a mile away. Instead, ask your landscaper about using a steel blade edger at least once a month to give your properties a clean and sophisticated look. When you compare a steel blade edger to properties that use a string trimmer to

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The Personality of Real Estate Investors

What is your Advantage? For the past 20 years, I have worked with hundreds of entrepreneurs from all career backgrounds while being an executive at HomeVestors, The We Buy Ugly Houses people. Each one had a common desire to build a profitable business buying, rehabbing and selling single-family houses. I developed an assessment for those investors to complete as part of the application process. I also met with each investor and their partner to discuss the part of the business that would provide the best opportunity for success. My other passion was to review the results. What I learned from the process of tracking the more than 110,000 houses they bought during those 20 years is this: Some personality patterns tend to be more successful than others. I also learned that all entrepreneurs—no matter their personalities—can succeed if they recognize what their Advantage is and team with others who can do the parts of the business where they do not have an Advantage. The Three Levels My system, called Your Living Talent, presents choices on three levels: Feeling, Thinking and Acting-Advantage. The Feeling level is what you were born with. It determines why you do what you do. The Thinking level is developed by age six and determines how you think and communicate. You get that from your parents. Whatever they give you causes you to develop the opposite. For example, if they are very organized, then you tend not to be. This explains why grandchildren and their grandparents get along. You say I will never raise my children the way I was raised, and you don’t. The grandkids say to the grandparents: I’m OK and you’re OK. What is wrong with my parents? The third level is your Acting-Advantage. This is developed by age 15-16. By that age, you have a half dozen fiber connections in your brain that will always be your best Acting-Advantage. You develop this by choosing what you enjoy doing and through the recognition your family and friends give you for doing well. If you can spend 80% of your day doing what you have an Acting-Advantage to do, you will be energized by your work and you will energize the people you work with and serve. The Four Colors The four colors are Red-Doers, Yellow-Talkers, Blue-Thinkers and Green-Controllers. You can have one, two, three or four of these colors on each level. All businesses require all four colors to be successful. Red has an Acting-Advantage to focus on results. Yellow has an Acting-Advantage to connect with people. Blue has an Acting-Advantage to solve problems. Green has an Acting-Advantage to maintain a system. The two most essential Acting-Advantages for building a successful business are the Red Acting-Advantage that focuses on results (production of revenue and income) and the Yellow Acting-Advantage that connects with people. The key to buying houses directly from sellers who are usually still in their homes is being able to connect with them and helping them make the decision to sell at a fair price in exchange for a quick sale without having to make repairs. If you have a Blue Acting-Advantage and can solve problems, you are a good listener because you are listening for the problem. The risk is that you can spend too much time trying to solve a problem that cannot be solved. If you have a Green Acting-Advantage, you are great at analyzing the details of the transaction. The risk is you talk yourself out of the transaction because you are too focused on the details. Most investors who have the Red/Yellow combination are not good with details. So, it’s important for them to surround themselves with people who can maintain the system. We have found that the most valuable person you can recruit for your team is good with detail and people and has a sense of urgency. Anyone who has had a great personal assistant can attest to the fact that their ability to focus on results was significantly improved by that person. People with Red Acting-Advantage can get almost anything done through focus and force. But they tend to be do-it-yourself people and end up doing things they don’t have an Advantage to do rather than doing what they are the best at doing. Thinking and Communication Patterns It’s also important to understand thinking and communication patterns. Understanding how different people think is a key component of building a successful team that can think through the best strategies and tactics. There is a process for fully utilizing the thinking of all your team members. First, Yellow determines who should be involved in the discussion. Blue determines why we are having the discussion and focuses on the best alternatives for solving the problem. Before they engage the Red to determine what we need to do to execute, they need to select the best two or three alternatives to present to the Red. Reds do best when they have two choices. Once Reds have picked the best strategy or tactic, Green determines the process or the system to get it achieved and tracked to make sure it is performing as expected. Partners or teams that take advantage of the thinking patterns of their team will always get better results than those that do not. Understanding how people feel is very important because feelings determine their decision to buy or sell. We justify our decisions with thinking, but we make our decisions with feelings. Reds have a need to win, be in charge and make money. Yellows need to be recognized, to celebrate and to do things with others. They never like it if they win and the team loses. Many of them start a real estate investment business so they can do it with their relatives, friends or neighbors. Blues have a need to research better alternatives. They focus how they can make life better for themselves and the people they care about. Their challenge is that they get bored with others once they understand

