Second Home Properties – Rental Income Now Okay

Fannie Mae just announced on 11/3/15 that rental income is now okay on second home properties. This is huge news for those looking to rent out their second homes on Airbnb, Homeaway or Rent Like a Champion without them being considered “investment properties”. You can now purchase property as a 2nd home instead of an investment property. Most lenders require 20%+ down payment on investment properties and charge interest rates about 1/2% higher than 2nd home rates. Today, (11/20/15) you could put 10% down and get an interest rate of 4% on a 30yr fixed mortgage with no monthly mortgage insurance.


Here is a excerpt directly out of FNMA’s guides:


Second Home Requirements
must be occupied by the borrower for some portion of the year
is restricted to one-unit dwellings
must be suitable for year-round occupancy
the borrower must have exclusive control over the property
must not be rental property or a timeshare arrangement1
cannot be subject to any agreements that give a management firm control over the occupancy of the property

If the lender identifies rental income from the property, the loan is eligible for delivery as a second home as long as the income is not used for qualifying purposes, and all other requirements for second homes are met (including the occupancy requirement above).


In other words as long as you occupy your one-unit second home for some portion of the year and you don’t use the rental income to qualify you are not subject to the restrictions of investment properties. Here is a link to the update. Now has never been a better time to buy second homes and rent them out on vacation rental sites. You can earn cash flow and get to travel to them for free once a year.


Five Real Estate Trends to Watch in 2016


Tracking current trends in the real estate industry can allow you to achieve higher profits to help you make the most of your investments. The experts at the Urban Land Institute and PwC recently released their Emerging Trends in Real Estate US & Canada (ETRE) forecast report for 2016, which offers insights into the direction of the marketplace in upcoming years. Here are some of the most important “must watch for” trends identified in this influential report.

Must Watch Trend #1 — Secondary Markets on the Rise

While the highest real estate values and rental prices are typically found in large urban environments like New York and Los Angeles, less populous cities are also making a significant mark on the real estate industry. The ETRE forecast identifies San Diego, Denver and Austin as three cities to watch in 2016 thanks to the high degree of entrepreneurial investment and development underway in these real estate markets. Looking beyond the obvious primary markets and exploring investment opportunities in second-tier population centers can provide added opportunities for profitability and growth.

Must Watch Trend #2 — Office Buildings in Demand

Commercial properties have often been considered a bellwether for the entire real estate industry. Office space is currently in high demand in many areas; however, the configurations and expected amenities have changed considerably. Cafeterias are reentering the corporate arena to promote greater productivity in the workplace. Open floor plans and shared spaces are also in demand. Opting for commercial buildings that already have these features can save on remodeling costs and can boost lease fees for real estate investment.

Must Watch Trend #3 — Climate Change Reducing Demand for Parking

With more urban residents opting for public transportation, Uber or bikes to manage their daily commutes, the need for parking structures and lots to manage vehicle storage has been reduced considerably. Concerns about climate change and an added emphasis on green-friendly living may have had an impact in this area of the housing market. According to the ETRE report, some cities are reducing the amount of required parking for new housing developments. Tenants and city officials also take walkability scores into consideration when considering the need for parking in the residential real estate marketplace. And for those that still drive there are now services like Luxe that will park your car for you.

Must Watch Trend #4 — Sticking with the Suburbs

Despite many doom-and-gloom predictions about the death of the suburbs, these areas at the outskirts of large urban metropolises continue to attract families and individuals seeking a respite from the bright lights and noise of the big city. The suburbs are reinventing themselves, though, and providing many of the same options once only available in the heart of the city. This hybrid approach to residential areas will have a significant impact on housing for the foreseeable future.

Must Watch Trend #5 — Interest Rates on the Rise

The ETRE forecast also predicts that interest rates will begin to rise in upcoming months, making mortgages more costly and investments somewhat riskier. This also typically means a higher demand for rental properties, as higher rates generally result in less of the population being able to take advantage of mortgage loans. By acting now on the still-low interest rates and available bargains, investors can ensure the highest returns on investment for their real estate portfolio.

