Gain Clarity on the Economy, Join Us for Our Next In-Person Summits

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With recent interest rate spikes and the collapse of two major banks on both coasts, the economy seems to continue being on shaky ground.

To help Realty411 and REI Wealth magazine readers get the timeliest information and updates, we are hosting a series of Real Estate Investors Summits around the country.

At these events, guests will enjoy a Breakfast Networking Session, copies of both publications, and a chance to get all your real estate questions answered — in person.

Don’t miss the opportunity to connect, learn and network live with like-minded investors ready to make their goals come true, too.

Here is your chance to learn proven strategies and techniques that can be implemented in your next real estate transactions. Join us for the opportunity to connect in person during a special morning mixer.

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Don’t miss our next events:

April 1st — Philadelphia, PA

https://www.eventbrite.com/e/481836685497

April 15th – West Los Angeles, CA

https://www.eventbrite.com/e/530733146127

September 16th, – Arlington, Texas

https://www.eventbrite.com/e/530755121857

We hope you can join us as we celebrate the incredible connections, we’ve made in our real estate investing career.

Realty411.com – phone: 310.994.1962 – [email protected]

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6 Things to Keep in Mind When Selling Your Home

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By Stephanie Mojica

During the first two years of the COVID-19 pandemic, investors and traditional homeowners enjoyed a true seller’s market. But as COVID-19 slowly fades from the news and global financial challenges persist, sellers no longer have the same advantages.

The good news is that the majority of homeowners can still get more than they paid for their property, but the bad news is that more planning is required. To that end, here are six things to keep in mind when selling your home, per REALTOR.com.

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1. Set the right selling price from the get-go.

Pricing your property above market value is a recipe for disappointment. Also, don’t count on the bidding wars that were everyday occurrences at the height of the pandemic.

2. Do not try to sell your property “as is”.

People just aren’t buying homes in need of TLC nowadays. While it may feel unfamiliar and even irritating, repairing your house before it hits the market will heighten your chances of making a quick sale.

3. Help your buyer as much as possible.

Interest rates are at historic highs, causing lenders to offer their customers less buying power. As a result, concessions such as sellers helping their buyers with closing costs are now a bigger part of the game.

4. Don’t expect any property to sell quickly.

The times of a home only sitting on the market for a few days seem to be gone; the current national average is 50 days. The good news is that this is still less time than the pre-pandemic average of 68 days.

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5. Invest time and money into home staging.

An empty house doesn’t appeal to buyers the way it once did. In fact, homes that are tidy and staged sell 88% faster (and at 20% higher prices) than non-staged properties.

6. Consider when to sell your home.

During the peak of the pandemic, it was okay to list a home anytime. But nowadays, spring and summer are the best buying seasons.

Stephanie Mojica

Stephanie Mojica, writer of How One Writer Shifted From Settling for $12 an Hour to Prospering at Over $90 an Hour and shorter books such as Quick Answers to Frequently Asked Credit Questions, is an award-winning journalist with publications such as USA Today, The Philadelphia Inquirer, San Francisco Chronicle, and The Virginian-Pilot, among many others. She helps executive coaches, business consultants, business owners, attorneys, and other decision makers generate more money online and become the go-to expert in their field by guiding them step by step through the process of writing and publishing a book.

Economic Extremes & Consumer Shock

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By Rick Tobin

None of us have ever seen such wide-ranging extremes of economic and asset trends as we’ve seen over the past few years. In many ways, it’s like we’re on a giant yo-yo swinging wildly from side to side or on a bumpy roller coaster ride with wicked twists and turns that keeps moving onward for years at a time instead of over just a minute or two.

All of the economic jerking that we feel on a daily basis can be overwhelming. Some days we see very positive news which gives us hope for a bright future. Other days, the gloomy negative news can seem a bit shocking because much of these positive and negative economic data trends have never been experienced in past years or decades.

Let’s review some of the key economic data trends that swing from very bad to very good (or vice versa) in hours, days, weeks, months, or over the past few years:

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Home Price Changes

Nationally, home prices have risen consistently since 2011. Investor home purchases fell the most on record in the 4th quarter of 2022 at a whopping -46% decline pace. Home prices fell for six months in a row since peaking in July 2022 through the end of January 2023, according to the Case-Shiller U.S. National Home Price Index.

A booming home price example: A young family purchases a new starter home for $300,000 in January 2020 shortly before the global pandemic designation. That same home would’ve peaked at $435,000 in the summer of 2022 using the same Case-Shiller data trends. If so, the family gained $135,000 in newfound equity in just 18 months or so.

