When you’re talking to real estate investors, they’ll often tell you how many doors they own, meaning how many rental units they have in their portfolio. Stating door numbers, however, can often be misleading. Generally, the real metric to keep track of is cash flow because, after all, profitability is what counts in any business, right? 

Sometimes, though, the two can get conflated, and on occasion, owning just a few doors, irrespective of cash flow, can be a good strategy for building long-term wealth. 

Confused? Don’t be. Rapidly appreciating areas can often generate far more wealth than simply adding doors that make $200-$300/month without the headaches of multiple tenants. In those instances, clinging to the side of a speeding real estate train might be the best investment strategy to generate wealth quickly, giving you investment options further down the line.

Note that most landlords in America are not Wall Street behemoths or incredibly successful businesses with hundreds of doors in their portfolio but mom-and-pop owners with a few units to supplement their income. 

In other words, relax if you still need to purchase your first unit. You’re not getting left behind in the stampede touted by investment gurus to scale your portfolio. Owning just a few units puts you alongside most owners. If you already own a primary residence, turning it into a rental is relatively easy if you plan to move.

If you want to scale your portfolio, however, there are some important things to consider before starting.

Where Do You Intend to Buy Your Rental Units?

Your purchase power will be sorely limited if you intend to buy rental units in expensive areas. Assuming you’re not sitting on a trust fund or haven’t written songs for Taylor Swift or Beyoncé, there are the practical issues of how much you can borrow and earn from your day job, which will directly influence your purchasing power. 

If you are a high earner or have investors and can afford to start your rental buying quickly, scooping up dozens of properties in cheaper markets can help your scale. However, there are pros and cons to both approaches.

What’s More Important: Cash Flow or Appreciation?

In an ideal world, you can have both. If you purchase a home in a transitional neighborhood and ride the demographic and economic turnaround, you’ll score a double whammy.

For example, many homeowners in the New York boroughs of Brooklyn and Queens became millionaires over 10-plus years simply by house hacking and renting out small multifamily buildings in which they also lived. Their appreciation far exceeded any cash flow they could have made by purchasing rentals farther afield. 

If you’re not desperate to leave your job, have no problem house hacking, and live in a major city, getting an FHA 203K loan for renovations is a great way to start building wealth without the hassle of long-distance investing and leaving the running of your properties to third-party management companies.

Scaling Sensibly

If scaling your portfolio is a priority, you must decide how much time and money you can dedicate to real estate investing. If your immediate priority is to leave your job, cash flow is king.

Whatever your chosen method—BRRRRing, multiple house hacks, or syndication—you’ll need to earn over your income to cover inevitable repairs and vacancies. However, leaving your job might affect your ability to scale securely.

Choose Your Location Carefully

In a rush to earn cash flow, many new investors make the mistake of thinking that buying low in D+/C- neighborhoods will allow them to scale faster and earn more. They could be setting themselves up for disaster. High-crime neighborhoods come with a lot of risks—vandalism and nonpayment of rent being the most obvious to investors. Your only hedge against this is to buy so cheaply so you can easily absorb the rental loss.

It’s usually more profitable to add fewer doors in better neighborhoods. Although the cash flow in less expensive neighborhoods is appealing on paper, this is rarely achieved. Scaling sensibly, not over-leveraging, and remaining in solid neighborhoods where you’re not afraid to walk the streets at night almost always makes more sense than simply adding doors to your portfolio if that keeps you locked in landlord/tenant court.

Your Job is Your First Business Partner

Another mistake of newbie investors is being too quick to leave their steady, W2-paying job. Not only will banks be more willing to lend to you with a job, but the income it generates will help you manage the unforeseen expenses that come with real estate investing, allowing you to scale faster.

Case Studies

Rick Matos and Santiago Martinez live and invest in Lehigh Valley, Pennsylvania. They are friends and have done deals together in the past. Both have a similar number of properties in their portfolio—Rick has 44 units, and Santiago has 47. 

However, their investment strategies have differed. Here’s a look at each.

Rick Matos

Rick took 10 years to accumulate his 44 units, generating a gross rent roll of about $40,000/month and $25,000 in cash flow today. When he started investing, he was a full-time employee earning six figures. He took a HELOC on his personal residence (which was paid off) to buy his first investment property. At the same time, he earned his real estate license to help him purchase more properties, saving on commissions.

“A lot of the properties I bought at the time were REO/foreclosures in Center City, Allentown, and Easton, so I was buying them at a clip for cash for $20,000-$30,0000 using my 401(k), borrowing from local lenders and my dad who owns real estate in New Jersey,” Rick says. “In addition, I did a few flips and bought a few houses on credit cards. I was adamant that I wanted to keep scaling, and having a good income through my job helped me do that.”

Did Rick regret buying in a rough neighborhood? “Not at all,” he says. “In fact, if you look at how both areas turned around, all the investment poured in there, and how the property values have gone through the roof, I wish I had bought more! I was buying these houses so cheaply that I couldn’t lose.”

 “The rents paid down the loans quickly, and then I did a few BRRRRs, enabling me to scale, Rick adds. “But it wasn’t overnight. “It took me 10 years. For most of that time, I had a good income from my job, so I never touched the real estate money to live off. I could always put it back into the business. In fact, when I purchased the properties, they were often in bad shape, so I just used the income from my job to fix them up.”

When Rick finally left his job three years ago to focus on real estate full-time, he supplemented his cash flow by doing more business as a real estate agent (he is currently affiliated with the Iron Valley Real Estate brokerage), as well as managing properties for out-of-state investors from New Jersey and New York.