These five trends will likely have a large influence the rental and leasing marketplace and will have a significant impact on real estate investments across the U.S. and Canada. By taking these factors into consideration, you can enjoy higher profitability as the marketplace continues to evolve.

Five Tips to Ensure You Stay Competitive in the Real Estate Industry



Remaining competitive in the real estate industry requires hard work and persistence. Property managers must provide a wide array of services for their clients, including the following:

  • Marketing properties to commercial and residential tenants
  • Screening potential tenants to reduce turnover and ensure on-time payments
  • Providing maintenance service for all units
  • Handling paperwork and recommending price points for lease and rental fees

For investors going at it alone in the real estate marketplace, managing all these tasks can be challenging. Here are five of the most important keys to longevity in the property management and real estate investment fields.

Tip #1: Solicit Feedback
Finding out what tenants are saying about you and your property is critical to maintaining a positive public reputation. By proactively requesting feedback regarding your properties, your maintenance procedures and your overall business practices, you can ensure a greater degree of tenant satisfaction and can reduce turnover in your investment properties. This can boost your profitability and ensure steady revenues for years to come.

Tip #2: Research Price Points
Making use of available tools to check pricing for comparable properties and to determine the real value of each real estate investment under consideration can help you select the right properties for your portfolio and the right rent or lease price points for your tenants. By staying competitive in the financial field, you can improve your performance and profitability in the real estate marketplace. Don’t forget to take neighborhood information into consideration; the right location can make a big difference in the desirability of a property.

Tip #3: Embrace Modern Technologies
Communicating with clients and tenants via email or text can save time and money in managing reminders and handling necessary correspondence. By paying expenses electronically, you can also reduce paperwork inside the office, allowing you to maintain a green-friendly workplace while enjoying added convenience for all your transactions. Mobile devices and cell phones can provide improved access to information, allowing you to stay productive even after hours or when you are away from the office.

Tip #4: Track Your Return on Investment
Maintaining meticulous financial records is not only a legal requirement but also a good idea to ensure that you are turning a profit on your real estate investments. Comparing revenues with expenses for each property in your portfolio can allow you to identify underperforming investments and take steps to address these issues to ensure the highest level of profitability for your company.

Tip #5: Trust but Verify

The right screening processes can have a real impact on the quality of tenants your properties attract. Checking credit reports, references and past payment patterns can provide added insights into the financial habits and dependability of potential tenants. In both the commercial and the residential real estate markets, acquiring and retaining the right renters and lessees can give a significant boost to your overall profitability. A little due diligence can go a long way toward helping you achieve this goal.

These five core strategies can help you manage properties and maintain a healthy financial profile in the real estate marketplace. By keeping your eyes on the profitability prize, you can expect your investments to pay off for increased longevity in this constantly evolving area of the U.S. economy.

Thinking Outside the Box: Vacation Home Options for Real Estate Investors

Thinking outside the box can help real estate investors make the most profitable use of their available capital. The National Association of Realtors (NAR) recently released its Investment and Vacation Home Buyers Survey for 2015, which revealed some surprising information about the current residential real estate market and the opportunities available for investors. While primary residence purchases continue to dominate the market and comprise 60 percent of all sales, vacation home sales are on the rise. In 2013, vacation homes accounted for 13 percent of sales in the national real estate marketplace; by 2014, that figure rose to 21 percent. Understanding the factors that influence buyers of second homes can ensure that investors achieve their fair share of profits in this niche market.


Dynamics of Vacation Home Buying
According to the NAR survey, vacation homebuyers had five primary reasons for purchasing these properties:

  1. Roughly one third were actively looking for a property to use as a vacation retreat.
  2. An estimated 19 percent purchased with the intent to use the vacation home as their primary residence at some point in the future.
  3. Projected appreciation played a role in the decision to purchase for 13 percent of buyers.
  4. Another 13 percent indicated that they had bought a vacation home because they had located a bargain in the local marketplace.
  5. 11% purchased a vacation home to generate income through renting out the property

The latter three reasons bear a striking similarity to the objectives of those looking to optimize their revenues in the real estate marketplace. By taking a more inclusive approach to the types of properties considered, investors can often expand their portfolios while achieving higher returns on their financial investments.