The most horrific housing crash in US history took place between the market peak in 2006 and 2012 when the national housing average fell – 27%. California’s home losses were much more extreme with the peak to trough bubble burst falling as much as -41%.

Between 2019 and peak prices near the summer of 2022, many regions had home appreciation percentages of somewhere between massive 50% and 100%+ gains. Future home losses will need to be significant and the worst ever in national history to turn recent home purchases negative.

For people who’ve owned their homes for many years or decades, they will be more likely to ride out any significant price drops in the future. However, buyers who purchased with anywhere between 0% and 5% down in recent years may soon go underwater with the mortgage debt surpassing the market value.

Year-over-year home sales fell between 37% and 47% in Southern California counties through January. As sales volume declines, home price drops tend to follow even if most sellers aren’t willing to do it at first because they want peak record high prices like last seen in 2022.

Fewer buyers means less competition for quality properties and may lead to home listing price cuts and increased closing cost credits from sellers to buyers.

Commercial real estate properties: Upwards of 50% of all commercial property mortgage debt is a floating or adjustable rate. Additionally, the cost to insure the interest rate cap derivatives contract that protects both borrowers and lenders from the increasing risks associated with rising rates has increased 10-fold for borrowers, as per the Wall Street Journal. As such, it’s a double whammy for commercial mortgage borrowers in that both their mortgage and insurance rates have skyrocketed over the past year. The commercial sector is still getting hit harder than residential.

Listing Supply

The St. Louis Fed and Realtor.com share data together which shows both the current and past history for single-family homes, townhomes, and condominiums across the nation at any given time. As with other products available for purchase, a lower supply of something like eggs or popular toys will likely lead to higher prices due to the demand exceeding the available supply. Conversely, an oversupply of a product and falling demand will cause prices to fall.

Let’s review the national home listing trends dating back to 2016:

The US Census Bureau recently published data for the 4th quarter of 2022 which showed that there were 15 million vacant housing units (homes, condos, and rental apartments).

Vacant “shadow inventory” homes that are NOT listed for sale absolutely dwarf the total number of listed homes nationwide by a significant multitude. This has been true since at least 2009. If just 5% or 10% of the “shadow inventory” homes suddenly changed to homes available for sale, it could double the size of the national listing supply. “Shadow inventory” homes can also include homes already foreclosed upon by banks or mortgage loan servicing companies that are not offered up for sale.

Mortgage Rates

Approximately 75% of all homes nationwide were purchased with mortgages in recent years. Almost every boom and bust housing cycle over the past 50+ years was directly related to mortgage rate trends.

Between April 1971 and September 2022, the average 30-year fixed mortgage rate was 7.76% as per Freddie Mac. Today’s rates for borrowers with average FICO scores near 690 have fluctuated between 7% and 8% in recent months. The main difference today is that mortgage balances are two, three, four, or five times larger than in decades past.

We’re in the midst of the fastest mortgage rate increase in US history. The Federal Reserve’s rate hikes at a record pace over the past year are likely to later pivot and become massive rate cuts at some point in the future like we saw shortly after the 2008 housing bubble burst.

For comparison purposes about rate hikes, the Fed increased rates 17 times between June 2004 and June 2006 while pushing rates from 1% to 5.25% over 24 months while much smaller rate hikes that were closer to .25% at a time. This was the catalyst for the housing bubble burst later as so many adjustable rate option-like pay ARM mortgages and HELOCs doubled or tripled in monthly payment amounts.

Between the 1st quarter of 2022 and the 1st quarter of 2023, we’re on pace to increase rates 4.25% just like during the 2004 to 2006 era while doing it in about half the time (12 months instead of 24 months).

As of July 2022, approximately 80% of all open residential mortgages nationwide were priced at a fixed 4% rate or lower as per CoreLogic. Approximately 40% of all US residential mortgages were financed or refinanced near peak lows in 2020 or 2021.

Key point: The Primary Mortgage Market Survey conducted by Freddie Mac found that 99% of all residential mortgages nationwide had existing fixed rates lower than the national fixed rate average during the first week of March 2023.

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Three years ago near the start of the “pandemic” declaration in March 2020, the 10-year Treasury yield hovered close to an incredibly low and rather spooky 0.666% yield. The 30-year fixed mortgage rate is tied to the directions of the 10-year Treasury yield. Today’s 10-year Treasury yield closed at 3.966% on March 6, 2023 by comparison, which was about 3.3% higher.