“I learned from my dad that real estate is not a get-rich-quick scheme,” Rick says. “It’s about buying homes that make sense and doing it slowly and methodically.”

Santiago Martinez

While in his early thirties, Santiago Martinez was an Olympic standard wrestler representing his native Colombia when he got his real estate license and began to scale rapidly. He amassed 41 units in four years (he previously purchased six from 2016-2019), borrowing private money—”usually at 8% with three points on the back end”—then refinancing and building a team to oversee renovations and management.

Although his portfolio currently generates about $43,000 per month in gross rent and he has close to $3 million in equity, thanks to the Lehigh Valley’s rapid appreciation, Santiago hardly sees any cash flow because net profits are eaten up in paying his virtual team of four to five people and three full-time contractors and various subs.

“I scaled and built the portfolio and the equity but didn’t make money personally because the drip system I was using meant that there simply wasn’t extra cash after all my expenses,” Santiago says. “Now, I’ve changed my strategy. I’m looking to make an active income by flipping and paying down mortgages. The portfolio is great, and I got some great deals, so I’m happy I could scale when I did before the rates went up, but now it’s about making them cash flow.”

Final Thoughts

Both Rick and Santiago benefitted from the Lehigh Valley’s rapid increase in sales prices to build equity. Because he got in earlier, maintained a full-time job, and built his portfolio slowly, Rick could scale without any sleepless nights, generating equity and cash flow at the same time. 

Meanwhile, Santiago’s rapid scaling is a testament to his networking, determination, and risk tolerance. It hasn’t been easy or without stress, as he readily admits, but his trade-off has been equity and doors rather than cash flow, which is no small feat. The next phase of his investment strategy is about paying down debt and realizing his portfolio’s tremendous cash flow potential.

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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Rocket Companies, the parent of Rocket Mortgage, lost money in 2023, but executives have expressed confidence about a big turnaround by touting investment in artificial intelligence (AI) to accelerate the company’s profitability. 

Despite reporting a GAAP net loss of $390 million in 2023, investors seem to be sold on the company’s path towards Rocket’s “AI-fueled homeownership strategy,” a phrase repeatedly used by executives in a fourth-quarter earnings call on Thursday.

Rocket’s stock price rose to $11.75 per share at market open on Friday, up from $10.98 per share at market close the day before. 

The three big pillars Rocket is betting on for profitability are AI-driven productivity, which in turn will bring increased profit; its acquisition of new clients and market share; and deep pockets for continued investment, which includes a lot of cash.

AI driving productivity across the board

The bottom line as to why Rocket is pushing hard on AI? It boils down to increasing capacity at scale via higher productivity. 

The three areas in which AI is driving impact are mortgage banking, underwriting and servicing, Rocket CEO Varun Krishna shared with analysts during the latest earnings call.

Its pilot AI virtual assistant enabled mortgage bankers to do the most important work when working with clients, with technology taking care of tedious tasks such as filling out applications and remembering regulatory requirements — things that bankers had to do before AI was implemented.

About two-thirds of Rocket’s income verification tasks were automated in December, without an underwriter needing to intervene. As a result, Rocket’s automated income verification provided a five-fold improvement compared to 15 months earlier, Krishna explained.

In addition, AI has enabled 70% of Rocket’s servicing calls and chats to become fully self-served, also freeing up time for team member assistance.

“If you increase the productivity, you increase the capacity, but you also increase the velocity. If you increase the velocity, that means faster turn times, and faster return times mean better client experiences,” Brian Brown, chief financial officer at Rocket Companies, told analysts. 

“… Having faster turn times means, in a very competitive market, it makes your offer stronger because you can close faster. To the extent that you can get loans off your balance sheet faster, it lowers your financing costs. So, we completely believe that these will translate into financial metrics and, frankly speaking, they already have, through some of the investments in 2023.

“We believe we can keep our fixed costs relatively flat (with AI) while originating significantly higher volumes.”

New client and market share acquisitions

In a rare move, Rocket shared specific numbers of its market share growth. 

The company’s shares of the purchase and refinance markets expanded by 14% and 10%, respectively, from 2022 to 2023. The company doesn’t break out purchase business versus refinances in its earnings reports.

In 2023 alone, the mortgage industry saw a total of 62 merger and acquisition transactions, lender exits and bankruptcies

Because Rocket absorbed some of the market share from lenders that closed their doors, it’s no surprise that it increased its market share despite a decline in origination volume from 2022. 

To court more clients, Rocket launched products targeted at accumulated home equity levels and potential homebuyers who face affordability challenges.

Rocket rolled out ONE+, a conventional 1% down home loan program for lower-income buyers, where the lender covers the remaining 2% needed to reach the required threshold for conventional loans. 

The BUY+ program provided borrowers a credit equal to 1.5% of the purchase loan amount when using a real estate agent from Rocket Homes to find a property.

In particular, volume for Rocket’s home equity loan products tripled between the first and fourth quarters of 2023.

“Home equity loans, ONE+ and BUY+ are unique products that have resonated strongly with both existing and new clients,” Brown said. “Notably, the vast majority of our clients who came to us through these products were new clients who did not already have a loan with us.

“These innovative solutions helped us attract new clients into the Rocket ecosystem.”

Deep pockets to pull from

For a company with a market cap of $23.3 billion and increased liquidity as of the fourth quarter, executives were confident that Rocket is well positioned to differentiate itself from other lenders that have joined the AI wave. 

