Thursday, August 24, 2017

REIT Returns on Manufactured Housing Communities – 2017

In 2016, REIT returns for mobile home parks averaged out at 28.5%! (REIT Returns for multifamily apartment complexes was at 18.2%. | Click Here to read our 1st Article on REIT Profits) From January to July this year, the manufactured housing sector brought in 18.3% in returns, making the average return for the last three years 26.7%! Even though we see a 10% drop from last year, this is incredible!

“It is rare to find a segment that has double-digit returns, and so consistently,” said NAREIT Senior Economist Calvin Schnure.

Right now, the US has an extreme housing shortage. There are the largest number of new units under construction this cycle, however almost all these new developments are in highly densely-populated areas and are decently expensive. This year, ~320,000 new deliveries are to be made to the multifamily sector; most of which are on the high-end of the spectrum and fall inside the larger MSAs.

Low- to mid-scale housing demand is on the rise, propelled by blue-collar workers, but affordable supply seems to only be found in mobile homes. Last year, the average price of a manufactured home varied between $50k and $90k - ~10%-30% less per square foot than a traditional home.
Not to mention, there are thousands of baby-boomers retiring every day to a minimum-wage social security check (if you do the math, it comes out to ~$15k-$30k a year before taxes, depending on where you live). Many of these retirees are moving into tight-knit, age-restricted communities and aren’t planning on leaving anytime soon!

If you’re an investor, the manufactured housing sector is your golden ticket – people need affordable housing; the need is only growing daily; and mobile homes meet those needs!

In summary:
  • Steady, Consistent, High Returns from MHP REITS!
  • Housing Shortage – Large Number of Units Being Built but they are too Expensive!
  • Mobile Homes are Significantly Cheaper than Traditional Homes!
  • Retiring Baby-Boomers & Other Low-Income Families!
  • Growing Housing Demand!

If you’re thinking of investing in a manufactured housing community, call Stratton Group at 855.596.7976 to look at some of our off-market pocket listings! We have deals in over 25 states as we do business in 43 states across the country!

Want to read the original article? Click Here!

Monday, August 21, 2017

Mortgage Interests Rates Lowest Since 2016 Election

Mortgage rates today are the lowest they’ve been since the election last November, but that did little to encourage people to either refinance their mortgage or take out a new loan to purchase a home. Typically, when rates drop, applications to refinance home loans rise – which they did, 2% up from last week – but they are still down 40% from last year. The average mortgage rate last year was 3.45% and now it’s 3.90%; so naturally it would make sense that more activity would occur last year, but mortgage applications to purchase a home specifically fell 2% over the week but remains 10% higher than last year.

So, what does this mean?

Refinancing is down from last year realistically since many have already refinanced at rock-bottom rates, so the pool of potential applicants is shrinking even though more people applied to refinance this week than last week.

And the lower rates did virtually nothing for home-buyers because prices are so high due to the lack of inventory available, but it seems more have taken advantage of lower rates throughout the last year.

Total mortgage application volume, all-in-all, is up 0.1% over the last week and down 22% over the last year. It’ll be interesting to see how this fluctuates throughout the rest of the year as The Fed unwinds some of its “Quantitative Easing” scheduled to begin in October.

Click Here to read the Original Article

Click Here to Read more on The Fed and Quantitative Easing

Thursday, August 10, 2017

Why to Invest in Real Estate instead of Stocks

There are a handful of advantages of investing in real estate that trump stock investments. Obviously, the primary edge that stocks has is liquidity – they’re relatively easy to sell quickly; but they are very volatile and frankly: many stock investors tend to be very emotionally involved while investing and therefore make clouded decisions. Real estate, on the other hand, is much less volatile but is illiquid, causing many investors to hold the property for several years to gain equity or sell the property.

But weighing in both the pros and cons, real estate still holds the upper leg. For instance, a few more strengths include depreciation write-off, tax deductions and the famous 1031 exchange where a property owner can sell a property, buy a new property within a certain time-frame and not pay capital gains tax!

Not to mention, you just can’t “beat the market” with stocks or at least not consistently – it’s been proven (and being proven by Warren Buffett right now; Click Here). However, in real estate, we see people beat the market all the time flipping houses – buying low, fixing up and selling high.

All-in-all, real estate is true equity that has several tax advantages along with the ability to provide consistent good cash flow for however long people will need a place to live (which is only growing).

To read more on this topic, check out the links below:

Thursday, August 3, 2017

Affordable Housing Solution Proposed by Freddie Mac

For the last few months, Freddie Mac, the Federal Home Loan Mortgage Corporation (FHLMC), has been drafting a plan that would support affordable housing and access to credit for very low-, low- and moderate-income households. This project is called Duty to Serve and its purpose is to bring liquidity, stability and cost-effectiveness to underserved housing markets.

Although the U.S. economy has made leaps and bounds in recovering from the recession, causing financial markets to hit record highs and the unemployment rate to drop to its lowest in a decade, the affordable-housing crisis is one that remains growing exponentially. A 2015 study conducted at the Joint Center for Housing Studies at Harvard University found that 27% of renters spent more than 50% of their income on rent. That’s 7% up from 15 years before in 2000 at 20%, and then compared to 1960’s 12% – you can see how that rate is rising somewhat quickly.

Now, there are only 7.3 million affordable rental units in the nation and there are 11.2 million low-income households. The 3.9 million deficit is Freddie Mac’s focus. Of the many multifamily loans financed by the mortgage corporation, roughly 90% support workforce housing. In late 2014, Freddie Mac Multifamily purchased its first manufactured-housing community loan and has since provided $2.1 billion in financing for manufactured homes, allowing housing availability for more than 53,000 families in over 265 communities across 31 states. According to Prosperity Now, more than 17 million Americans live in manufactured housing communities, making up approximately 12% of the low-income household population.

Want to read more? Click Here