Category Archives for "News"

Feb 25

Warning: Smart-Home Devices Going Berserk? | Episode 7

By Carole Ellis | News

This Article was Discussed in Episode #7 of the REI Today Podcast. Click Here to Listen Now

If you love the idea of being able to unlock your front door using your smart phone or use an in-home camera to watch your kids while you’re still at work, you probably love the idea of having a “smart home.” However, when your “smart devices” fly off the handle, it can be downright scary, as many users of a certain smart-home network purchased by Google for billions in late 2014 can attest. Nest, which is widely considered to be one of the most potential-filled smart-home systems, has gotten some pretty negative publicity lately thanks to some truly disturbing YouTube footage of smart fire alarms “going berserk” and a number of highly-publicized camera and film outages that left parents unable to contact or supervise their offspring.

While Nest products, as you might expect, work really well a lot of the time, the times that they malfunction are far more entertaining and likely to go viral. Furthermore, Nest has a “nasty habit” of blaming its service providers brutally and sometimes without investigation for product malfunctions, and rumor has it that the upper management echelons are in turmoil at the moment as well. Add all this together, and things are not presently looking bright for Google’s latest way to invade your home.

Lesson to Learn: As more and more homeowners want smart-appliances in their homes, real estate investors are beginning to install them in rehabs and renovations as well as in new development. Investors must determine for themselves and their market whether negative publicity and high-profile service outages mean that smart items should be left to the homeowner to install, Nest specifically should be avoided, or the whole thing is not really that big a deal.

Point to Ponder:

In your opinion and experience, do home-buyers really make their decisions based on the presence or absence of smart appliances?

Thank you for reading REI Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 7 here


Feb 25

A Little Mortgage-Rate “Magic” Heading Your Way… | Episode 6

By Carole Ellis | News

This article was discussed in Episode #6 of the REI Today Podcast. Click Here to Listen Now.

When the Fed raised interest rates by a mere 0.25 percent at the end of 2015, many borrowers, analysts, and economists reacted with loud proclamations that the mortgage-interest-rate sky would soon be falling. That first incremental rate hike, they warned, heralded the end of four-percent interest rates and, to hear many of the “talking heads,” you would have thought that we were heading back to the “bad old days” of 16-percent interest. When reality came crashing home, however, in the form of global economic instability in early 2016, it certainly was bad news for a lot of people, but not for home-loan borrowers. Now, it appears that interest rates will remain low indefinitely and, furthermore, some experts say that mortgage rates are likely to head even lower in the near future.

One of the main proponents of the historically-low-interest-rate prediction is Guy Cecala, the publisher of Inside Mortgage Finance. He explained that U.S. Treasury bonds are yielding at the lowest levels since 2012 and, he added, where those bonds go, so do mortgage rates. The result, then, is that you probably have a little more time to get that home loan before things get hairy for your mortgage application. However, Cecala warned that historically low home loan rates are not really good for the overall economy. He said that a healthier economy would have “mortgage rates in the five percent range” instead.

Lesson Learned:

Instead of worrying about what the media is “spinning” about mortgage rates, watch the bond market! As long as those yields are down, your home loan interest rates are likely to stay down as well.

Point to Ponder:

If those yields stay down long term, it will be bad for the overall economy and could end up hurting the same homeowners rejoicing over the “extension” of low rates. How long do you think our housing market and broader economy can take this?

Thank you for reading REI Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 6 here

Feb 25

The INVESTING GENIUS Behind the $6,000 Beer Pong Table | Episode 5

By Carole Ellis | News

This article was discussed in Episode #5 of the REI Today Podcast – Click Here to Listen Now

Can you imagine a scenario in which it makes good, solid investing sense to put a $6,000 beer pong table in a home you are selling and then leave it there for the new owner? This is not some crazy new staging technique; it’s a new concept favored by extreme investor Mike Meldman, who is known for his over-the-top resort-living communities that are, essentially, full of fraternity houses for families. Meldman, who coined the term “frat houses for families,” owns Discovery Land Company, a corporation that has already developed 18 private resorts that center around expensive activities for families to enjoy together. For example, every community has an over-the-top golf course equipped with on-site chefs and no dress codes, and every home has an extensive home theater system and, in many cases, extravagant entertainment “equipment” like, well, $6,000 beer pong tables.

