Attention savvy real estate investors, it’s time for another educational and exciting Realty411 Virtual Investing MeetUp uniting readers for insightful information and motivation.
Be sure to register for our online event this Saturday, November 16th at 10 AM (Pacific Time — 1 PM Eastern Time). On this special session, we will learn from Influenced Living, a real estate investment, development, and education firm known for its dynamic approach to global property investment and investor empowerment.
Joining us for this online event is Nechelle Vanias, Chief Strategy Officer of Influenced Living. In her leadership role, Nechelle oversees strategic acquisitions and steers the firm’s flagship educational initiative, The GROW Collective.
A real estate investor since 2004, Nechelle was among the first to recognize Buffalo, NY, as a prime cash flow market, sharing her expertise with investors from Australia to California.
The GROW Collective was created to make Influenced Living’s deep expertise in real estate investment accessible to a wider audience, transforming traditional REI education through practical, results-driven programs.
Now, with Zillow naming Buffalo the hottest real estate market in 2024, Nechelle takes pride in seeing the area finally receive the recognition it deserves. Alongside her husband, she propelled their investment company into prominence, catching the attention of a former president who featured their story in his book, Think Big and Kick Ass: In Business and in Life.
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Is it better to let your money work hard for you or for you to work hard for your money? For most people, the answer would be that they’d want their money or investments to grow and compound each year so that the investor could enjoy life and travel or sleep more.
The Social Security Administration released their final wage statistics for employed workers across the nation for 2023. As per this latest published report for annual wages, the “median wage” in the U.S. was just $43,222.81. If true, this means that half of Americans made less than $43,222.81 in 2023 while the other half made more than this annual income amount.
“Based on data, about 67.6 percent of wage earners had net compensation less than or equal to the $63,932.64 raw average wage. By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $43,222.81 for 2023.” – Social Security Administration
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Equity Gains and California Dreamin’
“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffett
Earlier this year in 2024, the average California home price statewide surpassed $900,000 for several consecutive months. This was more than double the national home price average closer to $428,000 that was reported for September 2024 by Redfin.
To simplify the math, let’s use the $900,000 California home value average and multiply this same home price number by the 6.77% average annual home appreciation percentage rate over the past 39 years.
$900,000 home value x 6.77% annual appreciation = $60,930 in potential future equity gains if future value percentage gains maintained the same 6.77% historical pace.
While there are no absolute guarantees for real estate and life, the fact that the average California homeowner might’ve collected more than $60,900 when they were literally sleeping part of the time is quite impressive. If so, this $60,930 annual equity gain was much higher than the $43,222.81 median wage income average for U.S. workers.
Whether the skies around you are blue or gray, it’s time to take more walks around your neighborhood to find the next great housing investment deal.
All the leaves are brown (all the leaves are brown) And the sky is gray (and the sky is gray) I’ve been for a walk (I’ve been for a walk) On a winter’s day (on a winter’s day) I’d be safe and warm (I’d be safe and warm) If I was in L.A. (if I was in L.A.) California dreamin’ (California dreamin’) Music video: California Dreamin’ by The Mamas & the Papas
Good or Bad Times in California
Is time the most valuable and precious commodity of them all? Life is too short for us all. Many people who invest in real estate, stocks, insurance vehicles, bonds, gold, silver, or other investments just want to create more free time to spend with their family and friends instead of being forced to work until they die.
The varying degrees of real estate wealth creation is directly affected by a few different things or factors such as location and time when the property was bought or sold. Since 1977, home appreciation in California has far surpassed the cost-of-living inflation increases two-thirds of the time.
Timing is key when you buy and sell your home for profits. For example, a California home purchased in 1990 and later sold in 2000 would’ve resulted in a net loss. Conversely, a home purchased in 1996 and sold 10 years later in 2006 near the peak of the last major housing bubble in both California and the nation would have resulted in a significant price gain.
Let’s take a look below at how statewide home values or median home sales prices either increased or decreased for a specific year in California:
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Between 2008 and 2012, California home prices fell to a still all-time state record loss of -41.7% from peak to trough. However, California home prices skyrocketed more than any other region in the entire 2010 decade, starting shortly after the housing market bottomed in 2012 or 2013, depending on the region.