“AI is something that you have to have a right to win. A right to win means you have to have the assets, you have to have capabilities, you have to have data, you have to have these ingredients to create the right recipe. So, because of those ingredients that we have at scale, it’s why we expect to be a benefactor,” Krishna said to an analyst who asked what puts Rocket ahead of the competition. 

Rocket reported $9 billion in liquidity as of Dec. 31, 2023, up from $8.7 billion in liquidity in the previous quarter. The Detroit-based lender had more cash on hand ($1.1 billion) at the end of last year than it did at the end of 2022 ($1 billion).

The firm also drove significant recurring revenue for mortgage servicing in the fourth quarter, which in turn generated $348 million of cash revenue from its servicing book.

In terms of operations, Rocket was all about cutting businesses that didn’t generate revenue and prioritizing the money-making operations. 

Cost structures were cut by nearly 20% last year, including the sunsetting of Rocket Solar and Rocket Auto, while investing money in innovation.

Executives emphasized that investment in AI will be applied to other parts of the business in addition to mortgage banking, underwriting and income verification. 

“We have a durable advantage because we have many of the ingredients that it takes to build one of the AI companies of the future. … You can expect to see many more as we continue to make progress on this journey. But it is a major strategic imperative and we’re investing across the board.”



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In December 2023, a startling rumor started to spread on social media — that large institutional buyers had purchased 44% of the available homes on the market in 2023, leaving policymakers concerned with the potentially predatory grip of these entities.

HousingWire lead analyst Logan Mohtashami immediately debunked the claim.

In fact, a recent study published by SFR Analytics shows that purchase activity among institutional buyers significantly decreased in 2023. The 10 largest institutional buyers collectively purchased 1,500 to 3,500 homes per month last year, the study shows. Purchase activity peaked in July, driven by a portfolio acquisition completed by Invitation Homes. 

The analysis is limited to resale properties and does not include new construction, which means that build-to-rent activity is excluded.

While it took more than 5,000 acquisitions per year to make it into the top 10 largest single-family rental (SFR) buyers in 2021, the threshold was downsized to 671 in 2023. Zillow, which was the second largest institutional buyer in 2021, exited the home-flipping business in November of that year after failing to accurately forecast the prices for buying and reselling homes.

A variety of companies earned a spot on the top 10 list for 2023, including real estate investment trusts such as Pretium, Amherst, Invitation Homes and Tricon. Two iBuyers,  Opendoor and Offerpad, were also on the list. 

Choctaw American Insurance was the only lease-to-own company to land on the list. New Western, meanwhile, also stood out as a marketplace for real estate investors. 

Opendoor (8,603 homes purchased), New Western (5,233) and Pretium (3,324) reaped the lion’s share of business in 2023, according to SFR Analytics. FirstKey Homes was the only large SFR fund not to be featured on the list.

The hot markets of 2023

Institutional buyers went all in on Dallas in 2023, snagging almost 3,000 homes in the metropolitan area. Atlanta came in second with about 1,900 homes purchased, followed by Houston (1,575) and Phoenix (1,383).

Investors of all sizes purchased 46,419 residential properties in fourth-quarter 2023, according to Redfin data. That amounted to $32.3 billion worth of property, or 10.5% less than in the final quarter of 2022. Meanwhile, total U.S. home purchases fell by 12.2% year over year to 251,462, the lowest fourth-quarter level since 2012, Redfin reported.

To generate its analysis, SFR Analytics leveraged nationwide deed and assessor data to track the single-family rental home market.



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We got a great existing home sales report on Thursday, but is this data already too old? Existing home sales showed a jump in sales, which was anticipated by most as we had positive, forward-looking housing data due to mortgage rates falling from 8.03% to 6.63%. However, the last four weeks have had negative trending data. This is nothing dramatic, but similar to what we saw in 2023 when mortgage rates rose from 5.99% up to 7.25%.

But before we address this, let’s look at the report because this report still shows what I have believed for a long time: even with elevated mortgage rates and home prices, lower rates lead to more demand as we are working from historically low levels of sales.

Here are some charts reviewing today’s report with a host of data lines from the NAR existing home sales report:

https://www.nar.realtor/newsroom/existing-home-sales-rose-3-1-in-january

A few critical glaring points: active inventory is still historically low, and so is monthly supply data. This is the timeframe where seasonality kicks in for both to go lower and it will be interesting to see where inventory goes this year with the NAR data. Our data lines here at Housing — which track things weekly — show inventory is growing year over year with new listings growth as well.

From NARTotal existing-home elevated 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.

Last year, we had 12 weeks of positive, forward-looking housing data, but it all fell into the March report we got for February, so we had a big jump in sales and a lower trend the rest of the year. This year, we might have a split two-month increase in sales before the forward-looking data takes us lower. The recent existing home sales bounce surprised some people, but the context is critical: we were working from a lower bar in sales this year than last year.

The recent move in mortgage rates from 8.03% to 6.63% pushed the purchase application data positive. Since November of 2023, purchase application data was positive for about eight weeks before it turned negative after rates rose to above 7% again.

From NAR: First-time buyers were responsible for 28% of sales in January; Individual investors purchased 17% of homes; All-cash sales accounted for 32%; Distressed sales represented 2% of sales; Properties typically remained on the market for 36 days in January.

.

A few notes on the data above: obviously, distressed sales are not a thing and haven’t been for some time. Another positive data line is that the days on market are above 30 days, which is something I would love to see year-round. The days on market are very seasonal, but we haven’t had the days on market stay over 30 days year-round since 2020, which is a reflection of active listings still being near all-time lows.  