Not surprisingly, Meldman locates his communities in areas of great natural beauty and that are usually already highly desired by wealthy buyers. Maui, Hawaii; Scottsdale, Arizona; and Big Sky, Montana are all home to Meldman developments. Not only are properties in the resorts available for purchase, but non-residents can apply to be members as well.

So should you start installing super-high-end amenities in your investment properties?

Well, yes and no. If you’re a developer like Meldman, then sure, try it! You could have a zillion-dollar frat-house-for-families hit on your hands. However, the real lesson here is to identify whatever it is that resonates with your target buying market and go out of your way to stand out for that thing. If your buyers love green homes, then evaluate the very best way to make a home truly green (preferably in an economic manner) and do it. I know a rehabber who made a fortune turning old homes into green homes, and she did it because she identified her buyers first as people who would rather have older, historic-feeling homes but who valued energy efficiency and environmental friendliness. Is that a huge market? Well, apparently it’s big enough. Maybe your buying market wants something as simple as windows into the playroom or a certain type of appliance. Whatever it is, identify it, then consider adding it to your repertoire when building your portfolio of investment real estate.

Point to ponder: What would make you jump at the chance to purchase a property?

Thank you for reading REI.Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 5 Now

Feb 23

The FINE PRINT on “Job Creation” and What It Means For YOU | Episode 4

By Carole Ellis | News

This Article was Discussed in Episode #4 of the REI Today Podcast – Click Here to Listen Now

One of the best ways to identify soon-to-be thriving housing markets is to take a look at local jobs numbers. For investors who love shortcuts, the Gallup Job Creation Index (GJCI) is a great way to start looking, since it identifies states that are trending positive and negative in terms of job creation, enabling a savvy, research-minded investor to narrow down his or her target markets from there. H

However, it is vitally important that you do not, when using the index, confuse a handy shortcut with an instant “thumbs-up/thumbs-down” sign for state housing markets. While the jobs index is a great tool, it does not measure the quality of jobs or the “job numbers” associated with the jobs created.

So what is a jobs number?

A jobs number is the number of jobs that a single job can create in a local economy. For example, a single high-paying IT job can create more than 10 additional jobs as the prototypical employee moves to the area, brings his or her family, hires help for his or her family, begins frequenting local eating and entertainment venues, and generally begins to participate actively and in an impactful way in the local economy. Jobs number is related in many cases to salary, but it also is related to the type of job being done. As a general rule, for example, a high-level IT job will actually create more jobs than a similarly-paid job in finance.

So what does this tell me about DETROIT, MICHIGAN?

Well, at time of publication, the state of Michigan was tied with four other states (Arizona, Florida, Ohio, and Washington) at number 10 on the list of top 10 states for job creation according to the Gallup Index. A metro-level poll conducted in the middle of last year placed metro Detroit as sixth in the nation for job creation compared to comparable metro areas. On the surface, things are looking up in the Midwest. However, a savvy investor needs to evaluate what types of jobs are being created in Michigan in order to invest correctly. What types of homes are new employees likely to be buying? Are they looking for starter homes? For example, in Birmingham, Alabama, one of the best types of properties to own is actually bottom-tier single-family rentals. That’s what sells consistently and has for the last two decades. On the other hand, in hot spots in Arizona and Texas, where the IT crowd is growing, an investor would do better to renovate and flip mid- and upper-mid-level homes to owner-occupants eager to settle into the area and put down roots.

In Michigan, and in Detroit in particular, one in every 10 new jobs is, as it has historically been, in manufacturing. However, nursing, software development, and network security are growing much more quickly as the state works to establish a presence in today’s new economy. Interestingly, however, the state is also experiencing a current shortage of truck and transport drivers, which has led several national firms to open driver schools in the area. As you can see, the fine print tells us that Michigan is experiencing diverse jobs growth, including some in that invaluable tech sector, but that it will be important to evaluate the buyer population on a local level before sinking your money into a market.

