REI INK

Suzanne Andresen

From Dorm-Room Real Estate to Premier Magazine for Real Estate Investors by Carole VanSickle Ellis When Suzanne Andresen matriculated at the University of South Carolina to earn dual degrees in real estate and marketing, she did not let any grass grow under her feet. By the time she had become a senior and hall advisor in the dormitory, Andresen’s career in real estate was already in the works. “It was prohibited to ‘work’ if you were a hall advisor at that time, but I was selling real estate out of my dorm room,” Andresen admitted. She recalled handing her first business card, complete with her dorm-room phone number, to a client looking at a local property. “Little did I know he was one of the deans of the university when he asked if the phone number was a dorm room!” she laughed. Fortunately, the dean was more intrigued than interested in shutting down her burgeoning business. “That was my first step into the industry, and I have been drawn to it ever since,” she said. “Oh, and he bought the house.” From there, Andresen proceeded with what quickly emerged as characteristic zeal for her chosen profession. Despite an active and successful career in real estate marketing and publishing, Andresen never lost her attraction to real estate itself. “I hold my real estate license with William Raveis in Maine and am also a member of the National Association of Realtors (NAR),” she said. “It keeps me linked with the industry and helps me connect with the readers and clients of REI-INK.” A Long Road, and a Good One Andresen joined the team at REI-INK, one of the few monthly print publications for active real estate investors available today, shortly after its founding in 2019. Before she did so, however, she participated with typical passion in several notably distinct business ventures — all while simultaneously sticking close to real estate as well. Throughout these years, Andresen’s determination to succeed and her wildly flexible dynamism was constantly on display, first at Xerox, where she had to apply twice to get the position, and then as she ran a successful family deli with her husband and father despite what she insists was “no culinary experience.” “I learned a lot of things during that time,” Andresen recalled. “From Xerox, I learned that I never had to be ashamed or embarrassed of having to try something more than once.” After not getting an offer following her first interview, she remembers thinking, “Oh, they must have been mistaken,” and heading off to interview in a different district. When she got the job and arrived at the office, she saw her district manager had framed his first rejection letter from the company. “Little did I know when I set up that second interview that Xerox considered it a huge bonus if you tried again because it showed you never accepted ‘No’ as an answer,” she explained. She spent seven years with the company, swiftly becoming a highly productive sales representative and winning many accolades. “Once you attained President’s Club status, you just want to keep achieving. That job showed me that if you create a positive driving force, it will help push you forward and help you push yourself to do better.” After leaving Xerox, Andresen worked briefly with a colleague running a print shop before leaving to run a family deli with her husband and father. The early days of that business are particularly meaningful to her because they were an “amazing experience” shared with her father. “My dad always really wanted to have a restaurant in his career path, and I had a great time spending eight weeks setting things up with him,” she said. “Four months after that, he passed away, so it was amazing to get to do that with him.” She also realized two important things about retail. First, “the customer is not always right,” and, second, “I wasn’t really cut out for retail.” Fortunately, Andresen had always known she was cut out for real estate, and she headed back into the industry with enthusiasm. Andresen also recalled a bit of irony mixed with real estate while at the Junior’s Deli. “My husband and I had a first right of refusal with our lease. Six months after opening the deli, we were presented with a contract of sale for the property. The deli occupied retail space in a set of two three-story brownstones with four separate business tenants. We had one week to get funding to purchase the buildings. We managed to success-fully purchase the buildings, and part of that funding strategy was to sell our condo and move into one of the mixed-use spaces.“ Ultimately, the couple lived in part of the retail space while they finished the renovation on the portion of the property. “We put deli paper up on the windows for privacy and set up a little living area,” Andresen recalled. “Experiencing hardship helps build character and provides the opportunity to embrace success when it happens,” she concluded. “Having all of this happen in our first year of marriage certainly put my husband, Scott, and I to the test!” Andresen recently celebrated her 25th wedding anniversary with Scott, and the two remember using their early experiences in the deli as a “learning foundation” for their son, Tyler. “He spent 18 months as a cashier at a local grocery store before heading off to the University of Maine’s College of Engineering,” Andresen said. “He enjoyed working at the store, but realized retail might not be his passion either.”  All About Coming Home In 1999, when Andresen headed back into real estate full-time, she did so with a much deeper understanding of the industry, the players in it, and what she truly stood to offer other real estate professionals. “To me, the best thing about real estate is that it is a life cycle,” she explained. “I understand that cycle, and I understand what the different players in that life