Cash sales rising year over year looks normal as mortgage demand is lower year over year. So, as it goes with traditional January data, there are no real surprises here but a glimmer of hope that with more inventory this year, the days on market can show year-over-year growth every month.

This existing home sales report was solid, as lower mortgage rates did their thing, but looking at the current data, the last four weeks have had negative purchase application data. Purchase apps look out 30-90 days before they hit sales data. Sometimes it comes early or later in that timeframe, but after eight positive weeks of positive purchase apps, we have now had four straight negative weeks. This means 2024 is starting to look a lot like 2023 unless rates fall soon. 

We don’t want to see mortgage rates break out toward 8%; even the Fed has said getting to 8% was a restrictive policy and something that isn’t in its interest. So let’s keep an eye out on that 4.34% level on the 10-year yield and hope that doesn’t break. Otherwise we could have a horrible carbon copy of what we saw in 2023.





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The year 2024 has started with cautious optimism that mortgage rates will drop, sparking much-needed activity in the sluggish U.S. housing market.

Mortgage rates, however, have been on a rising trend of late. Recent data shows that the economy is booming, while the Federal Reserve is signaling that it will take its time before cutting benchmark interest rates. 

HousingWire’s Mortgage Rates Center showed the 30-year fixed-rate mortgage at 7.21% on Feb. 23. And according to Freddie Mac‘s Primary Mortgage Market Survey, the average rate inched closer to 7% this week.

Fannie Mae, however, remains optimistic that housing market activity will pick up as existing home sales and new single-family housing starts are expected to grow modestly in 2024.

While existing home sales dipped slightly in December by 1% to a seasonally adjusted annual rate of 3.78 million units, an increase in mortgage applications and December pending home sales that led to average closing times of 30 to 45 days indicate that a modest rebound in sales is underway. 

With a low supply of existing homes for sale, demand for new homes is likely to remain strong, and the limit on new home sales will be determined by homebuilder production capacity, according to a report released Friday by Fannie Mae’s Economic and Strategic Research (ESR) group. 

“Single-family permits in contrast edged up 1.6 percent in January, back in line with the overall starts series,” the report noted. “With single-family permits and starts now back in alignment, we expect new single-family construction to continue to drift upward in coming months.”

Fannie Mae forecasts total mortgage origination volume of $1.92 trillion in 2024, down slightly from $1.98 trillion in its previous forecast. Volume is expected to climb to $2.36 trillion in 2025, compared to the ESR group’s January forecast of $2.44 trillion.

Softening economic growth anticipated 

The ESR group upgraded its 2024 macroeconomic growth outlook due to a stronger-than-expected fourth-quarter 2023 gross domestic product (GDP) report, as well as incoming data on recent population growth and immigration trends that point to faster payroll and GDP gains over the forecast horizon. 

Fannie Mae’s 2024 GDP outlook is for 1.7% growth in 2024, compared to 3.1% in 2023. The ESR group previously forecast a “mild recession” for 2024.

“An unsustainably low savings rate suggests softer consumer spending going forward, consistent with the pullback in January retail sales, and slowing local and state tax receipts point to slower direct government spending growth,” the report stated.

Further, while payroll growth looks to have reaccelerated in December and January, other labor market measurements indicate softness. The ESR group expects that the labor market “on net” is likely to cool in the near future.

“Market dynamics continue to reflect significant uncertainty regarding the sustainability of stronger-than-expected recent GDP growth, the continuity of the decline of inflation, and the path of monetary policy change, not to mention the many ways in which historical relationships in housing and the larger economy remain out of balance post-pandemic,” Doug Duncan, Fannie Mae senior vice president and chief economist, said in the report.



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Mortgage servicers, regulators and economists are closely watching the delinquency rates for Federal Housing Administration (FHA) loans following a spike in the fourth quarter of 2023.

Industry experts say that although there’s a correlation between unemployment and delinquency rates, some homeownership costs — including insurance — have increased significantly over the past two or three years, which has had a strong financial impact on homeowners. But experts also say the situation is not as bad as the one experienced during the COVID-19 pandemic.

The sources spoke about these issues during this week’s Mortgage Bankers Association (MBA) Servicing Solutions Conference & Expo in Orlando.

The latest MBA data shows that the delinquency rate for one- to four-unit properties rose to 3.88% at the end of 2023, compared to 3.62% in the third quarter, but still below the historic average of 5.25%. Meanwhile, the FHA-insured loan delinquency rate recorded a larger jump during the same period to 10.81%, up from 9.5%, the highest level since Q3 2021.

“We are seeing a bit of a pickup for two quarters in a row, but it’s very important to keep in mind that we were at the absolute lowest point in delinquencies in the third quarter of 2023,” Marina Walsh, MBA vice president of industry analysis, research and economics, said in a market outlook session.

According to Walsh, the delinquency rate for FHA loans increased by 130 basis points from the third to fourth quarters, but the current level is “certainly not nearly where it was at the height of COVID-19.” 

In addition, she said that foreclosures are not picking up, so borrowers are either paying off their loans before entering the severe delinquency stage, or if they are in the serious delinquency stage, they are entering a workout. 

“The question I posed to all of you is, ‘Is this a blip or a bigger trend?’” Walsh said, adding that based on data MBA has received from the industry, she believes the delinquency rate could come down a bit in first-quarter 2024 following the end of the busy holiday shopping season.

