Your weekly news and updates NationalREIA Lori Hudson

36k Completed Foreclosures in March 
This week real estate data powerhouse CoreLogic released their March 2016 National Foreclosure Report which shows national foreclosure inventory declined by 23.2% and completed foreclosures declined by 14.9%, both numbers year-over-year.  The number of completed foreclosures nationwide decreased year over year from 42k in March 2015 to 36k in March 2016, representing a decrease of 69.7% from the peak of 117,782 in September 2010.
Rising Compliance Costs Hurt Home Builders 
A new study from the National Association of Home Builders (NAHB) shows that, on average, government regulations account for nearly a quarter of the price of the average new home.  Three-fifths of that final number, 14.6%, is due to a higher price for a finished lot resulting from regulations imposed during its development.  The other two-fifths of the house price, 9.7%, are from costs incurred by the builder after purchasing the finished lot.
CFPB Acknowledges Problems with Regs – Will Seek Input 
The Washington Post is reporting that the U.S. Consumer Financial Protection Bureau (CFPB) has acknowledged problems associated with its attempt last fall to add more transparency to the home loan closing process and is now seeking public input on how to fix them.  Title companies and real estate agents have complained about the confusion and inconsistency brought on by these new “Know Before You Owe” rules, which took effect last Fall.  Reform proposals will be published in the Federal Register and comments from the public will be considered (how nice of them). Then, at some point, the CFPB will issue a “final rule” with the issues they chose to address.  Stay tuned.
Foreclosure Starts Lowest in 16 Years  
The Mortgage Bankers Association is reporting that the percentage of loans on which foreclosure actions were initiated was .35%, down one basis point from last quarter and 10 basis points lower than this time last year.  In addition, the data reveal that foreclosure starts were at their lowest level since Q2 of 2000.  The delinquency rate for mortgages on 1-4 unit properties remained unchanged from last quarter at 4.77% of all outstanding loans.  This is the lowest rate since Q3 of 2006 and 77 basis points lower than one year ago.
Combining Real Estate Investing with Notes 
RealtyTrac recently featured an interesting article by NoteSchool’s Eddie Speed & Kevin Shortle entitled “Make 5 Times the Profit by Combining Real Estate Investing with Notes.”  In the piece, the duo discuss how a husband & wife team purchased a vacant home using real estate and note investing techniques, instead of the traditional approach of buying and then reselling to a rehabber.  It’s quite fascinating.
Real Estate Industry’s 1st “data mart” 
This August, data-powerhouse CoreLogic plans to launch what it calls Trestle; “the ultimate listing data management and property information tool for brokers, technology providers, and multiple listing organizations.”  Drawing information from over 300 MLS’s, (and their own data), CoreLogic is setting up a virtual data marketplace targeting  brokers, technology providers and multiple listing organizations.
7 Things to Consider Before Investing in a Crowdfunding Project 
There is no doubt that crowdfunding will have an incredible impact on the way real estate deals get done in the future.  We’ve featured many posts about the subject here at REI2Day.  Today’s infographic suggests seven things to consider before investing in a real estate crowdfunding project.

Memory Points Sell! Dave Lindahl

Memory Points Sell!

Dave Lindahl who’ll join us July, 26, 2016!

Memory points can help sell a customer (renter or buyer) on your multi-family property. Sometimes even something small can make your property stand out from the rest. That something small is a memory point. And a memory point is what sticks in potential customers’ minds making them much less likely to forget you and your property.

Anything you can do to increase a potential customer’s favorable impressions of your property brings you that much closer to completing a deal. You can even begin before you show the property. For example, you can set up a model unit for showing  that is home to a unique color scheme. This is likely very unforgettable.

Or, you can give potential residents of a larger multi-unit a memory point of the property’s clubhouse as an inviting community space. One way to do this is by creating the image of a front porch. There are few methods to use to achieve this. You can put out welcome mat; you can put in banisters; or you can create a path through the grassy area to get to the new porch. These are all inexpensive options.

It is a very good idea to get your potential customer interested in your property from the moment he or she enters the leasing office. If customers have to wait for any length of time, give them something to do that provides them with memory points of the property. One idea is to let them view video of the property. This is unique and the experience will stick with them.

You definitely do not want a negative memory point. If you see unhappy residents, keep them out of sight with a rolling display. On this display, you would have floor plans and the site plan. Roll your display away from the unhappy residents and into a friendlier environment.