Resale a Better Bet than Renting
While investing in a vacation home as a rental property may seem an attractive option for real estate investors, the greatest profits may be available for those willing to earn a bit of sweat equity and to resell these properties in the current marketplace. Financial experts from CNBC, U.S. News & World Report and other reputable sites are touting the financial and tax advantages of purchasing a second home. By entering this sector of the real estate market now, investors can take advantage of this buzz to ensure the greatest possible returns on their financial investment.

Rental Profits Possible for Cautious Investors
Depending on the location and the initial and ongoing costs of the investment, vacation homes can also provide ongoing rental revenues for savvy buyers. TripAdvisor notes that the Southeast region of the U.S. is the most popular area for vacation rentals, attracting 39 percent of all business in this real estate sector. By choosing a location carefully and looking for bargains in high-demand areas, investors may be able to achieve high occupancy rates and competitive revenues in current market conditions.

As demand for vacation rentals increases from sites like Airbnb, HomeAway (just purchased by Expedia for $3.9 billion) and Rent Like a Champion more investors will become hosts and purchase vacation homes to generate income.

By expanding their portfolios to include select vacation properties, real estate investors can potentially enjoy added revenue streams and increased diversification. This can result in greater long-term returns on investment and improved performance in the next few years.


4 Ways to Go “Green” — Our 1-2-3 Guide On How to Be More Eco-Friendly in Real Estate


As climate change becomes an increasingly important part of our daily vernacular, finding ways to increase energy efficiency and environmental responsibility throughout your company can provide you with added savings on utility bills and reduce your carbon footprint. For real estate investors and managers, establishing a green-friendly brand image can provide a distinct selling point for your company while distinguishing you from your competitors in this field. Here are four proven strategies to boost your environmental credentials in the real estate industry.

Green Tip 1: Explore Paper-Free Options

Reducing the amount of paper needed to conduct business can have a dramatic effect on your office’s environmental impact. Some of the most important ways to limit paper use include the following:

  • Opt for online applications rather than print versions of the same documents
  • Allow for and encourage electronic payment and receipt options for tenants and lessees
  • Invest in centralized cloud or server storage rather than maintaining file cabinets and printed copies of contracts and other documents
  • Choose online commercials and a corporate website over printed brochures and direct mailings

These strategies can help you reduce paper use while offering the same top-quality service for current and prospective tenants in the modern eco-friendly environment.

Green Tip 2: Install Energy-Saving Fixtures

Although the cost of full replacement of light fixtures, water heaters and air conditioning units can be prohibitively expensive, upgrading to energy-efficient models over time can provide huge selling points for new tenants and corporate clients. According to the U.S. Energy Information Administration, lighting accounts for almost 20 percent of energy expenditures in the commercial sector. Installing green-friendly lighting fixtures and electrical equipment, you can reduce the cost of utilities every single month. Water-conserving bathroom and kitchen fixtures are also important in areas hard-hit by drought. Best of all, the cost savings realized by your tenants can result in increased retention and reliable revenues for your investment company.

Green Tip 3: Recycle and Reuse

Recycling aluminum, paper and glass items can be a good starting place for instituting green-friendly policies in your office. Refilling printer toners and recycling electronics can also reduce the environmental impact of your business enterprises. By passing along unwanted and obsolete equipment to charitable organizations or recycling centers, you can provide added help for those who need it most. At the same time, you prevent dangerous or toxic substances from contaminating ground water in your area.

Green Tip 4: Consider Transportation Options

Investing in a hybrid vehicle can not only provide you with added green cred among your potential clients, but can also save you a considerable amount on fuel costs during the course of an average year. By driving a vehicle that is in line with your corporate environmental policy, you can also enhance your company’s reputation among environmentally conscious buyers and sellers.

These four strategies can provide your real estate company with an added selling point for green-friendly clients and can enhance your overall reputation for innovation among potential renters, buyers and sellers. By adopting an environmentally responsible attitude toward all aspects of your business operations, you can enjoy the economic benefits of lower utilities and an improved market position among the eco-friendly demographic of the U.S. economy.


Six Real Estate Investment Practices You Should Stop Now.