“All these increases in costs impact people’s ability to pay, without question,” Steven R. Bailey, senior managing director and chief servicing officer at PennyMac Financial Services, said in an executives’ perspective session. “But we still see the strongest correlation is between unemployment and delinquency.”

Bailey said that although increases in delinquencies are not a trend that servicers want to see, “I don’t look at it with the same fear that I used to look like.” 

Homeowners insurance

According to industry experts, one of the costs affecting homeowners is their insurance, which can lead to increases in delinquencies. California and Florida are among the states where the situation is more evident. 

Seven of the 12 largest insurers in California have either paused or restricted new policies over the past 18 months, including State Farm and Allstate. In September, the state’s top insurance regulator announced that new rules are in the works to persuade insurers to remain.

In Florida, the departure of many insurers and reinsurers has resulted in homeowners paying an average of nearly $4,000 a year, almost three times the U.S. average, according to estimates from the Insurance Information Institute. In some instances, homeowners have seen their insurance costs more than triple, but a new bill seeks to help them.

“That’s a combination of both rates from a carrier perspective, as well as just the increase in home values,” Patrick A. Sullivan, vice president of industry relations and compliance at Assurant, said in a session about homeowners insurance. 

Sullivan said reinsurance is another factor weighing on homeowners insurance costs, a function of the global capital markets. He added that reinsurance costs have more than tripled over the past three years.

“Homeowners insurance is certainly a problem we need to tackle together,” John Bell, executive director of loan guaranty service at the U.S. Department of Veteran Affairs (VA), said during a regulatory session. 

“I hope that there are others on this panel and others out there that want to work together to try to solve some of those rising prices that our homeowners just can’t absorb, and at some point in time, it’s going to hurt the market.”

Bell said that if a home costs $800 per month more than last year, the industry needs to figure out how to solve it. Bell and the VA are working to move forward with options to help veterans avoid foreclosure, including a partial claim solution.

FHA Commissioner Julia Gordon, who announced the agency’s new payment supplement partial claim during the conference, added that the issue of homeowners insurance will take a village to tackle. 

“And that’s going to take real work in the states also, which is hard, and we just have to do it if we want people to be protected,” Gordon said.



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For many real estate agents, a logical step on their path of professional development is becoming a real estate broker, then working as either a managing broker or a broker-owner.

However, unlike other industries where promotion to the management level is generally tied to additional income, some brokers find themselves struggling to perform at the same financial level as their most successful agents.

For brokers who are franchise owners in a big-box brokerage model, upstream costs can make it difficult to maintain profitability. For brokers who are indie broker-owners, overhead and operating costs can make it practically impossible, especially during the start-up years.

It’s no fun being the broke broker, and it can keep you from offering your agents the support they need to grow their businesses and, by extension, your business. Here are seven ways to ensure you avoid being the brokest person in your business:

1. Determine whether you’ll be a competing or non-competing broker

You may find that you can’t secure your own income without being in production, at least initially. Make sure that you have a plan in place to feed leads to your agents as needed or that the agents you’re recruiting are experienced enough that they won’t feel like you’re working against their interests.

2. Develop a profitable commission structure

Make sure that you crunch the numbers on your commission structure to ensure you can operate profitably and in a way that allows you to earn an income that’s fair, competitive and aligned with market standards for your area.

3. Focus on volume or premium listings (or both)

Make sure that your marketing and branding allows your agents to secure higher volume or premium listings so that they (and you) can generate larger commissions. Provide the support and resources needed to help your agents work in these markets.

4. Leverage your expertise

Perhaps you have a wide network that allows you to develop relationships with other brokers and pursue high-net-worth clients. Perhaps you’ve developed specialized expertise that would allow your brokerage to dominate a specific niche or market segment. Position yourself as an industry leader and subject matter expert, and develop your unique value proposition to enhance the reputation of both your and your firm.

5. Optimize your management

Make sure that you’re doing what’s best for your agents so that they can produce at the highest possible level — and so that you spend less time on recruitment, onboarding and retention activities. Expand your team in a smart way so they’re happy to support each other instead of competing with each other for crumbs.

6. Diversify streams of income

Add additional services to your brokerage’s offerings, from property management to consultation and investment services. Pursue strategic partnerships with lenders or title companies. Start a real estate school or use your professional expertise to develop your own real estate investment portfolio. The more ways you make money, the higher your income and the better protected you are in the face of market adjustments.

7. Draw on the expertise of others

Work with a tax strategist and employ a fractional CFO to ensure that you’re making smart decisions with every dime that goes in or out of your brokerage. Make sure that you’re doubling down on the activities that generate revenue and delegating the support tasks to others so that you can use your talents in the best way possible.

Your financial success depends on your agents — and vice versa. Make sure that you’re creating a business where everyone can succeed, including (and especially) you.

Troy Palmquist is director of growth for eXp California.



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Less than 24 hours after announcing Nick Bailey’s departure from the firm, RE/MAX executives found themselves on a call with investors and analysts to discuss the company’s fourth-quarter and full year 2023 earnings.

In his opening remarks, Erik Carlson, who was named CEO of RE/MAX Holdings in November, mentioned the promotions of Amy Lessinger, who is replacing Bailey as RE/MAX president, Abby Lee and Susie Winders, but he made no mention of Bailey other than to note his departure. Additionally, no analysts asked questions about the changes the firm made to its C-suite.

“These are well-deserved positive changes that I believe will help us navigate the road ahead and realize our full potential,” Carlson said.

