Don’t Self-Sabotage as a Real Estate Investor, Rates are RISING!

Rates are heading up rapidly! Since 9/1/2021 when the best 30yr fully amortized loan interest rate was 3.625%, there has been a steady increase.  Within the past 7 days, the same institutional lender has increased its rates to 5.750%, the lowest possible rate available.  This is a 2.125% increase in approximately 6 months.  Interest rates will remain volatile during this period of inflation.  As the Fed works to rein in inflation by adjusting the rate upward, we will continue to see these increases.

What can be done to mitigate these increases?

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When your Loan Officer requests Documents please be expeditious in sending them.  We are seeing investors delay signatures, sending documents, and poor response times which have led to as much as a 1.00% to 1.25% increase in the interest rates.  Investors want to see the mailbox money flow in with a minimum of effort, that is understandable.  But when it comes time to purchase or refinance a property, please make sure that your entity documents are in order.  This means signatures are where they should be (the biggest issue we see today), That a clear chain of ownership of the entity is evident.  Lawyers like to hide the ownership trail to minimize exposure to risks.  Lending institutions want to know exactly who they are lending to, minimal smoke and mirrors make the organizations with the money happy.

Some lenders offer a rate buy-down.  The basic way this works is that by paying an increase in the origination points to the lender the interest rate can be lowered.  Generally, this is a ratio of points to interest buy-down.  An example could be:

The ratio is 0.333% per Point.  The maximum buydown is 2 points or 2 times the buy-down points offered.

Interest7.00%7.00%7.00%
Origination Pts0%1%2%
Buy Down0.000%0.333%0.667%
New Interest Rate7.000%6.667%6.334%

There are other lenders that offer a similar buy down at a rate of 0.5% maximum for an increase in the lender’s origination points of 1.5%.  This buy down can be bought in 0.125% increments if that works for your program.

BUT WAIT THERE IS MORE!

We do have better news if you are doing a BRR strategy and not just a regular refinance and are open to a 5 or 7 year ARM. Call us today to find out more about all our options.

If you need funding, apply now.   

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http://www.reicapital.cash/

Patrick St. Cin

W – 512-213-2271

Updates to our Loan Offerings – More for you as a Real Estate Investor

We are a direct lender and financial intermediary, which gives us the opportunity to place the most competitive financing options in the market.  Below is what we specialize in.  We look forward to winning your business and creating a long-term relationship: Ground-Up New Construction ($200K to $45M – Loan Amount), Fix/Flip Projects, Long-term Rental Property Acquisitions and Refinances, Airbnb or vacation rental acquisition and refinancing, and Commercial Property Lending including Apartments. Here are more details of our core lending products.

1. Fix and Flip Loans – up to 90% Of Purchase with 100% of Rehab, experienced, or first-timer investors

2. BRRRR – Buy, Rehab, Rent, Refinance and Repeat loans are available.  Loan programs include 5/1 ARM, 7/1 ARM, 30 Year Fixed Rates.

3. Rental Property Loans – Purchase – Refi – Cash Out.  SFR 1-4 units and AirBnB properties.  Loan programs include 5/1 ARM, 7/1 ARM, 30 Year Fixed Rates.

4. Ground Up Construction Loans

5. Portfolio Loans for SFR – 2-4 units and Multi-Family

6. Bridge Loans – Loans to Pay off current Lender – 1-2 Year Loans.

7. Multi-Family Loans from 5 doors to 300+ doors.  Value-Add Purchase, Turn-Key Purchase, Bridge, New Construction, Agency and non-Agency loans

8. Commercial and Mixed-Use Properties

9. Haz. Ins. Co you can use. https://affiliate.nreig.com/RichardTurner­

We are also very excited to be working with a new lender that will provide funding for the BRRRR investment concept.  Basically, the loans look like this:

