The Connection Between Banking and Real Estate in 2023

Throughout the years that I have written this blog, I have regularly connected the activity of the financial market with the real estate market. In doing so, I often take for granted the connection between the two markets. Recent troubles in local banking, however, give me yet another occasion to highlight how the banking industry impacts the real estate market. It seems like every few years, I write an article like this, but I will do my best to highlight the contextual factors that make this year’s bank failures unique.

Real Estate Is Power

Lost in all the talk about real estate markets and real estate wealth generation is one key fact—real estate ownership is one of the surest ways to consolidate influence and power. If you don’t think this is true, simply look up the largest land owners in each major US city and follow the trail of their political contributions and donations. Large land owners can exert a tremendous amount of influence on neighborhoods and local laws. One very public example of this is Dan Gilbert, whose mortgage and real estate empire influences the entire Midwest, but also Detroit and Cleveland in particular. Even former president Trump, who has a less than stellar reputation in the New York real estate market, was able to parlay a real estate empire into a presidency.

Discipline and the Down Payment: Using Your Superpower To Get Paid!

Real estate is about asset and cashflow management. Put more simply, it’s about managing what you have. The right purchase exchanges your resources, in the form of cash, into a property, contract, tax lien, note or some other real estate asset. Once you have obtained a property, decisions have to be made regarding its repair, management and sale, if that is your plan. No matter where you are in the process—purchasing, managing, or selling, discipline is key.

One of the most controllable aspects of our lives is our behavior. How we act and respond to the world shapes our present and our future. Our ability to act in a way that brings about our desired outcomes is uniquely ours and belongs to no one else. In that way, discipline is our superpower. 

We’re Back Again

It’s a pleasure to once again write to on this blog. TRET’s contribution to 2023 is long overdue and I couldn’t let the year go by without a post. As some of you may have noticed. The TRET website was down for a few weeks, which had to do with some hosting issue that have been corrected and we are now happy to bring you new content.

Transform Your Garage Into a Home Office Area

Suzie Wilson

If you work remotely or run a business out of your home, you know how important it is to have the right work area. It’s almost impossible to set any kind of boundaries between work and life, without one. If you don’t have a room in your house that can be used as a home office space, there are other alternatives out there, including turning your garage into an office. Because the garage is set apart from the central living spaces in your house, it can work especially well for those who need a little more privacy or quiet for their work.

2021: What A Year

Ok, I’ll admit it…I wasn’t prepared for the impact that returning to work in person would have on my life and on TRET. Now, 2021 is coming to an end and I find myself yet again writing another end-of-the-year post in which I am apologizing for the recent inactivity on this awesome blog. This time, however, it’s a little different.

2021 marked 10 years since I published the first post on this blog. At the time I was real estate agent and teacher who was about to begin law school and was looking for ways to better understand real estate modeling and real estate finance. I hoped to create a community of like-minded people so that we could explore ways to better value real estate properties and mortgages and discuss the market. Ten years and many experiences later this blog has grown and transformed into a general forum on all things real estate and I am amazed at the direction it has taken. 2021 has been an amazing year for TRET, so let’s take a look at the year in review.

The End of Summer

Stephon Martin

August is coming to a close and although Summer isn’t officially over until September 23^rd, the end of August has an unofficial feel of transition. School will soon have begun for all children in the United States and the country will attempt to push forward out of the shadow of COVID-19. Some areas will forge ahead more successfully than others, but an attempt will be made by all. The beginning of September means that the holiday season is just around the corner. With the impending change of the season, how will the real estate market be affected?

Moving to a Bigger House to Start a Business: How to Do It

Suzie Wilson

Starting a business in a new community can be challenging. Preparing to move because current living arrangements do not allow you to run a business from your home can be difficult, but it's doable. House hunting, moving, and starting a venture all require detailed planning. However, the enthusiasm, economic growth, and products or services you bring to the new community will reward your efforts.

To succeed in finding the right home for your business and prepare for future expansion, The Real Estate Think Tank offers the following tips below.​

The Ultimate Guide to Picking a New Tenant Referencing Provider

Hello TRET Readers/Followers:

Want to know more about ways to check references for residential tenants? Please read the article below from Just Move In.