Another great way to create memory points is to place words in various locations around the apartment or condo unit. These words should be suggestive of pleasant feelings or ideas. Wall decals/stencils are now widely available, or you could make your own cut-outs of words such as “ENJOY” or “HOME” in the dining and/or living rooms. Then, have your agent use the same word in a sentence or two to subtly bring the message home. For example, “You will enjoy meals in your dining room.” Or, “This room feels like home for me.”

As your customer leaves, give him or her something to remember you… A brochure of the floor plan with a written message from you is a great memory point. Also, follow up on the visit with a phone, email or text message to jar the customer’s memory of the unit.

Another nice idea is to create a special greeting to send prospective residents. This could be in the form of an email. And, it could (and should!) include streaming video of the property.

Do whatever you can to make your property stand out from the rest. Create memory points—big or small—that make a lasting impression. This all adds to your investing success!

You have to Rent to Criminals?

HUD’s new guidance on Criminal Background checks places Housing Providers and Municipalities in conflict over the recognition of Arrests!

 For the ten page HUD Guide –

HUD’s guidance includes the banning of arrests from consideration for housing.  While this may seem legitimate, it places housing providers in a very awkward position, as many municipalities have laws and regulations on the books regarding drug users, and justify eviction for drug-related arrests.    HUD states, “As the Supreme Court has recognized, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct. An arrest shows nothing more than that someone probably suspected the person apprehended of an offense.”  While this harkens back to a better understanding of “innocent until proven guilty,” until the municipal nuisance conflict is resolved, housing providers will face aggressive city enforcement on one side, and assertive housing advocates on the other.  National REIA suggests working with your local housing advocates to address this concerns with municipalities.

National Real Estate Group: HUD goes too far!

NREIA Says Guidelines Will Have Chilling Effect on Criminal Background Checks

HUD goes too far(Cincinnati, OH) The National Real Estate Investors Association (NREIA) said today that new guidelines issued Monday by the U.S. Department of Housing and Urban Development go too far and will have a chilling effect on criminal background checks used to screen potential tenants. According to HUD, because a disproportionate number of African Americans & Hispanics have criminal records, they face potential discrimination in housing options based on race, in violation of the Fair Housing Act. National REIA believes this would severely restrict a landlord’s ability to protect residents from predictable harm & violence.

From every Congressman who rents an apartment in DC, to the poorest of their constituents in every district, has just been made less safe with HUD’s pronouncement that makes criminal background checks tantamount to discrimination.

Fair Housing Discrimination is a serious issue. No person should be discriminated based upon race, color, religion, national origin, sex, disability, or familial status. For HUD to claim that an individual’s criminal behavior should somehow be protected is a gross violation of the Fair Housing Act, and undermines the First Amendment protection of Free Association.

HUD’s flawed argument on “Discriminatory Effects Liability” makes the case that Safety, is neither a substantial nor a legitimate concern. In fact, according to HUD’s theory, until a property has residents raped, rapist shouldn’t be banned. Similarly, unless there have been murders at the property or community, murderers shouldn’t be banned. Ironically, HUD recognizes that convicted drug manufacturers and distributors can be banned, because of specific federal language, only to make exceptions for those who use drugs, or are convicted of any other criminal act!

The approach recommended by HUD, to individually consider each applicant flies directly in the face of HUD’s stated policy and directive from Congress, to treat each person equally. Today’s guidance does little more than try to make the criminal class a protected class – beyond the scope of congressional authority granted by the Fair Housing Act.

Charles Tassell, Chief Operating Officer of NREIA said “While we agree that an arrest is not a justifiable reason to deny housing, after all a person is innocent until proven guilty, the banning of convicted criminals is an entirely separate issue.”

Tassell further stated that “the safety of the renting public should not be sacrificed.”

Cost vs Value

Cost vs Value

Last Friday at our Movers and Shakers we discussed using a General Contractor versus hiring your own Sub Contractors. Almost like buying Retail and Wholesale. However there are many drawbacks lsuch as When do you have an Alternative or Plan B?

We also spoke about which improvements do you make to a property. Frankly if it’s a rental  and won’t add any Rent increase, take care of Safety and Health issues or prevent further deferred maintenance, then Skip it!

[email protected] of Ask the Builder suggested we look at Remodeling Magazines’ Cost vs Value Report which he generously sent the link for

So before you start your improvements you may want to see what the payback is.


PS I believe the Boston Globe listened in Friday because their Real Estate section “Address” in the Sunday edition 2/7/16 had a similar analysis but also used Angys List. I noticed a big disparity in their answers. What do you think?