  • LTV – up to 88% of Cost / 68% LT Market Value
  • DSCR – 1.20 based on Market Rents (1.30 if less than 3yrs rental experience)
  • Experience – Min 5 flips or rental / 5yr look back
  • Loan Terms  – 7 yr  (5yr Fixed+2yr Floating)
  • Interest – Intro Rate 4.9% (increases with credit below 740, max 5.8%), First-year – no interest payments (rolled into loan principal)
  • Loan Terms – 12yr (10yr Fixed + 2 yr Floating)
  • Interest- Intro Rate 5.2% (increases with credit below 740, max 6.1%), First-year – no interest payments (rolled into loan principal)
  • Origination Points – 3% (2 to lender + 1 to us)  need to get a Broker/Client Agreement at 1%
  • Prepayment – Step Down 3-2-1  (No PPP if Origination Points Increased by 1%)

The lender will work with the following background issues:

  • Litigation with another Lender
  • Bankruptcy (10yr lookback)
  • Foreclosures (since 2012)
  • Delinquency with suppliers
  • Outstanding RE Liens
  • RE Loan Delinquency

This lender is geared up to work with contractors and investors.  They understand the issues they come into and have a system that helps to prevent further erosion of the borrower’s track record or credit.

One of their claims is that 95% of applications pass thru the system to get a loan.

If you’re planning to buy a distressed property, now may be a good time to buy. Just make sure you’re aware of the risks and understand what you’re getting into.  Distressed homes offer a unique buying opportunity for real investors, but the average home buyer should probably look elsewhere. 

If you need funding, apply now. I am working online with the rest of you.  

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http://www.reicapital.cash/

Patrick St. Cin

W – 512-213-2271

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Need Rental Acquisition Funds? How to get INSTITUTIONAL FINANCING!

This sounds rather ominous – INSTITUTIONAL FUNDING OF A RENTAL PURCHASE.  There is no creativity in this type of transaction.  It is a clean method of purchasing a property without the worry of what the underlying bank may do if the truth gets out. This post will cover:

  • So how do you get one of these loans?
  • How much money is needed?
  • Does my credit need to be pulled?
  • Does it have to be in an entity?
  • Do I have to put my first-born child up as collateral?

Get Your Affairs in Order

Having your documents ready to go at a day or two notice should be paramount to running a good solid business.  Knowing what the business is, how it was formed, documents are signed, financials are essential! 

Entity

  • First of all – if there is a signature line in your entity formation documents, make sure all principals have signed the document.  About 60%-80% of entity documents are left unsigned.
  • Secondly, the entity must be filed with the Secretary of State, in the State of Organization.  If the entity is working in another State then a DBA should be filed with the appropriate State.
  • Operating Agreement (OA)
  • Articles of Organization or Incorporation (Articles)
  • Resolution – A resolution that emphatically states who has the authority to sign financial documents is a must.  If this activity is either not in the OA or is poorly worded, then a separate resolution should be written, signed and filed with the appropriate Secretary of State’s office.

Assets

  • Financial Institution’s statements.  These are basically the bank statement for the entity, banks statements, investment account statement, retirement account statements of each principal.  Yes, the funding institution wants to know there are funds available to continually make payments especially when the property is vacant or has been damaged and in being repaired.
  • The cash value of a whole life or universal live insurance policy is also considered an asset.  Please remember that the face value of the $1.0M policy means nothing to the underwriter, only the amount of cash that the insurance company states is available to be surrendered, if and when requested.

Experience

  • Starting out is understood in the lending business.  Regardless of this being the first property or the 100th property the lender needs to know your level of experience.
  • Assuming the only property type you have investing in is rentals then your rent rolls, the last 12 months of rents, a balance sheet and a P&L statement should be close by.
  • Management experience is also key.  Regardless of the properties being managed by a 3rd party or yourself, this is something the lender needs to understand.
  • If the previous investments were fix and flips, then please provide a list of those properties, with the purchase cost, rehab costs, selling price and gross profit.
  • If you have partnered with other investors via an entity then these count towards experience.
    • To be considered as experience, the principal in question must have had significant ownership of the previous /partnered entity, approximately 25% or more.
    • JV partners are discounted but can be provided to show similar activity.
  • As a general rule the more rental experience the higher the Loan to Value of the loan.

