November 2022 – REI INK

100 House Members Pledge Support to ‘Neighborhood Homes Investment Act’ to Expand Affordable Homeownership Opportunities and Revitalize Communities

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500,000 homes could be constructed, renovated and sold under the bipartisan bill With Congress set to reconvene for a post-election legislative session, 100 members of the U.S. House of Representatives and 24 senators have now signed on to support a new tax incentive that would produce 500,000 starter homes in struggling communities over the next decade. The legislation would address the needs of families throughout the country that are struggling to find entry into the homeownership market, as costs continue to rise and the supply of homes is on the decline. The Neighborhood Homes Investment Act (Neighborhood Homes), introduced in both the House (H.R. 2143) and the Senate (S.98) last year, is designed to address a difficult market reality: in many areas, the cost to build or rehab a home exceeds the price at which the home could be sold once completed. The new tax credit would help fill that “value gap,” up to 35 percent of eligible development costs for new homes, thus reducing the developer’s risk of loss and encouraging investments in new and rehabbed housing. This will in turn widen the entry-point for homeownership and support broader revitalization and economic development strategies in disinvested urban and rural communities. With the 100th House member added to the legislation earlier this month, there are now 124 Members of the House and Senate from 37 different states, from Delaware to North Dakota to California, that have sponsored the bi-partisan legislation. “The affordable housing crisis has touched every community in the country. The widespread, bipartisan support for the Neighborhood Homes Investment Act shows the desire for new tools to address the affordable housing shortage, invest in our neighborhoods, and create opportunities for first-time homeownership, especially among those who are historically left out,” said Congressman Brian Higgins (D-NY), the author of the House legislation. “Together with the skilled and diverse group of advocates in the Neighborhood Homes Coalition, we will continue to push for the bill’s passage this year.” “It is critical that we get the Neighborhood Homes Investment Act over the finish line,” said Senator Rob Portman (R-OH), the lead Republican sponsor of the Senate legislation. “This bill would give us a critical new tool in the fight against rising housing costs, drive investment for more homes in the communities that need it most, and work alongside other powerful tools such as the New Markets Tax Credit, Opportunity Zones, and the Low-Income Housing Tax Credit to unleash investment and revitalize communities across the nation. I am thrilled that the support for this credit has continued to grow, now reaching 100 members in the House, alongside the 24 of us in the Senate. With our partners in the Neighborhood Homes Coalition, we will continue the fight to pass this bill before the end of this Congress.” Neighborhood Homes is particularly important given the nation’s deepening affordable housing crisis, much of it the result of insufficient housing investments in recent decades. Economists have pointed to the connection between housing availability and inflation, noting that the supply-demand mismatch has fueled rising costs and pushed both rents and homeownership beyond the means of many families. A recent study by the Bipartisan Policy Commission (BPC)/Morning Consult found that a majority of adults expect the federal government to tackle these challenges head on: 81 percent said it’s important for the federal government to address high housing costs that are contributing to inflation, and 71 percent said that bipartisan legislation to grow the supply of homes and improve housing affordability should be a priority for Congress. “Everyone deserves a safe and affordable place to call home. Our bipartisan tax credit builds on the success of the Low-Income Housing Tax Credit (LIHTC) and New Markets Tax Credit (NMTC) to attract investment and revitalize neighborhoods,” said Senator Ben Cardin (D-MD), the lead Democratic sponsor of the legislation in the Senate. “By creating this incentive in the tax code, we can create opportunities for families in Baltimore and across Maryland to build equity and wealth for their family.” Under Neighborhood Homes, tax credits would be awarded to project sponsors through statewide competitions administered by state housing finance agencies, much as the successful Low Income Housing Tax Credit program does for rental housing. Sponsors—which could include developers, lenders, or local governments—would use the credits to raise capital for their projects, and the investors would claim the credits against their federal income taxes once the homes are sold and occupied. “It is vital that we, as a country, make equitable investments in our housing infrastructure—both for the stability of our economy and the well-being of families and communities across the country,” said Kris Siglin, vice president of policy and partnerships for the National Community Stabilization Trust. “Neighborhood Homes encourages private investments in communities that would not otherwise have access to this kind of capital, creating new opportunities for families to put down roots in their own homes, strengthen their communities and build wealth for the future.” The Neighborhood Homes Coalition estimates that the Neighborhood Homes legislation would support a substantial economic impact over the next 10 years. In addition to the 500,000 homes that would be rehabbed and $100 billion in development activity, estimated impacts of this legislation include: About UsThe Neighborhood Homes Coalition is a national advocacy group comprised of 36 national organizations, including housing and community development nonprofits, financial institutions, and related trade associations—all supporting enactment of the Neighborhood Homes legislation. The Coalition recently sent a letter to House and Senate leadership calling for action on the Neighborhood Homes legislation before the end of the year. Please visit https://neighborhoodhomesinvestmentact.org/ for additional information.

