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3 Secrets About Financial Planning (That Your Broker Doesn’t Want You to Know)

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By Kris Miller, LDA

Most people who have a 401(k) or an IRA have little idea of where their money is invested. When you ask them, “whereʼs your retirement money?” they reply, “at the bank” or “with my broker.” No wonder so many people are financially unprepared for retirement.

If you want to be financially secure in your Golden Years, you must take control of your investments today. Handing your money over to a broker and hoping they will look out for you is a recipe for disaster. Imagine saving and investing for 40+ years, only to find out at age 65 or 70 that you donʼt have enough money to retire. It happens every day.

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With so much financial planning information available, why are so many people unprepared for retirement? Because there are certain financial planning myths that simply wonʼt go away. And the more you believe the myths, the more of a struggle your retirement will be. Letʼs uncover the truth (that most brokers would like to remain a secret) once and for all so you can take charge of your financial future.

Myth #1 You Must Put Your Money at Risk

Most 401(k) and IRAs are invested in the stock market, and the stock market is the riskiest place to put your money. Youʼve likely heard “market experts” say that now is a good time to invest in the market. A broken watch tells the right time twice a day, but thatʼs no reason to wear one.

Likewise, youʼve likely heard someone start a sentence with, “our economists are forecasting…” Ask your broker if the firmʼs economists predicted the most recent recession, and if so, when? Warren Buffett once said that forecasters make fortune tellers look good. If you want to earn higher returns, most brokers tell you that you have to take more risk. That’s not entirely true.

HERE’S THE TRUTH: Thereʼs no reason for all of your money to be at risk. You can make money with safer investments, such as fixed index annuities, which are like a savings account with an insurance company. In fact, even during the Great Depression, not one person lost money with a fixed index annuity. Theyʼre safe, they have liquidity, and they offer better rates than most other products.

Myth #2 Your Broker Only Makes Money When You Do

Itʼs nice to think that your broker only cares about you and your financial future, but thatʼs not 100% true. While your broker likely does want the best for you, hereʼs what usually happens when you let them invest your money:

Your broker buys shares of stocks and mutual funds. The market does one of three things: goes up, goes down, or remains stagnant. Wall Street canʼt control the market, and neither can your broker, but they make money regardless of whether you do or not.

HERE’S THE TRUTH: Brokers donʼt only make money when you do. Sure, theyʼd like you to make money, but they actually make their money by managing your money. They get paid when the market goes down; they get paid when the market goes up; they get paid when the market is flat. In other words, they always win. Their clients, however (and that would be you), only win in one of those three directions. Brokers win in all three.

Myth #3 Small Fees Are Not a Big Deal

Even if you are putting money into your retirement account on a regular basis, hidden fees may be slowly draining your account. The disclosed fees are simple to find — look at the expense ratio, which is found in the prospectus. These fees are commonly referred to as “management fees.” Administration fees (added on top of management fees) are much harder to find. You may think that a small fee here and there isn’t a big deal.

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After all, how much could these administration fees possibly be? Consider this example from the U.S Department of Labor 401(k) fee website:

“Assume you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000.

If returns on investments in your account over the next 35 years average 7% and fees and expenses reduce your average returns by 0.5%, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account.

If fees and expenses are 1.5%, however, your account balance will grow to only $163,000.”

The 1% increase in fees reduces the account balance at retirement by 28%. Thatʼs a huge fee!

Be sure to look for and ask your broker about the following fees:

• Plan Administration Fees
• Investment Fees
• Individual Service Fees

Plan Your Future Today

Whether you plan to retire today or in 30 years, you need to take control of your retirement accounts right away. Understanding how your money is invested and making sure itʼs working for you in the most efficient way will give you peace of mind and future security. By dispelling these three myths and putting some time into planning, you can rest assured that your retirement years will be pleasurable—and prosperous.

Kris Miller

Legacy Wealth Strategist
LDA Document Services
https://calendly.com/krismiller

Healthy Money Happy Life
Make an Appointment with Kris

CA Insurance License OC25427 I am not an attorney. I can only provide self-help services at your specific direction. Should you need legal advice, you will need to consult an attorney. We do Estate Planning, Wills, Living Trusts, Power of Attorney, Health Care Directives and Deeds. Legal Document Assistant in Riverside County, California LDA #000041 Riverside County, expiring 10/15/2021

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Tips on How Podcasts Can Make Money

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By Stephanie Mojica

When entrepreneurs think of getting into the media, they often think of magazines, newspapers, TV, and radio.