Historically, the 30-year mortgage rate pricing is about 1.7% over the 10-year Treasury yield (0.6630 + 1.7% margin = 2.363% 30-year fixed mortgage rate, approximately). Over the past year, the margin has widened considerably to 3% or 4% over and above the 10-year Treasury yield to arrive at the latest 30-year fixed mortgage. This widening of the margin was partly due to perceived worsening financial conditions and the Fed’s Quantitative Tapering strategies which included their attempt to sell off trillions of dollars’ worth of mortgage bonds in spite of their being few buyers.

As a result, the 30-year fixed mortgage rate skyrocketed faster than ever to reach somewhere between 6% and 8%, depending upon the borrower’s FICO score and other creditworthiness guidelines.

Mortgage Applications

The lowest mortgage application reading of the 21st century was reached as of the 1st quarter in 2023 due to rising rates. By comparison when mortgage rates were at or near all-time record lows, there were 23.3 million home loan applications completed by consumers, according to the Consumer Financial Protection Bureau.

M1 and M2 Money Supply

“M1 is the money supply that is composed of currency, demand deposits, other liquid deposits—which includes savings deposits. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash. However, “near money” and “near, near money,” which fall under M2 and M3, cannot be converted to currency as quickly.” – Investopedia

The federal government has not published data about M3 since 2006. Our national money supply trends are more of a factor for causing rising inflation or falling deflationary trends more so than consumer spending.

High

The M1 money supply from $4 trillion to $20 trillion between just January 2020 and October 2021.

Low

M2 is a measure of the money supply which includes cash, checking deposits, and other types of deposits that are easily convertible to cash such as CDs. Last year was the first time when bank deposits declined within the same year since 1948. This is partly why banks are finally starting to offer higher savings rates to attract more deposits because they’re running low on cash.

The M2 year-over-year growth swung from one extreme to another between 2020 and 2023. It peaked at a +26% year-over-year growth in 2021 and later collapsed to a -2% by early 2023. In the past, a negative M2 money supply that was contracting was a foreboding or ominous sign of an upcoming economic recession or severe depression like seen back in the 1920s.

The M1 and/or M2 money supply directional trends tend to mirror inflation or deflation trends. The more money that is created, the more likely that inflation will rise as well while pushing assets like stocks and real estate much higher. Conversely, a falling money supply can create a deflationary economic cycle when asset prices fall as well.

Savings: US savings rates reached an all-time record low by the 1st quarter of 2023.

Stocks

Let’s take a closer look at some key dates for the Dow Jones stock index to get a better understanding of how wildly stock prices have swung over the past three years:

The Dow Jones stock index fell from a peak high of 29,551.42 on February 12th to a market low of 18,213.65 on March 23rd in 2020, which is more than a 38% overall percentage loss in just over a month. Of the 10 all-time biggest daily point losses ever for the Dow Jones index, eight of these days took place in either February or March in 2020. By comparison, the then all-time daily Dow Jones point loss record for the infamous day that almost took down the global financial system back on September 29, 2008 was only a -777 daily point loss.

Month & Year / Daily Point Loss

#1: 03/16/2020 / -2997
#2: 03/12/2020 / -2353
#3: 03/09/2020 / -2014
#4: 03/11/2020 / -1465
#5: 02/27/2020 / -1191
#6: 02/05/2018 / -1175
#7: 02/08/2018 / -1033
#8: 02/24/2020 / -1032
#9: 03/05/2020 / -970
#10: 03/27/2020 / -915
Source: Standard and Poors (through 03/27/2020)

Consumer Debt

Mortgage and other consumer debt is at an all-time record high. Credit card debt is near $1 trillion with the highest rates and fees ever averaging over 20%.

Distressed or pre-foreclosure numbers are listed as “below historical averages” today partly due to existing Covid-19 moratoriums. However, the true number of distressed properties that do not have foreclosure filings may later be on pace to reach peak 2008 to 2012 numbers and will likely be led by FHA mortgage defaults (95% to 96.5% LTV is the norm for FHA purchase deals).

After loss of income, the #1 reason why homeowners walk away from their mortgage and let the property go to foreclosure is when it’s upside-down, underwater, or the mortgage debt is higher than the current market value.

The #1 cause of financial insolvency or bankruptcy is related to unpaid medical bills; Americans have never been unhealthier than today, tragically.

Published inflation rates have varied between 6% and 9% in recent months. Yet, the true inflation numbers are closer to 15% to 17% if the federal government used the same data analysis techniques as a few decades ago.

Subprime automobile loans recently surpassed 6%, which is the highest default number ever.