Managing your real estate investment business effectively is the key to continued profitability in this fast-paced industry. Knowing what not to do is just as important as understanding the positive principles of successful property investments. Here are six practices you need to think about when buying, selling or brokering real estate transactions in the modern marketplace.


#1. Failing to Perform Due Diligence

Doing your homework on the local real estate market is critical to your success as a real estate investor. Some of the most important things to consider before making a move in real estate include the following:

  • Current number of homes on the market in your area
  • Average sale prices & Average time on the market
  • Number of distressed properties available for purchase
  • Rental occupancy rates and average monthly revenues collected on rental units
  • Purchase prices for comparable properties
  • Neighborhood details to include demographics, crime stats, walkability, school district information and public transportation options
  • Zoning restrictions applicable to the property

Intangibles can be as important as these practical factors. Determining whether a particular neighborhood is in decline or in demand, for instance, can help you decide on the likely value of a property now and into the future.

#2. Failing to Consider All Expenses

When calculating the likely return on investment for a property, remember to include maintenance costs, property taxes and homeowners’ association fees into your figures. According to the experts at Zillow, typical operating expenses can add up to between 35 and 80 percent of the revenues generated. Aiming for between 40 and 50 percent can provide you with a healthy profit on your ongoing investment.

#3. Misunderstanding the Element of Time

Especially when purchasing distressed properties, timing can be critical to your own success and to the financial well being of the seller. Rushing into a deal, however, can be counterproductive. Missing out on potential revenues is never as damaging as taking a loss on a real estate investment. By taking your time and analyzing the pros and cons of each potential transaction, you can avoid making a costly mistake when time is a critical element. You need to learn how to say “no” when it matters most (i.e. investing in anything.)

#4. Utilizing Outdated Technology

Do you rely on an outdated, mobile-UNfriendly site that takes forever to load? Clients today are tech-savvy and finicky. If they’re unimpressed with the ease-of-use ways you communicate, advertise, and respond to them, they’ll likely not give you a second chance. A recent survey showed that 45% of consumers say a bad website is WORSE than no site at all. Everything from applications, to rental payments, to advertising should be online and easily accessible for every party involved. If you’re not managing the properties make sure your property manager is up to speed.

#5. Overextending Yourself Financially

Adding properties to your portfolio can increase your potential revenues to help you build wealth. However, failing to maintain adequate cash in reserve can leave you in real financial trouble if unexpected setbacks occur. The loss of one or more tenants, unexpected repair costs or legal entanglements can drain your available cash on hand. By ensuring that you have sufficient monetary reserves to manage these expenses, you can maintain an even keel even when unexpected financial storms arise.

#6. Going against Your Gut

Intuition is a valuable tool for investors in any field of endeavor. In the real estate field, going against your gut instincts can saddle you with a bad investment that can drain away potential revenues. In general, always listen to that internal voice and walk away when a property deal doesn’t seem quite right. The reverse is not always true, however; if a questionable investment appeals to you, it may be the wisest course of action to move on and examine other options — when all else fails, fall back on tip #1 and do your due diligence.

By avoiding these six pitfalls, you can increase your chances of long-term profitability in the field of real estate investment.

Use Mobile Friendly Website Instead of Revestor App!

Please Do Not Use Revestor App – Many of you have asked questions about our app and have mentioned issues you have had with it. So we wanted to make sure to clear up any confusion about it. Our efforts have been spent updating the entire website to be mobile friendly so you are able to use it on any device. There is no need to use the old Revestor app anymore. If you have it please delete it and use our website on your mobile browser instead.

It is on our list to have our iOS app updated but for now our mobile website works just as well as it does on a desktop. If you want to be able to quickly log on and search properties, you can add Revestor to your phone or iPad’s home screen. Here are the illustrated directions below using safari on an iPhone.

Press the middle icon on the bottom screen of Safari (the square with an arrow pointing out of it).

Revestor home page iPhone

It will bring up this screen of options, select Add to Home Screen.

revestor iphone share

You will then be able to name it whatever you would like.

revestor home screen save

This is what it will look like once saved as an icon on your home screen.

Revestor home screen add icon

Thank you for your patience and loyalty as we continue to grow and better our services.

