Letter To Investors 2016January 2, 2016 by Christian Chase
My goal is to keep our real estate investors informed regarding emerging markets for opportunity and tracking/trending current conditions. There are a number of new developments in our market and I felt that it best be shared in an email update. In 2015 we hit the $100,000,000 mark in closed transactions. We are very pleased with our investors performance. A majority of our investors purchased an average of 11 homes in the past year. I am grateful for the confidence you have in our firm and the opportunity to be part of your success. Our projection for the next year is positive due to the volume of foreclosed properties that will be coming to market in the Chicagoland area. There are a few key takeaways that investors need to be aware of moving forward. As the market changes we as investors must change with it
Here are a few takeaway points:
- 55+ communities are booming and there are always quite a few foreclosures available in these areas. Condition of these units are usually fairly good and require low dollar remodeling.
- Town home style units are in extreme demand. Many investors have gravitated towards single family in the past – this is a market change and I encourage you to adapt to this shift. Millennial buyers like the predictable payment of principle, interest, taxes and yes – the HOA payment. Town homes cover a majority of the large dollar expenses and buyers are not left with a large bill to replace roof, siding, etc.. and fixed monthly maintenance costs such as grass, snow, and rubbish services.
- Outlying suburbs are in high demand again. When the market collapsed in 2007, these areas were hard hit as buyers had an opportunity to move closer to the city for a lower price – as the market improves buyer demand has increased substantially in these outer areas.
- Financing options for investors have increased allowing for the purchase of rental real estate with a cash-out option. I had a bearish outlook on rentals over the past 8 years. As we begin to see price appreciation I encourage investors to slowly add these to their portfolio. Rent prices are steadily rising and I anticipate this to continue into the foreseeable future.
- Post-rehab home inspections are highly encouraged. Investors who follow our system and utilize this part of the process sell faster and reduce deal loss. This should be implemented on all transactions.
As our contact base with REO companies expands deal flow will be strong throughout 2016.