Energy Price Swings

Back in April 2020, oil prices per barrel briefly went negative to reach -37 per oil barrel. As a result, the cost of the barrel itself was more valuable than the oil inside. Energy costs are usually a root cause of both inflation and deflation as we’ve all seen over the past few years. Some oil barrel prices later surpassed $100 in 2022 as many of us saw $5, $6, $7, $8, and $9 per gallon, especially here in California.

Derivatives

At the peak of the last housing bubble burst in 2007 and 2008, the estimated value of the global derivatives marketplace was about $1,500 trillion. Today, the global derivatives market is closer to $3,000 trillion and may reach closer to $4,000 trillion by 2027 if the same annual growth rates continue, as per Globe Newswire. The frozen global derivatives market was the main cause of the Credit Crisis or Great Recession back in 2008.

A derivative is a hybrid financial and insurance instrument that can be leveraged up to 50 times. Or, it’s a glorified bet on the future direction of things like interest rate directional trends as seen with interest rate option derivatives. Even though us mortgage brokers and real estate investors were blamed by the media for the Credit Crisis, defaulted subprime mortgage debt represented less than 1% of all debt that imploded back then.

Denial or Research – Pick Your Poison or Solution

What we avoid in life controls us. It’s usually best to research as many different positive, neutral, or negative sides to any story or asset class like real estate. You’re more likely to survive any economic downturn if you make precautionary plans and keep your eyes wide open for new opportunities that few others around you can see at the time.

Denial is usually the most common first reaction when presented with dissenting opinions or scary topics, especially if you work or invest in the real estate or financial sectors. Yet, you must thoroughly analyze all sides, question everything (especially your own perspectives), and focus on the potential opportunities or solutions.

The harder we fall, the higher we bounce back, hopefully. If the Federal Reserve does a massive pivot and starts cutting rates again and increasing their Quantitative Easing strategies with more asset purchases (stocks, bonds, and mortgages) to boost the economy again, the market may do another positive market swing skyward. Only time will tell, so get your popcorn ready!

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

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

3 Tips for Finding Balance Between Building Marketing Momentum and Minimizing Expenses Amidst a Recession

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By Valeh Nazemoff

Lead economists predict a recession and therefore slower economic activity.

While this idea can bring flashbacks of 2008 and mounting worry for business owners, the best course of action is preparation.

Marketing in a downturn is something that many struggle with as they navigate expenses while still trying to drive revenue. The truth is that many small businesses neglect marketing momentum in an attempt to save money, but this is not the best business decision in the long run.

In reality, you must strike the balance between marketing momentum and budget during the financial downturn. Here are a few tips to implement.

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1.   Evaluate Your Resources

Both time and money are finite resources, and a recession can put a greater strain on them. Before you can master your time and budget effectively, you must nail down exactly what you have available.

We all live with an opportunity cap. There are limited hours per day, and the more time we spend on certain activities, the less we have for others. One resource you must assess is your time. Consider how much time you have for business activities, and the balance you need to strike between various activities.

Another consideration is the financial resources you have available. When the economy is strong and your revenue is predictable, you may be able to afford the same dollars for all marketing activities. Understandably, the economy can impact this. Based on how the recession will impact your industry and business, you may need to reduce the overall budget for marketing. Yet, what many don’t realize is that when you outsource marketing services, it can be 100% tax deductible for U.S. small businesses.

Additionally, some entrepreneurs and small business owners attempt to make up for this difference in budget with their time. They think that instead of paying someone to do the tasks, they can simply handle them alone. But remember time is also limited, and you must ensure it’s spent on high-level tasks that drive your business. Furthermore, you don’t want to sacrifice your lifestyle goals and end up struggling with burnout and chronic disease due to stress.

2.   Take Moment for Self-Discovery

Ultimately, automating, delegating and outsourcing can help you implement marketing momentum during a recession. But before you dive into splitting up responsibilities, take time for self-discovery.

Which activities are you good at? Which do you enjoy? On the other hand, what are some that you do not like or enjoy? This is what self-discovery is all about. The key is to examine all of the various parts of your business, including marketing, to lay out which activities you should do and which you should outsource either internally or externally.

We advise our clients to work through the self-discovery activity to help them understand the best strategy for owning vs automating vs delegating. Ultimately, you’ll break down tasks into the following categories:

  • I’m good at it and I like it.
  • I’m good at it, but I don’t like it.
  • I’m not good at it, but I like it.
  • I’m not good at it, and I don’t like it.

This breakdown will help you then determine how to best complete all of the different tasks for your marketing momentum. As you may imagine, the ones you love and are good at are best to own, while the others should be automated and/or delegated as necessary.