But podcasts are a growing, and still often-overlooked, form of media that can dramatically benefit all types of entrepreneurs and experts.

According to Buzzsprout, only 22 percent of American adults in the early 2000s knew the term podcast. Currently, the estimated number is 78 percent.

For those who don’t know, a podcast is generally a series of audio-only episodes surrounding a central theme. It’s sort of a mix of blogging and radio, though there are some distinct differences.

For example, podcast interviews are evergreen. Meaning, they last forever. Podcast hosts tend to publish their episodes on multiple websites and apps dedicated to this medium, including Apple Podcasts, Spotify, Audible, Google Podcasts, Blog Talk Radio, and many more.

I’ve been on podcasts where the hosts also livestream the interview (including the video) to YouTube, Facebook, and Instagram.

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Examples of Making Money Through Podcast Interviews

While many people produce podcasts or do podcast interviews as a hobby, there are ways to monetize both ends of the spectrum.

For example, I had an interview with the Yeukai Business Show (a podcast based out of the United Kingdom that is in the top three percent of globally ranked podcasts). The host, Yeukai Kajidori, immediately introduced me to someone he had recently interviewed who was hoping to write a book. She and I had a conversation and she enrolled in my 90-day intensive. She finished her book during our time together and is having it published.

My company had another client, I’ll call her Anne, who sold 400 books from a single podcast interview. Since her royalties through Kindle Direct Publishing are $9.72 per book sold, she made $3,888 from a single interview!

Yet another client, I’ll call him Don, sold an $8,000 consulting package to someone who heard him on a podcast.

The list goes on and on. Podcasts, when used well, are an amazing tool to gain more sales…and you don’t even need a book to do it (though a book always helps you get interviews and have something to offer listeners right away)

Tips for Monetizing Podcast Interviews

While we’ll go deeper into the process of getting these opportunities in a future article, it’s fairly easy to get started with podcast interviews. Facebook groups and Clubhouse rooms dedicated to find a guest, be a guest abound.

While you should do more careful targeting later on, it’s fine to do a few interviews with any show related to your expertise just to get started and become known. Many of my recent podcast interviews came from referrals from other podcast hosts, so getting in the game so to speak is key.

Each podcast interview takes about 30 to 75 minutes of your time. Depending on your schedule and goals, you should aim to do at least one a month. Many folks, including myself, try for one a week. If you’re launching a book or a course, the more interviews the better.

When pitching yourself to a podcast or speaking on a podcast, avoid hard sales pitches. I think you know what I’m talking about. Do not basically order people to buy your product or service. I’ve heard of podcast hosts not publishing episodes where all the guest does is try to sell to the audience.

Podcast listeners want value. They are dedicating their time to listen to you. While they’re aware that you’re in business, they don’t want to hear sales pitches the entire time.

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Tell Stories About Your Clients

Answer questions about yourself honestly and in an engaging manner.

Weave in ways they can get in touch with you. For example, I’ll say something like, “I go deeper into this in my free eBook” and mention the title and website.

Always say any web addresses twice and speak slowly when giving them.

Use headphones and a good microphone to avoid background noises that can render your episode unusable.

Most podcast hosts will let you put links in what they call show notes. Some have limits; others don’t. If you’re limited, I recommend a link to a free offer where listeners can leave their email address (aka they opt in), your LinkedIn profile, and your most popular social media profile or your Facebook group. I still wouldn’t give 50 links; as one of my mentors, Ali Brown, once said in a virtual training class, “A confused mind says no.”

Keep in Touch with Your Hosts

Not everyone will mesh well, and that’s okay. But most of the time, you’ve started a relationship that’s worth continuing — and you need to nurture it.

Keep in touch with the podcast host. Most are happy to accept your friend request on social media. See if there are ways you can bring them more value.

