February is almost over, but it’s not too late to say that it is a very important month, especially for 50 million Black Americans. Black History Month is a time set aside to recognize and celebrate the contributions, achievements, and history of African Americans throughout U.S. history. It’s an opportunity for everyone to learn more about this important history, and to better understand what this group has overcome.
This is important for anyone who wants to understand Black consumers and do business with them. By honoring this history, we honor the descendants of those who lived through it.
As diverse as any other ethnicity, many Black Americans are, at their core, hard-working, family-centric, church members who live, for the most part, in urban areas. Like the cities they inhabit, many have had a troubled past. For some, their present lives are troubled, often through no fault of their own.
The thing about history is that we make more of it every day. The actions we take today should serve to advance everyone in the system. My experience in the financial services industry tells me that there is more trouble for the housing economy on the horizon, for Americans of all ethnicities.
Here is why and what can be done about it.
You don’t have to be in the real estate business to know that homeownership is a cornerstone of the American Dream, representing stability, wealth building, and community ties. Black Americans know this well and see the path to homeownership as a way to build generational wealth and leave behind a legacy for their families. But they have found this path has been fraught with challenges, shaped by historical, systemic, and economic factors.
In the early 20th century, Black Americans faced significant barriers to homeownership, including racial segregation, discriminatory lending practices, and exclusionary covenants that prevented them from buying homes in certain neighborhoods. The practice of redlining, initiated in the 1930s, where banks and insurers refused services to entire neighborhoods based on racial composition, further entrenched these disparities.
After World War II, the GI Bill provided veterans benefits, including home loans. However, due to discriminatory practices, Black veterans often found it difficult to access these benefits, missing out on one of the most significant opportunities for wealth accumulation in American history.
The Civil Rights Movement of the 1960s led to significant legislative changes, including the Fair Housing Act of 1968, which aimed to eliminate discrimination in housing. But it wasn’t enough.
Despite these legal advancements, Black Americans still face challenges in achieving homeownership at rates comparable to other demographics. Systemic issues, such as unequal access to credit, discriminatory lending practices (like redlining persisting in different forms), and income disparities, have continued to impact the ability of Black families to own homes.
Today, homeownership among Black Americans still lags significantly behind other demographics. According to data from the U.S. Census Bureau, the homeownership rate for Black Americans remains the lowest among all racial and ethnic groups the bureau tracks in the United States.
Even when they win, they don’t. When they are ready to finance a new home, Black applicants are more likely to face tighter credit standards compared to other demographics with similar financial profiles.
Despite this, millions of Black Americans are homeowners today, the majority of them living in urban areas. They don’t know it, but they will be the first to be impacted by the next financial downturn.
Why I see these issues the way I do
I currently serve as CEO of a minority-owned asset management company focused on facilitating transactions that deliver high-yield returns for investors. My success is based on my skill at identifying, targeting, and acquiring distressed mortgage notes and properties that earn these returns.
If you want a high return, you’re more likely to find it in portfolios of distressed assets and REOs. You’ll find most of these assets attached to real estate in urban areas. Often, these homes are owned by Black homeowners.
I have a lot of experience with these markets in my portfolio. Where others in my industry might avoid these markets due to the uncertainty of generating returns, I lean in. I understand these markets very well.
I also know the inner city. I grew up in Paterson, N.J. Today, our headquarters is in Newark, N.J. Every city is fundamentally the same at its core. Sure, each urban center has its own flavor and each is special in its own way. But they all look very similar to me, both in terms of the real estate assets you find there, the relative value of its assets, the population that makes the area its home, and the distress many residents share.
Drop me into the middle of any city in America and I’ll find my way around. It’s home to me. I run a company that specializes in finding distressed assets and I can tell you that the distress is in our inner cities and it’s having a disparate impact on Black Americans.
I’ve seen it again and again in the portfolios we trade. People living in the inner cities are most at risk when times get hard. Those loans are always the first loans to go bad and it’s about to get worse.
The hard times that are coming
Getting more than one economist to agree on any prediction of future economic conditions is challenging. While they often agree in principle, they usually disagree on the details. After two years of a down housing market that followed on the heels of two years of an extremely hot market, everyone wants to know when the business will return.
Today, many predict that the U.S. might avoid a recession in 2024, or at least experience a soft landing. But even if the economy slingshots around the drain, commercial real estate, the skeletal structure of our inner cities is faced with many challenges.