In their new roles, the firm’s new leaders find themselves tasked with getting RE/MAX back on a profitable track. Despite losing $10.9 million in Q4 2023 and a total of $69 million for the full year, RE/MAX’s revenue of $76.6 million in Q4 was down only 5.7% year over year, while the $325.7 million in yearly revenue was down 7.8%.

These results came as the number of existing home sales dropped 18.7% year over year in 2023 to a near 30-year low of 4.09 million. RE/MAX’s U.S. agent count, meanwhile, fell from 58,719 at end of 2022 to 55,131 at end of 2023.

The company’s global agent count is up 0.6% annually to 144,835, due to slight growth in its Canadian agent count and a strong uptick in its international agent count, the latter of which rose from 60,175 at the end of 2022 to 64,536 at the end of 2023.

With this in mind, Carlson said two of the firm’s main priorities are to stabilize and grow its U.S. agent count and to expand its mortgage business. He said leaders are confident that these areas can “grow into a meaningful revenue business.”

“Posting gains in those two areas would build market share, increased revenue and earnings, and will create momentum for additional growth,” Carlson said.

As RE/MAX has attempted to overcome the challenges posed by housing market conditions, executives said they have reevaluated some of the programs the company offers in an effort to pinpoint which initiatives are worth further investment. One such program, Carlson said, is its teams initiative, which is launched in mid-2022 and expanded again in 2023.

“As a result of the program impact and our lessons learned, we are expanding the modified version of the program to encourage team recruitment and growth across much of the U.S.,” Carlson said. “From our perspective this is prudent, proven investment that will help franchises grow their offices, help team leaders build larger teams and, simultaneously, it sends a message across the industry that teams have yet another reason to affiliate with RE/MAX.”

Under the modified teams program, in order to unlock the program’s financial incentives (which include reduced recurring fees and a broker fee cap), a brokerage in an eligible state must first add any combination of six team leaders or members from outside the RE/MAX network.

RE/MAX executives also addressed the commission lawsuits and the firm’s settlement agreement related to the Sitzer/Burnett, Moehrl and Nosalek suits, which was confirmed as a nationwide settlement.

“While the settlement came at a significant financial cost, we believe it was the right decision for all our stakeholders, affiliates, employees, shareholders and debt holders alike,” Carlson said. “We view it as an investment in the brands, the networks, the franchisees and, most importantly, the agents.”

Executives noted they were “cautiously optimistic” about the settlement gaining final approval in May, an outcome that would see copycat litigation also go away. They also noted that RE/MAX is viewing this as an opportunity to further double down on agent education.

“In RE/MAX University, we offer something called the Accredited Buyer Representation Designation, which gives our agents education on exactly how to articulate their value proposition, so we anticipate that there will be more demand for that as we move forward,” Lessinger said.

As RE/MAX heads further into 2024, executives said they expect to continue seeing a purge of nonproductive agents across the industry, as well as more transactions in 2024 than in 2023, which they believe will serve their highly productive agents well.



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Despite slower housing market conditions, Big Four title firms Stewart, First American and Fidelity National Financial all managed to earn profits in 2023.

Stewart, which reported its earnings earlier in February, posted a revenue of $2.26 billion in 2023 and a net income of $30.4 million. Both figures were down significantly from 2022 when it recorded $3.07 billion in revenue and net income of $162.3 million.

In fourth-quarter 2023, Stewart earned revenue of $582.2 million and net income of $8.8 million, which was down from the $13.3 million in net income it earned a year ago. Despite declines in title transaction volume, Stewart’s title segment still reported an operating revenue of $503 million for Q4, down 14% annually, and a pretax income of $27.3 million, down 2% annually.

On a call with investors and analysts, Stewart CEO Fred Eppinger noted that the company’s focus in 2023 was on creating a more resilient firm that would be able to succeed in all phases of the real estate market cycle.

“As we close 2023, we are operating in an environment that saw mortgage interest rates reach a high of 8% during the fourth quarter before falling to around mid-6% near the end of the year,” Eppinger said.

“Mortgage rates and rate volatility continue to impact transaction volumes, and we find ourselves at historic lows for sale of existing homes. As I have said before, we see 2024 as a transition year toward a more normal market for existing home sales during 2025 and believe the next six months will likely be very challenging given the macroeconomics laid on top of a typical seasonal impact.”

To achieve its goal, Eppinger noted that Stewart is focusing on improving its technology and efficiency.

“These strategic investments are resulting in cost ratios that are somewhat elevated given we are in a market with historically low transaction volumes,” Eppinger said. “However, we are setting Stewart up for better overall performance in the future. We believe that these long-term investments coupled with thoughtful near-term expense management will improve our structure and financial performance in the long term.”

Executives at First American also lamented the challenging housing market conditions posed in 2023.

“While difficult market conditions will likely persist this year, we do expect to benefit from modest growth in both our residential and commercial businesses, but this could change depending on the path of mortgage rates,” First American CEO Ken DeGiorgio told investors and analysts on the firm’s Q4 2023 earnings call earlier this month.

“We continue to run our business efficiently and maintain a strong balance sheet, which allows us to invest in strategic initiatives that support long-term growth, while returning capital to shareholders.”

In 2023, First American recorded total revenue of $6.004 billion, down from $7.605 billion in 2022. Its net income last year was $216.8 million, down from $263 million a year prior. This decrease came as the number of title orders opened during the year fell from 895,500 in 2022 to 629,100 in 2023.

Additionally, First American’s title revenue fell by roughly $1.8 billion from 2022, finishing last year at $5.725 billion, as the title segment’s net income dropped from $757.4 million to $494 million during the year.