In October 2021, I hosted a 30-plus speaker summit called The Visible Authority Virtual Event — Be Seen. Get Heard. Get Paid. Alex Villacis, host of Do I Need School to… invited me to do an Instagram Live with her to help drive members of her audience to my summit. This was only possible because we kept in touch after my interview with her about the book editing side of my business.

Another host, Heather Zeitzwolfe from the Get the Balance Right podcast, invited me to be a speaker on her Zoom networking event. People signed up for my free Business Book Blueprint five-day challenge as a result. I’ve also introduced potential virtual assistants and mentors to her.

I’ve referred multiple clients and business associates of mine to these podcasts as well as other podcasts. The key is to treat every host you meet with respect, bring plenty of value to their audiences, keep in touch, believe in the power of your message, and just get started.

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.

Get Started Investing in Vacant Lots

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WEBINAR:

Get Started Making Passive Income By Investing In Quarter-Acre Vacant Lots In Up-And-Coming Resort Communities.

Discover How to INVEST In Vacant Lots — A Fast, EASY and Safe Way To 10x Your Investments — Land Can Beat Out Stocks & Mutual Funds!

In our latest webinar our host, Michael Poggi, will introduce an exclusive Land Investment Strategy, which shows our readers how they can invest In 1/4″ Acre Buildable lots In The Fastest-Growing resort communities In the country.

This opportunity may outperform other opportunities on The Market… and the best part of all is that investors can can get started with Very Little Money Down.

In this training, Micheal will teach our readers his land investment strategy & secrets that will DOMINATE any other investment you make this year.

Did you know that you can use your current IRA or old 401(k) plan to invest in vacant lots by moving it to a self-directed IRA with no penalty?

Michael is going to teach you these secrets on how to get ahead exponentially faster by using some or all of your IRA or 401(k) plan funds using the land investment strategies and secrets. Be sure to register today.

This Real Estate Investment Strategy offers a non-correlated risk and is a headache-free, passive income — with no tenants.

GROW LIKE A PRO 2023:
HIDDEN GROWTH OPPORTUNITIES TO BOOST YOUR BOTTOMLINE AND BRAND

Learn “the best of the best” strategies and techniques for supercharged growth and high success from our expert at this power-packed
LIVE VIRTUAL WORKSHOP.

This will be a LIVE WEBINAR about Earning Passive Income With Vacant Lots on July 20th, 2023 @ 7:00 – 8:30 PM EST.

How Raising Your Business Credit Score Can Help Your Company

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By Vista Capital Solutions

You probably remember using your personal credit lines to take out the initial loans needed to open your business. Before starting a company, you don’t have any business credit. Even after a few years, it is possible that your company still won’t have established business credit. If you don’t actually work on your business score, then you may never have this kind of credit. Discovering ways to beef up your business credit score can help your company realize a whole host of untapped opportunities.

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Repair Your Personal Credit

Your personal credit score and business credit score are two totally different entities. However, the first factor in establishing a business score is maintaining a decent personal credit score. Before you can start building business credit, you should focus on any necessary personal credit repair first. If you find that your individual score needs improving, there are some things you can do. Any derogatory marks can keep your score down, so try to dispute these items with each of the different credit bureaus. If you’re successfully able to remove any of these negative marks, your score will increase as a result.

Build Your Business Credit

Although the first step toward building business credit is focusing on your personal credit repair, there are additional measures you should consider. One way to start having good business credit is by paying your bills as early as possible. This factor is very important to the bureaus that determine business scores. Checking with these bureaus can help you understand other factors that make up your score, so you don’t waste time with unnecessary actions.

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Understand the Benefits of Good Credit

Before you go through the necessary credit repair to begin building your business score, you want to understand why this type of credit is significant. Not all companies have established business credit, and it may limit future growth in many ways. A good business credit score makes you eligible for financing opportunities that can dramatically expand your company. A good business score can make or break a deal, especially when purchasing or leasing commercial real estate. If you want to grow your business and make exponential profits, you should pay attention to building business credit.

There are many benefits to establishing a decent business credit score. Your personal credit will improve, your business will grow, and you will realize many new opportunities as a result of your hard work.

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.