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Regional Spotlight: Charleston, South Carolina

The metro has a strong market structure likely to hold up under pressure. In March 2020, Charleston, South Carolina’s home sales posted a year-over-year growth of 6%, even with a coronavirus shutdown already looming on the horizon. Local businesses, including tech employers like Atlatl Software, home repair services like Punchlist, and a number of local and national commercial real estate developers, reported their outlooks for spring 2020 would remain positive and, in many cases, largely resistant to the COVID-19 shutdown. They set the tone for the city’s real estate sector as we move toward the halfway point in 2020. Justin Scott, CEO of Atlatl, reported only about one in 10 of his customers have “put a pause on purchases” from his company, which creates three-dimensional visualizations for manufacturers of complex machinery. The company continues to employ its roughly 60 employees, and its augmented reality software is filling a niche many companies need desperately as stay-at-home policies keep clients and service providers physically distant. Other Charleston industries are showing remarkable tenacity as well. For example, South Carolina’s ports in Charleston, Greer and Dillon all maintained normal operations into the second quarter of 2020 despite the coronavirus pandemic. And the Hugh K. Leatherman Terminal, located in nearby Mount Pleasant, remains on track for phase-one completion in March 2021. The facility’s five enormous cranes, all manufactured in China by the world’s only large-scale ship-to-shore crane company, are on track to be delivered in August or September. Statewide, South Carolina ports facilitate about 225,000 statewide jobs, so ongoing operations at these facilities indicate an underlying economic strength in the region. Of course, not all areas of the Charleston real estate market are doing “business as usual,” noted Bobette Fisher, president of the Charleston Trident Association of Realtors. She said March 2020 activity put the market in a strong position to face “the inevitable impact of the global pandemic on our market,” but she emphasized the housing market is likely to have “several challenging months ahead.” For example, Charleston’s available housing inventory dropped dramatically at the end of the first quarter of 2020. Homeowners removed their houses from the market to avoid showings that would expose their families to “through traffic” at a time when social distancing was becoming part of daily conversation. Interestingly, this could to some degree insulate the Charleston market from the wild price swings other markets may experience. Fisher said, “Charleston is in a somewhat unique position in that we continue to see buyer interest and demand in our market even as we progress through this highly unusual situation.” For real estate investors interested in the Charleston area, Fisher’s optimistic take on the situation can be feasibly supported with the area’s strong economic foundation. However, the positive aspects of Charleston’s “unique position” are tempered by some serious coronavirus-related issues. Is Support System Holding Firm? Investors interested in the Charleston area should look carefully at the strategic position of a potential acquisition before making a purchase. For example, Charleston led national numbers last year in terms of how many new homes were added in the area, with Construction Coverage reporting the area added more than 6,700 new homes total, more than twice the national average. Analysts expect the new construction sector of the real estate industry to weather the current economic crisis far better than the existing-home sector. So, the relatively higher availability of new construction and a preexisting trend toward new development could make Charleston particularly attractive to investors in this sector. On the other hand, certain industries in Charleston have been hit particularly hard. Employees in the area’s previously booming restaurant and hospitality industries are filing unemployment claims in record numbers. The South Carolina Department of Employment and Workforce (SCDEW) reported a 400% increase in claims the week of March 19, 2020, alone. That was the week following the state governor’s order calling a halt to all dine-in activities at restaurants, bars and cafeterias. The order also banned organized events of more than 50 people. South Carolina did take steps to protect these workers by enabling employers to file unemployment for employees infected with the virus, affected by a temporary shutdown, who have slow or smaller workloads, or who have temporary or seasonal work. Investors whose investment strategy involves housing for this currently unemployed population may have difficulty liquidating inventory at this time. Still, it is possible that investors who can hold these assets may benefit in the long run, once the state “reopens” its economy. In January 2020, the Charleston area’s unemployment was so low that SCDEW executive director Dan Ellzey said in a public statement, “More jobs are available than people to fill them. … South Carolina continues charting record levels of low unemployment while more people are earning paychecks than ever before.” Whether the state can regain that momentum will hinge largely on the fallout from the extended national COVID-19 shutdown and how the state handles its reemergence from sheltering-in-place orders. College of Charleston economics professor Frank Hefner suggested the aftershocks of the coronavirus outbreak could be like that of a hurricane in some ways, but emphasized the comparison is neither direct nor wholly reliable. “This is so unusual; anyone that tries to put a number on it is really going to be shooting blind,” Hefner said. When a hurricane hits the state, people may leave the area but then continue to spend money inland—sometimes more than they would spend if they had remained at home. Furthermore, when the storm is over, those people return and bring their buying power with them. “The local stores [in areas that evacuate] may lose a lot of retail sales, but people will need to buy from them a week later,” Hefner said. In the case of the coronavirus, consumer absence in the area could be multiplied by five times or more, depending on how long the state remains on lockdown. As a result, the financial stress on local businesses will be magnified. “Every time I have stood in [my