Principals

  • Copy of your Drivers License or other government picture ID.
  • Either an application or a Personal Financial Statement are required
  • Authorization to pull your credit.
    • Credit drives the interest rate.
    • The higher the score the lower the rate.
    • Min Score is 660 for most lenders.
    • Some will go much lower to 500 but a higher interest rate will reflect this score.
  • The institutions are truly not interested in using your first born as collateral!

Property

  • Will need an appraisal
  • Depending on the experience of the principals the maximum LTV could be as high as 80%
  • The purchase contract is required
    • Any Amendments, Addendums or Assignments will be required
  • Lease documents
    • If there is a lease in place that will be sufficient
    • If a new lease has been signed then make sure that all attachments, Lead Based Paint forms, and As Is Condition forms are included.
  • All pages of the lease need to be sent in.
  • What is the target closing date?

Title Company

  • What is the name of the title company?
  • Who is the person(s) in this office that will handle the closing?
  • What is their Address?
  • What is their phone number?
  • What is their email?

Insurance Agency

  • Who is the insurance agent?
  • What is their Address?
  • What is their phone number?
  • What is their email?
  • Minimum Coverages (as of January 2022)
    • Greater of Building Replacement Costs or the Value of the Loan
    • Min Liability is $500,000
    • Fire and Hazard Coverage
    • Min 6 months Rental Loss Coverage

So, what does this same purchase look like in an institutional loan?

“Subject To”Institutional
ARV$200,000$200,000
Purchase Price$25,000$175,000
Credit Score740
LTV80%
Down Payment$35,000
Loan$165,000$140,000
Interest Rate4.00%4.25%
Term30 years with only 25 yrs remaining30 years
Payment$788.00$689.00

The upsides to this transaction are many:

  • Arears are covered making this a clean deal, cleared off the books of the previous bank
  • Lower monthly payments
  • Possible immediate tenant
  • Lender has no reason to call the loan
  • Refinancing to pull equity at your desired timing not an underlying bank

The downsides, to name a few, are:

  • $10,000 more in down payment
  • May take more time to close

If you’re planning to buy a distressed property, now may be a good time to buy. Just make sure you’re aware of the risks and understand what you’re getting into.  Distressed homes offer a unique buying opportunity for real investors, but the average home buyer should probably look elsewhere. 

If you need funding, apply now. I am working online with the rest of you.  

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http://www.reicapital.cash/

Patrick St. Cin

W – 512-213-2271

Photo by Kindel Media on Pexels.com

Texas’ hot housing market might be cooling down … or not?

As providing funding for real estate projects which include new construction as well as fix-n-flip loans and long-term rental loans, we keep our eyes on the market economics that might impact our clients.

The pandemic price run-up for homes has been helpful for some of our investors especially to mitigate the rising cost of lumber and other materials. In major Texas cities from the end of 2020 through much of 2021, the median house price soared!!! Here’s the difference in cost between September 2021 and September 2022:

  • D-FW: $298,884 (Sept. ’20) to $350,000 (Sept. ’21). Change: + $51,116 
  • Houston: $261,000 (Sept. ’20) to $300,000 (Sept. ’21). Change: + $39,000 
  • San Antonio: $255,000 (Sept. ’20) to 294,950 (Sept. ’21). Change: + $39,950 
  • Austin: $350,318 (Sept. ’20) to $448,00 (Sept. ’21). Change: + $97,682 

The A&M researchers expect the price per square foot to keep going up in the next several years, but not anything like what we have just seen. Home prices have risen and so have property taxes. Landlords want to pass costs to renters and renters are not immune.

New research from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) found that renters were about 3X more likely than homeowners to miss payments this year.  Renters may be vulnerable to the expiration of expanded pandemic unemployment benefits.  Therefore, we recommend our long-term buy-and-hold investors be sure to run background checks on potential renters.

