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If history tends to repeat itself, you might wonder whether it’s round two for the mortgage industry and the underwriting of risky loans – specifically, for short-term rental properties. It’s easy to get into a short-term rental with a loan that’s based on future rental income. It’s not a new concept for real estate investors, but it’s now becoming very popular for short-term rental investing as a way to pay for more expensive properties. On the other hand, it’s possible to cover that expense with the expected income. But, what happens to that loan if, let’s say, we have a recession and demand dries up for expensive short-term rentals? Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Non-Owner, No Income Loans You may already know a bit about these loans. They are commonly known as NONI loans which stands for Non-Owner, No Income and are based on the future income of a property, and not on the borrower’s paycheck. When a lender

In this Real Estate News Brief for the week ending June 18th, 2022... the Fed’s supersized rate hike, mortgage rate sticker shock, and the home equity bonanza. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the Fed’s biggest rate hike in three decades. The central bank hiked the federal funds rate by three-quarters of a percent which puts it between 1.5% and 1.75%. If inflation doesn’t show signs of slowing by next month, Fed Chief Jerome Powell said they might hike it by another three-quarters of a percent. He doesn’t expect that to be a common practice, but he said the Fed is determined to get inflation back down to 2%. (1) The rate hike came after two more hot inflation reports. The Consumer Price Index shows that inflation hit an annual rate of 8.6% in May, while wholesale prices came in at 10.8%. Economists are now looking ahead to the CPI report for June a

There’s a lot of uncertainty in the economy right now as inflation pushes higher. The housing market is contributing to inflation with higher home prices, and now we’re seeing higher mortgage rates. As potential homebuyers get priced out of the market, real estate investors see the need for housing as a big opportunity for single-family rentals. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Institutional investors have been very busy this year expanding their portfolios of single-family rental homes. As reported by HousingWire, they’ve sponsored at least 10 SFR securitization deals worth almost $8 billion. (1) ATTOM Data Solutions’ Rick Sharga says: The historically low inventory of homes to buy coupled with (rental) vacancy rates hovering around 2.5%, have positioned SFR owners for success in today’s housing market.” Strength of the Single-Family Rental Market The institutional deals highlight the strength of the single-fami

Reporting rent payments to credit bureaus is growing in popularity to help tenants build credit. But it’s not just something that helps tenants. According to the media website, Propmodo, it’s also a better way to do business for landlords. And there are a growing number of companies offering this service to both tenants and landlords. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Having a long history of on-time rent payments speaks well of a renter. That’s something every landlord looks for during the screening process. But until more recently, the only option for passing that information along to the “next” landlord is by word of mouth – from one landlord to another who’s checking references, typically by phone. For the renter, on-time rent payments will obviously keep the peace with a current landlord, and help with any phone calls from a new landlord, but it does little to improve a renter’s credit score. Although ren

In this Real Estate News Brief for the week ending June 11th, 2022... inflation hits a 40-year high, demand grows for single family rentals, and a popular TV show inspires a Montana migration. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and a report that shows the highest rate of inflation since 1981. The Consumer Price Index was up 1% in May to an annual rate of 8.6%. It was 8.3% last month. The increase is mostly due to rising gas and food prices. If you strip those out, the core rate was up .6% to an annual rate of 6%, which was actually down slightly from 6.2%. (1) The report is setting off alarm bells. Financial experts are now anticipating a 75 basis point rate hike at the next Fed meeting in June, and further hikes in July and September. The talk so far has been more along the lines of two 50 basis point hikes in June and July, but as one wealth advisor t

A Phoenix-based construction company isn’t worried about the high price of lumber. It has replaced lumber with another building material that it claims is cheaper, more available, more resistant to natural disasters, and more energy efficient. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Amazing Building Material So what is this amazing building material? It’s basically a combination of foam and cement in layers. It can be used on all parts of a home including walls, floors, and ceilings. And lowers the cost of building the home by as much as 10 to 50%. Strata International calls the product SABS which stands for Saebi Alternative Building System. Strata is a green structural engineering company and Amir Saebi (Sigh-EE-bee) is the Executive Operations Manager. (1) The process involves the cutting of foam slabs into smaller elements of the home design and then gluing them together with a foam adhesive to create a three-dimens

In this Real Estate News Brief for the week ending June 4th, 2022... what’s being done about inflation, how inflation is impacting homebuyers, and why lumber prices are actually falling. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and lots of talk about inflation. President Biden launched a new effort last week to tackle inflation. As reported by the Washington Post, he was apparently fuming to aides that not enough was being done to control inflation. That turned into a flurry of activity to get the ball rolling and send a positive message to the American people. He met with both Federal Reserve Chief Jerome Powell and Former Fed Chief Janet Yellen in the Oval Office, and said in a public address that fighting inflation was his top economic priority. (1) President Biden also published an op-ed piece for the Wall Street Journal outlining a three-part strategy fo