The normalization of hybrid working arrangements will continue to limit office demand growth, and the biggest wave of new apartment supply in decades will temper rent growth, improving affordability for renters. Multifamily and neighborhood retail sectors are expected to remain strong, while the future of office buildings remains uncertain, especially as central business districts evolve.
Local governments are anticipated to focus more on housing affordability, with actions such as adopting land-value taxes and promoting building to make homes more affordable. Of course, this won’t work in urban areas where all the available land has already been divided up among the various stakeholders.
Those with the least power and the highest likelihood of being called upon to make up for any tax shortage caused by a floundering commercial sector are the homeowners. These residents, mostly Black, took out their loans when mortgage rates were very low and when they needed more cash, they opted for a HELOC instead of a cash-out refi, for a lower blended interest rate.
What we’re seeing now is higher delinquency in these second liens and more non-performing mortgage assets based on them. Homeowners are struggling with high credit card debt, but they are still managing to make their first lien payments.
The risk is that the problems with their seconds could cost them their homes in 2024.
The difficult solution that banks should embrace
Foreclosing on a second lien may be the easiest solution to this problem, but it’s not the best one. It’s certainly not the solution Black homeowners need now. Sending them back to the starting line won’t serve them. Besides, it’s unnecessary.
Any investor with a portfolio of non-performing HELOCs has a number of tools available that can get these loans back on track and help keep homeowners in their homes. But most of these solutions are not easy.
Some may involve partnerships with community organizations, non-profits, and even governmental agencies that can provide outreach, education, financial assistance, and advocacy to support Black homeowners.
Banks working alone will find that success requires consistent outreach to these borrowers to get them to engage. This can be challenging and costly for banks as delinquent loans require more time and resources to resolve. Additionally, borrowers will avoid contact with their bank, which creates additional challenges to finding a workable solution.
These delinquent loans are an extremely small portion of the banks’ portfolios. Most banks don’t have the time or resources to modify these liens.
Part of the problem is that many banks don’t know they can offload entire portfolios of non-performing second liens, but they can. If they sell it to an investor who understands the inner city and the homeowners that live there, it can be a win-win that also delivers a win to the city.
What the industry does now will become part of the history that future homeowners look back upon each February. I hope that Black History Month will remain a source of pride, empowerment, and connection to a heritage that we must not lose.
The best way to ensure that, to honor that history, is to build a better future by working together to keep Black homeowners in their homes.
Jason Lewis is CEO of AryMing Asset Management, a boutique private alternative investment firm
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story:
Jason Lewis at jlewis@aryming.com
To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com
Source link
HUD, VA announce $14.5M for veterans seeking permanent housing
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Veterans Affairs (VA) this week announced the awarding of more than $14.5 million that will be distributed by public housing agencies (PHAs) across the country in an effort to house veterans.
The funds will be distributed by the PHAs through more than 1,400 HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers. While the highest concentration of vouchers are going to Tucson, Arizona; Philadelphia; and Spokane, Washington, the footprint covers a wide range of states, according to the list of awards.
“HUD is committed to ending veteran homelessness once and for all,” HUD Secretary Marcia Fudge said in an announcement. “These HUD-VASH voucher awards help us to reach that goal. We will continue to work with our local Veterans Affairs Medical Center partners at public housing agencies across the country so we can get veterans and their families off the streets and into affordable housing.”
Veteran homelessness is a chronic issue that VA Secretary Denis McDonough intends to eliminate. The vouchers are an important tool to accomplish that goal, he said.
“HUD-VASH has been one of the most effective tools in our toolkit, empowering VA and HUD to provide more housing and wraparound services to more homeless and at-risk Veterans than ever before,” McDonough said in a statement. “Together, we will not rest until Veteran homelessness is a thing of the past.”
The vouchers combine rental assistance from HUD with the individualized support many veterans need, including case management and clinical services provided by VA.
“Thanks to the joint efforts of HUD, VA, and the United States Interagency Council on Homelessness (USICH), the number of Veterans experiencing homelessness has fallen by 4% since early 2020, and by 52% since 2010,” the announcement stated. “Additionally, VA and HUD partnered to permanently house more than 46,000 homeless Veterans in 2023, surpassing the calendar year goal by 22.5%.”