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3.   Own vs Automate vs Delegate

Automating and delegating are two powerful ways to reduce costs during a recession, especially in light of layoffs. After breaking down where the common marketing momentum activities fall in the self-discovery activity, it’s time to determine which to own, which to automate, and which to delegate. Evaluate each task and determine how you’ll best handle it.

If it does not impede your ability to handle other critical business tasks, then it makes sense to “own” the tasks that you are good at and enjoy. However, if taking those tasks will cause you to lose time on other important ones, or eat into your lifestyle goals, then you still may need to implement automation or delegation.

Next, consider internal delegation. Does your internal team already have the resources for you to delegate the activity? Again, consider the skillset of your existing team, but also the time cap that they all have. If they can reasonably take the task without overworking or sacrificing time on something else important, then it makes sense to delegate internally.

But if your team does not have the skillset or time to handle the tasks, consider external delegation. Hiring additional team members or retaining employees is far more expensive than working with a complete digital marketing team. When delegating externally, you won’t need to worry about the cost of benefits packages. Furthermore, an experienced external team can help you implement key automation (like online booking appointments, chatbots, automated email campaigns, funnels, etc.) to further streamline your marketing momentum.

Keep Your Marketing Momentum Going During a Recession

The looming recession should not signal a backtrack from marketing momentum. Skipping out on marketing will only hurt your revenue and stifle business growth in the long run. On the contrary, you need to implement cost-effective marketing momentum to drive revenue during challenging times. Automating and outsourcing can help you balance marketing momentum and budget, but it all begins with taking a closer look at your skillset, interests, and internal resources.

Valeh Nazemoff

Valeh Nazemoff is an accomplished speaker, bestselling author, coach, and the founder of Engage 2 Engage, a digital marketing services company. She is passionate about improving people’s lives through strategic planning, collaborative teamwork, automation, and delegation. She removes the frustration, overwhelm, burnout, and stress that entrepreneurs and small businesses face in figuring out the various marketing elements so the focus remains on growing and scaling. Her books, Energize Your Marketing Momentum (2023), Supercharge Workforce Communication (2019), The Dance of the Business Mind (2017), and The Four Intelligences of the Business Mind (2014) aim to help businesses create order from chaos. She has also been featured in many publications such as Inc., Entrepreneur, SUCCESS, Fast Company, Huffington Post, and more.

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

Realty411’s VIRTUAL Investing Summit + NEW Property Portal

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Attention Meetup Members, it’s time for another educational and exciting Realty411 Virtual Investing Summit. Our new Realty411 Virtual Investing Summit is uniting investors for an amazing day of information and motivation. We also have exciting news to share about the launch of our exclusive Property Portal for Realty411 and REI Wealth readers.

This exclusive technology will provide readers with off-market real estate properties from around the nation. Many of these houses are exclusive wholesale deals.

Find out more about our Property Portal on our Realty411 Virtual Investing Summit this Saturday, March 11th. In addition to launching this new technology, we will discuss important information on this INTERACTIVE online event.

Some of the topics that we will dive into include: Multifamily Investing, Scaling a Real Estate Business, Tips for Rehabbing, Financing Options, Off-Market Properties, plus more!

Register for our **NEW Virtual Investing Summit ** on SATURDAY, March 11th, 2023, from 9 AM to 3 PM PT (East coast: 12 PM to 6 PM ET).

Join us LIVE to chat directly with our educators and get all your questions answered on the spot. Every online event we produce is unique, be sure to reserve this day for REI learning at its best.

Realty411 will virtually unite some of the most successful, knowledgeable and savvy investors in the REI (Real Estate Investing) industry to help our readers make educated and informed decisions.

RESERVE YOUR TICKET

Or, visit the link below:

https://us02web.zoom.us/webinar/register/WN_MHudxzhHSXKSAq702UqxOA

Intelligent Package Rooms Close The Door On Traditional Locker Systems

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By Ned Hill, Position Imaging

The historical volume of packages gets all the multi-family press. But volume isn’t the actual property owners’ problem. Instead, their big problem is figuring out how to manage a shift in package management preference; e.g., residents and managers find that existing locker systems are inadequate for package delivery and distribution. And for a good reason. People now request a staggering range of goods be delivered to their homes, from car parts and carpets to dining room tables and the dinner served on them. The shipping industry excels at accommodating in many areas, but it serves single-family, porch drop-offs better than multi-family deliveries.

How is a Locker System to Cope?