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Housing market perspectives are synthesized with the new interactive interface U.S. News & World Report, the global authority in rankings and consumer advice, unveiled its new Housing Market Index. The new tool leverages IBM Watson® Natural Language Understanding – and the recently acquired Housing Tides Index from EnergyLogic – to help enable U.S. News to interpret and synthesize large volumes of housing data for easy viewing. This new index comes as the housing market crisis continues to raise concerns about the current and future state of interest rates – and homeownership as a whole. The computing power supporting this platform allows users to find tailored data results for different regions and time periods, allowing them to make informed decisions about housing. “Our platform features an incredibly intuitive interface that simplifies housing market insights,” said U.S. News Real Estate Director Matt Bray. “We incorporate housing demand signals, housing supply data, and key financial indicators to provide a detailed market score. Whether you’re looking for an aggregated view of the top U.S. markets, or want to analyze a specific metropolitan market, single-family or multi-family, our new index is at your fingertips.” U.S. News experts are also enthusiastic about the platform’s robust sentiment analysis feature which interprets the sentiment of 500 media pieces related to housing monthly. “Sentiment analysis of major media sources helps us see market trends and understand economic changes,” said Bray. “The impact of media coverage on the housing market and home builder equity returns should not be underestimated. Our housing market sentiment analysis tool lets you see how each regional housing market is being discussed, positively or negatively, in near real-time.” The new Housing Market Index expands on its capabilities through its single and multi-family housing permit tool, another core feature that provides forecasts for the top 50+ U.S. markets. Many models only predict construction start dates, but this tool provides a competitive advantage by peering further into the future with permit forecasts. Read more about the sentiment analysis methodology behind the new Housing Market Index here. About U.S. News & World Report U.S. News & World Report is the global leader in quality rankings that empower consumers, business leaders and policy officials to make better, more informed decisions about important issues affecting their lives and communities. A multifaceted digital media company with Education, Health, Money, Travel, Cars, News, Real Estate and 360 Reviews platforms, U.S. News provides rankings, independent reporting, data journalism, consumer advice and U.S. News Live events. More than 40 million people visit USNews.com each month for research and guidance. Founded in 1933, U.S. News is headquartered in Washington, D.C. SOURCE U.S. News & World Report, L.P. CONTACT: Jessica Lewis Young, jlyoung@usnews.com, 202-955-2203.