Do You Like Free Money? Six Tax Tips For Homeowners



Buying your own home can provide an added sense of security for your entire family. With every mortgage payment, the amount of equity in your property increases to improve your overall financial position. This major purchase also comes with some important advantages that can help you save money on your taxes year after year. Here are six of the most important tax benefits associated with purchasing and owning a home.

Tax Tip #1: Mortgage Interest Deductions

For those who itemize deductions on their annual income tax returns, the mortgage interest deduction can add up to real savings each year. According to the Internal Revenue Service, better known as the dreaded IRS, the average mortgage interest deduction adds up to $12,615. The taxes that would otherwise be due on this amount can add up to thousands of dollars, making mortgage interest an important deduction for the 75 million homeowners in the United States.

Tax Tip #2: Home Equity Lines Interest Deductions

The interest paid on a secured home equity line of credit or loan is also tax deductible. These financial arrangements can provide added flexibility for homeowners in managing major expenses while reducing the overall level of tax obligation for these individuals and families. By opting for a home equity credit line over traditional revolving credit accounts, it may be possible to save a significant amount on taxes over the course of the loan. Transferring high-interest credit card debt to a lower-interest home equity loan can not only reduce monthly payments but can also offer significant tax advantages for qualified homeowners.

Tax Tip #3: Closing Costs and Points

Depending on the terms of the mortgage and purchase agreement, buyers can usually deduct any origination fees from their taxable income. Most homebuyers pay at least one percent of the total cost of the home in points to reduce their monthly payments over the life of the loan. Points are generally deductable if the following criteria are met:

  • The loan is secured by the primary residence of the buyer.
  • The points are within the amount normally and generally allowable for the area in which the transaction took place.
  • The buyer paid at least as much at closing as the amount of points deducted from annual taxes.
  • The cash method of accounting is used to figure income and expenses.

A qualified tax attorney or real estate professional can often provide detailed information regarding the deductibility of points on income tax returns.

Tax Tip #4: Property Tax Deduction

Property taxes on both primary residences and vacation homes are tax-deductible. This can add up to real savings on state and federal income taxes.

Tax Tip #5: Tax-Free Rental Arrangements

Renting out your home for a couple of weeks each year can be a financially profitable venture, especially if you maintain a vacation home in an exotic or in-demand area. Best of all, the fees received for rental agreements of two weeks or less need not be reported to the IRS and constitute tax-free income to you and your family.

Tax Tip #6: Tax-Free Profits on Sales

Homeowners can also deduct a healthy chunk of the profits derived from selling their primary home:

  • Up to $500,000 for couples filing jointly.
  • As much as $250,000 for individuals.


By taking advantage of these benefits, you and your family can enjoy the greatest possible tax savings year after year.


To Fix & Flip Or to Buy & Hold – That Is the Question: Statistics to Help You Decide

As another fiscal year draws to a close, many investors are trying to decide whether they should hold on to their real estate properties or sell them for immediate profits. Some say the glory days of “flipping” are over, but we’re not so convinced that’s true. Read on for all the info you need to make an informed, right-for-your-situation decision.

fix flip buy hold


Here are some of the most important stats and trends you need to know to make the right choice about your investment properties.


Existing Home Sales in Decline

The National Association of Realtors (NAR) compiles statistics on a monthly basis regarding new and existing home sales and trends in the real estate marketplace. Here are some of the most important stats from their August 2015 report.[i]

  • 8% — percentage that existing home sales fell by month-over-month between July and August 2015. However, home prices were on the rise thanks to limited inventories and relatively low new home construction in the single-family residential marketplace.
  • 2% — percentage that year-over-year home sales improved by as of August 2015.
  • 7% — percentage of foreclosures and short sales that comprised the market in August 2015, holding steady from the previous month.
  • 18% — percentage below market value that foreclosed homes sold for in August 2015.
  • 12% — percentage of market value that short sales typically when sold.
  • 12% — percentage of real estate investors that accounted for sales in August 2015.
  • 60% — percentage of investors who paid cash.
  • 7% — percentage of gain over the $228,700 median price for all existing housing in August 2015.
  • 32% – percentage of first-time homebuyers.