In total, than 110,000 HUD-VASH vouchers are being administered by more than 700 PHAs nationally, HUD reported. New HUD-VASH vouchers have been issued every year since 2008, and more than 81,000 of these vouchers are actively under lease by veteran recipients.
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ThoughtFocus appoints new chief business officer
Financial services consulting firm ThoughtFocus appointed Santhosh Ananthakrishnan to the position of chief business officer. In his new role, Ananthakrishnan will oversee growth strategies and report directly to ThoughtFocus CEO Shylesh Krishnan.
“I am very impressed with the rich portfolio of long-term customer relationships that the firm has built,” Ananthakrishnan said in a statement. “The culture of excellence built by the founders and their aspiration to leave a legacy resonates very well with me.
“All of this is getting a major boost with the latest round of growth investment from H.I.G. Capital. I am looking forward to working with Shylesh and the board to accelerate the firm’s growth.”
Before joining ThoughtFocus in January, Ananthakrishnan led the global mortgage business at Tata Consultancy Services. Ananthakrishnan, a 2023 HousingWire Vanguard, also previously worked at Freddie Mac as a senior director of product development.
“We are delighted to welcome Santhosh to our team as we embark on our growth journey together,” Krishnan said in a statement. “Given his exceptional track record in crafting digital business solutions that drive transformation, coupled with his deep expertise in strategic business growth, Santhosh is ideally poised to spearhead and expedite the growth trajectory at ThoughtFocus.”
ThoughtFocus is a consulting, software engineering and business process management firm. It serves clients in the financial services, manufacturing, education, aerospace and technology industries.
Source link
Opinion: The best way to honor our past is to protect borrowers in the present
February is almost over, but it’s not too late to say that it is a very important month, especially for 50 million Black Americans. Black History Month is a time set aside to recognize and celebrate the contributions, achievements, and history of African Americans throughout U.S. history. It’s an opportunity for everyone to learn more about this important history, and to better understand what this group has overcome.
This is important for anyone who wants to understand Black consumers and do business with them. By honoring this history, we honor the descendants of those who lived through it.
As diverse as any other ethnicity, many Black Americans are, at their core, hard-working, family-centric, church members who live, for the most part, in urban areas. Like the cities they inhabit, many have had a troubled past. For some, their present lives are troubled, often through no fault of their own.
The thing about history is that we make more of it every day. The actions we take today should serve to advance everyone in the system. My experience in the financial services industry tells me that there is more trouble for the housing economy on the horizon, for Americans of all ethnicities.
Here is why and what can be done about it.
Homeownership in the black community
You don’t have to be in the real estate business to know that homeownership is a cornerstone of the American Dream, representing stability, wealth building, and community ties. Black Americans know this well and see the path to homeownership as a way to build generational wealth and leave behind a legacy for their families. But they have found this path has been fraught with challenges, shaped by historical, systemic, and economic factors.
In the early 20th century, Black Americans faced significant barriers to homeownership, including racial segregation, discriminatory lending practices, and exclusionary covenants that prevented them from buying homes in certain neighborhoods. The practice of redlining, initiated in the 1930s, where banks and insurers refused services to entire neighborhoods based on racial composition, further entrenched these disparities.
After World War II, the GI Bill provided veterans benefits, including home loans. However, due to discriminatory practices, Black veterans often found it difficult to access these benefits, missing out on one of the most significant opportunities for wealth accumulation in American history.
The Civil Rights Movement of the 1960s led to significant legislative changes, including the Fair Housing Act of 1968, which aimed to eliminate discrimination in housing. But it wasn’t enough.
Despite these legal advancements, Black Americans still face challenges in achieving homeownership at rates comparable to other demographics. Systemic issues, such as unequal access to credit, discriminatory lending practices (like redlining persisting in different forms), and income disparities, have continued to impact the ability of Black families to own homes.
Today, homeownership among Black Americans still lags significantly behind other demographics. According to data from the U.S. Census Bureau, the homeownership rate for Black Americans remains the lowest among all racial and ethnic groups the bureau tracks in the United States.
Even when they win, they don’t. When they are ready to finance a new home, Black applicants are more likely to face tighter credit standards compared to other demographics with similar financial profiles.
Despite this, millions of Black Americans are homeowners today, the majority of them living in urban areas. They don’t know it, but they will be the first to be impacted by the next financial downturn.