There’s no other state in the nation that has experienced such extreme home price swings from low to high in a relatively short period of time than California, for better or worse. In spite of falling more than -41% within four years (2008 to 2012), California home prices still rose a net gain of 120% between 2010 and 2020, which was double the national average.
Life is Short, Invest Today
The sooner you start investing in real estate, the more likely it will compound and grow over time as the home value may double or triple while you pay down your mortgage debt until the home is later free and clear.
A few decades ago, it was much more common for young college graduates to marry and start having multiple children in their early to late 20s. Additionally, these same young families followed their heart and grabbed a piece of the American Dream by buying their first home.
In more recent years, housing has become so unaffordable and fewer people are choosing to marry or have children, partly due to how expensive it is to raise children these days, that the average first-time home buyer age and the overall age of all homebuyers nationwide have reached all-time record ages.
Between July 2023 and July 2024, the average age of first-time buyers rose from 35 to 38, and from 58 to 61 for repeat buyers.
The average age of all U.S. homebuyers reached an all-time record high of 56 years of age in 2024, according to the National Association of Realtors and Yahoo! Finance. By comparison just one year earlier in 2023, the average U.S. homebuyer age was seven years younger at 49.
Please note again that California home prices tend to be more than double the national average, so it can be more challenging to purchase here. Yet, rents are significantly higher here in our state too.
If you can set aside a few thousand dollars or more or have family members “gift” you some funds, you may still be able to purchase a home in California or across the nation that has a monthly mortgage payment similar to what rent is these days for many tenants.
The average age of a U.S. home seller in 2023 was 60. For many of these homeowners, they probably bought their home 30 years earlier at the age of 30 when they borrowed a 30-year mortgage.
Either way, your monthly housing payments will make someone wealthy over time whether you rent or own. Homeowners are 40 times wealthier on average than tenants as I’ve shared before in past articles.
It might as well be you who creates wealth while you sleep, so please create a plan and take action sooner rather than later as your future nest egg is depending on you.
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.
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In the last two centuries, real estate was how 90% of millionaires made their fortunes. To achieve generational wealth, there is no doubt that real estate should be the main asset class to invest in. For over two centuries, and arguably longer, real estate has continued to offer unique benefits for generating generational wealth in real estate. You are asking yourself whether it’s too late for you to start the journey to achieve this goal. The answer is no! It is never too late to begin. If you plan to pass down wealth to your kids or your grandkids, then real estate is the perfect asset class for this. To best understand how to achieve generational wealth through real estate, it is equally important to know why it works.
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Appreciation
If you are unfamiliar with what appreciation is in real estate, essentially it is defined as an increase in value over time. Real estate generally increases in value over the long run. Compare what a house costs in one of the most expensive real estate markets during the 1970s compared to the value of a home now in the 2020s. In 1970, you could buy a home in San Francisco for an average price of $25,000. An average home price in San Francisco now will set you back $1,700,000. That’s right, your grandparents’ home can be worth over 7 figures. What if they pass that home down to you? That would be considered generational wealth in real estate as you are now taking ownership of a million-dollar asset. Over time, appreciation works in favor of real estate as the asset class stays ahead of inflation.
Depreciation
One of the main benefits of investing in real estate is tax benefits. Depreciation is one of them. This does not mean that your home is losing value. Simply put, depreciation describes the ability to write off some of the value of your asset every year. What this does is significantly reduce the tax burden that an owner is responsible for. Essentially, you are protecting your wealth as your net worth grows. One of the main destroyers of wealth is tax liabilities. Therefore, it is important to understand the proper legal accounting practices that help reduce your overall burdens. Another benefit of depreciation is that often, the write off exceeds the amount of cash flow you may have brought in from a rental. The amount written off oftentimes is more than the entirety of the cash flow will actually help reduce your tax obligations. Of course, you do need to speak with a CPA to get all the details and to support you when filing for taxes. Most CPAs understand how to utilize depreciation properly.
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Loan Pay Down
Most investors of real estate use leverage to purchase properties. This involves taking out a loan to buy real estate and using a fraction of your available cash within the deal. In some cases, there are opportunities to buy without any of your own money. For the sake of keeping the concept simple, if you are just starting in real estate, you can take out a 30-year fixed mortgage with a low-interest rate. Over time as you rent your unit and earn an income from the cash flow, a part of the rent also covers the monthly expenses including the mortgage. Your loan’s principal payment is paid down over time. Each payment adds equity to your position gradually adding to your net worth. By the end of your 30-year term, you will have a fully paid off property that you can pass on to your children.