Naaman Taylor On Building Wealth As An Army Veteran-Turned-Real Estate Investor

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Being in the army is a patriotic duty that gives you overflowing pride, but time will come and you need to move on from the service. Going into real estate is one of the best investments a veteran can do, given its wide variety of assets and available opportunities. Many retired soldiers only don’t know about it because they’re not exposed to it. Our guest made it his mission to educate and expose the power of real estate investing to his fellow veterans and how to grow steady revenue with it. Join Tim Herriage as he talks to the CEO of Marching Time Capital and real estate soldier, Naaman Taylor. Listen to his journey from serving in the United States Army to getting into the real estate industry. Discover how he grew his wealth by learning wholesaling, fixing and flipping, and more. Learn why education and community are important in this career, especially for up-and-coming real estate investors. — Watch the episode here Listen to the podcast here Naaman Taylor On Building Wealth As An Army Veteran-Turned-Real Estate Investor I’m here with the Real Estate Soldier, Naaman Taylor. Naaman, thanks for stopping by. Thanks for the invite. Why don’t you start and tell everybody a little bit about yourself? I was in the Army for thirteen years. I joined straight out of high school. I got into real estate investing about a decade after that. While I was in the Army, I went to Iraq and Afghanistan and did some time in Korea, Germany, and a bunch of different duty stations. I got to do a lot of traveling. That’s one of the reasons why I decided to get into real estate investing, so I could travel. After those ten years of service, I started getting a little interested in real estate. The pandemic pushed the gas pedal on that because the Army slowed down. For years and years, I was on missions. As soon as that slowed down, I decided to educate myself on something. That was what got me started in real estate investing. Aside from that, I’m a husband, father, and friend. I pride myself on having a good social circle and a great relationship with my friends, my wife, and my new business friends and associates. First and foremost, thank you for your service. I remember what it was like when I got out. You were probably in elementary school. I don’t even know. You were probably like eight. I start every show with a segment called the Bottom Line Up Front, the BLUF. I was in intelligence and I had to brief the commanders all the time, and they always said, “Don’t bury the lead.” Give them the bottom line up front in case the briefing needs to end. They know the most important information, and they can take action. Imagine there’s someone about to be doing something. Their phone disconnects and they forget to finish reading. Let’s give them the most important stuff, the things that you’re seeing in the market, the things you think people should be doing, the things you think they should be avoiding, and ultimately the bottom line of the real estate market nowadays. Are you good to go? Take it away. The information I want to share isn’t even specifically about real estate investing. It’s more don’t get lost in your business in your day to day that you forget to live a good life. Everyone gets to a point in their business where they’re feeling a little overwhelmed, in their marriage where they’re feeling a little stressed, or with their family when they’re starting to feel maybe a little neglected. Remember every day to live a very good life. At this point, we’ve all figured out how to make a lot of money. We’ll all earn 7 or 8 figures, but ask yourself when you look in the mirror every morning, “Am I an eight-figure husband? Am I an eight-figure father? Am I an eight-figure friend?” It’s easy as an investor and as someone who sees my path of success and knows that I’m going to make a lot of money to get lost each day, and I try to find reasons each day to find myself as an eight-figure husband, father, friend, and business partner. Remember to put those that love you first. Have a good social circle, live well, and earn well. You should trademark eight-figure. That’s powerful, but it’s also important. This business can be lonely and your social circle and truly amongst those that are doing this business successfully is small. Being a good member of that circle is important. Business-wise, what are you up to? What is your core focus, area of operations, and area of responsibility? I’ve got a couple of different businesses and I play different roles in each one. Our smallest business is probably our rental car business. We have a bunch of cars that are on the Turo platform, and then we also rent some privately. I’m more of the money behind that company. I hired an operator to do the day-to-day on that one. Another business that I’m more of a partner in is our education business with my friend, RJ Bates. We run a couple of different education things. We have a small community. We have Crucible that we run every quarter or so, and then we also have our house flipping business and then our whole selling company. I see both of those companies and make high-level decisions. Every now and then, I like to get on the phone and close some deals. There is a lot to unpack there. What is the Turo platform? I have never heard of it. It’s like Airbnb for cars, a ride-share company. You can list your personal car on there and rent it out to people. There are all different cars on there. I’m sure if you looked at it here in Dallas, you probably have some sweet