Why I see these issues the way I do
I currently serve as CEO of a minority-owned asset management company focused on facilitating transactions that deliver high-yield returns for investors. My success is based on my skill at identifying, targeting, and acquiring distressed mortgage notes and properties that earn these returns.
If you want a high return, you’re more likely to find it in portfolios of distressed assets and REOs. You’ll find most of these assets attached to real estate in urban areas. Often, these homes are owned by Black homeowners.
I have a lot of experience with these markets in my portfolio. Where others in my industry might avoid these markets due to the uncertainty of generating returns, I lean in. I understand these markets very well.
I also know the inner city. I grew up in Paterson, N.J. Today, our headquarters is in Newark, N.J. Every city is fundamentally the same at its core. Sure, each urban center has its own flavor and each is special in its own way. But they all look very similar to me, both in terms of the real estate assets you find there, the relative value of its assets, the population that makes the area its home, and the distress many residents share.
Drop me into the middle of any city in America and I’ll find my way around. It’s home to me. I run a company that specializes in finding distressed assets and I can tell you that the distress is in our inner cities and it’s having a disparate impact on Black Americans.
I’ve seen it again and again in the portfolios we trade. People living in the inner cities are most at risk when times get hard. Those loans are always the first loans to go bad and it’s about to get worse.
The hard times that are coming
Getting more than one economist to agree on any prediction of future economic conditions is challenging. While they often agree in principle, they usually disagree on the details. After two years of a down housing market that followed on the heels of two years of an extremely hot market, everyone wants to know when the business will return.
Today, many predict that the U.S. might avoid a recession in 2024, or at least experience a soft landing. But even if the economy slingshots around the drain, commercial real estate, the skeletal structure of our inner cities is faced with many challenges.
The normalization of hybrid working arrangements will continue to limit office demand growth, and the biggest wave of new apartment supply in decades will temper rent growth, improving affordability for renters. Multifamily and neighborhood retail sectors are expected to remain strong, while the future of office buildings remains uncertain, especially as central business districts evolve.
Local governments are anticipated to focus more on housing affordability, with actions such as adopting land-value taxes and promoting building to make homes more affordable. Of course, this won’t work in urban areas where all the available land has already been divided up among the various stakeholders.
Those with the least power and the highest likelihood of being called upon to make up for any tax shortage caused by a floundering commercial sector are the homeowners. These residents, mostly Black, took out their loans when mortgage rates were very low and when they needed more cash, they opted for a HELOC instead of a cash-out refi, for a lower blended interest rate.
What we’re seeing now is higher delinquency in these second liens and more non-performing mortgage assets based on them. Homeowners are struggling with high credit card debt, but they are still managing to make their first lien payments.
The risk is that the problems with their seconds could cost them their homes in 2024.
The difficult solution that banks should embrace
Foreclosing on a second lien may be the easiest solution to this problem, but it’s not the best one. It’s certainly not the solution Black homeowners need now. Sending them back to the starting line won’t serve them. Besides, it’s unnecessary.
Any investor with a portfolio of non-performing HELOCs has a number of tools available that can get these loans back on track and help keep homeowners in their homes. But most of these solutions are not easy.
Some may involve partnerships with community organizations, non-profits, and even governmental agencies that can provide outreach, education, financial assistance, and advocacy to support Black homeowners.
Banks working alone will find that success requires consistent outreach to these borrowers to get them to engage. This can be challenging and costly for banks as delinquent loans require more time and resources to resolve. Additionally, borrowers will avoid contact with their bank, which creates additional challenges to finding a workable solution.
These delinquent loans are an extremely small portion of the banks’ portfolios. Most banks don’t have the time or resources to modify these liens.
Part of the problem is that many banks don’t know they can offload entire portfolios of non-performing second liens, but they can. If they sell it to an investor who understands the inner city and the homeowners that live there, it can be a win-win that also delivers a win to the city.
What the industry does now will become part of the history that future homeowners look back upon each February. I hope that Black History Month will remain a source of pride, empowerment, and connection to a heritage that we must not lose.
The best way to ensure that, to honor that history, is to build a better future by working together to keep Black homeowners in their homes.
Jason Lewis is CEO of AryMing Asset Management, a boutique private alternative investment firm
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story:
Jason Lewis at jlewis@aryming.com
To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com
Source link
Rithm Capital announces deal with Great Ajax Corp.