Leverage
One important wealth generator in real estate is the ability to buy properties using leverage. If you were presented with two options which would you choose? Buy one property free and clear for $100,000 or use the $100,000 towards down payments on 5 properties with each requiring $20,000 down payments. If you opted for the second option, then you understand the power of leverage. You are essentially making your money work harder for you. Tied with loan pay down, rental cash flow, and appreciation, your investments are magnified when you leverage your cash across multiple properties instead of sticking to only one deal.
Forced Equity
When you invest in real estate, investors have the opportunity to make a significant amount of money directly from the purchase of the property. Forced equity is defined as the wealth that is created when you buy a property at a discounted price and improve the property to be valued more. For example, let’s say you bought a property for $50,000 and added $25,000 in improvements, then based on the comparable homes in the neighborhood, your property could be worth closer to $100,000. By improving the property, an investor can force the creation of equity in their deals which overall is a driver of wealth.
Passing Your Property To Your Heirs
Now that you understand all the ways to generate wealth, it is also important to understand the different ways you can pass your properties down to your heirs. There are four main ways to accomplish this. First, you can sell your home to your kids. A second approach is simply giving the property to your kids. Bequeathing your property would be a third option. Last, a deed transfer can be done.
Each of the options presented has different ramifications from a tax and legal perspective so it is best to consult with your lawyer and accountant to gain the best insight for transferring over your real estate assets.
Overall, real estate can create generational wealth in a variety of different ways. It is no coincidence that 90% of millionaires were created through real estate. Consider starting your journey towards financial freedom and generational wealth.
Joe Arias
Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors.
RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.
Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.
“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”
From a young latino immigrant to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.
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.
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Real estate is one of the very few investment vehicles where you can force appreciation of your asset. Additionally, there are a variety of ways to force appreciation in real estate which makes this investment class the most flexible to leverage for investors. One way to increase real estate property value is through a change in land use.
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Land use refers to the assigned zoning of a piece of land for a particular type of real estate. There are several types of land use that are typically used to classify a piece of land. The most commonly familiar type of land use is residential and commercial. Additional land use types include recreational, transport, and agricultural. Land use is subject to change with proper approval by the municipality that the land falls under. The most common laws associated with changing land-use types are zoning laws. Zoning laws involve the regulation of the use and development of the real estate.
The purpose of zoning is to divide a municipality into residential, commercial, and industrial. Zoning regulations may include the specific requirements as to the type of buildings allowed, location of utility lines, restrictions on accessory buildings, building setbacks from the streets along with other boundaries, size and height of buildings, and several rooms. Now that you are familiar with the basics of land use type and zoning, it is time to understand how to increase real estate property value through a change of land use.
Plottage
Plottage refers to the increase in value realized by combining adjacent parcels of land into one larger parcel. The process of combining the parcels is known as assemblage. What occurs often is the value of the whole parcel will be greater than the sum of the individual parcels. This is a great strategy when you have the opportunity to purchase the surrounding parcels of land.
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Conversion
This strategy refers to taking an existing building or land and converting the asset for another use. An example of this is taking an old commercial warehouse and converting it into a 100 unit residential apartment complex. Oftentimes, the best approach is finding underperforming commercial assets in growing markets and renovating it for better use that will provide long term cash flow and appreciation.
Zoning
Great for expanding population markets. This method requires taking zoned land such as agriculture and having it changed to residential or commercial. Think about the land that is in the path of progress. Do you live near a town or city that is expanding outwards towards agricultural land? You can spot the progress years in advance and buy up the land and change the land use for that land which ultimately will help boost its value as land becomes more scarce with the growth of expansion by the city.
Real estate has many angles that you can play. Changing the land use of land that you purchase is a fantastic strategy for those interested in taking advantage of appreciation. There are endless opportunities in several growing markets.
Joe Arias
Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors.
RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.
Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.
“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”
From a young latino immigrant to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.
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.