From Texas Real Estate Research Center at Texas A&M University: “With lumber prices falling, total Texas housing starts increased for the second consecutive quarter. Zonda data revealed roughly 38,000 homes broke ground in the Texas Triangle in 3Q2021, pushing single-family housing starts up 3.9 percent on a quarterly basis amid strengthening economic conditions and robust housing demand. Housing starts in North Texas and Austin reached an all-time high, increasing 8 and 13.8 percent, respectively, from last quarter. “

Read more stats here:  https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

Lastly, the average rate on 30-year fixed-rate mortgages in Freddie Mac’s survey was 3.11% during the week ending December 2, up one basis point from the previous week. The rate averaged 3.07% in both October and November. All rates quoted have fees and points averaging 0.6% to 0.7% of the loan amount.   

If you’re planning to buy a distressed property, now may be a good time to buy. Just make sure you’re aware of the risks and understand what you’re getting into.  Distressed homes offer a unique buying opportunity for real investors, but the average home buyer should probably look elsewhere. 

If you need funding, apply now. I am working online with the rest of you.  

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http://www.reicapital.cash/

Patrick St. Cin

W – 512-213-2271

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Rent Payments 😶

The National Multifamily Housing Council’s rent payment tracker found that 92.1 percent of apartment households made a full or partial rent payment by August 27. The survey included 11.4 million units of professionally managed apartments across the country.

This is 210,458 households down from last August and compares to 93.3 percent of households paying last month (July 27, 2020).

When the economy collapsed because of coronavirus shutdowns, the federal government helped with additional unemployment benefits, stimulus checks, and a moratorium on evictions and foreclosures. Those who did not lose their jobs cut back on costs, paid off debts, and made home improvements 🔨🔧(WSJ.com). Those who did lose their jobs made it through the crisis but, according to Ben Eisen’s WSJ article, now are not sure they can pay their next month’s rent (WSJ.com).  

People are uncertain about the economy. Gasparro & Kang report in their WSJ article that one indicator of this anxiety is that spending on groceries 🍗🍺🧀🍦dropped sharply in mid-August particularly in states with high unemployment.  

The federal government’s $600 per week additional unemployment benefits ended July 31. People who got those benefits and the $1200 economic stimulus payment from the federal government spent that money. Another round of stimulus has been discussed in Congress, but no agreement has been reached so far.

Doug Bibby, the President of the National Multifamily Housing Council (NMHC) (nmhc.org), said “Lawmakers in Congress and the Administration need to come back to the table and work together on comprehensive legislation that protects and supports tens of millions of American renters by extending unemployment benefits and providing desperately needed rental assistance.”

Photo by Kelly Lacy on Pexels.com

“The [multifamily housing] industry remains encouraged by the degree residents have prioritized their housing obligations 🔑🏡so far, but each passing day means more distress for individuals and families, and greater risk for the nations housing sector. If policymakers want to prevent a health and economic crisis from quickly evolving into a house crisis, they should act quickly to extend financial assistance to renters.”

REI Capital Resources is a funding source for SFR Fix-n-Flip, Fix-to-Rent, and refinance projects as well as larger commercial projects such as office buildings, 5-40 door multi-family buildings, and many others.  These programs vary wide and far throughout the gamut of lending. Call or e-mail for more information.

Give me a call or send an e-mail.

Patrick StCin, 512-213-2271,

e-mail: patrick@REICapital.cash

References

https://www.nmhc.org/research-insight/nmhc-rent-payment-tracker/

Ben Eisen, “How’s the Coronavirus Economy? Great or Awful, Depending on Whom You Ask.” WSJ.com. September 2, 2020. Available at https://www.wsj.com/articles/hows-the-coronavirus-economy-great-or-awful-depending-on-whom-you-ask-11599039003?mod=hp_lista_pos4

Annie Gasparro and Jaewon Kang, With Second Stimulus Checks on Hold, Americans Spend Less at the Grocery Store.” WSJ.com August 27, 2020. Available online at https://www.wsj.com/articles/with-stimulus-checks-on-hold-americans-are-spending-less-at-the-grocery-store-11598526249

Rental Concessions

Landlords should not bear all the risk of another government shutdown, but tenants are being more aggressive about demanding pandemic language in new leases, this according to reporter Esther Fung’s article, Retail Landlords Offer Pandemic Clauses in New Leases, August 25, 2020 in WSJ.com.