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Sami Abdallah

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Gaining the Respect of the Motor City Sami Abdallah bought his first fix and flip house in Detroit while still a senior in high school. With the brief exception of “dabbling” in the business side of the music industry, Detroit real estate has always been his passion. And he has never looked back! Today, 35-year-old Abdallah is the president of Temple Homes in Detroit, Michigan. He estimates that he and his partner, Freddy Antar, who oversees field services, have an economic impact of ten-million dollars every year on the Detroit metro area. “Real estate investors do not get the respect we deserve after everything we do for our communities,” he proudly noted. “We help people, we pay delinquent property taxes on the homes we buy, we get water and electricity turned back on, we spend six-figures every month at home improvement stores, we employ people, the list goes on and on.” Instead, real estate professionals in the state of Michigan (and the city of Detroit) were deemed non-essential during the COVID pandemic. Abdallah has been successfully buying and renovating property to rent or sell in the Detroit metro area as an independently owned and operated HomeVestors® franchisee since 2012. Prior to that, he was an investor and REO Broker, completing thousands of transactions with HUD and Fannie Mae when foreclosure inventory was high. However, in 2011, he saw the writing on the wall and realized the market was changing. He also realized his business model was no longer sustainable. According to Abdallah, “I knew how to sell, I knew the funding side, but I did not know how to get into people’s living rooms to discuss buying their homes at a discounted price.” The HomeVestors Advantage “Then I met UG, the iconic caveman mascot for the HomeVestors brand, and I immediately knew this is what I needed and wanted,” said Abdallah. “HomeVestors gave me instant credibility, they had a great marketing program, a proven system, and national brand awareness. I didn’t need to create processes or worry about advertising.” He added, “being a part of HomeVestors, each day is a new opportunity. It is super fulfilling — in each transaction we help people and take care of our families at the same time. I can absolutely look at myself in the mirror everyday and sleep good at night.” The Detroit market is strong. It is very affordable and has a low cost of living. According to Abdallah, Detroit is as strong as the surrounding suburbs. “The primary force driving the resurgence of the city’s economy and its revitalization overall is the large concentration of new corporations moving in and bringing good-paying jobs with them. This then increases the demand for housing which, in turn, boosts median home sales prices.” Consequently, this allows Abdallah and Antar, to do a little bit of everything, from buying historical properties, fix and flips, and buy and holds. They even do wholesaling. A Local and National Leader Abdallah is also the Development Agent (DA) in Detroit, president of the Advertising Council, and Chairman of the Franchise Advisory Council for HomeVestors. In his role as DA, he coaches other franchisees about the local market and how to approach and work with sellers. He also enforces the strict HomeVestors ethical standards of which he is immensely proud. Being a part of HomeVestors also allows Abdallah to spend quality time with his wife, Jenna, and nine-year old daughter, Layal (which is translated “Beautiful Night”), and one-year old son, Hassan. HomeVestors What exactly does it mean to be a HomeVestors® business owner? Owning a real estate business is life changing and naturally comes with risks! When you become a HomeVestors business owner, you get immediate access to motivated seller leads, financing resources for qualifying purchases and repairs, one-on-one coaching with your local Development Agent, proprietary software for analyzing properties and deals, and access to a nationwide network of coaches and peers. Your house-buying business is yours and you run it as your own venture with a focus toward your individual business goals. If you are interested in a franchise, call 855-454-4578. Each franchise office is independently owned and operated.