The problem is that lockers, by design, are too inefficient to keep up with today’s delivery needs, and—multi-family residents are unhappy about it. Lockers can neither expand to accept oversized deliveries nor shrink to more efficient space utilization. Instead, they force “spill-over” into insecure, unmanaged areas. Unpleasant heaps of bags, boxes, and stray styrofoam package peanuts overtake beautiful lobbies and common areas.

The new residential delivery state of affairs requires a dynamic, intelligent infrastructure. The type of package management system required to meet renters’ needs consistently favors intelligent package rooms that optimize the process. For example, unlike the lockers with fixed-sized storage compartments, intelligent package rooms provide shelving to accommodate packages of any size or shape, staging areas for substantial items such as furniture, and even cold storage areas for perishable food.

All packages—regardless of size or location—are tracked and monitored in an intelligent package room via advanced Computer Vision technology. This cutting-edge technology has the intelligence to associate every item with its specific owner. In addition, it will notify residents if they accidentally retrieve the wrong package and try to leave the area.

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Intelligent package rooms are designed to fit within existing or former locker spaces but with more functionality. Cameras and sensors monitor the placement and movement of every package to ensure security and chain of custody. Lights and laser pointers guide residents to their packages so they can quickly and accurately locate their items. As a result, any package can be placed in areas designed to accommodate them safely and efficiently.

With intelligent package rooms, food and dry cleaning deliveries can be accepted, virtually without oversight, via new “smart clip” technology. These smart clips are small devices attached to any loosely packaged object. When residents enter the intelligent package room to retrieve their items, they simply scan a QR code from their notification text or email. The smart clipped item flashes in the staging area for instant identification. The clips are embedded with an accelerometer that detects motion; if the item’s movement is not associated with the item’s owner (the proper QR code) or the clip is removed, a notification alarm will alert the person they have retrieved the wrong thing. In addition, smart clips also monitor the temperature to ensure perishable items stay fresh.

Adaptive Package Management

Package room technology will adapt to buyers’ preferences and property owners’ needs. This flexibility is possible because of Artificial Intelligence (AI), the technology supporting advanced Computer Vision. These technologies present massive processing efficiencies behind the scenes to optimize the package management process to benefit all multi-family stakeholders, such as property owners, managers, and tenants.

Masking the operational difficulty saves property management money while improving the property. Intelligent package rooms require little to no training, and the engagement is intuitive. Couriers delivering packages scan each item in the intelligent package room, just like they would at a single-family unit. Residents receive an instant text notification with a QR code to enter the room.

In addition, intelligent package rooms enable residents to retrieve belongings on their desired schedule. The room’s security features remove the need for any building personnel to be on call to assist residents. It’s a 24/7 convenience that keeps food cold and watches over packages until the owner retrieves them. However, if the wrong item is taken and the alert alarm is ignored, there is a digital breadcrumb trail of everything in the room. In the event of a missing item, building management can check the log files to ascertain precisely when the package was removed and by whom because all activity in the room is digitally recorded.

Intelligent Package Room Designs Replace Lockers and Add Revenue Opportunity

Unused storage areas or oversized closets make great candidates for intelligent package rooms. Many locations have converted existing space, especially in space-confined buildings in New York City. In NYC, real estate owners are retrofitting current areas into intelligent package rooms and generating additional revenue via increased rents for added convenience. In addition, architects are now including intelligent package rooms in their building designs. Building owners and managers now realize that providing their residents with an intelligent package management solution is an amenity they certainly can turn into a revenue source.

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Conclusion

Legacy locker-based systems can’t process today’s package volume coming into multi-family units. The plausible solution is AI and Computer Vision technologies; once at work only in high-end computing, now delivering a modern-day convenience for intelligent package management. When deployed as an intelligent package room, property owners provide a best-in-class experience with the following:

  •  Intelligent in-room tracking and notification with little, if any, supervision.
  • Smart clips that watch over perishable food items ensuring their freshness.

In addition, intelligent package rooms can be installed in only weeks, often within what used to be the locker system area. Today, many architects include intelligent package room designs into new multi-family building specifications as a competitive and convenient enhancement.

Ned Hill is the founder and CEO of Position Imaging (PI), a pioneer in the field of advanced tracking technologies. Under Ned’s strategic vision and guidance, PI has developed an industry-leading tracking solution, utilized computer vision and laser guidance to simplify item delivery, and created unique AI-based technologies. These combine to improve logistics efficiency and continuous visibility of items at any stage in the process. Ned has raised close to 20 million in funding, driven product development, and created a partner ecosystem of industry leaders in hardware (Hitachi-LG Data Storage, Intel), software (Microsoft, Salesforce), solutions (Zebra, Lozier), and service (Bell and Howell). Ned is the inventor or co-inventor of over 50 patents/patent applications and a speaker at industry conferences, including CES, Live Free, and Start, and at MIT.