Lesson: Just jobs are not enough, although they definitely can point the way to an up-and-coming market.

Point to Ponder:

According to the Detroit Free Press, the most in-demand workers in Michigan these days are commercial drivers, ethical hackers, nurses and nurse practitioners, and welders.

Would you move to Detroit to get any of these jobs?

Thank you for reading REI Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 4 now.

Feb 23

Facebook’s DIRTY TRICK on Real Estate Investors | Episode 3

By Carole Ellis | News

This Article is Discussed in Episode #3 of the REI Today Podcast – Click Here to Listen!

Any real estate professional who is active on social media knows that getting “likes” on your Facebook posts is hugely important when it comes to organically winning the social-media battle for consumer eyeballs. However, Facebook is about to make some changes that are going to make that process substantially more difficult for you – all under the guise of helping users better “express themselves.” That’s right, folks: It’s the dawn of the “dislike” button.

While you probably have wished that you could dislike a post on more than one occasion, how would you feel if someone disliked your recent renovation pics, or used a Facebook button to let everyone know just how “sad” or “angry” your latest listing makes them feel. While interaction will likely still lead to more views whether your viewers are positive or negative about your postings, imagine, more to the point, how your seller is going to feel about your listing if it gets negative feedback on Facebook. That’s right: it’s going to be a problem.

Facebook is making a huge deal out of this looming change, calling the move “the decision to blow up the like button.” In reality, Facebook “reactions” will supplement the “like button.” You will still see the familiar “thumbs-up” icon with every pic and post, but holding the cursor over the icon will reveal additional “Facebook reactions,” sad, angry, wow, laughter, and love. So you can see, not everything is negative, but as you’ve probably noticed on the internet, the negative does have a nasty tendency to dominate. News feeds will show a running tally of reactions in much the same manner in which they presently simply display a running tally of “likes.”

So when will we get to see Facebook Reactions?

At time of publication, Facebook is still testing the reactions feature, which means that some devices and users in various countries have access to it while others do not. Facebook CEO Mark Zuckerberg has repeatedly expressed concern about the negativity issue, and appears unwilling to take reactions global until he is, in his own words, convinced that the new addition is “a force for good, not a force for bad.” In truth, it’s likely that Zuckerberg wants reactions live as much as everyone else, since it dramatically ramps up the network’s ability to collect emotional data that can then be used for targeted advertising. However, he – and Facebook – cannot afford to release on a wide scale until the button is tailored to at least feel positive to users.

Food for Thought:

When Facebook Reactions roll out, there will be some pretty dramatic ramifications for social media marketers. Top of the list will be that people will be able to say negative things about your posts without even taking the time to post a comment. Think about how many things you “like” without commenting. Scary, huh? You’ll need to track the feedback on your posts carefully and determine how, if at all, your specific audience leverages the expanded emotional reaction options. Then, adjust your marketing and remember, the better you understand what Facebook is getting out of the button (emotional information on its users’ likes and dislikes) the better you can leverage that button to your advantage.

Are you happy to hear about Facebook Reactions? Have you used it?

Thank you for reading REI Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 3 Here


Feb 23


By Carole Ellis | News

This Article is Discussed in Episode #2 of the REI Today Podcast – Click Here to Listen!

Way back in Fall 2014, housing experts started warning that the “millennial rescue” that we’d all been counting on – that is to say, the huge movement of millennial renters into the housing market as the country arguably emerged from the Great Recession – was not going to happen on schedule. As the months have passed, this has certainly proved true. Among the things keeping millennials out of the housing market, a few stand out:

  • Difficulty getting financing
  • Unwillingness to buy
  • Delayed launch into family formation (They’re adults living on their own or with roommates, but marrying and having children later or not at all)

These factors tend to stem from a common cause, coming-of-age in the wake of the housing and financial crises, but the fallout has affected millennials in ways that older analysts and investors alike fail to consider. The main thing that is slowing millennials down in their home purchasing is not that they do not want to own property – about half do – but that they believe on a fundamental level that they are unable to do so, usually because they believe that they cannot access conventional financing.