Pacific Urban Investors Acquires La Jolla International Gardens

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PALO ALTO, Calif., July 06, 2023 — Multifamily owner-operator and investment manager Pacific Urban Investors acquired La Jolla International Gardens, a 400-unit apartment community in the La Jolla / University Town Center (UTC) submarket of San Diego, CA, on April 27, 2023. The property was renamed Allina La Jolla (the “Property”) and marks Pacific’s 21st acquisition in the San Diego Market.

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Allina La Jolla is a 100% market rate property built in 1986. La Jolla / UTC is known as a regional employment driver in multiple science and technology fields due to its business connectivity to the University of California at San Diego (UCSD) research ecosystem. Proximity to downtown La Jolla, job centers up and down the I-5/I-15 corridors, and some of southern California’s best beaches make La Jolla / UTC a highly sought-after locale offering convenient coastal access and short commute times. The Property offers semi-urban, walkable living 10 minutes from the ocean, a job-dense micro location with abundant neighboring retail, and spacious amenities. Community offerings on the meticulously crafted, 7-acre asset include a resort-style pool and spa, sprawling clubhouse, fully-equipped business center, modern fitness center, sand volleyball court, and bar-be-que area.

Pacific Urban Investors is committed to preserving the distinctive character and identity of Allina La Jolla while introducing new initiatives aimed at further enhancing the resident experience. The company plans to invest in modernizing the community’s amenities, including expanded communal areas for residents to connect and engage, and upgrading resident unit interiors.

“Allina La Jolla gives Pacific the opportunity to own a high quality, well-kept vintage asset that offers residents a pleasant living experience with proximate access to La Jolla beaches only a short drive away. Exceptional demographics, award-winning schools, world-class outdoor amenities, and expansive retail offerings make La Jolla / UTC as desired a coastal community as any in San Diego County. The Property’s premium location, access to multiple employment nodes, ample amenities, and well-designed floor plans, all serve as differentiating features in the marketplace,” said Grant Geisen, Senior Vice President of Investments at Pacific.

Pacific’s President Rory Gardner commented, “We are excited to obtain a position in this coveted coastal San Diego submarket where opportunities are so difficult to come by. Allina La Jolla is a welcome complement to our growing Southern California portfolio, and we are actively seeking additional San Diego investments across all our strategies; including both direct acquisitions, as well as joint venture and preferred equity opportunities.”

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About Pacific Urban Investors: The Palo Alto, CA-based company has over $8.6 billion in assets under management and owns and manages a national portfolio of more than 20,000 units. The firm and its partners have decades of experience in apartment investments, both repositioning and ‘re-manufacturing’ multifamily assets and their income streams to their optimal, core potential. Pacific has progressed over time to become a best-in-class owner, operator and asset manager in the multifamily space, serving as a fiduciary for its own partner capital as well as its strategic partnerships with institutional pension funds and other sophisticated investors. Pacific is actively acquiring multifamily assets as a principal and providing both co-investment and preferred equity for development, acquisition, and recapitalization.

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How Different Kinds of 401K Rollovers Can Help Your Employees

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By Vista Capital Solutions

Figuring out to handle issues regarding 401K retirement plans can be particularly tricky for some people. When you own a company and offer this kind of benefit to your employees, you want them to get the most out of the experience. People use this kind of feature to save money for retirement, and they take it out of the income they’ve worked hard for. If you’ve hired a new associate who has a 401K with their previous company, then you want to offer them a way to roll it over to the plan that you offer.

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Consider New Associates

When you find a great new candidate to join your company’s team, you want to give them flexible benefits. Allowing them to do a 401K rollover from their previous company to the plan that you offer is a huge benefit. Sometimes, people can’t keep this benefit once they leave an employer and must find a way to roll their funds over to avoid hefty tax penalties.

Think About Former Employees

If you have an associate who chooses to leave your company, then they may have to perform a 401K rollover elsewhere. For example, if this person goes to work for a company that doesn’t offer a 401K plan to its associates, then they will have to find a place to put their account or pay taxes. By allowing your former employee to keep their money in the account after they no longer work for you, you will be saving them a large amount of their hard-earned funds. Check with your benefits provider to see how you can arrange this for former employees.

