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by Robert Rakowski
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You’re Invited . . . To Receive Advance Access to New Listings REI INK magazine is excited to announce the launch of the REI Referral Network. Real estate investors and service providers are invited to join this membership platform to connect with real estate agents who are active in the investment space. For our inaugural launch, we are offering FREE memberships for the first 500 investors who enroll. Your complimentary membership is good through March 2020. There are associations that connect lenders with investors, but none that connect investors with real estate agents and brokers. Our network of real estate agents and brokers are well versed in the business of real estate and are fluent in the criteria investors use to analyze their asset acquisition and disposition strategies. As a member, among other benefits, you will learn how regional markets are performing, receive localized information that will help you expand your portfolio and have access to a database of Real Estate Professionals listed by state and by county to accurately align with your industry focus. We understand the investor arena and believe our referral network members will help you develop strategies to meet and exceed your ROI projections. We look forward to working with you and assisting in your ROI performance. Author Robert Rakowski View all posts

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According to the 2019 Buyer Insights Survey Report, released this week by Auction.com, more than half of foreclosure auction buyers are mom-and-pop investors who are purchasing between one and five properties a year. The survey found that 51 percent of foreclosure auction buyers plan to purchase fewer than five properties in 2019, and 22 percent plan to purchase more than 10 properties for the year. Only 2 percent of buyers said they plan to purchase more than 100 properties in 2019. “Foreclosure auctions are no longer dominated by larger investors able to navigate what was an opaque process of purchasing a property at the courthouse steps or from a hard-to-find REO asset manager,” said Jason Allnutt, Auction.com CEO. ”The majority of foreclosure and REO auction buyers are now smaller, mom-and-pop investors who are taking advantage of a much more accessible buying experience.” Among the report’s additional highlights: 73 percent are purchasing properties in the South region of the country, the highest share of any region. Other regions of the U.S. came in at Midwest (39%), Northeast (22%) and West (13%). 24 percent said their local housing market is overvalued, with a correction possible. 33 percent expect to see home price appreciation between 3 and 5 percent over the next 12 months. Novice investors were identified as the biggest competitive threat to buyers surveyed. Rehab-and-flip was the most popular investing strategy. 49 percent budget at least 20 percent of the property purchase price for rehab costs. The Auction.com 2019 Buyer Insights Survey Report is based on a survey sent to more than 4,700 buyers who had purchased at least three properties on the Auction.com platform. The survey was conducted between June 6 and June 20, 2019, with 197 buyers responding. Author admin View all posts

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Doorstead, an operations technology company, has raised $3.3 million in funding, according to an October 8 press release. The company has pioneered a new class of property management called “iRenting,” a model that provides landlords with a guaranteed rental income, regardless of occupancy, with rental offers within hours. Doorstead was co-founded by Ryan Waliany and Jennifer Bronzo. Waliany was previously a technology-operations expert at Uber. Bronzo is a tech entrepreneur who grew up managing properties for her family’s construction company. The founding team are all alumni of UC Berkeley and have built technology-operations products at Uber, engineered scalable systems at Doordash and Dropbox, and built forecasting models at Goldman Sachs. The company uses modern data science to model risk alongside operations technology that enables consistent high-quality service at scale. “Today, we are seeing the emergence of operations-technology companies like Uber, DoorDash and Opendoor with both operations and technology crafted into their DNA. At Doorstead, we believe that software cannot exist without the human component, and the operations cannot exist without software orchestrating the process,” said Doorstead CEO Waliany. Doorstead has met 100% of its guarantees, reduced vacancies by as much as 76% and helped owners earn up to 9% more in annual rental income, according to the release. Doorstead currently serves the San Francisco Bay Area. The company plans to expand into Sacramento and Los Angeles. The seed round was co-led by global investment firms M13 and Silicon Valley Data Capital with participation from the Venture Reality Fund and SOMA Capital. Author admin View all posts

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According to recent research by Zillow, adding a solar energy system to a home can increase the property value by as much as nearly 10% in addition to lowering electricity bills. Zillow’s research found that more than 80% of home buyers cite energy-efficient features as being important. The sale premium varies by market. For example, in the greater New York City metro area, solar-powered homes have a premium (5.4%) that is double that of Riverside, California (2.7%). Zillow notes that the Top 10 states where solar energy most increases property values are: New Jersey (9.9%) Pennsylvania (4.9%) North Carolina (4.8%) Louisiana (4.9%) Washington (4.1%) Florida (4.0%) Hawaii (4.0%) Maryland (3.8%) New York (3.6%) South Carolina (3.5%) Zillow cites future energy cost savings as a major reason why homes with solar energy systems can command higher prices. The research also points out that homes with these systems may be more likely to have other features—such as heated floors—that are desirable. California has passed legislation that requires solar panels on all new homes beginning in 2020. It is the first state in the country to do so. Zillow calculated the solar premium by comparing homes with and without solar-energy systems that were listed for sale and sold from March 1, 2018 to February 28, 2019. The study controlled for observable attributes of the homes, including bedrooms, bathrooms, square footage, age of the home and location. Author admin View all posts