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

Advisors Mortgage Poised to Help Clients Benefit from Recent Federal Housing Authority (FHA) Announcement

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Over 33% Reduction in FHA Annual Mortgage Insurance Premium Will Open the Door to Home Ownership for More Americans

Advisors Mortgage Group, based in Ocean Township, New Jersey, today comments on the recent announcement from the Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), that starting on March 20, 2023, it is reducing annual mortgage insurance premiums by 30 basis points on FHA-insured mortgages. The reduction will benefit approximately 850,000 borrowers over the next year, which will save these families an average of $800 annually.

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How does this translate into savings for a buyer looking to get an FHA-insured mortgage*? If an individual were to buy a home at a sales price of $400,000 and put 3.5% down, the mortgage would be $386,000. The current mortgage insurance premium (MIP) would be $271.89 per month. Once the 30 basis point reduction takes place, the MIP will be $175.93 per month. That is a savings of $1,151.52 per year. This change applies to new loans only starting on March 20, 2023.

This change comes on the heels of a few other recent updates by HUD to make home ownership a reality for more Americans. The FHA’s underwriting policies were changed to allow lenders to use positive rental history in evaluating applicants’ creditworthiness for an FHA-insured mortgage. This will make it easier for first-time home buyers to qualify for a mortgage. HUD also changed the way in which student loan debt is evaluated in FHA mortgage underwriting, which will enable more borrowers who are making payments on student loans to qualify for an FHA mortgage.

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Erika Whalen, Advisors’ underwriting manager, states, “These steps by HUD and the FHA are going to help many more people achieve the dream of owning a home. We at Advisors are excited to see these changes take place and that we now get to be a part of the American dream of home ownership for even more first-time home buyers.”

*The FHA’s annual MIP is a percentage of the outstanding loan balance. Advisors Mortgage Group is an FHA-approved lender and is not acting on behalf of or at the discretion of HUD/FHA or the federal government.

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San Francisco Home Prices Are Dropping — Could This Happen in L.A.?

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By Stephanie Mojica

Homes are selling for less than the asking price in San Francisco, and some experts speculate that the same thing could happen in Southern California, per the Los Angeles Times.

The report stopped short of calling the San Francisco Bay Area a buyer’s market, but labeled it a buyer-friendly market.

Before the challenges of the COVID-19 pandemic, massive tech industry layoffs, and high mortgage interest rates, homes in the Bay Area sold for 113% of the asking price.

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As of December 2022, the sale-to-list ratio was 99.8% — the lowest it had been in nearly six years.

The usual figure is 105% in Los Angeles, but that has dipped to 98.5% for the first time in over four years.

Experts interviewed by the Los Angeles Times believe that this trend will continue in both San Francisco and Los Angeles. The stock benefits that tech employees often use for down payments have significantly less value now. Also, the increased trend of remote work is leading people in multiple industries to seek cheaper housing options in cities such as San Diego, Sacramento, and Phoenix.

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Self-Storage Investment Guru and CEO AJ Osborne Discusses Real Estate Development Portfolios and Geographic Strategy

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For many investors, the real estate development field is a fascinating and terrifying one. While those eager to make money may have studied the stock market for years and feel comfortable parking their wealth there for the long haul, real estate investments may feel like more of a risk.

But, they can feel confident with the right research, education, and a team with an uber-successful track record forging the path.

AJ Osborne, CEO of Cedar Creek Capital, sees one real estate development market segment that has steadily grown and remains stable despite recessions and a global pandemic: self-storage.

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And he should know, he’s been making a killing in the niche — which he calls truly hands-off and high cash flow — for 20 years.

“We’ve never lost a deal, but that does not mean there aren’t risks to look into and be aware of. We always make sure to look at things that we can’t control so we can do our best to mitigate risk on every deal,” said the investment expert, whose Boise-based company holds $300 million in assets in its real estate portfolio.

Low Risk, High Returns

Osborne keeps his standards for investing strict to protect investors and provide the clearest path for success possible. The Cedar Creek Capital CEO believes each investor is meaningful and a trusted partner in the deal, whether the contribution is $50,000 or reaching into the millions.

“We want our investors to know that the money they invest with us is being utilized to the maximum degree,” he said. “This is why our non-negotiable due diligence process is exhaustive. We want to be able to present the good, the bad, and the challenging to our investors upfront with a plan for how we will grow their wealth through these acquisitions.”