The Ultimate Guide to Picking a New Tenant Referencing Provider

Improvement Options You Should Consider to Increase the Value of Your Home

Please enjoy this article from guest author Suzie Wilson of Happierhome.net

Unless you plan to sell your house “as-is,” when you’re ready to list your home, you have a lot of work to do. While there are some benefits of keeping the original fixtures and features of a home, staying up to date with the latest home trends is crucial in selling as quickly as possible. The good news is you can get the job done with some simple upgrades. Below are a few that you need to consider.

Stick With Properties—For Now

Stephon Martin

It is an interesting time in real estate—we stand on the precipice of the ending of a national foreclosure moratorium, interest rates are extremely low, the housing market is red-hot, and the commercial market is still unpredictable. What should a real estate investor do now? While there are a number of options that can lead to success, there is one caution—stay away from whole loans.

Cautioning against whole loans almost goes against the very nature of this blog, which promotes all profitable methods of real estate investment. Whole loan trading and valuation is the very reason why I started this blog and whole loan investing can be a great way to find hidden value real estate. That said, the following are various reasons why whole loan investment is not the best strategy in the current market:

Press ‘Home’ — Selling Properties With Smart Tech

 

Please enjoy this article from guest author Suzie Wilson  of  Happierhome.net

There are many advantages to home automation: ease of use, better accessibility, and let’s face it — there’s something cool about a fireplace that starts up when you clap. What you may not have foreseen, however, are the benefits that technology provides when selling a property.

The Role of Tech

 In almost all areas of life, it’s clear that the pandemic has increased our reliance on tech. This is no less true in the housing market, where the need to actually step inside a property has been somewhat reduced by the use of 3D walkthroughs, video-chat tours, virtual open houses, and Zoom realtor consultations. This is good news for prospective sellers as, in the wake of COVID, housing sales have bounced back to levels unseen since pre-2008. If you are looking to sell your property, physical limitations need not slow you down.

12 Baffling Mortgage Acronyms Explained (UK)

Hello TRET Readers/Followers:

Please check out the Tembo article below regarding mortgage acronyms in the UK:

12 Baffling Mortgage Acronyms Explained

Foreclosures and the Moratorium

Stephon Martin

The Biden administration has extended the COVID-19 moratorium on foreclosures to July 31, 2021. Totally avoiding the policy and ideological discussions that could be had about such a decision, one thing is apparent—the additional month extension will increase the backlog of foreclosure and eviction cases that courts around the country will face once this moratorium has ended. Absent any legislative changes, the implementation of creative government programs mitigating distressed loans or both, foreclosure filings, executed foreclosure judgments and foreclosure-related evictions are all set to see an uptick over the next year.

An increase in residential foreclosures and evictions is certainly bad news for affected homeowners and tenants, who will have to find new living arrangements, undergo costly moves in short timeframes, uproot their lifestyles and, in some instances, face long term financial effects. Increasing foreclosures will also serve as a market correction in the real estate market, which is currently driven by inventory scarcity. Amidst the market change and its social implications, many real estate investors can be left wondering which strategy to employ. The answer is simple—any or all of them.

Calculating the Cost of Delay

Stephon Martin

Happy Memorial Day to all and a heartfelt thank you to all those who serve and have served our country. Your sacrifices are truly appreciated by TRET.

Let us quickly discuss, on this last day of May, the value of Delay. Late payments, be they intentional or not, are costly, no matter how late they are. Time has a calculable value and delayed payments provide a monetary benefit to the payee and punish the lender or vendor. This value is easily observed in the world of retail, where giants like Wal-Mart, not only connect the speed with which they pay their vendors to the success of the products in their stores, but also fine retailers for late shipments. In retail, late shipments equate to lost sales. In real estate, late payments lead to increased opportunity costs and decreased value of money.