In Q4 2023, First American reported a 15% year-over-year decrease in revenue to $1.429 billion, along with a $20 million decline in net income to $34.1 million. Title revenue for the quarter also fell to $1.321 billion, as the number of title orders opened dropped from 153,100 in Q4 2022 to 124,600 in Q4 2023.

DeGiorgio noted during the call that the firm’s financial results were materially impacted by the December cybersecurity incident that resulted in First American’s systems going offline for a few days.

“We were performing well in a challenging market ahead of the cybersecurity incident that occurred in late December,” DeGiorgio said. “We elected to take systems offline, which materially impacted the company’s operations and, consequently, our fourth-quarter financial results. Our title orders and related product demand appear to have returned to normal levels, however. We expect no significant ongoing impact from the incident.”

He also noted that the firm was grateful for the support and patience of agents, customers and other industry participants during the cybersecurity incident.

Cybersecurity was also a topic of discussion on Fidelity’s Q4 2023 earnings call, as the firm suffered its own attack just weeks before First American was hit. According to CEO Mike Nolan, Fidelity’s Q4 2023 title segment results were negatively impacted by the incident.

“We estimate the incident reduced adjusted pretax title earnings by $8 million to $10 million and lowered our adjusted pretax title margin by roughly 50 basis points and 12.3%, which would have been in line with the prior year quarter to 11.8% as reported,” Nolan told investors and analysts during the firm’s Q4 2023 earnings call.

“As challenging as this event was, it really showcased how our team pulled together.”

Despite the cybersecurity incident, Fidelity’s title segment performed well in both Q4 and full year 2023, reporting revenue of $1.7 billion for the quarter and $7.038 billion for the year. The title segment reported an adjusted net income of $174 million for the fourth quarter and $760 million for the full year. Both of these figures were down from $180 million in Q4 2022 and $1.2 billion in full year 2022.

These results came even as the number of purchase orders opened during the quarter were down 1% and the number of refinance orders opened were down 11% annually.

Due to losses reported by the firm’s corporate and F&G Annuities and Life segments during the fourth quarter, Fidelity as a whole reported a net loss of $69 million during these three months, even as revenue rose from $2.557 billion in Q4 2022 to $3.432 billion in Q4 2023.

For full year 2023, the firm reported total revenue of $11.752 billion and net earnings of $517 million.

Looking ahead, Nolan is optimistic about how the firm will fare in 2024.

“As always, we will manage our business to the trend in opened orders to protect our profitability,” he said. “We feel that we are well positioned for the current market and poised to benefit from a potential turn in the housing market, should mortgage rates drop in 2024. Beyond the near-term pressures, we remain bullish on the mid- to long-term fundamentals of the real estate market.” 



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HousingWire Editor in Chief Sarah Wheeler sat down with Jason Cave, former deputy director at the FHFA where he ran their FinTech Office, to talk about where mortgage tech is falling short, and what the government should do to help.

Sarah Wheeler: What led you to leave FHFA for the private sector?

Jason Cave: I spent 30 years in the government — 27 at FDIC and three at FHFA. It was the right time to make a change and I figured it would be neat to work on some of the issues with the fintechs. There are a lot of banking challenges, just like with mortgage, and it felt like a good time to be part of the solution. So, I’ve been helping companies navigate the D.C. landscape, and just helping improve engagement. And it’s a lot of fun to wake up and do a bunch of different things on a given day. I guess I’m a gig economy worker now! A month in, I’m enjoying it.

SW: Looking at the mortgage space, what are some of the challenges when it comes to technology?

JC: There are several, but I think for IMBs specifically, it’s finding a way to get a stable investment track — something that allows you then to be able to continue to build in good times and bad times, because this industry is so boom/bust. And it seems like with technology, even when times are good, a lot of companies aren’t interested because there’s so much money to be made. That’s a broad generalization, but this is coming from discussions with lenders as well as vendors.

And then when times are tough, you know, you’ve just got to hang on and putting that kind of money into technology is tough. Many players in the mortgage space are well behind technological advances, and they need to find ways to really smooth that out, so that they’re continuing to make some investment in all the cycles. That would make them so much more efficient.

SW: You launched FHFA’s Velocity tech sprint in 2023 to bring the industry together to collaborate on solving some of the tech problems we face. What were some of the areas it focused on?

JC: We got a lot of different ideas! A lot of the discussions were very much: ‘let’s not just make incremental changes, let’s really look long-term. Like, how could we actually use blockchain or some form of distributed ledger to really build a better mousetrap?’ But the issue with so many of the ideas is that you have to have the policymakers or regulators, the GSEs, the lenders, and all the other parties on the same page. Now, the positive thing with that is, if you can get that, I think you can make real change.

The downside is that it takes a lot to get everybody there. But I think some of the problems we have today is because it’s so difficult to get everyone at the table. You have a lot of solutions, where it’s like, well, I’m not going to get everybody — I’m going to get a lender and I’m going to get a vendor and then we’re going to do this. And then somebody else says I’m going to get a title company and I’m going to get a POS provider, and we’re going to do this. And that’s quicker and easier, but I don’t know if it’s effective.

At the end of the day, I think we’re finding that companies are having challenges both on adoption and integration. And so maybe this idea of really putting in the time to get everybody at the table and start building makes sense.

A lot of people brought up things [in the tech sprint] that were not heavy lifts, but so important, like down payment assistance. There are so many programs out there, but sometimes in Washington, we forget that just because there are a lot of programs out there, doesn’t mean they’re accessible, doesn’t mean everybody knows about them. We also had some really good ideas about the front end, really being able to pull customer information quicker.