In a word, this belief is largely untrue. There are hundreds of first-time homebuyer programs out there to help buyers get low interest rates, low down payments, and even finance everything completely. Furthermore, there are many affordable markets in the country right now that are also desirable to millennials (think Atlanta, Georgia, and Pittsburgh, Pennsylvania as two examples where millennials can find jobs and the coveted “hip atmosphere” – almost certainly not how a true millennial would describe it, by the way – that they need).

So why are millennials running scared from home purchases?

The truth of the matter is, they simply do not believe that they can make the purchase. According to Berkshire Hathaway Home Services,, Neighborworks America, and countless other data and analytics teams, millennials are not even investigating buying because they don’t think a conventional mortgage is within their reach. It’s the same reason fully half of all renters refuse to check their credit but will tell you they can’t get a home loan (

So what can smart REI Today investors do with this information?

Literally, GET CREATIVE! If your target market of new buyers thinks they can’t get a mortgage, then don’t offer them properties with conventional financing. Offer them properties with built-in financing, or lease-option financing (which might make habitual renters more comfortable), or subject-to financing. Offer an individual who wants a home but believes he or she will never own one (whether they’re right about this or not) an option to own, and they’ll take it the majority of the time. And off-market financing options like these often result in higher profits for investors because homeowners who think they cannot finance in a traditional way will often pay a premium for the option to finance using unconventional methods.

Lesson: Look for fear in your market, and assuage that fear. When you do so, you’ll be helping your buyers (and yourself)!

Have you ever bought or sold using unconventional or creative financing? Would you do it again?

Thank you for reading the REI.Today News and Networking Section!

Your comments and questions are welcomed below,

Listen to Episode 2 Now

Feb 22

Mega-Developer DR Horton’s Hint for Wholesaling Success in 2016 | Episode 1

By Carole Ellis | News

This Article Is Discussed In Episode #1 of the REI Today Podcast – Click Here To Listen!
If you’ve been watching mega-developer DR Horton like REI.Today has, then you know that they’re up to something. Back in 2014, the homebuilder started building large numbers of entry-level homes under their brand “Express.” These homes are exactly what their name sounds like: they are “starter-homes” for first-time homeowners who are seeking fast, easy (read: affordable) access to the home-owning population. The properties are priced between $120,000 and $140,000, a prime price tag for first-time buyers with a relatively small amount of money for a down payment and high hopes of leveraging some federal assistance in getting a favorable mortgage.

DR Horton started transitioning resources to its Express brand early, while most other builders were still focusing on high- and middle-tier homes. In fact, many are still focused there. For example, Atlanta-based Pulte Group is just now starting to investigate starter-build options as its high-end margins tighten. DR Horton, however, has some padding built in thanks to its early start now that its luxury-home brand, Emerald, is starting to falter.

So what does this mean for you and your wholesale deals?

It means that right now, in 2016, there is a shortage of “starter homes” available for first-time buyers. There is a reason that a dominant number of successful investors refer to these “little” three-bedroom, two-bathroom homes as their bread and butter: these homes are in demand, often come with easier financing than larger homes, and are proven in short supply at this time.

Lesson: If you’re looking to wholesale properties fast, then give your buyers (be they investors or homeowners) what the market wants, and what the market wants at present is entry-level homes.

Point to Ponder:

National Association of Realtors (NAR) chief economist Lawrence Yun and CNBC real estate reporter Diana Olick both think that DR Horton has set itself up for success by investing in starter homes thanks to the 2 million new households that will likely be attempting to transition to home ownership in 2016.

Would you invest in starter homes?

Thank you for reading REI.Today’s News and Networking Section!

Your comments and questions are welcomed below.

Listen to Episode 1 Now

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