In this Real Estate News Brief for the week ending May 28th, 2022... you’ll hear about the “condo comeback,” a new wildfire risk assessment tool for your properties, and which states can save you the most money on taxes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and a bit of good news about inflation. The Federal Reserve’s preferred method for tracking inflation shows that price growth could be slowing down. The Personal Consumption Index or PCE rose only .2% in April. That brings the annual rate down from 6.6% in March to 6.3% in April. As reported by MarketWatch, it was the first time we’ve seen a pullback in a year-and-a-half. (1) The PCE is considered to be more accurate than the Consumer Price Index or CPI because it factors in additional criteria such as consumers substituting expensive products for cheaper ones. The latest CPI shows an annual inflation r

It’s no secret that energy costs have been soaring. That goes for the money we spend at the pump, and the money we spend to heat and cool our homes. Homeowners can do things to increase efficiency, but renters typically get whatever comes with the unit and without knowing the cost for utilities before they move in. One group hopes to change that scenario with research that shows how energy labels in rental listings can be a win-win for both tenants and landlords. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Researchers with the “American Council for an Energy-Efficient Economy” conducted a survey recently to find out how energy labels would impact a rental applicant’s preferences. They enlisted the help of about 2500 people in different parts of the country who used a fake listing website to search for rentals. Survey on Tenant P

The Biden administration announced an ambitious new goal to close the affordable housing gap in just five years. The plan includes financial incentives to build more housing, along with changes to zoning and land use regulations to potentially make it easier to create new housing. It also includes new financing policies for things like accessory dwelling units and manufactured homes, and solutions for the supply chain crunch that’s making it difficult for builders and renovators. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The White House released details of its Biden-Harris Administration Housing Supply Action Plan on May 16th. (1) It falls under President Biden’s effort to tackle inflation as a top priority and the need to address housing costs. According to the Consumer Price Index, housing accounts for about 30% of the prices increases we’re seeing today. Housing Supply Action Plan With this new plan, the administration

In this Real Estate News Brief for the week ending May 21st, 2022… forbearance claims hit a two-year low, rent levels are setting new records, and a new list of the “best places to live”. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from the past week, and comments from Fed Chief Jerome Powell about the central bank’s resolve to fight inflation. He told the Wall Street Journal that “restoring price stability is… something we have to do” and, he says, “there could be some pain involved.” (1) The Fed approved a 50 basis point increase for the federal funds rate at its last meeting. And, it expects to do the same at the next two meetings. The short-term rate is now within a range of .75 to 1%. Raising it another 100 basis points will bring it to 1.75 to 2%. Powell says it’s still possible to avoid a recession, but he’s now describing the process as a “soft-ISH” landing. (2) He hopes to

As the country deals with high inflation in food, energy, and housing, many real estate investors are pivoting to keep up with changing market dynamics. Smart investors can thrive in challenging times, if they know where to look. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. I recently interviewed John Chang on my other podcast, The Real Wealth Show. John is the National Director of Research at Marcus & Millichap, and he offered some very good insights that I wanted to summarize here on Real Estate News for Investors. Marcus & Millichap’s John Chang Just to give you some background on John, he leads a team of real estate research professionals and is responsible for the production of the firm’s vast array of commercial real estate publications, tools and services. Under his leadership, Marcus & Millichap has become a leading source of market analysis, insight and forecasting, and the firm’s research is regularly q

In this Real Estate News Brief for the week ending May 14th, 2022… why lumber prices are falling, what the FHA is doing to discourage investors, and the new Google mapping tool that could help house hunters. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. Inflation appeared to slow down a bit last month. The government reported a slight decline in the Consumer Price Index from an annual rate of 8.5% in March to 8.3% in April. But that’s coming off a 40-year high, so we haven’t come down much. Plus, the so-called “core rate of inflation” - which omits prices for food and gas - was .6% higher. That was a disappointment on Wall Street because analysts had forecast a lower .4% increase. (1) As reported by MarketWatch, many economists expect inflation to slow down, but they say it will probably take a while for that to happen. Supply chain issues and the labor shortage a

Dealing with sea level rise along the California coast is not going to be easy. One of the options that cities are encouraged to consider is something called “managed retreat.” In a nutshell, that’s when homes are moved away from the coast as it crumbles toward the sea. With so many expensive California homes perched on oceanside cliffs, the idea has become very controversial. There’s even debate over the use of the term “managed retreat.” (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Managed retreat is a concept that’s been around for a while. It’s been used after natural disasters that have flooded whole communities. As reported by the SF Chronicle, The town of Soldiers Grove, Wisconsin, began relocating about 600 homes in 1979, after the Kickapoo River had flooded 25 times. It cost more than $27 million in federal, state, and local funds to buy new land and move 70 buildings, including 24 homes. “Managed Retreat” to Fi