Depending on your target audience and your expected return on investment, it may be worthwhile to research your local real estate market to determine the current value of your investment properties.


Rents Continue to Rise

On the other side of the equation, property owners and managers continue to enjoy high occupancy rates and increasing rental revenues in almost all areas of the country.

  • A joint report by Axiometrics and MPF Research indicates that the single-family rental market may have finally reached a tipping point. After months of low vacancy rates and high rents, builders and property owners are seeing a slight rise in the number of vacant units. This is attributable in part to the increased construction of apartment complexes and rental units across the U.S.[ii]
  • The 2015 Rental Market Report from paints a rosier picture of the overall outlook for rental property owners in the current economic environment. Based on information from property managers across the country, this report indicates that high occupancy rates and demand for rental properties are driving current favorable conditions for real estate investors nationwide.[iii]

These statistics make a good case for holding on to high-performing rental properties in the current economy.


Future Predictions

The financial experts at Fortune are predicting increases in average rental costs of 8 percent or more in 2016.[iv] This will constitute a real windfall for real estate investors who stay the course and rent their properties for ongoing profit. These rent increases are attributable to high demand and low inventories that are expected to continue throughout the upcoming year.

At Revestor, we specialize in giving real estate investors the tools they need to succeed. Whether you are investing and and/or flipping your first house or your thirty-first, we’re here to help you make the most of your investments no matter what the housing market has in store.








Real Estate Crowdfunding: The Future of Real Estate Financing is Here {Guest Post}

In the past few years, crowdfunding has become one of the most effective and popular ways for companies and individuals to raise capital over the Internet.  In fact, since Congress passed Title II of the JOBS Act in September 2013, one of the industries that’s benefited the most from crowdfunding has been the real estate industry.  These provisions, which allowed for debt and equity crowdfunding to become a legal and viable option, have spawned a new method for real estate investors and sponsors to raise capital for their projects, without having to rely on their local banks and hard money lenders for financing.

The genius of the real estate crowdfunding model is in its simplicity.  Typically, in a real estate crowdfunding scenario, a developer of a property brings a deal to the table by submitting the details of their project to a platform.  The project is then vetted by the platform to make sure the investment is a sound and lucrative venture.  After the platform has conducted their due diligence they will then host the project on their site, giving investors the opportunity to contribute funds towards that particular loan.  As the project moves towards completion, the Borrower pays down their loan with interest while the contributors receive dividend distributions as a return on their principal investment.  The exit strategy for the Borrower depends on what type of project they’re working on.  Regardless, the peer to peer lending process is fairly simple for all parties involved and everyone is able to benefit from the experience if all goes as planned.

Ultimately, Patch of Land’s real estate crowdfunding platform bridges the gap between traditional and hard money lenders by combining the best elements from each.  This concept provides a fast and reliable solution for real estate investors looking to borrow funds and raise capital for their projects in an easy and repeatable way.  Here are just some of the benefits of getting a peer to peer loan through Patch of Land:

  • Access to Capital – Our large network (or “crowd”) of accredited investors provides you with a source of capital that never runs dry.
  • Speed to Close – Our tech-enabled platform helps us work with a sense of urgency to approve and fund your loan in as little as 7 days.
  • Prefunded Loans – After we’ve approved your loan, we will fund you at closing first, then offer your deal to the “crowd” second. This is opposed to traditional real estate crowdfunding platforms that make you wait until the “crowd” fully funds your loan before moving forward with your financing.
  • Nationwide Reach – We operate in every state throughout the nation with exception to a select few.
  • Brand Your Business – The projects hosted on our industry-leading platform are listed on CNBC’s Crowdfinance 50 Real Estate Average which means investors throughout the world will take notice and recognize your business.
  • Easy to Repeat – Once we’ve worked with you in the past we’re able to close your loans even faster in the future.

pol - logo - 2014-02-27 TAGLINE REV VERT HIGH RES

For more information on how you can use real estate crowdfunding to finance your next project, visit Patch of Land.  Our Lending Parameters, FREE Borrower Handbook, and Application Center will provide you with the educational resources you need to get started on financing your next short-term residential or commercial real estate loan today.


Guest Post by:
Marco Rivera with Patch of Land