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Investing in rental properties is a great opportunity to establish an alternative source of income outside your main career. If done well, you can even retire early and live off your rental income. The key to investing in income properties is establishing strong criteria and understanding what to look for that would qualify a property as the right investment for you. By understanding exactly what to look for in the beginning, you can establish a strong filter when researching properties and only allow the ones that align with your investing strategy.
It’s important to establish the type of criteria you have for yourself. How much cash flow are you looking for a per deal? Some people live in markets where $200 per door is a healthy cash flow and is desirable. Other more expensive markets produce an average of $500 to $800 a door. Depending on how much cash flow you are interested in earning from a deal, further narrows the type of properties you will be buying.
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What price range can you afford? If you live in a state like California, an investment property may cost you upwards of $700,000 compared to states like Kentucky where a property may only cost $50,000. Budget what is possible for you. Some investors may house hack and leverage 5% down while others are forced to put 25% down. If you live in a market and know the prices, understand what type of financing you have accessibility to and what you can afford.
Are there certain specifications about the home that you prefer? Some investors do not want to purchase a home that may be 50 or 100 years old while other investors only look for those types of homes. Maybe you look for a certain bedroom count or amount of bathrooms. Some investors look for spaces that additional bathrooms or bathrooms can be added so a basement would be very beneficial.
Research different neighborhoods. Especially if you live in a large metropolitan area or city. Sometimes investing in one street and not the other can make a huge difference in the purchase price and potential rental comps. Schools may play a role as well. It is better to invest in a part of town with a good school district. People are willing to pay more for their kids to go to a good school.
The job market is critical when looking at the rental market. Are there enough employers in the area? There are markets across the country where the main employer in town is one factory and if they go out of business, so does the whole town. You want to make sure there are a large number of employers and companies in the area that can sustain a healthy job market.
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Overall, many different factors go into looking for income property. Each investor should develop their own criteria based on their situation and needs. By taking the time to assess what is important to you, you can make better decisions when refining your filter for different income properties that you search for.
Joe Arias
Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors.
RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.
Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.
“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”
From a young latino immigrant to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.
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.
https://www.realestateinvestormagazines.com/wp-content/uploads/2024/10/property.jpg4001000dulcehttp://www.realestateinvestormagazines.com/wp-content/uploads/2013/04/logo.pngdulce2024-10-23 04:30:492024-10-23 04:30:50What to Look for in Income Property?
We live in interesting times these days with the unusual combination of all-time record highs for weather extremes, home prices, mortgage and overall consumer debt, and insurance costs.
Redfin reports that the combined total U.S. home value rose $3.1 trillion in value between August 2023 and August 2024. If these home appreciation trends continue onward at a similar pace, the US housing market may soon surpass $50 trillion in total value by sometime next year in 2025.
If you have a mortgage secured by your home, you are required to carry some form of basic homeowners insurance that’s sufficient enough to cover your ownership risks as well as your mortgage lender’s risks.
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Water is usually the #1 source of damage to homes across the nation each year. These horrific hurricanes, tornadoes, and massive fires across the nation are financially wiping out many homeowners, insurance companies, and government agencies.
These literally underwater homes from the horrific floods in many Southeastern regions are also causing many of these properties to lose value and become “underwater” figuratively where the mortgage debt far exceeds the current market value.
The Pool of Disaster-Relief Funds Dried Up
Let’s take a closer look at some of the news headlines shared this year about how financially insolvent insurance or government agencies are these days: FEMA (Federal Emergency Management Agency) has been technically insolvent or broke since earlier this year, as per FEMA themselves. The National Flood Insurance Program (NFIP) was described as being more than $20 billion in debt back in January 2024 at a panel hearing held by the U.S. Senate Banking, Housing and Urban Affairs Committee.
“The Small Business Administration’s (SBA) disaster assistance loan program is out of money after hurricanes Helene and Milton struck parts of the United States, the agency has announced.” –ZeroHedge
The Citizens Property Insurance Corporation is described as the “last” option for insurance within the state of Florida. However, Citizens was also described by many as being out of money before Hurricanes Helene and Milton reached the Florida shores.
“Citizens was created by the Florida Legislature in August 2002 as a not-for-profit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market.” – Citizens Property Insurance Corporation
Hurricane Helene and Milton might’ve caused more than $200 billion dollars’ worth of damage in Florida, North Carolina, and other nearby regions, according to The Real Deal.