The Real Estate News Brief; Fed’s Rate Hike Plan, Record Home Price Growth, Real Estate Career Surge In this Real Estate News Brief for the week ending May 7th, 2022... the Fed fights inflation with rate hike, home prices hit new record high, and the popularity of a career in real estate. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and words from the central bank that touched off a dramatic roller coaster of gains and losses on Wall Street. Fed Chief Jerome Powell sat down with the press for an hour on Wednesday after a decision by Fed officials to raise the Federal Funds rate by 50 basis points. Powell said that inflation is too high but essentially nixed the idea of a 75 basis point rate hike. He also suggested the possibility of two more 50-basis point rate hikes during the next two meetings. (1) His comments about shelving a more aggressive rate hike plan tri

The Supreme Court has refused to step into the battle over the cap on SALT deductions. Several states sued to lift the cap on state and local tax deductions but the high court refused to hear the case. That leaves the matter up to Congress which hasn’t produced results so far, or to the states which in some cases have offered a work-around. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The $10,000 cap on SALT deductions was one of the most controversial parts of the 2017 tax bill. Those deductions cover state sales, income, and property tax. Once upon a time, they were unlimited. The Tax Cut and Jobs Act or TCJA was passed by a Republican-controlled Congress under President Trump and provided $1.5 trillion in tax cuts. (1) The low cap on the SALT deduction helped offset that lost tax revenue, along with a lower cap on the mortgage interest deduction. A higher individual tax deduction was also offered as partial compensation f

The Real Estate News Brief - Week Ending April 30, 2022; Growing Demand for ARMs, The 7-Year Foreclosure, Top Complaints about Neighbors In this Real Estate News Brief for the week ending April 30th, 2022... you’ll hear about the surging demand for adjustable-rate mortgages, the years it takes to foreclose in some states, and the top reasons people dislike their neighbors. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Before we start, I want to let you know that we are hosting our first live event in over 2 1/2 years on May 21st in St Petersburg Florida. I'll be there giving my 2022 Housing Update, and we'll also have property teams from 10 different markets to update us on what's going on in their markets and share available income properties. We'll also have a tour of rental properties in St Pete on Sunday and then Jacksonville on Monday. Check it out at newsforinvestors.com Economic News We begin with economic news from this past week, and more concerns about inflation. The Federal Reser

Real Estate News - Construction Companies at Risk of Dangerous Cyberattacks There’s growing concern about the possibility of a dangerous cyberattack on automated systems used by construction companies. These programs are used for things like the measuring and mixing of materials used to support large construction projects. Some companies are taking steps now to protect themselves from hackers but cybersecurity experts say the threat level is rising, and the safeguards are lagging behind other industries. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. White House Warning about Cyberattacks Just a few weeks ago, the White House issued a warning about a possible Russian cyberattack linked to the Ukraine invasion. U.S. intelligence officials got together with more than a hundred infrastructure companies and industry groups to share classified information related to this threat. (2) Cyber security researchers from Mandiant say t

Real Estate News Brief - Week Ending April 23rd, 2022 Top Investor Concerns, Foreclosure Activity, 40-Year Loan Option In this Real Estate News Brief for the week ending April 23rd, 2022... the top concerns for investors, what’s happening with foreclosures, and a new 40-year loan option for some borrowers. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and growing concerns about inflation. Fed Chief Jerome Powell says: “It’s absolutely essential to restore price stability.” He feels it’s appropriate to move more quickly with interest rate hikes and says that a 50-basis point rate hike is on the table for the Fed’s May meeting. He says: “Our goal is to use our tools to get demand and supply back in sync, so that inflation moves down and does so without a slowdown that amounts to a recession.” But he also warns that it will be a challenging process. Consumer inflation

The National Association of Realtors is hoping to bring a case before the Supreme Court on the use of “floor plans” for real estate deals. NAR and a coalition of real estate groups want the high court to overturn an appeals court ruling that claims the creation of a floor plan is a copyright violation, by anyone, including the homeowner who might want to post a floor plan online to help sell the home. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The lawsuit was filed last year by Missouri-based Designworks Homes, and the company’s owner, Charles James. They claim that two real estate companies violated copyright laws by creating floor plans to help with the sale of homes that James had built. Designworks lost the first case, but the Eighth Circuit Court of Appeals overturned that ruling saying that copyright law also applied to floor plans. Ruling Has Wide-Reaching Implications The ruling has wide-reaching implications f