Housing Starts Drop, Mortgage Originations Increase, and Should You Join an REIA?
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News, Tips and Tricks

Housing Starts & Completions Drop in October 2015

shutterstock_205360306.jpgThe U.S. Census Bureau and HUD announced November 18, 2015 that single family residential construction slowed in October 2015 in both starts and completions. Housing starts decreased 2.4 percent from the prior month with September showing 740,000 starts and October dropping to 722,000 starts.

Single-family completions also dropped, but less significantly, down 0.5 percent from September to October 2015 with the September rate of 643,000 dropping to 640,000 in the next month. Construction labor shortages could be contributing to the problem, according to NAHB Chief Economist and SVP David Crowe.

He offers a possible explanation for the slow-down in a recent MReport article: “The steady increase in residential starts in 2015 has produced a steady increase in the number of homes under construction although carrying them through to completion slowed a bit as labor shortages, especially finishing carpenters, slow the ability to get finishing touches done," he said.

One place where housing did not see a drop was in building permits. The single-family housing market building permits were at a rate of 711,000 in October 2015, up from 694,000 in the prior month—an increase of 2.4 percent.

Mortgage Originations Up 42.5% as Credit Scores Improve

shutterstock_270368444.jpgExperian’s annual State of Credit report recently found that as the overall national credit improved over the last year, mortgage originations increased 42.5 percent. The new data also links the rise in the national VantageScore credit score, which climbed three points over the last year, with substantially higher mortgage loan originations.

According to the report, broken down by city, Minnesota claimed the top three spots in best average credit scores. Mankato, Rochester and Minneapolis led with scores of 706, 705 and 704 respectively.

Cities with the lowest average credit score included Greenwood, Miss. (612), Albany, Ga. (622), and Riverside, Calif. (642). Overall scores are much closer to pre-recession numbers, and Experian estimates that the general rise in credit scores and positive credit environment will encourage lenders to capitalize on the prime market to foster business growth.

Flips Down in Third Quarter 2015, Up Year-Over-Year

Realtytrac has reported that home flipping in the third quarter of 2015 represented 5 percent of total single family and condo sales, down from 5.4 percent in the second quarter of 2015.

The 5 percent of total homes flipped last quarter is actually up though, when compared year-over-year with the third quarter of 2014, which had just 4.3 percent houses flipped out of total sales.

Realtytrac defines flipped homes as those sold as part of an arms-length sale for the second time within a 12-month period.

Viewpoints

Joining an REIA – Is it Worth it?

You’ve gotten the flyers and seen the advertisements, but if you’ve considered joining a local REIA you may have wondered: Will it be worth my time and money? Great question. REIAs and other real estate clubs can be a goldmine for local resources, information and networking.

shutterstock_281107127.jpgWe’ve asked Visio Account Executive Rasmey Enn for his take on local REIA clubs and how they can benefit all investors, from beginners to experts.

One of the top benefits according to Enn is networking, meeting people and getting to know the who’s who in your local real estate investing community. Local clubs make it easy with regular meetings, conferences and educational programs.

“You will meet realtors, wholesalers, contractors, private and hard money lenders, and many others who are important in the game of real estate investment,” he said. “Start to build relationships one-on-one and learn from others who have been in the business for a while. You can learn what’s trending in the area, where to invest and where to avoid, what contractor or subcontractor to use and where to send your deal.”  

Mentorship is another highlight of joining a club. If you are new to the industry, having an experienced investor to turn to when you have questions can be invaluable in your journey. For experienced investors, mentoring is a chance to give back and teach others what they’ve learned.

shutterstock_275814062.jpg“Real estate is more micro than macro. If you are just starting out, a local industry player can help you know what is going on with the real estate market in your area,” Enn said. “It is important that you get that insight to implement the right strategies in your real estate investment.”

Other benefits to joining include listening to guest speakers, finding out tricks of the trade and being able to get honest reviews of wholesalers, brokers and the like.

“Clubs definitely will help new investors with networking, education and deals. As an established investor, it can get you deals, new funding sources and other opportunities that you might be missing if you weren’t a part of the club,” Enn said.

But before you run to your nearest meetup, you need to do your homework on which is the right club for you. Depending on where you live, this can be a fairly simple or a more detailed process. The first step is finding out your options.

rasmey.jpg“Start by Googling ‘REIA’ and checking out biggerpockets.com and meetup.com for events and clubs in your city,” Enn said. “Call them up and see what they have to offer. On Meetup, you can see how many people will be attending the meetings, which can indicate that the REIA is a good one, and popular within the community. On BiggerPockets, it’s easy to ask local investors in the area for their opinions.”

Empowered with information, attend your top chosen clubs and ask a lot of questions. Get a feel for whether the club really exists to help investors or if their goal is to turn a profit. And once you find that perfect club, is it worth the yearly fees to join? Absolutely, says Enn.

“The networking and relationships you build, and the education and insight that you gain will far outweigh the yearly fees, which can be as low as $100 in some clubs. Just like anything else, you get what you put into it. Make sure to get there early, leave late and really take advantage of everything they have to offer,” he said. “With all the networking opportunities, educational resources and local contacts you’ll find within your REIA, it could be the very thing that multiplies your success as a real estate investor.”

The Pulse

October Poll Results: When do you think the Fed will raise rates?

Last month we asked when you think that the Fed will raise rates. Results were largely mixed with First Quarter of 2016 being the top answer. 

 

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November Poll: Do you think that your personal real estate investment income will increase, decrease or stay the same in 2016?

The new year is coming up fast and it's time for goal-setting. Do you think it'll be a good year for you as an investor? Let us know what you think about your investment income in 2016 by taking our poll.

  • I expect my income to increase.
  • I expect my income to decrease.
  • I expect my income to stay the same.

Take the Poll

 

Visio News

3000-email4-1.jpgVisio Originates More Than 3,000 Loans

We're excited to announce that we've closed more than 3,000 loans since our founding in 2011. With all of those deals completed, we know a thing or two about real estate investing. We'd love to help you reach your goals as an investor, whether that be building up your rental portfolio or flipping more houses each year. Contact us if you're interested in speaking with one our expert account executives about your needs.

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