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Understand Other Options

When people want another option for their 401K rollover, they usually turn to an individual retirement account or IRA. As a business owner, it’s important to understand this option especially if you’re investing for your retirement. This option can help a person avoid the tax burden that comes with cashing out a 401K before the minimum age. If you have a 401K from a previous job and wish to put the money elsewhere, choosing this option is usually a good idea. Check with your local financial advisor to learn more about this process.

Understanding more about how to transfer from one 401K to another can help you make informed benefits choices for your employees. When you offer more options to your workers, they will be happier as a result.

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.

The Lock-In Effect and Keys to Success

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By Rick Tobin

There sure seems to be more bad news than good news these days about the state of real estate. During turbulent times like we’ve all seen in recent years, the most common first human reaction is usually denial or acting somewhat like a locked up “prisoner” with a frozen “deer-in-the-headlights” look in our eyes. Yet, this is exactly when we should stay focused on the potential opportunities more so than the temporary obstacles standing in our way.

As foreclosure filings continue to increase to an average near 50% higher than the pre-pandemic years (2019 and earlier), struggling homeowners and landlords will need to focus on solutions such as loan modifications, forbearance agreements, short sales, and quick sales for cash. As an investor in the near future, you will likely find more deals readily available to choose from if you know where and how to look for them.

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Some metropolitan regions like Houston have 56% higher foreclosure rates. Other places like Minneapolis/St. Paul saw +106% foreclosure rates in March. Nashville was +35% higher and Phoenix + 33% higher in May; Rhode Island was up 32% in May.

During the depths of the Credit Crisis / Great Financial Recession years between 2008 and 2013, California was hit the hardest with a -41% home price drop average from peak to trough. Nevada, Arizona, and Florida weren’t too far behind.

Some California home prices have risen as much as +41% over a period of just 18 to 24 months in recent years, so an equivalent -41% price drop is easier to imagine as some values may drop back towards 2021 levels.

The typical home today is about $80,000 higher than it was just two years ago. The average monthly rent payment today is more than $1,000 higher than it was in 2020. Middle-income first-time buyers are unable to afford 70% of homes. As California unemployment rates continue to rise at a faster pace than most other states (Big Tech layoffs, especially), it will be more challenging to continue making mortgage payments.

Rental Market Trends

Today, there are 65% more active short-term rental listings on Airbnb and VRBO (965,000+) than all homes listed for sale nationally (554,000+), as per Realtor.com and other sources. At some point, the vacant short-term rentals will become listed homes for sale or distressed properties due to higher vacancy rates.

Ironically, the founders of Airbnb originally used air mattresses to cover their own San Francisco apartment unit’s rent. Eventually, air bubbles go pop one way or another.

Rent Increases

The following metro areas have experienced the greatest year-over-year rental price percentage increases through May 2023:
Providence-Warwick, RI-MA (+17.44 percent)
Kansas City, MO (+13.20 percent)
Minneapolis-St. Paul-Bloomington, MN-WI (+8.97 percent)
Raleigh-Cary, NC (+8.05 percent)
Charlotte-Concord-Gastonia, NC-SC (+7.65 percent)
San Jose-Sunnyvale-Santa Clara, CA (+7.59 percent)
Hartford-East Hartford-Middletown, CT (+7.47 percent)
Columbus, OH (+6.81 percent)
Los Angeles-Long Beach-Anaheim, CA (+6.20 percent)
Riverside-San Bernardino-Ontario, CA (+5.97 percent)

Rent Decreases

The following metro areas have experienced the largest year-over-year rental price percentage decreases through May 2023:
Austin-Round Rock-Georgetown, TX (-20.76 percent)
New Orleans-Metairie, LA (-20.42 percent)
Las Vegas-Henderson-Paradise, NV (-10.57 percent)
Houston-The Woodlands-Sugar Land, TX (-8.42 percent)
Seattle-Tacoma-Bellevue, WA (-8.28 percent)
Cincinnati, OH-KY-IN (-6.49 percent)
Phoenix-Mesa-Chandler, AZ (-6.46 percent)
Birmingham-Hoover, AL (-5.98 percent)
Memphis, TN-MS-AR (-4.85 percent)
Oklahoma City, OK (-4.44 percent)
Source: Rent.com

Multifamily Trends in Southern California

Sales and prices for multifamily apartment buildings have started to really fall in Los Angeles and other metropolitan regions across the nation. Specifically within Los Angeles, the number of units fell 11% in the first quarter of 2023 as compared with the previous fourth quarter in 2022. More shockingly, multifamily apartment building prices collapsed by -37.5% year-over-year as per a report shared by NAI Capital.