By Mike Hurney, Director of


There’s a matter of position. You as a Landlord want to be perceived as Responsive, Fair and Honest, otherwise simple things won’t get resolved such as what’s “Wear and Tear” and what needs to be charged back to a Tenant. And you could even lose a good Tenant.


If you’re a Tenant, you never want the rent to increase, “It’s way too high already!”

And of course if you’re the Landlord “It’s been below market for too long, I’ve got to catch up!”

We need to get somewhere in between. As Successful Landlords say I didn’t get into this business to get a Job, I got into it to make Money!



Number 1 you’ve got to determine if there are any Rent Control Laws? Rent Control which limited or prevented any increase was originally instituted after the second World War when there was a housing crisis. Fortunately Massachusetts voters ended Rent Control it in 1994 after some Tenants in Boston, Cambridge & Brookline had enjoyed it for 30 years.


It’s more likely you would have Tenants on Section 8 than rent control. Section 8 is the Massachusetts version of Section 8 (Housing choice Voucher) program administered through local PHAs (Public Housing Authorities) and funded by HUD (U.S. Department of Housing and Urban Development) The Vouchers are mainly based on the applicants family income and nationality. There are strict eligibility requirements based on need and income. The PHA calculates the maximum housing allowance and the families contribution. It’s unlikely you’ll be able to raise the rent on families that have a voucher for your unit since it is set by the PHA and monitored by HUD.



Owners and especially Non-Owner occupied properties have two reasons to keep their rents current with market rates. First it helps Cashflow (Rental Income minus Expenses) and Secondly it’s an indicator of value that Buyers use to justify a purchase price. GRM (Gross Rent Multiplier) and DSR (Debt Service Ratio) are two commonly used by Real Estate Investors.
 Here are some tips and guidelines for figuring How much and When to raise rents.

  1. With annual leases, just include an increase at renewal time. Personally I give a 60 day notice not just the 30 days required by Massachusetts law.
  2. Tenant-at-Will (month to month) I give the same notice of 60 days on the Anniversary. I like the TAW because we’re on the same footing, Landlords and Tenants that is. With an Annual Lease in Massachusetts a Tenant only has to give a 30 day notice for an action (such as leaving) but a Landlord has to wait until the term of the Lease for an action (such as an increase or notice to quit without cause). TAW we each can give the 30 day notice.
  3. Your City or State may have different requirements for notice, Check that out first!
  4. When raising rents for any unit in a building make sure you raise the rent for everyone with the same amenities the same amount. It takes Tenants about 3 minutes to find out what everyone else is paying;-) and you do not want to be on the wrong end of a discrimination suit which can take years. Incidentally the reporting requirement for HUD is 365 days, Massachusetts it is 360 days. Most Discrimination settlements are heavily weighted with Punitive damages against a Landlord.
  5. Many Landlords have a policy of increasing the rent every year, even if it’s only a small amount, that way Tenants are used to the increases. Often new Landlords will take pity on a Tenant for some perceived reason and not raise rents. However once they need to raise the rent and it is a significant increase, look out. As the Irish say “No Good Deed Goes Unpunished!”
  6. You could link your rent to the Consumer Price Index. For 2015 Housing, all cities in the US it was 3.2% but rents have skyrocketed in Metro Boston for 2015 with a severe shortage of units.
  7. Some of my fellow Landlords will use Rentmetrics or RentoMeter to find local market rents but I like to check the competition using CraigsList. It’s a little more work but I believe I’m looking at the same units that my potential Tenants see.
  8. Find the pain point, who will leave for $20 vs $50/month increase You know it costs at least a months rent to do over and rent a unit. Then there can be a period of vacancy.
  9. If this is tough for you, hire a PM (Property Manager). Hire directly not the newest broker in a franchise who’s chasing FSBOs and Expired Listings. They’re answering two Bosses: The franchise Broker/Owner and You. Who do you think wins?

This information is for informational purposes only and cannot be substituted for Legal or Financial advice from licensed experts. When you consult these experts, Attorneys, Accountants and Tax Experts at least you know who to see if there is trouble! Mike Hurney is also the author and Coach of the Step by Step Course “How to Become a Real Estate Investor in 12 Easy Lessons” you can reach him at [email protected]

Copyright © 2016 Can be reprinted only in its’ entirety.

PS There are 7 Protected Classes that HUD prohibits any housing or Rental Discrimination against, Massachusetts has 8 more, New Hampshire has 4 more. As a Landlord, do you know


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