{"id":638,"date":"2017-02-02T13:32:34","date_gmt":"2017-02-02T13:32:34","guid":{"rendered":"http:\/\/blog.leadpropeller.com\/?p=638"},"modified":"2017-02-02T13:32:34","modified_gmt":"2017-02-02T13:32:34","slug":"real-estate-investing-in-2017","status":"publish","type":"post","link":"https:\/\/lpblog.leadpropeller.com\/?p=638","title":{"rendered":"Real Estate Investing in 2017"},"content":{"rendered":"

It\u2019s no surprise that the housing market is looking to change in the coming year. As basically everyone has stated, mortgages are likely to go up, inventory is going to be tighter, and the cost of building is going to be more expensive. But what does this mean as a real estate investor? After all, real estate investing in 2017\u00a0is going to be different than just being interested in the market.<\/p>\n

First things first, let\u2019s see what the actual projections are. Then we can see what that means for real estate investing in 2017.<\/span><\/p>\n

Rising Mortgage Rates in 2017<\/span><\/h2>\n

There are new mortgage programs that are going to be introduced to buyers. According to <\/span>The Washington Post<\/span><\/span><\/i><\/a><\/span>, these new plans will \u201ccall for a modest down payment and don\u2019t require the buyers to purchase an <\/span>FHA loan<\/span><\/a><\/span><\/span>.\u201d An FHA loan typically means lower down payments, lower closing costs, and easy credit qualification. <\/span>The Washington Post<\/span><\/i> goes on to say that normally \u201clenders require credit scores of at least 620, often 650, to qualify.\u201d<\/span><\/p>\n

Ok, so without needing to buy an FHA loan it looks like credit approval will be easier to come by. That\u2019s awesome! <\/span>Fortune.com<\/span><\/a><\/span><\/span> predicts that \u201cthough rates may rise, mortgage credit will likely be more widely available due to slightly looser lending standards\u201d like those mentioned by <\/span>The Washington Post<\/span><\/i>.<\/span><\/p>\n

But if housing loans are going to be easier to come by, why will rates rise? <\/span><\/p>\n

Well, trends show that this is a market reaction to the presidential election. In a case study on the subject, <\/span>Forbes<\/span><\/a><\/span><\/span> found that in November, right after the election results came in, the mortgage rates rose \u201cabove 4% for the first time in two years,\u201d going on to say that \u201cestimates out there range from between 3.75% and 4.6%.\u201d <\/span><\/p>\n

That\u2019s not so different from where it was only a few months ago at around 3%, but why exactly is making mortgage rates higher? Again, as a reaction to the election, the cost of building houses are going to go up.<\/span><\/p>\n

Building Costs Up & Sale Growth Down<\/span><\/h2>\n
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Image information from: Forbes Business<\/a><\/span><\/span><\/figcaption><\/figure>\n

Similarly to how house mortgage rates reacted to the recent election, building costs are estimated to go up because of increasing construction wages, and lack of cheaper immigrated labor. <\/span>
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That\u2019s…basically it. <\/span><\/p>\n

As a mix of the increased mortgage rates combine with the growing expense of building houses, it\u2019s estimated that there will be less buyers in the market. And as the \u201cif \/ than\u201d statement goes – <\/span>if<\/i><\/b> there are less buyers, <\/span>than<\/i><\/b> sales will go down – you would think that the outlook isn\u2019t so good for real estate investing in 2017.<\/span><\/p>\n

But, that\u2019s not true. <\/span><\/p>\n

While building costs and sales may look daunting always remember that, as a real estate investor, you\u2019re not focusing on new builds as much as someone just entering the housing market. <\/span><\/p>\n

You\u2019re not someone looking to be a homeowner, you\u2019re an investor. So the properties that you\u2019re looking at are ones that need help, need repair, and are definitely not brand spanking new houses.<\/span><\/p>\n

Even so, is the volatile housing market in 2017 enough to deter buyers from your inventory? That\u2019s sort of a loaded question.<\/span><\/p>\n

Inventory Might Be Tight for Real Estate Investing in 2017<\/span><\/h2>\n
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Image credit: Realtor.com<\/a><\/span><\/span>, numbers; GordCollins.com<\/a><\/span><\/span>, graph.<\/figcaption><\/figure>\n

But only for a little while.<\/span><\/p>\n

The sale of existing homes is dependant on cost, interest rates, and mortgage. According to NAR statistics from <\/span>Kiplinger<\/span><\/a><\/span><\/span>, \u201cthe decrease in contracts signed for purchase of existing homes reflects a rise in interest rates that began after the presidential election.\u201d<\/span><\/p>\n

Which, ok, makes sense. <\/span><\/p>\n

Rising mortgages and interest rates are something that potential homeowners aren\u2019t thrilled about. So, as far as the first quarter of 2017, you might have resistance in moving your inventory to home buyers looking to live there. But, that doesn\u2019t mean that real estate investing in 2017 will take a hit as a whole.<\/span><\/p>\n

After all, you aren\u2019t just selling to first-time home buyers, or potential homeowners. You\u2019re also selling to other investors, and people who want to be landlords. As long as someone is paying cash in full, you can still move your inventory – just not to people who want a house to live in. <\/span><\/p>\n