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Growing in Service, Organically and Exponentially

SingleSource celebrates 20 years in real estate with a dynamic new twist. When three friends from childhood joined forces in 2000 to form an REO asset management company paired with a broker price opinion forum, they knew their foundation was a firm one. They could not have dreamed, however, of just how broad their reach into the real estate industry would one day become. In 2020, their company, SingleSource, is celebrating two decades of service to real estate originators and investors with what has become a somewhat typical announcement: They are growing again. SingleSource’s extensive network of valuation services, REO services, field services, title and settlement services, and document management services has been joined by a dynamic new company with all the power of the SingleSource network backing it and all the creativity and adaptability of a startup at its disposal. This hybrid, named Resolute Diligence Solutions (Resolute), is already serving investors and originators as it grows and builds with them, creating an investing environment that will enable them to respond quickly and effectively to changes in today’s economically challenging and volatile marketplace. Purposeful, Organic Expansion For many companies, this type of growth might be a once-in-a-decade sort of expansion. Or, it may occur via myriad acquisitions of other industry operators. For SingleSource, however, it is just part of the growth pattern. “Everything we have done in our space has been organic,” said Brian Cullen, CEO of SingleSource and one of the company’s founding members. Cullen cited the company’s organic (but exponential) growth as one of the biggest factors in its success. “Probably the most important thing anyone can know about SingleSource is that we actually do everything under one roof. We are not a company of separate silos,” he said. This means that SingleSource evolved and grew over time rather than being assembled in pieces as various component companies were bought and sold. Although SingleSource may not be the only company operating in the real estate services industry, it is one of the few that has built up and outward rather than acquiring new elements and service providers. “Everything we are and have accomplished has been grown organically, even Resolute, which has a different location and more independence than some of our other product lines,” Cullen said. “For example, Brent Taggart, the managing principal, is not a new hire. He is someone already with the company who is going to have the ability to think and function like an entrepreneur but with the backing of the entire SingleSource pool of resources.” Cullen and Taggart said this unique combination will enable Resolute to focus on customer growth and service while streamlining costs and timelines. “We will have the benefit of all the best practices already in place, but we will also be able to grow our new systems to fit our new clients in this niche space. We have no legacy issues, so we will be able to grow and build with our clients from advanced starting points, like our new portal,” Taggart said. “Of course, for standard transactions, our system is ‘plug-and-play,’ so clients can begin using it immediately. But one of our biggest assets is the ability to make changes to scopes of work and provide unique services to our clients that others do not.” Launching a Startup 20 Years In Resolute serves single-family rental and bridge loan aggregators, originators and warehouse lenders. The company specializes in property/asset-level reviews for an array of transactions. And, like the mountains in its logo, Resolute is solid and unwavering in its determination to provide clients with the clarity and data they need to invest wisely Taggart said. The company is a standalone subsidiary of SingleSource with a proprietary technology platform that reduces transmission of manual reports and a staff of experienced single-family rental and bridge loan diligence operators. However, Resolute retains access to the financial backing and additional services that SingleSource provides, granting it both quick decision-making abilities and solid internal support. “When we first started talking about Resolute as a concept, we wanted it to be a wholly-owned subsidiary of SingleSource so it would have that huge power underneath it, but we also wanted it to function more as a startup,” said Taggart. The managing principal spent more than 20 years in the mortgage industry in various roles at industry giants like Green River Capital, Fairbanks Capital, Credit Suisse, 406 Partners and Clayton Holdings before moving to SingleSource. He was named a 2015 Rising Star by Housingwire magazine and leads the charge at Resolute. “Ultimately, SingleSource is our parent company and Resolute is operating in a new and very timely niche [to SingleSource]. That startup element keeps us successful and agile so that we can grow with our clients, be flexible and adapt to changing client needs,” Taggart said. Cullen and Taggart said this unique combination will enable Resolute to focus on customer growth and service while streamlining costs and timelines. Independent Vision and Momentum The clients who work with SingleSource tend to rely heavily on the company for multiple services, and they can leverage the entity’s interconnected offerings to stay ahead of the curve when the economy is volatile. “Needless to say, our clients have been seeing some pretty wild swings in terms of what they can expect out of their properties and strategies right now,” Cullen said. “We see so many different sides of the market that we are able to help them adjust quickly to changing guidelines and leverage emerging opportunities.” The ability to work in sync across various divisions of the company fosters an independence the founders cherish. “There are no competing interests,” Cullen said. “We are independent, and that makes us a true advocate for our clients. We can help them make decisions about what will work best in their situation without any other factors in play. “The massive amount of information we can access is an advantage as well,” Taggart said. “Investors need to be able to make accurate forecasts. Income streams only