Who will bail out FEMA first so that FEMA can bail out the National Flood Insurance Program, Citizens, SBA, and others?
Top 10 Largest Insurance Payouts
Will Hurricane Helene and/or Hurricane Milton break the all-time financial damage record set by Hurricane Katrina or at least reach the all-time Top 3? Please see the Top 10 financial damage list that I put together before in past articles and real estate courses.
Hurricane Ian, which hit Florida and other regions in late September 2022, has already caused more than $109 billion in overall damage claims in Florida alone. How will the insurance industry make it through another hurricane and fire season in Florida, California, Oregon, Washington, Idaho, Texas, Louisiana, and elsewhere?
Floods from horrific rain storms or hurricanes especially are generally the most common and costly natural disasters each year. Within the past 20 years, the 10 most financially damaging floods in the history of the National Flood Insurance Program (NFIP) happened while exceeding $50 billion dollars in costs. A whopping 75% of national flood insurance payouts have happened since 2002.
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The 10 largest payouts in the history of the National Flood Insurance Program on an adjusted inflation basis up through the second quarter of 2022 were as follows:
Upwards of 75% of flood insurance funds that were paid by the National Flood Insurance Program (NFIP) to property residents were located in just five states: Louisiana, Texas, Florida, New York, and New Jersey. After inflation adjustments, Louisiana was the highest-ranked state with NFIP payouts at $28.9 billion since 1978. The highest percentage of NFIP payouts to Louisiana residents were as a result of Hurricane Katrina. which totaled more than $22.1 billion dollars.
Paying High Premiums with Lower Chances of Coverage Benefits
It’s not uncommon for Florida residents to pay close to an average near $1,000 per month for homeowners insurance coverage. I’ve heard of property owners in the high-risk Florida Keys region who pay upwards of $100,000 per year for insurance coverage for homes valued near $2 million dollars.
It’s one thing to pay significant amounts for home insurance coverage protection benefits when you may later need it if a storm or fire damages your home. Yet, it’s even worse when the insurance carrier later denies any coverage protection.
For example, the lesser known Hurricane Debby that reached Florida as a Category 1 storm on August 5, 2024 caused significant damage to homeowners and businesses.
According to published data released by the Florida Office of Insurance Regulation, nearly 60% of all Hurricane Debby insurance claims cases were listed as “closed” just about one month after the storm hit. More than half of those insurance claim cases were listed as “closed without payment.”
As of September 6, 2024, the Florida Office of Insurance Regulation data showed that 19,973 insurance claims were filed after Hurricane Debby. The number of closed claims were listed as 11,090. Of these closed claims, 6,447 were listed as closed without any payments and 58% of those claims were completely denied, according to ABC Action News.
High-Rise Condominium Tower Risks
The implosion of the Champlain Towers in Surfside, Florida (Miami-Dade) back in 2021 was a catalyst to set off a chain reaction that is adversely affecting high-rise towers in Florida and even across the nation to this day.
As a result, a higher percentage of all-cash buyers who can self-insure like BlackRock, Vanguard (BlackRock’s largest shareholder), Blackstone (BlackRock spinoff), and others will likely acquire a higher percentage of these properties in the near future. Gee, what’s the common link here?
The legal outcome of the Champlain Towers collapse story was the SB 4-D legislation, which passed in 2022, that requires all owners of condominiums older than 30 years to hire outside engineering and/or architects to thoroughly inspect these properties no later than December 31, 2024.
These inspections will also be used to ensure that the usually financially insolvent HOAs have enough funds to cover the repairs or they must rapidly increase the monthly HOA payments that could be increased by several hundred or thousands of dollars per month.
Local, state, or federal agencies may have the power or legal right to fine or assess apartment building landlords or individual high-rise condominium owners with $100,000 to $300,000+ retrofit requirements per unit to modernize balconies, air conditioning and heating systems, appliances, windows, and other property features while insurance costs skyrocket.
Then, these older and more spacious affordable building units may be replaced with new smaller and more costly “smart” buildings that rent for $10 to $20+ per square foot (or up to $4,000/month for a 200 square foot unit) while closely following the newly restrictive high-density zoning laws.
If so, there will be an increasing number of motivated sellers who wish to avoid these new HOA assessments and “green living” requirements, especially if their own homeowners insurance company cancels their policies due to the perceived risks.