During the same first quarter time period, the average sales price per apartment unit dropped by 18.4%. One major factor for the falling price and sales volume numbers for Los Angeles County was directly related to the Measure ULA “mansion tax” that affected both luxury homes and commercial real estate properties priced above $5 million as of April 1st.

While $5 million may seem pricey for a luxury home in Los Angeles or elsewhere, the same $5 million dollar price tag for a rather small multifamily apartment building is much more common.

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Strangely, both vacancy rates and apartment rents continue to rise together at the same time in many parts of Los Angeles and elsewhere. Average rents rose to $2,156 per apartment unit in Los Angeles, a +1.9% year-over-year increase.

Some regions of Los Angeles had more negative rent, sales price, and vacancy trends. For example, the first quarter numbers for these Los Angeles multifamily submarkets were more negative than positive and were as follows:

  • San Fernando Valley and Santa Clarita Valley: The average multifamily sale price per unit fell by -35.9% year-over-year while the vacancy rates increased by +22%.
  • San Gabriel Valley: The average sales price per unit decreased by -20.3% while vacancy rates skyrocketed by +32.2%.
  • L.A. Westside: The average sales price per unit fell by -9.5% while vacancy rates increased by +10.7%.

Historically, rising vacancy rates and rental payment trends are usually inverse to one another like a seesaw with payments falling as vacancy rates rise. We shall see how long this trend lasts.

A very high number of landlords haven’t collected a rental payment for two or three years either, especially in Los Angeles County. When will the foreclosure and tenant eviction rates really begin to accelerate and adversely impact both tenants and landlords?

The Locked-In Homeowner and Unlocked Treasures

There are upwards of 16 to 20 million vacant or distressed properties across the nation. Additionally, there are millions of distressed FHA mortgages alone. Many homeowners haven’t made a mortgage payment for more than three years just like so many tenants.

Loan modifications, forbearance, and loan forgiveness plans continue at near record paces across the nation. Lenders are not filing foreclosure as aggressively as they would have in years past, partly due to ongoing pandemic restrictions in place. This is a major reason why the national home listing inventory supply is so low.

Another reason why there are so few homes listed for sale is because upwards of 92% of homeowners with a mortgage have an existing rate at or below 6%, as per a study released by Redfin. Let’s take a quick look below at the fixed rate estimates for homeowners as of the first quarter:

  • 91.8% of mortgaged homeowners have rates below 6%.
  • 82.4% of homeowners have rates below 5%.
  • 62% of homeowners have rates below 4%.
  • 23.5% of homeowners have rates below 3%.

It can be rather challenging for a homeowner to consider losing their 6%, 5%, 4%, 3%, or even 2% fixed rate mortgage with a 30-year term and move to another home with a rate closer to 7% or 8%. As a result, it’s referred to as the “lock-in effect” because so many homeowners don’t want to lose their near record rate locks.

The market may change for the better or worse later this year depending upon a few factors such as follows:

First, will future unemployment trends improve or get worse. A loss of income is generally the #1 reason why someone loses their home to foreclosure.

Second, will lenders and loan service companies start to file foreclosure notices at a much faster pace than in recent years?

Third, will tenant protections in place be eased up or tightened? Most landlords are small investors who may be fortunate to own just one or two rental properties. After months or years of no rent collected, the landlords may be at risk of losing their rentals and primary home to foreclosure.

Your key to future success that unlocks your potential as either a homeowner, investor, or tenant is to focus on the positives and negatives while minimizing your risk and maximizing your gains. With the right mindset and guidance, it will be akin to a literal key that unlocks a treasure chest!!!

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.

Pending Home Sales Shrunk 2.7% in May

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WASHINGTON, June 29, 2023 — Key Highlights

  • Pending home sales dropped in May, down 2.7% from April.
  • Month over month, contract signings decreased in three U.S. regions but jumped in the Northeast.
  • Pending home sales fell in all four regions compared to one year ago.