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Three New Year’s Resolutions for SFR Investors

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Automate Your Processes to Increase Efficiency and Scale Marketing Efforts By Kori Covrigaru Demand for single-family rental homes is showing no sign of easing up. Nationally, rents rose 9.3% in August, year over year, up from a 2.2% year-over-year increase in August 2020, according to CoreLogic. As a result, investors continue to flood the market and are rushing to buy and build more rental properties, signaling a busy year ahead. With 2021 coming to an end, now is the perfect time for SFR investors, owners and operators to review their existing acquisition, property management and marketing strategies and consider embracing new tactics to improve their portfolio performance in the New Year. Here are three New Year’s resolutions for SFR investors to consider for optimizing operational efficiency and growing and scaling their property portfolios. 1. Leverage Technology During Due Diligence Technology will continue to play an increasingly key role in the SFR space in 2022 and it is time to take advantage of it. Stop acquiring properties in the old manner with a “boots on the ground” approach to due diligence that is largely painful, unorganized, inefficient, and inaccurate. With innovation in software services, data accessibility, due diligence scoping tools and 3D, the real estate investing process can be made more efficient. One of the most powerful digital tools to help streamline the due diligence process is the 3D tour. A 3D tour of a home allows you to see both the exterior and interior of the property from afar and can help inform decisions and scopes for renovations without having to ever see the property in-person. By visualizing the layout and condition of the property ahead of time, you will have a better idea of the profit you can make from the investment. In addition, consider ordering an electronic investment property condition report prepared by an experienced third-party company to provide a snapshot of the condition of the home, along with details of any needed repairs. When you are making new acquisitions, you do not want to leave your investments to chance. At PlanOmatic, we offer Property Insights services which includes a Property Condition Report and 3D Inspection Tour for properties across the nation and delivered within 48 hours from the time an order is placed. 2. Embrace 3D Virtual Tours for Marketing and Operations A 3D virtual tour is like a buy-one-get-one-free deal and something every investor should be thinking about leveraging in the New Year. It is an easy way to ensure your SFR properties stand out against the competition when they are marketed to consumers, and it is a great way for your operations team to get the dimensions of the property to better inform renovation decisions. 3D tours also allow future residents to explore the home in a real-life way and get a clear visualization of the space, creating more qualified leads. At PlanOmatic, we have captured and created thousands of 3D tours on behalf of our SFR clients and according to them, 3D tours have resulted not only in more views per property, but in fewer lease opt-outs because the leads are more qualified. In fact, PlanOmatic measured the impact of 3D tours on SFR property marketing and found that property leads increased by 25 percent, and days on the market decreased by 23 percent when a 3D tour was used to market a property compared with only using professional photography. 3. Automate Your Property Marketing Automation should be top-of-mind in 2022. SFR investors, owners and operators should consider automating the process for all property marketing and operational assets, including the ordering and uploading of property photos, floor plans and 3D virtual tours. By automating the process, SFR investors can increase efficiency throughout the entire property lifecycle and easily scale their marketing efforts to keep up with portfolio growth.

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Six Data & Analytics Predictions for SFR in 2022