Real estate investment trust Rithm Capital, the parent of multichannel lender Newrez, has agreed to issue a one-year loan, purchase common stock and become the external manager of its peer Great Ajax Corp.
New York-based Rithm Capital engaged in acquisitions last year to become a global asset manager focused on real estate. This year, it restructured its distributed retail business in a shrinking mortgage market, cutting managers and reducing compensation at NewRez, a top 10 mortgage lender and servicer.
Michael Nierenberg, CEO, chairman and president of Rithm Capital, said in a statement that the company’s transaction with Great Ajax represents ”another step forward in our evolution as a global alternative asset manager.”
“We believe Great Ajax will be well-positioned to execute on a commercial real estate-focused strategy and generate significant value for shareholders,” Nierenberg said.
According to the deal announced Tuesday, Great Ajax will borrow $70 million in a one-year term loan agreement with one of Rithm’s subsidiaries. The proceeds are expected to repay Great Ajax’s outstanding convertible notes.
The companies noted that Great Ajax will also issue five-year warrants to Rithm, exercisable for its common stock, based on the amounts drawn under the loan facility.
Meanwhile, Rithm will purchase $14 million of Great Ajax common stock to be issued in a securities purchase agreement subject to stockholder approval. Great Ajax has entered into support and exchange agreements with certain institutional stockholders representing more than 40% of the shares of its common stock.
As part of the deal, Rithm will also replace Thetis Asset Management LLC as Great Ajax’s external manager, which will enable Great Ajax to “shift its strategic direction and capitalize on commercial real estate investment opportunities,” the companies stated.
Citi is the financial adviser for Rithm, while Piper Sandler & Co. is advising Great Ajax. Meanwhile, BTIG LLC is the financial adviser for the special committee of the Great Ajax board of directors.
Source link
8 best real estate marketing companies to boost your business in 2024
Vetted by HousingWire | Our editors independently review the products we recommend. When you buy through our links, we may earn a commission.
Real estate marketing isn’t just about posting a few property listings and hoping for the best. It’s a multifaceted strategy that encompasses branding, lead generation, social media management, content creation and more. The most successful real estate agents aren’t always the ones with the most experience — but rather those who know how to leverage the best real estate marketing companies and digital tools for their success.
Ahead, we list the best real estate marketing companies to help you grow your business. We examined factors like pricing, features, support and customer reviews. Whether you’re looking to build a custom website, launch effective email campaigns, enhance your social media presence or manage your client communications more effectively, these real estate marketing companies can help you do it.
Summary
At-a-glance: 8 best real estate marketing companies for 2024
Best all-in-one marketing solution
Market Leader
From $139/month
Best for custom web design
Agent Image
From $399 + $99/mo.
Best for design templates and graphics
LabCoat Agents
From $59/month
Best for social media branding
Coffee & Contracts
From $59/month
Best for low-cost lead generation
RealGeeks
From $299/month
Best for search engine optimization (SEO)
iNCOM
From $49.95 per month plus $249.95 setup fee
Best for direct mail marketing
ProspectsPLUS!
From $0.91 per postcard
Best for upscale website design
Luxury Presence
From $500 per month
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At-a-glance: 8 best real estate marketing companies for 2024
Best all-in-one marketing solution
Market Leader
From $139/month
Best for custom web design
Agent Image
From $399 + $99/mo.
Best for design templates and graphics
LabCoat Agents
From $59/month
Best for social media branding
Coffee & Contracts
From $59/month
Best for low-cost lead generation
RealGeeks
From $299/month
Best for search engine optimization (SEO)
iNCOM
From $49.95 per month plus $249.95 setup fee
Best for direct mail marketing
ProspectsPLUS!
From $0.91 per postcard
Best for upscale website design
Luxury Presence
From $500 per month
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Market Leader
Starting price: $139/month
Notable Features:
Pros:
Cons:
If you’re looking for a comprehensive real estate marketing solution with an emphasis on automation, Market Leader should be on your radar. Positioned as an all-in-one hub for real estate marketing, this platform helps to boost everything from lead generation to client management, website development and email drip campaigns.
With Market Leader, you can design a fully customizable, brandable website that’s optimized for lead generation, complete with landing pages, search engine optimization (SEO) and internet data exchange (IDX) capability that lets you display MLS listings on your website.