ARMs: A Quick Look

Stephon Martin

Adjustable-Rate Mortgages (ARMs) are a viable financing option for both single, multifamily and owner-occupied commercial property owners. Ever since their formal establishment by Title VII of the Garn–St Germain Depository Institutions Act of 1982, ARMs have offered the opportunity to link mortgage payments to marketplace activity. Coupled with the rate collars, ceilings and floors, these financial instruments have the potential to lock in the conditions of a favorable interest rate market, at interest rates that are typically lower than a fixed-rate mortgage. In the world of retail real estate, lower rates can translate into increased purchasing power. For the real estate investor, however, rate fluctuations and potential for sustained above market-rates usually tends to also lead to an early refinance. With the January 3, 2022 deadline for ARMs to decouple from the LIBOR index imposed by Fannie and Freddie, now is an opportune time to take a look at ARMs and their role in the mortgage market.

How to Navigate Legal Structures in Real Estate

Stephon Martin

As the real estate market attempts to move past the COVID-19 pandemic and progress toward a “New Normal,” federal moratoriums have become a way of life in real estate. Navigating the legal landscape of a local market has always been part of creating wealth in real estate. Every real estate marketplace is subject to its own local laws, as well as its state law and federal law. At the highest level, real estate investment and development is a game of understanding the rules—the applicable laws, ordinances, building codes, etc., and knowing when you can bend them in your favor through variances, court cases and lobbying. Although much of this may seem a little nefarious, it need not be, as our legal system was designed to establish a certain set of default rules for real estate, with a mechanism to allow for change in the event that either some rules are inapplicable generally or inadequate for a given situation. That stated, below are some ways to capitalize, navigate or at least survive the laws of any real estate market:

Why Most People Don't Get Rich In Real Estate

Stephon Martin

Initially, I intended this post to be a continuation of my prior post on how to get rich in real estate. I was going to address the barriers to entry that most people confront when attempting to begin a career in real estate and offer some suggestions on how to get around them. I am still going to address some of those barriers, but upon further reflection, I think that there is a common theme amongst most of the reasons why most people do not succeed in real estate when they wish to do so—motivation.

This may seem harsh, but please let me qualify my statement by saying that it is not easy to maintain consistent motivation. Having sufficient motivation to push through real estate losses, market downturns, bankruptcies or even years of unfruitful prospecting takes inner strength. During down times and after particularly difficult lessons in real estate, it can often feel like the experience was a sign to quit or move in a different direction. It takes true motivation, self-confidence and some self-delusion to look at a negative real estate experience, learn from the experience and continue on. This motivation is intrinsic and it only comes from a goal-driven approach to make it in a real estate. Quitting can never be an option. To that end, I want to share the following link to “The Strangest Secret” by Earl Nightingale, in the hopes that it is helpful to someone.

The Strangest Secret: Earl Nightingale

How To Get Rich In Real Estate: The Proven Method

Stephon Martin

Welcome the first post of the New Year! A number of years ago I wanted to start a business purchasing residential mortgages in the secondary market. This was a significant time after the Great Recession of 2009 and although the smoked had cleared from that downturn, enthusiasm in the mortgage secondary market had not yet fully recovered. I knew that if I were to market my business idea, which I was positive was sound, I would have to not only formally document it in a presentation and a business plan, but would also have to show actual positive implementation results. I realized that I would have to raise a small amount of capital to implement this strategy on a small scale, so that I could present it to larger investors upon its successful completion.

The End of 2020: Now What?

2020 has been a life-changing year for everyone, literally everyone. From the global pandemic, to the fluctuating economy, not to mention the seismic shift in the perception of "going to work," it is safe to say that the world is different place than it was 12 months ago. Now what?

Every year Bloomberg Business Week puts out its "Bloomberg 50"--a list of 50 individuals that have made their mark during the prior year. Although this year's list contains a number of impressive men and women who were able to quickly mobilize and make moving, positive contributions during this tumultuous year, it is notable that not one member of this list was mentioned for contributions to the real estate market. In fact, there are many executives on the list that are touted for reducing the size and/or the footprint of their companies, which in many instances includes real estate divestment. Furthermore, Blackrock, a private equity that is well know for its real estate investments, has made the list, not for real estate, but for its renegotiation of national debts in South America.