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Most of the Biggest Changes Remain Impossible to Predict By Sean Begley Single-family rental continues its streak as one of the nation’s hottest asset classes. Demand for single-family rental homes continues unabated and capital flows into the market are showing no signs of easing. At CAPE Analytics, our team works with a number of real estate investors to provide remote property intelligence, and we have a distinct view into how the industry is evolving—especially in how organizations are leveraging technology to support their decision-making and operations.  As we near the end of 2021 and look forward to 2022, there are several ways we see the industry changing in the coming year. As with many industries, the players with the right operations, technology, and predictive data sources are likely to come out on top. Let’s get into some of our predictions…  Prediction 1: More volume means buyers will be increasingly reliant on analytics to run due diligence and manage portfolios  According to CNBC, “In the past year, there were roughly 43 announcements totaling more than $30 billion in capital targeting U.S. rental housing.” With some of the biggest players planning to purchase tens of thousands of homes in the coming months, and new shops opening up seemingly every day, it is critical that investors rely upon high-quality property information and analytics to make decisions. Analytics platforms that are regularly refreshed and can combine data sources into a singular view will see increased adoption. While initially used to help decide which properties to target and set purchase prices, rising volumes will dictate the use of advanced analytics for property management as well. Those organizations that can manage properties without relying on an army of (expensive) people, will see more profitable operations.  Prediction 2: More competition in the best markets means a bigger buy box… and more risk   Competition is the mother of innovation, and due to a limited supply of homes and ever-growing demand, competition will only increase. To cope, more large-scale investors will rely on a sophisticated waterfall of property and geospatial data to optimize their incoming lead lists and adjust their internal home price and rental models to make the best investment decisions. They will need to make investments within a larger buy box while maximizing returns and maintaining the desired risk profile.  In addition, speed will be of the essence. Coming up with a sticky offer—quickly—will be important in the ability to win bids… having pricing models that understand the nuances of specific properties also helps avoid gumming up the acquisition pipeline with properties that should never have been considered in the first place due to condition and or negative location factors. This need for speed will push more buyers into using automated approaches. Those that widen their buy box and push to be aggressive without incorporating the latest in analytics will end up lowering their returns and increasing their risk. Prediction 3: The lines between iBuyers and SFR firms will continue to blur Today, SFR players rely on iBuyers as a channel to enhance their volumes—iBuyers excel at pulling in off-market leads, which are otherwise challenging to identify. And SFR investors are a channel for iBuyers to offload their inventory. So, if volumes continue to grow, iBuyers and SFRs will only become more reliant on each other. In which case it would not be unexpected to see iBuyers and institutional SFR buyers integrate further.  However, there may be some challenges ahead: some large iBuyers may want to create their own SFR operations to create cash flow from existing inventory. Or, if more iBuyers start to freeze their operations in the face of a choppier market  — like Zillow did in October—SFR firms may no longer be able to rely on these players to reach their required volumes and increase their own off-market capabilities  Prediction 4: A softening market will test buyers  As Warren Buffet said, “It’s only when the tide goes out that you learn who has been swimming naked.” The adage also pertains to the SFR market which, having been born out of the great recession, has not had to weather a true bear market since inception. Just in the last month, we have seen a widening spread in HPA forecasts for the coming year, with some stakeholders predicting 2% nationally and others sticking to a bullish 15% estimate. The volatility in these predictions could signal that we will soon see a softening market in 2022. If and when the market softens, organizations will not be able to hide behind the extra home liquidity and wider margin for error that comes from rising home prices. Volatile markets generally separate the buyers with strong fundamentals and those taking on excessive risk. It also means that investors will have to get more discerning about their investments and start to take secondary factors like property condition and location into account. Prediction 5: More distressed properties will be coming onto the market  SFR as an asset class was born in response to the Great Recession and was largely built to deal with larger bulk volumes. That regular volume had turned into a trickle given the strong housing and lending market—then completely dried up due to the pandemic. Now, with federal measures expiring, everyone is expecting some return of distressed volumes, and competition will be stiff. But many of the newer market entrants have not had to deal with distressed properties and larger bulk acquisitions. Distress increases the likelihood of negative property conditions and decreases the certainty of home value estimations—for both automated models and human-derived values. There can also be complicated neighborhood and comparable sales-related issues in areas where distress is concentrated. From our own research at CAPE, we know that condition issues can increase rehab or maintenance costs by as much as 250%. Data and analytics solutions that can help investors quickly understand the condition of distressed properties and more accurately predict value will be extremely useful as this volume comes back.  Prediction 6: M&A is coming…   Like many industries,