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Pending home sales shrunk 2.7% in May from the previous month, according to the National Association of Realtors®. Three U.S. regions posted monthly losses, while sales in the Northeast surged. All four regions saw year-over-year declines in transactions.

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” said NAR Chief Economist Lawrence Yun, “The lack of housing inventory continues to prevent housing demand from being fully realized.”

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – dropped 2.7% to 76.5 in May. Year over year, pending transactions fell by 22.2%. An index of 100 is equal to the level of contract activity in 2001.

“It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient,” added Yun. “There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”

Pending Home Sales Regional Breakdown

The Northeast PHSI climbed 12.9% from last month to 66.7, a decrease of 21.9% from May 2022. The Midwest index dropped 5.3% to 74.4 in May, down 23.5% from one year ago. 

The South PHSI decreased 4.4% to 94.4 in May, reducing 19.6% from the prior year. The West index lessened 6.1% in May to 58.4, falling 26.6% from May 2022.

About the National Association of Realtors®

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.

The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

Lauren Cozzi
National Association of REALTORS®
202/383-1178
[email protected]

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How Can Someone With Bad Credit Obtain a Hard Money Bridge Loan?

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By Michael Mikhail 

You only have the traditional institutions (banks), mortgage companies, and direct private money lenders as possibilities if you’re a borrower seeking for finance for your investment property.

However, many of the conventional finance sources would not be good choices if you are a real estate investor with poor credit. The majority of banks and mortgage firms don’t have mortgage loan programs for those with bad credit. Fortunately, a Hard Money Bridge Loan is a wonderful choice to get funds and even raise your credit score in the world of private money lenders.

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There are so many loans available, and a lot of them substantially factor a person’s credit score into whether or not they will grant them a loan. Thankfully, Hard Money Loans are an exception to this rule.

What conditions must be met to qualify for a hard money bridge loan?

The criteria for a hard money loan are your assets, not your FICO score. There is no required minimum FICO score for the borrower, but you must still furnish your credit score. Hard money lenders instead concentrate on the asset’s Loan-to-Value (LTV). There is no need to be concerned about bankruptcies, foreclosures, collections, etc. because there isn’t any underwriting involved in these loans either. They are typically limited to 75% LTV or below, with rates between 9.00% and 11.99%, and are always bridge loans for 12 to 24 months. True hard money loans never come with terms.

As was already mentioned, the emphasis is on equity and assets rather than credit. If there is enough equity in the property and the applicant can repay the loan, it may be possible to overlook the borrower’s terrible credit, prior bankruptcies and foreclosures. The property’s value is given additional attention. In comparison to typical loans, the financial checks for these loans are less thorough and take less time. Hard money lenders are exempt from many of the regulations that more conventional bank loan lenders must follow. As a result, a Hard Money Bridge Loan can be authorized considerably more quickly. Stratton Equities, the top Nationwide Direct Hard Money and NON-QM Lender, may fund a Hard Money Loan in as little as two weeks, when a standard bank loan might take 45–90 days.

There is more risk being assumed by the lender because of the short turnaround time and less stringent surface-level financial standards. Therefore, compared to regular loans, the repayment terms are much shorter. A Hard Money Bridge Loan must be repaid in a matter of years, as opposed to a standard loan, which may have a repayment period of around 20 to 30 years. Therefore, if a borrower has poor credit, the lender is taking a bigger risk and needs the money repaid faster.

How Can a Private Lender Improve Your Credit Score?

A real Hard Money Bridge Loan does not have a minimum credit score requirement and can even raise your score, in contrast to a term loan, which calls for a minimum credit score of 650.

If you are a real estate investor and you have a substantial amount of equity in your investment property (more than 50%), you may be able to use a hard money bridge loan to withdraw the funds and use them to settle debts or repair your credit.

Return to the private money lender and submit an application for a term loan after your credit score is more than 650. (ex. no documentation loan).

How can you submit a Bridge Loan application?

Due to predatory lending and expensive rules, hard money bridge loans are only permitted for investment properties. You cannot obtain a Hard Money Bridge Loan if you are shopping for an owner-occupied property.