What sets Market Leader apart, however, is the its leads packages which let subscribers pay a flat rate for a specified number of exclusive leads. Rather than pushing leads to multiple agents at once, Market Leader pairs potential buyers with the best suited agents for them, eliminating the competitive mad dash and ensuring a calmer process for everyone involved.
(A word of caution here: Reviews suggest the leads provided are not always the most qualified, but experienced real estate agents who feel more confident screening buyers report decent satisfaction with this feature.)
Let’s also not forget Market Leader’s sophisticated customer relationship management (CRM) system. Agents can automate email drip campaigns, set up paid ads on social media and order print marketing materials — all from one, single platform.
There is even a Market Leader app that delivers real-time contact management notifications directly to your phone. Finally, the platform gives subscribers access to original monthly newsletters that can be repurposed as your own.
Customer Reviews:
Visit Market Leader
Related Articles
8 top real estate lead generation companies for 2024
6 best real estate lead generation websites for 2024
The ultimate guide to real estate lead generation ideas for 2024
Agent Image
Starting price: $399 for setup; then $99/month
Notable Features:
Pros:
Cons:
Agent Image offers a suite of packages for every budget and team size. If you want a completely done-for-you website that you own (meaning you’re not tied to them forever), you can have that. But their most customized, fully supported options are expensive. But not more expensive than hiring a design agency. And the best part is that they’re designed by and for real estate professionals so they understand the unique needs of agents, teams and brokers — which makes Agent Images websites a far better options than hiring your local web designer who may not understand the unique features you’ll need as a real estate agent, team or brokerage.
Customer Reviews:
Visit Agent Image
LabCoat Agents
Starting at $59/month
Notable Features:
Pros:
Cons:
Known for its humble beginnings as a Facebook group for real estate agents (which quickly grew to one of the largest online watering holes for real estate industry professionals), LabCoat Agents (LCA) understands the unique marketing needs of real estate agents.
LCA has taken the concept of DIY design platforms like Canva and infused it with real estate-specific marketing expertise — resulting in eye-catching templates that help any real estate agent prepare for open houses, create custom signage, print business cards and more.
The LCA website now offers a vast collection of real estate templates, scripts and design assets to help real estate agents communicate effectively with their potential clients. Whether you’re creating listing presentations, invitations or online ads, LabCoat Agents provides the designs you need to make a splash on Facebook, Instagram and in real life.
Pricing starts at $59 per month for individual agents; at $240 for teams of ten or more; and $499 per month for teams of 50+.
Customer Reviews:
Visit LabCoat Agents
Coffee & Contracts
Starting price: $54/month or $480/year
Notable Features:
Pros:
Cons:
If you’ve ever wished someone would create a ready-to-use social media roadmap for you (at the fraction of a cost of a creative director’s salary), then Coffee & Contracts is the membership for you.
Founded by Florida-based real estate agent Haley Ingram, who recognized the struggles of fellow agents with their social media content, Coffee & Contracts is tailored specifically for real estate agents and brokers, and provides content calendars and social media strategies for all major platforms including Instagram, Facebook, Twitter and TikTok.
Signing up for the Coffee & Contracts dashboard gives real estate agents unlimited access to tools, templates, content calendars and strategies to help them excel in their digital marketing efforts.
The site also offers video templates for various platforms, a database of content categorized by type, and a wealth of marketing collateral. Interested subscribers can join the waiting list to access the database of resources, along with exclusive discounts.
Customer Reviews:
Visit Coffee & Contracts
Luxury Presence
Starting price: $500/month
Notable Features:
Pros:
Cons:
Luxury Presence lives up to its name by emphasizing the high-end market and helping real estate professionals design websites that reflect their impressive style. The company specializes in creating personalized websites and marketing tools that exude sophistication and elegance.
Notably, Luxury Presence’s in-house design library boasts a vast repertoire of customizable templates and designs. These templates are the foundation of captivating websites that prioritize lead generation through SEO tools and MLS integrations.
Agents can request full-service website design, or opt for a DIY service at a lower price tier that unlocks access to Luxury Presence’s template library.
For instance, Oahu-based real estate agent Kinga Mills utilized Luxury Presence templates to create her stunning real estate website. As you can see, Mills took full advantage of Luxury Presence’s IDX home search tool while establishing her website’s custom look at a significant cost savings.
With features like landing pages, pop-ups, and lead capture forms, choosing the right templates can help optimize your online brand and presence while also converting leads.