SW: What were some of the themes that came out of the tech sprint that you’re excited about?

JC: The trusted repositories. I’m excited because I think this is something that has not gotten a lot of investment and attention. And I think it goes back to the need for collective action. Just that word itself means you need to have a lot of people that are agreeing to move forward and do these transactions in a different way. And it’s going to affect all of us, but we’re going to be okay with it — we’re going to find a way to make money at it and also be efficient and lay the tracks down.

Blockchain sort of gets a bad name because it’s often connected with crypto. But a lot of these trusted systems run on distributed ledger technology. I’m not a techie, but I’ve looked at it and talked with a lot of people. And when you read what distributed ledger technology is meant for and where it really can bear the greatest fruit, it seems made for mortgage. And I think that’s something that the government and the GSEs are going to really need to encourage — I don’t think this is just going to happen from the bottom up. It’s too much money and it’s too big of a change. So I would like to see that become a priority.

SW: Where else do you think it will take government incentives or at least clearer regulation to advance tech?

JC: We need that sort of strong encouragement/directive even in areas where there’s already been work done. So one of the first things that we wanted to tackle with Velocity was the consumer information and the services that can quickly allow people to transmit what’s normally done in a paper-based, labor-intensive way. Tools such as Day 1 Certainty and AIM have been around for so long — six, seven, eight years — but take up was so low. What is the holdup? What are the bottlenecks? And how do we really push through them? And I think that’s something FHFA and the GSEs need to really push.

When adoption rates are so low, it becomes a vicious cycle. Adoption rates are low, that means people don’t think that the tools are effective, that means that they don’t use it, that means adoption rates go lower.

But think about Day 1 Certainty. I mean, one of its main reasons for coming into existence was to deal with the rep and warranty issue years ago. This isn’t just innovation, this was Fannie Mae and Freddie Mac getting the benefit of a secure, true document — it’s not something I can pull out and doctor up, it’s the actual record. And so it’s safer. You would think some of these tools are just a no-brainer, but I don’t think that’s the case. So that’s an area where Fannie and Freddie as well as FHFA should really push on it.

I would even be so bold to say I think the enterprises should be required to be getting adoption rates of 50% or more, and if they’re not, to really be able to explain why people aren’t using these very important tools they’ve developed. A lot of money has gone into building those tools. Also, to be very transparent, I am advising Argyle and they are one of those providers, so just full disclosure there that I’m advising them. But they and other companies like them are doing really interesting work.

SW: Let’s talk more about direct source data, since it seems like low-hanging fruit, whether that’s credit scores or verification of income and assets.

JC: I couldn’t agree more. And whether it’s The Work Number or credit scores, those are two examples where the consumer is paying that bill directly. And as we already know, closing costs go up every year. It’s an impediment for people — especially those with lower to moderate income — to be able to refinance and get the credit they need. So the more people do what Sandra Thompson is doing by looking at credit scores and trying to create greater competition, the better.

I mean, anytime somebody all of a sudden gets to double their fees because they see that their potential monopolies is threatened, I think it’s a sign that it’s a monopoly! As a taxpayer, I’m flabbergasted to see companies say, now that we might have to lose some of that, we’re going to increase our fees and make it up in the meantime. I think that’s a problem.

And I think that what CFPB did with the proposed Personal Financial Rights Data rule, they have started down that path with making banks share this information. Banks have been able to have a lot of our information locked up, but it’s not locked up for them — they get to use it. And when we want to use it or allow others to use it, it’s not that easy. I applaud the CFPB for really taking issue with that because it is the consumer’s information.

Now, I would say it’d be very nice if the CFPB expanded that to look at things such as payroll and credit scores, because the companies that I just talked about, are unfortunately not getting picked up. It’s the banks, right? And I really do hope that CFPB looks at some of these other companies, who are saying well, we built the pipes, and so we should be able to charge what we want. I don’t think so. There are a lot of subsidies in this housing space. I don’t know who built the pipes. I don’t think anybody on their own, with all their own private money, did it — I think there was a lot of help along the way. And, and again, when you look at who’s paying the bill at the end, it’s really troubling.

SW: What about alternative data? Where is that headed?

JC: I’m not sure where it’s going. I think it’s another one of those areas that with some guardrails, is going to be necessary because of demographics. The reality is that if you do 1099 work, it’s really hard to get a mortgage. I know that from the work we did at FHFA. Those processes are still geared to the 1950s Ward Cleaver family. I’ve heard concerns that some of the alternative credit information is not as robust, it’s not being based on longer-term data histories. I think it’s fine to raise those issues. I don’t think it’s fine to say that means we’re not going to factor it in or we’re going to be very stingy with whatever credit we give for those sorts of things. I think there are some companies like Argyle and others that are finding ways to be able to get that information from good verifiable sources so that lenders can bring that information in into the equation.

SW: What happens to the FHFA’s Velocity tech sprint now that you’re gone?

JC: The Velocity tech sprint and just the FinTech office in general is in very good hands. At FHFA Anne Marie Pippin is continuing to do that work. She did most of the heavy work when I was there, so you’re seeing Anne Marie at the various conferences and panels. FHFA Director Thompson continues to strongly support the work. She has Tracy Stephan, who we brought on board, who was a long term executive at Fannie and also Leah Price has joined recently. And while they have a small group, you’ve got some good leadership and also some people that have actually done this work.



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