Covid-19 is persisting in many parts of the country and it is hard to tell what will happen now that schools begin to open and fall and winter approach. When the government ordered nonessential businesses to shut down due to the Covid-19 pandemic, many households lost their income and businesses lost their sales. Rents became hard to pay whether you were paying rent for your home or paying rent for your retail shop or office.

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Previous force majeure language in lease contracts did not specifically mention “government mandated shutdowns in response to a global pandemic” under what was categorized as an “Act of God.”  Force majeure language in lease paperwork allows tenants to terminate leases or reduce rent in extraordinary circumstances.  However, the WSJ article cited above by Fung points out that “force majeure language in a lease hurts owners’ ability to get financing for the property.”

Landlords of both multifamily units and retail units have had to offer concessions to retain tenants and attract new ones. Philippe Lanier a principal for a property developer managing retail properties in Washington DC told Fung, that as a landlord, “You have to provide the tenant an easy decision. If you make it complicated, you’re not going to get this done.” Philippe Lanier, EastBanc

Percentage Concessions and Shorter Leases

What is a simple concession in a lease agreement? Lanier offered to cut the base rent by 50% if retail stores are forbidden to operate their businesses and this same concession could apply to an apartment tenant loses their job in a mandatory shut down. In Lanier’s agreement, the difference would be repaid in 6 equal installments that begin on the first day a business can reopen, or a tenant returns to work.

In Detroit, Bedrock, offered to waive base rents in return for 7% of gross sales for eligible tenants, which include restaurants and retailers. (WSJ.com) This company was also allowing the use of security deposits for other purposes.

Some investors are signing leases with shorter terms and that are more revocable by either party.

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With rents taking a hit in large cities across the country it is hard to tell how long it will take an investor to make a profit on a rental property. Location still seems to matter, but the location may be in smaller towns and the suburbs near large cities rather than in the large metropolitan areas themselves.

Clear, simple language in a lease is best but the concessions themselves can be as creative as you are.

If you need funding, apply now. I am working online with the rest of you.

Patrick St. Cin

W – 512-213-2271

M – 505-239-3026

Patrick@REICapital.cash

http://www.reicapital.cash/

Multi-Family 2020

Investing in, constructing, renting, and remodeling healthy multi-family living environments is still important and even more important now that the coronavirus has rubbed our faces in the dangers of living and working close to other people. Since more land has not materialized in most cities to give us more room to live on and in, builders and investors need to be creative about how to design or redesign compressed housing that will prevent and control the spread of an infection that is viable in air and on surfaces. People are and will be looking for homes that keep them safe from infection.

The Problem of Close Quarters

The necessity of elevators and lobbies, as well as the cost of swimming pools and on-site gyms they pay for but cannot use are scaring renters away from large apartment complexes. These are the places where dwellers must maneuver around each other in tight spaces, share air for minutes at a time, and touch buttons and handles others touched just moments ago.

Photo by San Fermin Pamplona on Pexels.com

Consider in Your Budget Some New Things

To update your multi-family housing project in this time of coronavirus spread, include in your remodeling budget something new, such as, touchless and voice technologies that can improve the safety of getting into or out of a home without touching contaminated surfaces, new air handling technologies that vent air to the outside and clean air within an elevator or other room after each use.

If your project has many units on multiple stories, you may need to consider some robotic or AI technology that will keep the number of occupants in an elevator down to one at a time. Perhaps the elevator itself could be modified into a capsule that only holds one person at a time, a capsule that could be disinfected and dried automatically between uses. Ah that will be expensive. Some complexes would require numerous elevator capsules.

Photo by Miguel u00c1. Padriu00f1u00e1n on Pexels.com

It looks like fighting the virus will not be energy efficient. Supplying cleaner air includes containing contaminated air or exhausting it to the outdoors, diluting the virus in the air by injecting clean and filtered outdoor air, and cleaning the air within a room. Any of exchange of air with the outside will make temperature control more difficult and less energy efficient. Thus, to make your multi-family housing as safe as possible, you will likely need to install larger electrical capacity.