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U.S. home flipping returns dropped to a nearly eight-year low in the second quarter of 2019. That’s according to a second quarter U.S. Home Flipping Report that ATTOM Data Solutions released on Sept. 19. The report showed that 59,876 U.S. single family homes and condos were flipped in the second quarter of 2019, a 12.4% percent increase from the previous quarter, but a decrease of 5.2% from a year ago. Homes flipped in the second quarter represented 5.9% of all home sales during the quarter, down from a post-recession high of 7.2% in the previous quarter, but up from 5.4% a year ago. They typically generated a gross profit of $62,700 (the difference between the median sale price and median paid by investors), up 2% from the previous quarter, but down 2% from a year ago. That typical gross flipping profit of $62,700 translated into a 39.9% return on investment compared to the original acquisition price, down from a 40.9% gross flipping ROI in the first quarter of 2019 and from a margin of 44.4% in second quarter 2018. Returns on home flips have dropped six quarters in a row and eight of the last 10, marking the lowest level since fourth quarter 2011. Despite the quarterly drop in home-flipping rates, 104 of 149 metropolitan statistical areas analyzed in the report (70%) posted a year-over-year increase in their rates in second quarter 2019. Among the areas analyzed, the number of homes flipped reached new peaks in second quarter 2019 in 10 MSAs. The largest were Charlotte, North Carolina; San Antonio, Texas; Pittsburgh, Pennsylvania; Oklahoma City, Oklahoma; and Raleigh, North Carolina. The total dollar volume of financed home flip purchases in the second quarter of 2019 was $8.4 billion, up 31.3% from $6.4 billion in second quarter 2018 to the highest level in 13 years, since third quarter 2006. Flipped properties originally purchased by the investor with financing represented 41% of all home flips for the time period, up slightly from 40.8% in the previous quarter, but down from 45.9% a year ago. Among the 149 metropolitan statistical areas analyzed in the report with at least 50 home flips completed in second quarter 2019, five had gross ROI flipping profits of more than 100%: Scranton, Pennsylvania (134%); Pittsburgh, Pennsylvania (132.5%); Reading, Pennsylvania (129.3%); Kingsport, Tennessee (104.1%) and Augusta, Georgia (101.1%). Homes flipped in the second quarter of 2019 sold for a median price of $220,000, with a gross flipping profit of $62,700 above the median purchase price of $157,300. The second quarter 2019 figure was up from a gross flipping profit of $61,500 in the previous quarter, but down from $64,000 in second quarter 2018. During the time period, the average time to flip nationwide was 184 days, up from an average of 180 days for homes flipped in the previous quarter and up from an average of 183 days a year ago. Author admin View all posts

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Fannie Mae has released the results of its 13th reperforming loan sale transaction. The deal, which was announced Aug. 13, 2019, included the sale of approximately 29,400 loans totaling $5.1 billion in unpaid principal balance, divided into six pools. The winning bidders of the six pools for the transaction were Goldman Sachs Mortgage Company for Pool 1; Towd Point Master Funding LLC for Pools 2, 3, 4; NRZ Mortgage Holdings, LLC for Pool 5; and DLJ Mortgage Capital, Inc. for Pool 6. The transaction is expected to close Oct. 25, 2019. The pools were marketed with Citigroup Global Markets Inc. as advisor. Loan Pools The loan pools awarded in this most recent transaction include: Group 1 Pool 3,298 loans with an aggregate unpaid principal balance of $752,107,728 Average loan size $228,050 Weighted average note rate 3.12% Weighted average broker’s price opinion (BPO) loan-to-value ratio of 75% Group 2 Pool 7,328 loans with an aggregate unpaid principal balance of $1,484,418,320 Average loan size $202,568 Weighted average note rate 3.92% Weighted BPO loan-to-value ratio of 85% Group 3 Pool 7,698 loans with an aggregate unpaid principal balance of $1,063,641,374 Average loan size $138,171 Weighted average note rate 5.02% Weighted BPO loan-to-value ratio of 68% Group 4 Pool 3,504 loans with an aggregate unpaid principal balance of $585,171,556 Average loan size $167,001 Weighted average note rate 3.97% Weighted BPO loan-to-value ratio of 79% Group 5 Pool 2,875 loans with an aggregate unpaid principal balance of $549,731,163 Average loan size $191,211 Weighted average note rate 4.24% Weighted BPO loan-to-value ratio of 72% Group 6 Pool 4,664 loans with an aggregate unpaid principal balance of $678,220,033 Average loan size $145,416 Weighted average note rate 4.35% Weighted BPO loan-to-value ratio of 78% Author admin View all posts