As far as strategy goes, you should focus on selling to other investors at the start of 2017, then move to selling to homeowners as the housing market settles down. Remember, people still need places to live. And, there\u2019s a whole lot of new first-time buyers heading this way.<\/span><\/p>\n

Say Hello to the Millennial Homeowner in 2017<\/span><\/h2>\n

\"millennial<\/a><\/p>\n

So, new builds will be more expensive, and your inventory might be tight for a bit, but that doesn\u2019t mean there still won\u2019t be homebuyers. <\/span><\/p>\n

Zillow\u2019s<\/span><\/a><\/span><\/span> statistics show that \u201cnearly half of all buyers were first-time buyers in 2016\u201d, and of those first-time buyers, \u201c61% were people under 35\u201d. NAR Chief Economist, <\/span>Lawrence Yun<\/span><\/a><\/span><\/span>, says that this is likely the result of millennials\u2019 \u201cturbulent beginning to their adult life and career following the Great Recession.\u201d <\/span><\/p>\n

After all, those millennials are finally old enough to buy houses. Remember what we talked about as far as housing loans being easier to come by? More and more young adults are getting approved and actually able to buy houses, and the majority of them aren\u2019t looking at new builds. They\u2019re looking for fixer-uppers.<\/span><\/p>\n

And who better to sell them a fixer-upper? Real estate investors. <\/span><\/p>\n

Whether you\u2019re wholesaling or flipping, the houses you\u2019re selling are the exact product that roughly half of new buyers are looking for. So while 2017 may look scary for builders and realtors, it seem to be shaping up to be a pretty good atmosphere for investors.<\/span><\/p>\n

So What Does Real Estate Investing in 2017 Really Look Like?<\/span><\/h2>\n
\"housing<\/a>
Image information from: Contactually.com<\/a><\/span><\/span><\/figcaption><\/figure>\n

As long as you play your cards right, this should still be a good year for your real estate investing business. <\/span><\/p>\n

Yes, there are things to look out for like an increase in building costs. If you\u2019re a flipper, or have been focusing on empty lots or new builds in the past, then a change in your strategy for 2017 would be a good idea. <\/span><\/p>\n

For flipping, you have to take into account the new rise in construction, renovation, and overall building cost. You\u2019ve probably already got a team of contractors that you trust, who rates are mostly fixed, and that\u2019s awesome! But, if you\u2019re new to flipping, you\u2019ll need to shop around and work on your negotiating to make sure that the cost of your flip doesn\u2019t outweigh what you\u2019re able to sell it for, or what you paid for it.<\/span><\/p>\n

Who should you focus on selling to? In the start of the year, wholesaling in general is the way to go. There won\u2019t be too many potential homeowners looking to buy because of the increase in mortgage rates. But if you\u2019ve found a cash buyer, then you\u2019re set! Remember, if they pay in cash, they don\u2019t need a home loan. <\/span><\/p>\n

You Should Grow Your Wholesale Buyers List<\/span><\/h2>\n

As we\u2019ve talked about in our other articles, <\/span>growing a buyers<\/span><\/a><\/span><\/span> list isn\u2019t a difficult thing to do, and is a great way to expand your business! Especially when real estate investing in 2017 looks like it\u2019s going to be friendly to wholesalers.<\/span><\/p>\n

There are tons of strategies, <\/span>like posting to Craigslist<\/span><\/a><\/span><\/span>, going to local Real Estate Investing Associations, and social media marketing. But the best by far is <\/span>having a website for your real estate investing business<\/span><\/a><\/span><\/span>.
\n<\/span><\/p>\n

\"build<\/a><\/p>\n

We won\u2019t talk about it too much, but think of it this way: you go online for basically everything. You search for recipes online, you look up movies – if you have a question about <\/span>anything<\/span><\/i> you Google it first. Motivated sellers, and other real estate investors, are no different. If you need someone to buy a property, wouldn\u2019t you go online to look first? About 50% of Americans already do.<\/span><\/p>\n

So then doesn\u2019t it just make sense to have a <\/span>website<\/span><\/a><\/span><\/span> for your business? Especially a website that\u2019s designed to convert leads into deals, and is super targeted to any market you want. If you don\u2019t have a website yet, check out LeadPropeller. You don\u2019t have to commit to anything, just <\/span>test drive a few of the templates<\/span><\/span><\/span><\/a> to get a feel for it \ud83d\ude42<\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s no surprise that the housing market is looking to change in the coming year. As basically everyone has stated, mortgages are likely to go up, inventory is going to be tighter, and the cost of building is going to be more expensive. But what does this mean as a real estate investor? After all, […]<\/p>\n","protected":false},"author":2,"featured_media":639,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[57],"tags":[59,60,58],"_links":{"self":[{"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/posts\/638"}],"collection":[{"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=638"}],"version-history":[{"count":14,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/posts\/638\/revisions"}],"predecessor-version":[{"id":665,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/posts\/638\/revisions\/665"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=\/wp\/v2\/media\/639"}],"wp:attachment":[{"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lpblog.leadpropeller.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}