All Things Real Estate: Getting Started, Scaling Your Team, And Living The Dream With Jason Mcdougall

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Finding opportunities in the market has always been hyped and encouraged—but it is actually as challenging as it is dreamy. In this episode, Jason McDougall shares with us his financial journey and all the gold nuggets he got in real estate from learning the hard way! Jason is a DFW All-Star, real estate investor, and founder of Next Era Home Buyers. How do you pick a market to focus on? Why is success in social media not as perfect as it seems? How do you gain freedom from real estate? Tune in and learn all about getting started in real estate, scaling your team, and ultimately, living the dream! — Watch the episode here Listen to the podcast here All Things Real Estate: Getting Started, Scaling Your Team, And Living The Dream With Jason Mcdougall I’m here with a good friend of mine, Jason McDougall. Jason, thanks for stopping by. Thanks for having me on again. Jason is a DFW all-star real estate investor. I’ve known him for about a decade now. Jason, why don’t you tell everybody a little bit about yourself? I got into real estate in 2016. I had a W-2 job that I felt like somebody wanted way more than I did. I fired my boss in 2016. My wife was a few months pregnant. I started out wholesaling and flipping and then got into the rentals. That’s where I am now, stacking up the rentals. That’s a good time, 2016. I’m not sure about the whole pregnant wife part being a good time. It was fun. We don’t know what we don’t know. We forget what we did know. I like to start every week with a segment I call the Bottom Line Up Front, the BLUF. When I was in the Marine Corps, I was an intelligence guy. We had to brief the generals. They would always say, “Don’t bury the lead.” You have to say the most important thing up front in case there’s a mortar attack or people have to get up and leave or whatever. Bottom Line Up Front, up to two minutes, anything you think people should be thinking about now, maybe focusing on, maybe avoiding, monitoring in their business or the economy. Take it away. The most important thing to look for right now is opportunities. Back when I got started in 2016 is when I started buying houses. I was in real estate in 2011 trying to learn the business. Those were the best buying opportunities of most people’s careers. We’re about to get into the same situation now. Don’t be fearful of the market. Buy them, but buy the houses responsibly. Make sure you’re buying them deep enough to account for any drop in value in the future or something like that. Also, stack up some cash to make sure that you’re staying liquid during that time too. Both those things are super important. A lot of the people that are on the sidelines right now are going to miss some great opportunities to buy some good deals to hang onto for many years to come. That’s my advice. You said some things that are important that we have to peel back the onion. Buying deep. Why do you say buy deep right now? We all don’t know what’s going to happen with the market. It could go down by 10% or 20%. I personally don’t think that’s going to happen, but you never know. Buying deep where you have enough equity portion to always make sure you’re not upside down, and there’s enough juice in that deal. Maybe if you have to refinance it in a few months after your rehab and the market’s changed, you’re still good. You’re not going to be stuck with something in a bad loan or whatever. At RCN, to do well over $1 billion in loans, and as I shared with you at lunch, trying to do another $500 million or so by the end of the year, we’ve always got to have cash. When you’re funding hundreds of loans a week, you have to have cash. There are some people that say cash is trash. It rhymes and it makes a good little meme. You said during the BLUF to sit on cash or conserve cash. What is your business or investing thesis on how much cash to keep at any point in time? I don’t know that there’s a number. For each person, it’s probably different. For me, I want to have enough where I can maintain if there are no rents for six months across my portfolio. I want to make sure I’m not going to have to give those properties back. I want to make sure I can cover the debt on those. Also, for opportunities. There are some opportunities that might come up where maybe a lender isn’t available or maybe you can’t get funds fast enough or something, but it’s a great deal. You want to