Having the wisdom to walk away and say ‘no’ and mitigating risk is just as important as finding the real cash cows, for Osborne.

“We’ve had to walk away from some potential investments that up front came across as a great deal, but after a deeper dive into our research process, we found that the deal either had too much risk or wasn’t going to provide the kind of returns we’re looking for,” he stated.

For Osborne, quality deals come down to much more than cap rates and tenant occupancy.

His due diligence includes studying long-term forecasts for the self-storage market, heavy research into any geographic location he’s considering investing in, and much more. He believes the long hours he puts into a deal before its signed has made his investments so low-risk.

Those looking to learn more about Osborne, the self-storage investment landscape, and opportunities with Cedar Creek Capital, can subscribe to his popular YouTube channel, presented in cooperation with the most listened-to industry-specific podcast, Self Storage Income. The entrepreneur’s book, Growing Wealth in Storage, is also Amazon’s bestseller among investors interested in the self-storage investing market.

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No Guesswork Geography

Location is one of the most important aspects of any deal to Osborne. In the past, he has avoided investing in towns that rely heavily on one industry or a single large employer. He knows that if that industry suffers, his deal will suffer too.

“If there’s only a few employers in town, you don’t want to own the self-storage facility there. For example, If I’m looking at self-storage in a logging town, and the mill is on of the only employers there, I already know that I don’t want to own that because when the market changes or the mill goes out of business, my asset is gone too since the locals will leave or not be able to afford storage. There’s too much risk,” he shared.

Across the Street from Amazon

More recently, he’s expanded his research and philosophy on geography to include researching where the nation’s big companies are opening new factories or other operations and putting more focus on those areas. He knows that these larger companies will have researched the area well and will hire a large influx of people that will relocate to the area, many needed storage spaces as they resettle into new lives and jobs.

But, in some ways, Osborne already seems attuned to the market. This worked out particularly well when he purchased a property a few years ago along a quiet stretch of Arizona highway, with plans to develop it in the future.

Cedar Creek Capital will begin breaking ground in early 2023 on the exciting new project, ahead of The Wall Street Journal’s recently released video discussing the upcoming boom in the area, calling it a “logistics hub” and revealing that one of the world’s biggest semiconductor and microchip manufacturers is moving there — as well as Amazon, Puma, and UPS.

“The development in Arizona is a great example of how our due diligence process pays off massively,” explained Osborne. “In that process, we came to the same conclusion about this area as those companies. We’ve already made a significant profit on that deal without even renting a single unit. After that video came out, land prices along that highway grew exponentially.”

Along with building wealth for himself, his company, and his investors, Osborne is also set on keeping his investors for the long term.

“We don’t roll out investors when we are buying an asset, we look at them as investors for life,” said Osborne. “This helps us ensure long-term equity and passive income for investors while returning their principal and profits in just three to six years.”

Please visit its website to learn more about Cedar Creek Capital’s many self-storage investment opportunities.

About AJ Osborne

AJ Osborne is the CEO of Cedar Creek Capital and has an impressive 20 years of experience as a Self Storage owner, operator, and developer. He is the founder and board member of the largest Self Storage Co-op, Storelocal, as well as Tenant Inc – a saas company supporting self storage facility management. AJ has also written the No. 1 bestselling book on Self Storage Investing and hosts the top rated and listened to self-storage podcast, Self Storage Income. Accredited investors can find more information here: https://www.cedarcreekwealth.com/

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Contrarian RE Fund 1, LLC Introduced as Investment Opportunity in Distressed Real Estate Assets

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Real estate veteran and turnaround specialist James King has introduced a real estate investment fund, providing people with the opportunity to invest in distressed real estate assets. The Contrarian RE Fund 1, LLC, researches, identifies and acquires multifamily and manufactured home communities that are being sold at steep discounts.

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“These opportunities are beginning to present themselves as more distressed assets are coming online and property owners are struggling with increased debt,” said King, who along with his team of professionals has successfully owned and operated more than 2,000 units across the United States. “We are actively identifying distressed real estate assets and reviewing if they are viable options for our “Value-Add” business model. If they are, we are making purchase decisions regarding the properties and investigating the level of enhancements and improvements that need to be made for each property.”

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The Contrarian RE Fund 1’s “Value-Add” business model has realized significant profits since King first started implementing it in 2009. By purchasing properties with low rental rates and making substantial physical and operational enhancements that improve both the property and resident experience, King has been able to consistently achieve higher rental rates and refinance initial capital investment.

More information regarding the Contrarian RE Fund is available by contacting James King at KingCommunities.com ([email protected]).

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