A homeowner with a mortgage who loses all access to insurance will then later have a mortgage default trigger and subsequent foreclosure filing, sadly.
Check Your Insurance Policies
No matter where you live, there are potential internal and external risks that can severely damage your home or rental property investments. Please call your insurance agent to discuss the best ways to minimize your risks and maximize your asset protection.
You may also consider speaking with local experienced home inspectors who can advise you how to best clear trees and shrubs near your home to reduce fire risks and how to protect against floods and mold risk.
For most Americans, the bulk of their net worth comes from the equity in their primary home. To best protect your wealth and to keep a roof over your head, please surround yourself with a knowledgeable team of inspectors and insurance, mortgage, and real estate agents who can help advise and protect you at the same time.
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.
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The Norris Group’s annual award-winning event, I Survived Real Estate, is once again coming to you LIVE! Our 17th annual black-tie gala that benefits Make-A-Wish will continue at the Nixon Presidential Library. Since 2008, together we’ve raised over $1,191,000 for charity!
In a year of lingering inflation, housing shortage, sticky high interest rates, national affordability challenges, a dangerous war and an uncertain upcoming election are just some of the headwinds we face as an industry and a nation. What will the FED do as the year finishes out? How big will the FED decision loom on this year and the expectation of a better 2025? Oh yeah, there is that little decision the country is going to make as this year looks like a big presidential election in terms of what the economy will look like for the next four years.
Our network will want to pay special attention to The Norris Group Radio Show and Podcast as we will be doing pre-event shows featuring local experts as well as national leaders. There’s a lot at stake in 2024 and beyond for real estate investors. I Survived Real Estate was created during a year in crisis and our mission continues to bring thought leaders together for a great cause while preparing our industry for the year ahead.
Our panel this year is a mix of new and old favorites. These are always some of the brightest minds in the real estate industry. Together they help us tackle topics we never thought we’d have to consider and how they might impact real estate.
The Panel
We are thrilled with this year’s lineup of experts:
• Mark Palim, Chief Economist of Fannie Mae (Incoming) • Selma Hepp, Author and Chief Economist of Core Logic • Marck de Lautour, CEO of SBD Housing Solutions and the Collective Genius • Bill Allen, Owner of 7 Figure Flipping and Fliphacking LIVE • Bruce Norris, Investor, Market Timing Expert and Educator, The Norris Group • Craig Evans, CEO of The Norris Group
Our benefiting charity this year will be Make-A-Wish of The Inland Empire and Orange County.
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A Realty411 Special Opportunity – Now you can access the best Property Leads on today’s market!
As one of Realty411’s trusted subscribers, you know that exclusive opportunities are the key to staying ahead in the market. That’s why we’re thrilled to present a limited-time offer tailored just for you, in partnership with our long time partner, U.S. Probate Leads!
Add a New Revenue Source Today
Up to 35% Off: Enjoy these premier leads at some of the most competitive prices ever offered.
20% Off: Just for being a Realty 411 member
Historical Data: Jumpstart your probate program with historical leads
Monthly Recurring Leads: Consistent access to high-quality estate opportunities
Motivated Sellers: Estate Heirs are looking for help
Limited Special Offer – Only for Realty411 Members
Realty411 members like you are part of an elite circle, the top 5% of investors who understand the value of exclusive data.
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As a real estate investor, especially a wholesale real estate investor, distress or abandoned properties are often the best homes to find under market value. Many of these homes, though, have owners who skipped town and are now just about impossible to find. Luckily, there’s a method for finding these homeowners called skip tracing. You can easily track down someone who has skipped town with no forwarding information through skip tracing as a real estate investor. Skip tracing will allow you to find the homeowner and move forward with a deal to purchase the property you’re after.
Quite a lot goes into skip tracing that you wouldn’t normally expect from real estate investors. You may have to do a little bit of digging to find the homeowner of the property you are looking to buy. Luckily there are tons of tools you can use to find someone who left absolutely zero breadcrumbs. Not only can you utilize search engines, but tons of websites have databases you can look through to find your person.
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What is Skip Tracing?