Smaller Price Tag for Separate Entrances

If a large complex seems to come with a price tag that is too high, there are smaller multi-family investment projects that have designs that handle the problem of indoor common areas by doing away with them. Small apartment buildings, duplexes, and joined houses work well as rental investments. They include individual entryways and even small yards or gardens.

Small units of 2 to 5 homes can easily be designed with individual outdoor entries that meet social distancing requirements. In one design I recently studied online at http://www.houseplans.com, the complex included 5 units. Each house was three stories, but the overall complex was only one housing unit tall. All homes included a ground-floor separate entrance. Those that had garages had two entrances counting the front door and an entrance from the garage.

Although this design might not be great for seniors because of the stairways, I found it a manageable complex size that allowed each home to be independent. Each unit in this design is roughly 1170 sq. feet with 2 beds, 2 baths, 3 floors, 1 garage, 3 levels, and separate outdoor entries. The garage and second bedroom or home office were on lower level. The living room, dining room, and kitchen with washer and dryer and utility room were on the second floor. The master bedroom, bath, walk-in closet and roof-top deck were on the third story. Five printed sets of plans cost $950.00.

If you need funding for your project, apply now. I am working online with the rest of you.

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Patrick St. Cin

W – 512-213-2271

Patrick@REICapital.cash

http://www.reicapital.cash/

References

https://www.houseplans.com/plan/5850-square-feet-2-bedrooms-2-bathroom-luxury-home-plans-1-garage-33631

Migration Boom

People are moving. Single-family houses in the suburbs are opportunities real estate investors should consider.

According to an article in Mansion Global, apartment living in densely populated urban areas is already losing its appeal to Americans as they process their experiences during the coronavirus pandemic. Many people are eyeing options for relocating to the suburbs and a single-family home after facing the challenges of coming into contact with infected individuals in apartment building common areas and restrictions on their use of outdoor spaces like pools and game rooms.

Buyers crave —ROOM— living space, outdoor space, privacy, flexibility, and safety.

When you are researching a purchase of a rental property, evaluate:

  1. Is there room for an office in the house?
  2. Does the house have a good-sized yard?
  3. Is there a pool in the backyard?
  4. Is there a deck or porch that offers a sheltered option to living indoors?
  5. Is the neighborhood safe to walk around in at night?
  6. Is there a neighborhood association and is it restrictive?
  7. Did local authorities try to restrict people’s use of their yard during the pandemic?
  8. Consider taxes. People are richer in states where taxes are lower.
  9. Big or tiny, single family homes in suburbs near major cities offer good opportunities for people to escape living in densely populated apartment buildings where entrances and recreation space is shared and access is restricted. If you need funding, apply now. I am working online with the rest of you.

Patrick St.Cin

W – 512-213-2271

M – 505-239-3026

Patrick@REICapital.cash

http://www.reicapital.cash/

graphic:tsca / CC BY-SA (http://creativecommons.org/licenses/by-sa/3.0/)

Partners in Private Funding

I know a banker and his partner who recently purchased and remodeled a building that was once a doctor’s office. They turned the space into 7 small suites, a conference room and a kitchenette. They advertised for occupants with an ad looking for entrepreneurs with ideas for a business who needed some space in which to grow and offered seed loans for the startups.  His motive is multifaceted, to rebuild the downtown business section of the town he lives in and to put some of his money to work for his community. He also wants his hometown to be vibrant and is offended when someone says, there is nothing going on in that downtown. Like all good investors, the partners are also interested in putting their money to work to make more money in the form of income.

These partners specialize in fix-n-rent business investments. Most recently the duo closed on a property that they will remodel from a Victorian house on the corner of a small downtown into a used bookstore, bar, and coffee shop with an outdoor patio area. The purchaser? A publisher who still loves physical books more than online articles.

What else has these small town fix-n-flip investors been up to? They remodeled a ballet studio into a financial investment office with a family psychologist renting a back office with a separate entrance, turned an insurance office into a yoga studio, turned a paint store into a gift and DIY furniture rehab shop, and helped a daughter purchase her mother’s restaurant business lock, stock, and liquor license.

If you are interested in putting your money to good work in your community, become a private lender and work with me. I am focused on funding success, both yours, and the buyers.