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It Isn’t About the House

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Connect the Dots to Better Marketing Performance By Charlie Calise Zillow announced in early November of this year that they were getting out of the business of buying and selling homes, with the chief executive acknowledging that the division was proving to be unsuccessful and it would be impossible to scale. The division, Zillow Offers, was an iBuyer company, one that uses algorithms to make mass, “instant offer” home buying decisions. This is not a story about Zillow, but rather the big question it raises in the minds of the average real estate investor, namely, “If a company like Zillow with its massive financial and technical resources cannot be successful in this business, how can I?” The answer is simple: Real Estate is a relationship business…it isn’t just about the house (a transaction) but rather about the seller (a relationship). To demonstrate this point, HomeVestors®, the “We Buy Ugly Houses®” company, had a record year, achieving the highest gross revenue per house in the history of the company. They accomplished this feat by leveraging technology AND building relationships with their sellers. Perspective Over the last several years, the best ways for most organizations to market themselves have significantly changed. New tools, platforms and digital technologies are enabling a more insightful, holistic approach to marketing planning, better customer understanding and improved ways to convert new customers more efficiently. However, rather than making things easier, this transformation has made marketing much more complex as the proliferation of technology has resulted in more media options and the atomization of touchpoints along the customer’s path to sale. What was once a fairly straightforward process from awareness to consideration to purchase, is now a constellation of countless directly and indirectly connected touchpoints that even the most seasoned marketing team can find difficult to harness. Consider these facts: » There are now hundreds of offline and online media channels available to reach customers. They can be reached in their homes through direct mail, traditional broadcast television or streaming OTT (over the top) platforms such as Netflix or HULU, or on the go through out-of-home media (billboards) and SMS text campaigns delivered to their smartphones or watches. » Customers rely heavily on search to find what they are looking for and they search differently on their phone versus their desktop or laptop computer. The fact that Google changes its search algorithm (which determines placement in search rankings) almost daily makes managing search alone a daunting task. » The ubiquity of social media platforms and review sites like Yelp have given rise to the voice of the customer. This has forced brands to be much more transparent, to constantly monitor what is being said about them online, and to engage with customers in real time to improve their experience with the company. » To manage all of this activity, there are tens of thousands of tools and platforms designed to help marketers plan, execute and measure marketing performance—all generating more data than any organization knows what to do with. To manage today’s marketing complexity, companies should look for ways to connect the dots of multiple customer touchpoints throughout the path to sale. This simplified approach allows for the delivery of the right message to the right customer at the right time on the right channel, all the way down to their device of choice. Start with the customer Any successful marketing program starts with the customer, or even better, a data-driven portrait of their demographic and behavioral characteristics. There are hundreds of customer data points available from first-party (information you have about your customers), second-party (information other companies like Facebook and Google have about your customers) and third-party providers (aggregated information on your customers from sources like Experian, First American, and Equifax). When combined, you will have a quantitative, actionable profile of your sellers and their houses. One of the best ways to collect, analyze and activate this disparate customer data is through a Customer Data Platform (CDP). CDPs are technology systems that create a unified customer database from many different data sources. The resulting structured customer profile data is then made available to other systems like CRM and marketing automation platforms for activation. Another beneficial use of a CDP is to create “look-alike” audiences which are made up of people not doing business with you at the moment but share the same personal and household characteristics as your most valuable customers. A CDP ultimately serves as a catalyst for more effective and efficient marketing programs—from awareness all the way through to sale and endorsement (Google reviews). Don’t Silo Your Marketing Approach One issue many companies are dealing with is taking a siloed approach to marketing. For example, there may be one team (or agency) executing direct mail or television campaigns and another executing paid search or online display advertising. In some instances, these teams or agencies don’t always communicate well with each other resulting in a great deal of friction, inefficiency, and poor cross-organizational sharing and learning. The better approach is to bring everyone together, all armed with data insights from platforms like a CDP. When one integrated team—subject matter experts, media planners, etc.,—has shared, real-time access to information about the seller and what’s working and what isn’t, they are able to make more meaningful cross-departmental connections and collaborate better, resulting in better marketing performance for the organization. Refine your Media Mix When evaluating media performance, while many customers may appear to convert online (for example, scheduling a service appointment on a website), their journey may begin offline where they were first reached by traditional media such as direct mail or television. The most effective marketing practices today should be able to track a customer’s behavior as they pinball between multiple offline and online media touchpoints, across different devices, on their journey from awareness to conversion. Understanding these conversion, or attribution, paths and which media types play nicely together can help you get the most out of every media dollar spent. Final Thoughts While I barely