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Save Loan Denials With Trio

SPONSORED Wouldn’t it be great to be able to close a loan for your customer even if they are denied? Sounds too good to be true! But now you can through Trio’s OwnOption Mortgage. Three years ago, Trio launched its OwnOption Mortgage product with a select group of lenders with the sole purpose of responsibly expanding access to credit. Today, lenders across the country are lining up to take advantage of this innovative program. Through Trio, lenders now have access to a Federal Housing Administration (FHA) lease-purchase mortgage product they can originate when a customer is denied. Trio’s affiliates qualify as borrowers under a special program with FHA. Lenders originate a simplified FHA mortgage to Trio’s affiliates and distribute through its partnered FHA issuer and servicer, Land Home Financial Services. Customers then sign a lease-purchase agreement with Trio and take occupancy just like a traditional mortgage. One hundred percent financing is available down to a 580 credit score. The program has no maximum income limits. After customers take occupancy, they have up to three years to finish qualifying. Trio’s HUD-approved counseling agency (Money Management International) provides 24 months of counseling to assist. Once customers are ready, Trio provides down payment assistance covering the required down payment and closings costs. Customers can assume the original FHA OwnOption Mortgage or, if rates have gone down, use a new mortgage to purchase their home from Trio. “From late-stage denials to expanding our third-party origination channel, Land Home Financial has partnered with Trio and its OwnOption Mortgage Program,” says Mark Sheridan, senior vice president of Third-Party Origination. “Lenders, brokers, builders, agents and sellers benefit from a successful closing that would have otherwise resulted in a loss. But, to see customers that were denied for a mortgage returning to our closing offices to become homeowners is very satisfying and proof that Trio’s system works.” And now, Trio has created an online ‘Rules Engine’ that simplifies and automates the process for lenders. According to Land Home Financial Services, Trio’s Rules Engine qualified over 40% of its denied mortgages into an OwnOption Mortgage. Imagine sitting with a customer and realizing they will likely be denied and then being able to offer a ‘back up plan’ that assures them of a path to homeownership.   Sheridan, says, “This is a game changer for originators when working with potential homeowners. It expands originations as well as saves deals.” Trio is a finance company based in Bellevue, Washington, that has been offering affordable lease-purchase programs for nearly 20 years. Most industry professionals shy away from lease-purchase programs because most overpromise and underdeliver. What makes Trio different is that each home comes with a single-family mortgage and a fixed purchase price, making ownership affordable. Darryl Lewis, managing director and founder of Trio, is very proud when he tells us, “Trio has over a 70% success rate of transitioning its customers into homeowners.” Needless to say, Trio’s OwnOption Mortgage is a safe alternative for customers having a difficult time getting into a traditional home loan. “Trio’s OwnOption Mortgage was created to bridge the gap between renting and owning, for those who aren’t able to initially qualify for a traditional mortgage,” says Lewis. “Our mission is to create homeowners through responsible innovation. Everything we do goes back to that idea.” Trio’s OwnOption Mortgage helps potential homeowners ranging from first-time buyers to recent college graduates to those with student loans or jobs in the gig economy. An OwnOption Mortgage is also a wonderful option for those lacking a down payment, small business owners, those recovering from a financial or medical setback as well as renters wishing to become homeowners. Lenders have used OwnOption Mortgages to save late stage denials, bridge qualification gaps due to changes in employment, relocation, down payment seasoning and have rescued new construction sales with homebuilders.  