Turnkey Real Estate Investments

Single family Home and Multifamily Turnkey Real Estate Investments Opportunity
Everyone wants more passive income, and turnkey real estate investments offer a tremendous opportunity to grow your passive income. We...
View More

Buy Sell Investment Property

Residential homes and commerical properties Opportunity in Dallas
We have years of expertise and local knowledge to bring to the table for buying and selling investment properties. We’ll...
View More

Investment property advice in Dallas

Educate the investor for Investment properties in Dallas
It’s important to always be learning about investment opportunities so that you can make the best investment decisions possible. We...
View More

Questions? Need Help?
Give us a call at
214-810-4DFW or Email us: info@investmentclub360.com
Real Estate Investment Business Grow Finance

What’s Pushing Single Family Home Prices Higher?

Homeowners aren’t the only thing that propels the single-family housing market. In fact, even hedge funds have stepped up their interest in tangible property, purchasing homes to rent as perennially falling rates allow for higher returns on invested capital.  In major markets, single family homes are red hot. Some owners speak of having multiple offers for their newly listed properties. So what’s so hot about single family homes in 2016?

Low costs of borrowing, excellent spreads between rental prices and mortgage payments, and an uptick in job growth. Elsewhere, investors are padding the real estate market with fresh cash to make their venture into the rental business.

On CNBC February 27, 2012, Warren Buffett said that “single-family homes are an outstanding asset class for long-term investors.” He was right then and still is!

As the recovery in the housing market continues, investors that buy single-family homes are less interested in sudden variations in home values. Now, homes are no longer highly undervalued, and investors are looking for good long-term returns based on rental incomes from their properties, as well as the appreciation in home prices based on the long run demand for houses compared to the supply.
United State House Prices

Home prices are still rising about 5 percent a year, on average, though that’s a lot less than the 10 percent average appreciation from a year ago. According to CoreLogic, Appreciation is strongest in Texas markets like Houston and Dallas. Institutional investors will continue to buy single-family homes, but are focused on the growing cities and metro areas in the South, where long-term demand for housing will support their investments. Institutional investors have been migrating to faster-growing Southern markets, where demographic growth is strong.

Investors that buy single-family rental homes, typically, buy less expensive houses, priced at about two-thirds of the median home price. For decades, the average prices of these homes have grown faster than home prices overall. According to CoreLogic, “Over the last 30 years, home prices at the lower end of the price range have appreciated twice as much as the high end.” The supply of these less expensive homes has been lean, especially after the housing crash and the Great Recession. The Construction of new homes has fallen well below our national previous norm of 1 million annually, and now, when developers build new homes, they tend to build more expensive ones.

There has always been a vibrant single-family rental market, though, over the past few years, we’ve seen impressive growth and a real effort to professionalize what has conventionally been a fragmented marketplace. The National Rental Housing Council  (NRHC, the single family rental association) has initiated a new model for SFR that leverages best practices from all other well-established rental industries. Combined with improved property management, service, and maintenance systems, we are beginning to provide an unequaled resident experience.

SFRs offer tremendous opportunities for investors to achieve an attractive risk-adjusted rate of return.  As an industry, the U.S. housing economy is evolving, rental demand is surging, and professionally managed single-family rental homes will continue to be a desirable choice.  The industry is maturing, and investors are becoming more sophisticated about this asset class. NRHC members are showing a strong track record of performance that investors are beginning to appreciate. Institutional SFR scaled quickly, and our members have transitioned from aggregators of homes to traditional institutional owners and operators of rental properties.

“We at Investment Club 360 specialize in exceptionally profitable properties.”, said CEO of Investment Club 360, Kamran Baluch. “Real estate investment, especially single-family residential real estate investment, is a local play, not a national one. It requires an experienced talent with expertise.” He went on to explain how “every local market is different and high-level analyst reports don’t cut it when comparing variables like prices, vacancy rates. Our group specializes in finding the right spot, at the right time, with the best management, for the greatest returns. Join us or call 214-810-4DFW.

Five reasons single-family homes make solid investments.

1. Leverage – Maximize Your Return on Investment

Learning to use other people’s money for your investment will allow you to leverage your single-family homes 100%, which provides an infinite return on investment. Instead of investing your cash and using credit, you can buy single-family homes and invest your knowledge into your deals. Even if you decide to finance with a bank, you’ll likely be making a 20% down payment on your single-family home.  If you buy a single-family home for $100,000, you’ll need a $20,000 down payment as your investment, but the cash flow you create will be a high return on that $20,000 investment.

2. Growth – Equity, Amortization, and Appreciation

There are a number of ways that single-family homes will grow your investment. On top of the overall pricing being attractive and real estate investors know how to find the right houses for sale in every market. A $100,000 house can be purchased for $70,000, which creates $30,000 of equity upon purchase. Additionally, if you finance your purchase with a bank, you will enjoy amortization that comes with principle pay-down, so each year you owe less on your investment. In 2013 the real estate market began to show price upticks in a number of cities, though no one knows how long this will continue.

3. Cash Flow

Cash flow is a significant reason for investing in single-family homes, and investing in assets that generate income is a huge benefit of buying and holding single-family homes. Your tenants pay for your mortgages, and the cash left over after your expenses equal your net cash flow.

4. Tax Benefits

As you begin investing in real estate and holding onto your investment, you realize there are a lot of significant tax advantages that accompany your investments. For example, rental income is considered to be passive income and not subject to self-employment tax.  Depreciation allows the investor 27.5 years of deductions on your property and the equipment that makes them habitable (heat pumps, appliances, etc.).  Mortgage interest is typically the investor’s single biggest annual expense, but the good news is, it’s deductible. Other expenses that can provide tax benefits can include mileage, home office, repairs, etc. create $4,500 of monthly cash flow while enjoying all the other benefits of single-family homes.

5. Multiple Exit Strategies

Multiple exit strategies can produce much better results. You can be a landlord and enjoy rental income; you can use lease options as your exit strategy; you can sell with seller financing and enjoy income from your note, or you can sell the house outright to a new buyer (flip it). If you seek to create cash flow and equity from selling with seller financing, please be sure to study the new Dodd-Frank bill carefully as it now regulates seller financing.