Essentially, skip tracing is the process of finding someone who has skipped town with little to no warning. They did not tell anyone where they were going and left no information on how to reach them. Despite this person leaving no trail, skip tracing is the process of searching for them or their contact information. To do this, one might hire a professional skip tracer or use their own savvy to try and locate them. There are quite a few tricks you can do on your own to find out where a person has gone even though they have not left any information. Many people utilize Google, social media, the post office, and other assets to find someone. This is considered skip tracing.
What are Skip Tracers?
There are professionals who are often private investigators, and they specialize in helping you find the owners of the properties who are incredibly hard to find. Many real estate investors hire the help of skip tracers to find the owners of properties they are interested in buying. These skip tracers typically start looking for a person by looking through public resources like utility bills, job applications, credit reports, DMV records, public property records, loan applications, background checks, and court records. They also carry out in-depth searches through multiple online databases that contain information not available to the public.
Although skip tracing costs money, it can be a huge benefit to any new or experienced real estate investor. Not many other real estate investors take the time or spend the money to hire skip tracers to find abandoned property owners. So, if there is a property owner who is extremely hard to find, you’re likely going to get to them first and have a better shot at buying the property. With competition for standard properties being high, using the method of skip tracing to beat competitors to vacant properties can be a massive advantage as you look to increase your portfolio and really start growing your wealth.
Why Do Investors Use Skip Tracing for Real Estate
As previously mentioned, abandoned homes can be really great for investors. The two investors who likely have the most interest in these homes are real estate wholesalers and real estate flippers. A wholesaler will offer the homebuyer an agreed-upon amount for the home, then they will find an interested buyer, likely another real estate investor, and connect the two. They will then make a profit based on a percentage of the final sale. While wholesalers are always on the lookout for houses that are under market value, it can be hard to get them against so much competition. When someone disappears and is hard to find, they significantly cut down the competition. Now, all the wholesaler has to do is find the homeowner and convince them to sell, and they have a profitable venture. Similarly, flippers are looking to buy homes like these because they have great potential to be repaired and sold for a large profit margin. Since all of the real estate flippers are after the same homes, finding properties like these can actually be a big break for some investors.
Is Skip Tracing Legal?
If you go through a professional skip tracer, the process is legal. Most states require skip tracers to be employed as independent private investigators who have a license with skip tracing certification options. States also have laws that dictate how you can use the information you got from skip tracing, which your skip tracer should expand upon based on your state. Make sure to only ever use a skip tracer who operates under all rules and regulations.
How to Use Skip Tracing for Real Estate
Skip tracing can actually be a very easy yet effective strategy to find property owners who have properties that are under market value. Essentially, you want to be able to find an alternate address for vacant property owners who are hard to find. From there, you’ll be able to contact them and see if they are willing to make a deal with you. Most people who have abandoned their properties are willing to accept fairly reasonable offers.
The hard part is that these property owners rarely leave details behind of their new address and contact information, so it’s almost impossible to find them once they’ve left. That’s why so many real estate investors either try their own hand in skip tracing or hire a professional.
One trick that many real estate investors try is using the United States Postal Service to get the property owner’s new address. What you do not want to do is walk into the post office and ask for their information. The post office is not obligated to provide you with their forwarding address. They are only allowed to give that information to law enforcement, licensed private investigators, or any other entity under court orders. So how do you get around this? All you have to do is send a letter addressed to the property owner at the address you wish to buy. Mail them a letter and on it, write “Do Not Forward – Return Service Requested.” Now that you wrote this, the post office will not be able to forward your letter to their new address and will have to return it to you. If they set up mail forwarding, you’re in luck! The letter will come back with a sticker on it detailing their new address. If it comes back with no address, that’s when you will have to look into skip tracing to find them.
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What to Try Before Hiring a Skip Tracer
If the post office trick didn’t work, your next step should be to use all of your resources before hiring and paying for a skip tracing service. Depending on what you need from the person, you may be able to do your own version of skip tracing and get what you need. For just an address or phone number, the internet may be your best tool.
Often information about someone can be found through a Google search, social media, or through the county assessor’s database. Many people even have their phone numbers linked to their Facebook profile without even knowing it. If they are the owner of a page or group, go into the info section and see if it has a contact email or phone number. Using social media, you may be able to look through their photos or connections’ photos and find out their new location. From there, do a Google search for their name and location and see if you can get an address or phone number. You may even be able to find them through a people search or a phone directory.