Due to the substantial risks, some states have non-judicial foreclosure legislation as well. Due to the protection provided by these laws, lenders feel more secure providing these high-risk loans because they are not traded on the secondary market and the lender keeps the note. Additionally, rural communities are not eligible for these loans if they have poor FICO ratings.

If you have poor credit, get in touch with Stratton Equities to find out your available loan alternatives and which one will suit you the most.

Our goal at Stratton Equities is to make private mortgage lending simple, effective, and stress-free. With a straightforward three-step process that includes pre-approval, processing & underwriting, and funding, we assist other seasoned investors, borrowers, and experts in the mortgage and real estate industries in succeeding.

To find out if you qualify for loan pre-qualification, call us at 800-962-6613, send us an email at [email protected], or submit an application right away by clicking here!

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Michael Mikhail, CEO Stratton Equities

Michael Mikhail is the Founder and CEO of Stratton Equities, the nation’s leading hard money-lender to national real estate investors, with the largest variety of mortgage loans and programs nationwide.

Having launched Stratton Equities in early 2017, Michael has always been an entrepreneur and innovator in the real estate market, purchasing his first home at 19.

A serial entrepreneur with a foresight for business opportunities, Michael had a slew of small businesses prior to launching Stratton Equities. One of his most prolific ventures was a car wash connected to a gym he was affiliated with in Florida during 2001-2002 while attending college.

It wasn’t until he graduated from Florida State University with a degree in Business, that he officially joined the mortgage industry in 2003 and decided to travel to explore his options globally.

After travelling to 19 countries in 5 years, Michael knew two things; he wanted to start his own business and launch it in the United States. He knew that moving back to the states was the best place he could start something small and grow it into something infinite.

In 2017, Michael noticed how the mortgage industry had transformed after the regulations presented from 2008-2012, and knew it was time to set out something on his own, thus creating Stratton Equities.

Under Michael’s leadership, Stratton Equities has grown into one of the biggest leaders in the Mortgage and Real Estate industry across genres and platforms.

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What is the Difference Between a Borrower and a Real Estate Investor?

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By Stratton Equities

The real estate world can be complicated. There are a significant amount of terms and concepts that you need to understand to be successful in the field. Real Estate Investors, borrowers, and entrepreneurs are some of the most fundamental terms you’ll need to know.

Luckily, these are very self-explanatory and easy to understand. Here is what each term means and the differences as well as similarities between them.

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What is a Borrower?

A borrower is generally a person who is looking to obtain funding for an investment property. Although prospective borrowers are individuals, once they are approved for financing, their funding is sent to their LLC or company that has been set up for the purchase.

In the context of hard money and private money lending, the funding provided is used to finance a real estate venture. In the world of private lending when funding a real estate investment, there are borrowers and lenders.

Real Estate Investors are people who purchase properties as investments to provide them with passive income. Real Estate Entrepreneurs are those who receive the majority, if not all, of their monthly income through real estate investing.

Once a real estate investor or entrepreneur has sought out financing for a property purchase, they become a borrower.

What are Real Estate Investors and Entrepreneurs?

Both real estate investors and entrepreneurs are individuals who invest in real estate to generate income or benefits. There are many similarities between the two, but they’re defined by a few key differences.

Real estate entrepreneurs were once investors, who have transitioned from solely investing in a few properties to creating a business acquiring multiple properties as their main source of income. Their business model as an entrepreneur is based upon the act of investing in real estate full-time.

Aside from having the technical ability to spot lucrative real estate opportunities, entrepreneurs hold the critical ability to seize them at the right time. Driven to succeed just as much as the entrepreneur, investors tend to have less experience, are just starting out in the real estate world, or don’t put in as much time into their investment ventures. As a result, they are more concerned with smaller details and the daily functioning of their company or portfolios.

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When just starting out, it makes sense for any real estate investor to be preoccupied with the individual aspects of their property to make sure they stay afloat. However, as the investor grows, entrepreneurship and its tenets become more and more plausible. Any investor can become an entrepreneur, but not every investor does.

Real Estate Education

Being knowledgeable about the real estate market is critical in becoming a successful real estate entrepreneur or investor. That much is obvious. With more knowledge or experience in the field, entrepreneurs are able to lower risks, better investments, and build stronger relationships with lenders.

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