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Phoenix, Arizona

The “Valley of the Sun” Is Not Too Hot to Handle Just Yet By Carole VanSickle Ellis When former Confederate soldier Jack Swilling moved west after the American Civil War in order to prospect for gold and, hopefully, start a new life, he certainly was not expecting that his excavation efforts would include making his fortune digging out the canals of an ancient, indigenous civilization that had abandoned the Arizona Territory more than 6,000 years prior. Nor did Swilling and fellow settler Phillip “Lord” Darrell Duppa anticipate that Duppa’s optimistic title for the new city, Phoenix, would prove to be so apt. Today, Phoenix, Arizona, or the “Valley of the Sun,” has likely surpassed even what the notoriously optimistic Duppa predicted would be “a city, greater and grander than that which had preceded it, born from the ruins of a former civilization.” Interestingly, despite posting 33 percent year-over-year price-growth gains and leading the nation in home-price growth for 27 months (as of October 2021), many analysts believe the Phoenix market will hold steady or climb even higher before home values level out or experience a downturn. “The entire Phoenix area is breaking records over records in sales prices, and I expect this to continue. The supply simply is not close to catching up to the current demand,” explained Alex Molleo, a local realtor based in the Phoenix metro area. He continued, “I anticipate this increase continuing through 2022 and beyond.” Molleo conceded much of the upward pressure on home prices in the Phoenix area is due to low interest rates, high levels of fix-and-flip investor activity, and construction shortages. Investors considering entering the market should do so with caution and a viable game plan for competing in a difficult market where it may be challenging to find materials and labor for renovations as well as properties with the right metrics for successful investment returns. However, with the right connections and a good game plan, the market still holds a great deal of promise. “Phoenix is all set to remain a seller’s market in the next 12 months,” said Marco Santarelli, founder and CEO of Norada Real Estate Investments. He noted that Phoenix home prices have appreciated more than 237 percent in the past 10 years, yet the city’s median home price is still more than $100,00 below median home prices in San Francisco, Los Angeles, Seattle, Portland, and Denver. “From those perspectives, Phoenix’s housing prices remain relatively modest,” Santarelli noted. Redfin recently reported about a quarter of all Phoenix out-of-state homebuyers hail from Los Angeles, while nearly one-fifth were current residents of Seattle. These buyers and others like them who are fleeing the West Coast markets are certainly playing a role in shoring up skyrocketing values in the area. Intense Competition from Individuals, Investors & iBuyers With so many different types of buyers focusing in on the Phoenix metro area, competition remains steep for available properties. According to Redfin, Phoenix homes are selling in an average of 26 days, down from 32 days-on-market in September 2020. However, slightly more homes are selling these days, with the number of closed transactions in the Phoenix area climbing by 69 deals in September 2021 compared to the year prior. “On the one hand, homebuyers continued to face a competitive market in which home prices increased at a double-digit pace from one year ago,” said Danielle Hale, chief economist at Realtor.com, in commentary on Phoenix’s climbing home prices. “Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply.” She noted that some buyers were already having more difficulty qualifying for home loans as interest rates have risen since August of this year. National Association of Realtors (NAR) chief economist Lawrence Yun chimed in, saying, “Inventory is still tight, [but] the declines are not as severe.” In fact, Yun went so far as to predict Phoenix inventory might “turn the corner and increase” sometime in 2022, decelerating price increases although not bringing about a full stop. Behemoth iBuyers in the Phoenix area have had and will continue to have an outsized influence on housing market activity in the region. Phoenix was among the first test markets for multiple tech-company real estate ventures, including Zillow, Redfin, Opendoor, and OfferPad. The city is “often referred to as the birthplace of the iBuyer trend,” observed GeekWire reporter Nat Levy, noting that in 2019, Phoenix had the second-highest share of home purchases by iBuyers. Redfin chief economist Daryl Fairweather said the Phoenix market “worked well for iBuyers, which tend to purchase homes that are relatively affordable, were built within the last few decades, and are easy to price accurately because they are located in tract neighborhoods with largely homogeneous housing stock.” At present, more than 12 percent of all the property listings in the Phoenix area are held by Offerpad, Zillow (which has now famously closed its iBuying division), and Opendoor. In October 2021, that meant that of 6,500 total listings, 800 were listed under these three tech buyers. Analysts warn that this type of market domination tends to “warp” prices. For example, in Maricopa County, where most of the Phoenix metro area is located, 13 percent of listed inventory belongs to iBuyers. Local agents say that this enables iBuyers to drive up home prices and then benefit from selling at inflated rates. “They are playing the market as if it is a game [that] they intend on winning,” said Matthew Aguilar, a local renter who says he is finding it impossible to purchase a home due to iBuyer-inflated prices. Real estate investors who identify ways to work with would-be buyers like Aguilar who want to buy and have the income to do so but not necessarily a traditional down payment may create a profitable, stable niche for themselves in what could become a volatile market if iBuyer inventory fails to move in a timely fashion. Now that Zillow Offers has paused home buying at least through the end of 2021,

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