have cash available for that too. Cash is trash. I’ve heard that. I know it is because of inflation and stuff, but it also makes you feel good to be sitting on some cash. You can’t put a number on that investing-wise. There’s no return on how you feel. A great mentor of mine used to say that real estate can make a millionaire out of a multimillionaire quickly. You can get real estate rich and cash poor. You can’t service your obligations, but you also can’t take advantage of opportunities. That opportunity cost is huge. Real estate isn’t completely liquid. It’s pretty liquid. You can sell a house, but that takes time. If you have an event where you need some liquidity and all your liquidity is tied up in equity, then you’re stuck. What amount of cash these days can buy a house? You hear everyone complaining about how affordable homes are. You hear everyone complaining that you can’t get started in this. What’s the

Renters Warehouse: Leveraging Your House To Generate Income With Noel Christopher

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When you own the house, you can’t generate wealth from it if you don’t leverage it. In today’s society, where people are moving five to ten years from now, how can you create wealth by owning that house? In today’s episode, Noel Christopher, the Senior Vice President of Renters Warehouse, shares his insights on homeownership and how you can leverage your house to generate income. Tune in and learn more about how you can optimize homeownership and create a long-term investment plan! — Watch the episode here Listen to the podcast here Renters Warehouse: Leveraging Your House To Generate Income With Noel Christopher Thank you so much for stopping by. I’m here with a good friend of mine, Noel Christopher. Thanks for stopping by, bud. Thanks for having me. Noel, why don’t you take a minute and tell everybody a little bit about yourself? I’m the SVP of Portfolio Services for Renters Warehouse. We are a national property management company. I manage about 15,000 homes in 45 markets around the country. I run our Portfolio Services Division, which focuses on institutional investors, family offices, and private equity that want to invest in a single-family rental scale. Everything from sourcing homes, if you want to buy off the MLS, off-market sourcing, underwriting, acquiring, renovating, leasing, and property management. A little bit of asset management light in there as well. We are going to get into your background. There is probably a lot more in-depth here but you are not just a guy at Renters Warehouse. How long have you been in the investing field, and how many houses have you bought? I started in commercial real estate in Chicago back in the ’90s. That’s where I cut my teeth. It was a doggy dog world. It still is. After the Great Depression or the Great Financial Crisis, I got into real estate investing personally in Chicago, buying 2 and 3 flat buildings. I bought a few hundred of those. Renovated them, and you couldn’t get a purchase loan. We worked with a lender and did refinances. We did Fannie Mae and Freddie’s refinances. We did almost a thousand of those overall but I owned a couple of hundred. In 2012, through a mutual friend that I went to college with in Arizona, the late Todd Farnsworth, who is a good friend of mine from college, introduced me to Dallas Tanner when it was still Treehouse Group, and they were about to go big with Blackstone. My real estate group was the main broker they used in Chicago. Previous to that, as a commercial real estate shop, we were buying other brokerages and doing a lot of different things. We started buying homes from Invitation Homes, and the rest is history. Since then, I’ve worked all through the industry. I bought thousands and thousands of homes, whether that’s buying directly for a fund or representing different funds. I have some very close friends and deep connections in Chicago, some of whom I’m sure you know, that I still do a lot of business with. I decided in 2012 that this was what I was going to do, and I’ve been doing it since. I start each week with a segment we call the bottom line up front. What I’m going to do is I’m going to ask you to look into the camera and spend two minutes talking to that individual investor. That investor that’s out there only heard you blush over, “I bought a couple of hundred homes.” As we know, I’m a client of Renters Warehouse and most of your customers don’t own a hundred homes. There’s a lot of fear out there. There’s a lot of misinformation. There’s a lot of, “What should I do?” Imagine that after these two minutes, they are going to stop tuning in. They are going to stop at a gas station to get some gas. In two minutes, pour into the audience the most important things you are seeing, the things they need to know, things they should be doing, and things they shouldn’t be doing. Take it away. If you look at where the market is now, I talk about this a lot. What’s happened in the last few years is that it’s gone up to about 40%, 42%, and 45% in some areas. A lot of people talk to me