Sheridan further comments, “Lenders big and small are now using this unique product to expand qualifications and cure deals helping to expand relationships with agents and builders.” Trio and its industry partners have engineered the ‘holy grail of home finance’ that unlocks a new door to homeownership, providing the industry with a new way to originate a mortgage for customers that are nearly qualified, but not yet ready for a direct mortgage. Trio truly provides a win-win-win for all parties involved. iBuyers, homebuilders and single-family rental investors are also working with Trio. Trio pays market pricing for existing rental homes with tenants that may want to convert to homeownership through its OwnOption Mortgage product. Trio purchases in bulk or singles from these investors and offers its lease-purchase program to existing tenants. “Our mission with our investor purchase program is to return affordable homes that were swept up after the housing crisis back to homeownership” says Lewis. Trio is currently offered in California, Nevada, Arizona, Texas, Colorado and Georgia. “We will be expanding very quickly in 2020 to more states” according to the business development director Aaron Tuttle. “There is a lot of demand for this program, and we are excited to partner with our government housing agencies to bring Trio to potential homeowners in those states.” The Trio Rules Engine will be broadly available at the end of the first quarter of 2020. Lenders who are interested in learning more about Trio’s OwnOption Mortgage or signing up to participate can inquire at the Trio industry website, www.trioresidential.com/lender. “With our Rules Engine launching this year,” said Lewis, “originators everywhere will have a streamlined way to save loan denials and help more people break out of rentership to become homeowners. Everybody wins.”

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RCN Capital Resumes Funding

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RCN Capital has resumed funding for both short-term fix-and-flip loans as well as long-term rental loans for non-owner-occupied residential properties. RCN is one of the first private lenders to re-enter the space with a full suite of financing options geared towards real estate investors. “As the real estate market and overall economy continue to search for stability following the enormous amount of volatility resulting from the COVID-19 pandemic, we are incredibly proud to relaunch all of our loan programs back into the marketplace,” said Justin Parker, head of treasury and capital markets. “As we navigate a new world post-COVID, we take a great amount of pride in being able to stand true to our customers and be there for them when it matters most.” The terms RCN is currently offering are slightly more restrictive. Specifically, with these new product offerings, customers will find slightly lower leverages and higher rates than what the company was offering pre-coronavirus. Given the fluidity of the market and indications things are starting to stabilize, RCN believes these guidelines will loosen. The company fully anticipates being able to provide clients with higher leverages and lower rates in the not-so-distant future. Vist the RCN Capital website for the company’s current loan programs and guidelines.

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