The following are a list of sites you can try to track down the property owner:
FindPeopleSearch.com
Pipl.com
TruePeopleSearch.com
PeopleSmart.com
PeekYou.com
YellowPages.com
AnyWho.com
TLO
Spokeo
Accurint
If you call a number and it’s not them, see if they have any connection to the person you’re looking for. You never know; sometimes, a dead end is just a redirection.
Hiring Skip Tracing for Real Estate Investments
Once you have exhausted your search to find the new address or phone number of the property owner on your own, you will have to look into skip tracing services.
Luckily there are plenty of skip tracing services to choose from. Speak with some of your real estate connections and see if anyone has had a good experience with a specific skip tracer. If you are unable to find a referral, do your own research. Read the reviews and make sure they look legitimate. Do not, no matter the price, hire a skip tracer who does not act ethically. It doesn’t matter how great the potential property investment is. It’s not worth breaking the law or involving yourself in sketchy practices.
Generally, skip tracing is not a very expensive service. Using a licensed investigator with skip tracing certification will only cost you around $25 per hour for their services. You could hire an unlicensed skip tracer for around $18 per hour, but it’s not worth the risk over such a small price difference.
What to Do If You Don’t Find the Owner
If you’ve exhausted all of your resources and you cannot find the owner of the property that you want to buy, just put this effort on pause. Move on to other projects and start looking for other properties that you find to be good investments. Add this property and any evidence you found into a spreadsheet where you can keep all skip tracing leads. After a few months, revisit your sheet and do a quick search on a few of the tools provided in this article. While there may not have been any information on the homeowner a few months ago, they may have down something to now appear in a search. Continue to do this every few months until either the property is sold, too run down, or you’ve moved on to different business ventures.
Summary
Skip tracing real estate is not for everyone. If you are a real estate investor looking to get into property management, you likely do not need to waste your time tracking down owners of abandoned homes. On the other hand, if you are someone who is just starting out in real estate, this might be a good thing to try. It could get you a step ahead of your competition, and you may be able to strike a really good deal with the homeowner, as they will likely be motivated to buy. If you are in the business of wholesaling or flipping homes, skip tracing is also something you may want to consider for your business. While it’s a lot more effort than other methods, it has a potentially great payoff if you succeed.
Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors.
RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.
Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.
“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”
From a young latino immigrant to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.
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A Realty411 Special Opportunity – Now you can access the best Property Leads on today’s market!
Dear Investor,
As one of Realty411’s trusted subscribers, you know that exclusive opportunities are the key to staying ahead in the market. That’s why we’re thrilled to present a limited-time offer tailored just for you, in partnership with our long time partner, U.S. Probate Leads!
Why Inherited/Probate Property Leads? Ask any serious investor, and they’ll tell you that some of their most profitable ventures have come from the inherited/probate property niche. Since folks first began buying and selling residential properties, inherited/probate properties have been recognized as the premier investment source for these properties.
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These are preowned properties that are being passed down to the next generation and are often available at a fraction of new housing prices. With new investor properties becoming more and more scarce, these leads have become a sought-after commodity.
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Up to 35% Off: Enjoy these premier leads at some of the most competitive prices ever offered.
20% Off: Just for being a Realty411 member.
Monthly Recurring Leads: Consistent access to high-quality estate opportunities.
Motivated Sellers: Estate Executors and Heirs are looking for help.
Historical Data: As Low as $.75/rcd – Jumpstart your probate program with valuable historical information.
Limited Special Offer – Only for Realty411 Members
Realty411 members like you are part of an elite circle, the top 5% of investors who understand the value of exclusive data. Our two decades long partnership with U.S. Probate Leads means you can get access to high-quality, highly curated inherited/probate property leads every month.
These offers are exclusive to our community and represent the lowest prices for inherited/probate property lists seen in years.
Or call 972 945-0209 for more information
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I know Leon and his team have dedicated their time and energy to developing tools and systems that are proven to guide you on a successful path to real estate investing.
Don’t miss this opportunity to get potentially life-changing insights from one of the top real estate information providers I know.
Linda @ Realty411 Team
P.S. Whether you’re brand-new to the real estate game or you’ve already invested before… this Program is for you. The leads you’ll receive can help you level up faster and drive more success than you might be able to achieve on your own.
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