if it is time to sell their house. What should they do? What’s going on? The fact is that if you think that the market was going to continue to go, for example, if we were back in 2019 and fast forward now and we said, “The market went up 3.5% to 4% in the last few years. The rent went up from 3.5% to 4%. We had all been clapping each other on the hands, saying it was a good couple of years. Now, it’s gone up 40%, and people are having a little bit of a conniption with it going back down maybe, and I’ve heard some projections, 15% to 20% in certain markets across the country. That’s a huge opportunity because it probably will not go down and what will continue to go up incrementally is rent. That’s what’s going to drive your investment. The cost of the capital is going to adjust over time, so you buy and invest now. In a couple of years, you will probably be able to refinance into a lower term. You are taking a higher equity risk now and for the next year so that you can realize huge gains in 18 or 24 months. That’s whether you are a large institutional investor, whether you are a small or a medium-cap investor. You have a 1031 exchange, you are investing a couple of million dollars or you are a small investor buying one home. Don’t look at where the market is today and where it’s going to be tomorrow. Look at where it’s going to be in 5 or

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– Prepayments fell 16.5% to a single-month mortality (SMM) rate of 0.48%, well below the previous record of 0.55% and the lowest recorded since at least 2000 when Black Knight began reporting the metric – The national delinquency rate rose 4.5% in October to 2.91% – up 12 basis points since September – driven by a sharp 9.4% rise in 30-day delinquencies – Florida led the jump in new early delinquencies (+19K) – with the state delinquency rate rising 53 basis points to 3.42% — giving an initial indication of Hurricane Ian impact – Loans 60 days past due ticked up 2.9% nationally, while those 90 or more days delinquent saw continued – if modest – improvement, inching down another 1.5% in October – October’s 19.6K foreclosure starts represented a 7% increase that partly reversed September’s decline, but are still 55% below pre-pandemic levels – Foreclosure starts were initiated on 4% of existing serious delinquencies in October, up slightly from September but still less than half the rate seen in the years leading up to the pandemic – Active foreclosure inventory held steady as volumes have remained subdued in 2022 due to still historically low foreclosure start levels Black Knight, Inc. reports the following “first look” at October 2022 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market. Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 2.91%Month-over-month change: 4.45%Year-over-year change: -22.32% Total U.S. foreclosure pre-sale inventory rate: 0.35%Month-over-month change: 0.42%Year-over-year change: 33.22% Total U.S. foreclosure starts: 19,600 Month-over-month change: 6.52%Year-over-year change: 390.00% Monthly prepayment rate (SMM): 0.48%Month-over-month change: -16.48%Year-over-year change: -75.47% Foreclosure sales as % of 90+: 0.59%Month-over-month change: -1.47%Year-over-year change: 117.07% Number of properties that are 30 or more days past due, but not in foreclosure: 1,557,000Month-over-month change: 66,000Year-over-year change: -429,000 Number of properties that are 90 or more days past due, but not in foreclosure: 551,000Month-over-month change: -7,000Year-over-year change: -555,000 Number of properties in foreclosure pre-sale inventory: 186,000Month-over-month change: 1,000Year-over-year change: 48,000 Number of properties that are 30 or more days past due or in foreclosure: 1,743,000Month-over-month change: 66,000Year-over-year change: -382,000 Top 5 States by Non-Current* PercentageMississippi: 6.50%Louisiana: 5.75%Oklahoma: 4.88%Alabama: 4.64%West Virginia: 4.47% Bottom 5 States by Non-Current* PercentageColorado: 2.05%Oregon: 1.99%California: 1.84%Idaho: 1.74%Washington: 1.67% Top 5 States by 90+ Days Delinquent PercentageMississippi: 2.38%Louisiana: 1.90%Alabama: 1.66%Oklahoma: 1.55%Arkansas: 1.54% Top 5 States by 6-Month Change in Non-Current* PercentageAlaska: -23.82%Hawaii: -20.35%New York: -14.00%North Dakota: -10.47%New Jersey: -3.13% Bottom 5 States by 6-Month Change in Non-Current* PercentageIowa: 22.96%Florida: 16.80%Colorado: 15.91%South Dakota: 13.12%Arizona: 12.43% *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.Notes:1) Totals are extrapolated based on Black Knight’s loan-level database of mortgage assets.2) All whole numbers are rounded to the nearest thousand, except foreclosure starts, which are rounded to the nearest hundred. For a more detailed view of this month’s “first look” data, please visit the Black Knight newsroom. The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at https://www.blackknightinc.com/data-reports/ by Dec. 5, 2022. For more information about gaining access to Black Knight’s loan-level database, please send an email to Mortgage.Monitor@bkfs.com.