Competition for good rental properties is stiff, and in order to buy a property in a climate of competition a buyer need funds fast. As a broker, I help people find funds for their fix-n-flip and fix-n-rent project. Be a private lender with me and put your money to work for you.

Call me and let’s set up a meeting.

Patrick StCin, 512-213-2271

e-mail: patrick@REICapital.cash

55+

Renting and “aging in place,” but not alone, is a growing preference for aging baby boomers and seniors and offers a unique opportunity for investors who want to invest in and operate multifamily units.

Baby boomers are defined as those born between 1946 and 1964 while seniors are defined as those born before 1946.

According to research done by ARBOR, an increasing number of senior renters now live with unrelated adults across all multifamily property types. Small apartment buildings (5-49 units) have slightly higher shares of senior renters with roommates compared to large multifamily properties (50+ units). However, the co-living senior renter segment is growing the fastest in large-asset multifamily.

Co-living among seniors is highest in the single-family rental (6.1%), then the duplex/quadruplex (5%), next small-asset multifamily rentals (4.6%), and last, large-asset multifamily rentals (3.2%). To put this in perspective, among Millennial renters, the share of renters living with a roommate in a small-asset multifamily situation is 14.4%.

Sharing is motivated primarily as much by social connection as by income needs. According to Psychology Today, “20% of people over 60 frequently feel intensely lonely.” Loneliness can be a risk for heart disease, Type 2 diabetes, arthritis, and Alzheimer’s disease. Because of health risks associated with loneliness, seniors that share a home are actually dealing with their current and potential future loneliness.

In addition to social connection and apartment affordability, sharing is also motivated by personal security, and sharing of daily chores. The need to “age in place” is driving the increase in co-sharing seniors in the large asset multifamily rental because these buildings tend to be located near urban services and health care centers, have elevators and wheelchair lifts, and have higher levels of amenities.

Amenities Promoted in 55+ Adult Living

When looking over senior housing options available in Houston, I found most of the advertising in the higher end communities mentioned affordability, distinction, style, lifestyle, freedom from chores, and choice. Specific advantages and amenities listed by the higher end properties in the facility advertising included:

  • Independence
  • Affordability
  • Beautifully landscaped grounds
  • Luxurious and spacious interiors
  • Locations close to dining, entertainment, parks
  • Locations close to and medical centers
  • Diverse and colorful neighborhood
  • “Dynamic alternative to the ordinary”
  • “Live your lifestyle with passion”
  • Luxury
  • Style
  • Home
  • Distinctive living experience
  • Restaurant-style dining
  • Resort amenities
  • Complete freedom
  • Infinity pool
  • Court yards
  • Dog park
  • Wine tasting lounge
  • Media room
  • Chef quality demonstration living
  • It’s a lifestyle
  • Boutique, resort style

Amenities Advertised at Less Expensive 55+ Community Options

Retirement and 55+ community combinations in a lower price category advertised:

  • Activities and programs
  • Privacy
  • Aging in place
  • Gym
  • Garage
  • Outdoor grills
  • Designer living
  • “Trade your to do list for a bucket list”
  • Pet-friendliness
  • Outdoor pool
  • Yoga and art classes
  • Access to meals
  • Choices
  • Community
  • People of similar life stages
  • Leave home maintenance and yard work behind
  • Water gardens
  • Swimming pool
  • Computer room

The youngest of the baby boomers are approaching 55, and the huge number of 55+ adults who are still active but looking for reduced housing maintenance responsibilities and costs as they age and live within a fixed income makes this group a dynamic market for senior living situations. Not all are turning to apartment renting, but this tend is worth watching.

Competition for good rental properties is stiff, and in order to buy a property in a climate of competition you may need funds fast. As a broker and a direct lender, it is my job to help you get a hard money loan easily and quickly. Private Lenders, not banks, are willing to help you fund your project based on the value of the property and its after renovation value. We have money to lend. A perfect fit is out there.

Give me a call or send an e-mail. I am focused on funding your success.

Patrick StCin, 512-213-2271,

e-mail: patrick@REICapital.cash