Beyond websites, Luxury Presence offers a real estate marketing agency and delivers services like branding, content creation and social media marketing. Its analytics help you track the effectiveness of your marketing efforts, ensuring you can make data-driven decisions.
If you aim to establish a brand synonymous with luxury and refinement, Luxury Presence should be on your radar.
Customer Reviews:
Visit Luxury Presence
RealGeeks
Starting price: $299/month
Notable Features:
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Imagine a real estate marketing company that works like a well-oiled machine, where Facebook and Google ads direct potential clients to your website to be captured as leads and sent directly to your CRM. That’s RealGeeks, a lead generation powerhouse designed to help real estate agents manage leads at scale.
The RealGeeks ecosystem revolves around an IDX-connected website equipped with lead-capture landing pages and marketing automation. RealGeeks focuses on driving traffic to your site through paid ads on social media platforms, and it makes this process seamless by providing you with the ability to build your own real estate website.
While RealGeeks does offer a robust CRM and email marketing, the primary value here is the unbeatable lead generation capabilities. If you’re looking to supercharge your lead-gen efforts and drive more traffic to your website, RealGeeks is a top choice.
Customer Reviews:
Visit RealGeeks
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iNCOM
Starting price: $249.95 setup fee + $49.95 / month
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iNCOM is a top-rated real estate marketing company that stands out for its affordability and robust website search engine optimization (SEO) tools. iNCOM helps real estate agents enhance visibility through customized websites and landing pages, and even provides light analytics to help you better understand your audience.
While iNCOM doesn’t require long-term contracts, setting up your iNCOM account may take some time. Online training videos are available, but unfortunately online marketing is a separate feature from website design, and live chat support for both is notably absent.
Recommended for growing offices and agents with limited marketing resources who rely primarily on social media-focused lead generation, iNCOM is lauded by users for its effectiveness. However, users also report a few occasional glitches, such as issues with automatic renewals.
Overall, iNCOM is highly recommended for website design and online marketing in the real estate industry, with room for improvement in CRM reporting, customer service and user experience (UX).
Individual agents can expect to pay a $249.95 setup fee plus $49.95 per month; whereas brokerage pricing begins with a $350 setup fee, and $68.95 per month.
Customer Reviews:
Visit iNCOM
ProspectsPLUS!
Starting price: $0.91 per postcard
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While digital marketing is essential in today’s real estate industry, traditional methods like direct mail can still yield impressive results when done right. ProspectsPLUS! specializes in direct mail marketing for real estate professionals, most notably emphasizing the almost-forgotten art of the real estate postcard.
ProspectsPLUS! offers a wide range of direct mail marketing materials, from Open House flyers and brochures to door hangers. The company provides customizable templates as well as the option to upload your own designs.
There’s also the ability to send mailers to targeted mailing lists and ship personally branded real estate marketing magazines to specialized demographics.
Direct mail can be an effective way to target specific geographic areas or demographics, and ProspectsPLUS! simplifies the process for real estate agents looking to tap into this old-school, time-tested marketing channel.
Customer Reviews:
Visit ProspectsPLUS!
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The power of real estate marketing
In the fast-paced world of real estate, partnering with the right marketing company or agency can be a game-changer. The above real estate marketing companies offer an array of marketing solutions for real estate professionals, allowing you to concentrate on nurturing relationships with clients and closing deals.
Remember: Each of the real estate marketing agencies and companies we’ve reviewed here offers unique strengths, whether you’re looking for comprehensive marketing solutions, content generation, lead generation or specialized design templates.
Before you decide on which marketing company to choose, take a few days to consider your goals and define the results you’d want to see for a successful real estate marketing initiative, campaign or overall strategy.
Frequently Asked Questions
How to choose the right real estate marketing company?
Remember that the effectiveness of any marketing strategy depends on your specific needs, goals and target audience.
Take the time to assess your marketing needs, budget, and long-term objectives. Then, make a list of the top marketing companies to find the right partner for you. If possible, set introductory calls with each marketing firm and spent a few weeks comparing the pros and cons. Communicate in advance that you are evaluating a few different options, and once you think you have your marketing team assembled, sign up for a monthly subscription or pay for the company’s services.
What are the 4 P's of marketing in real estate?
In real estate, the traditional marketing mix — often known as the 4 P’s of marketing — includes:
How can I market myself as a real estate agent?
Before you can market yourself successfully as a real estate agent, you need to understand where your business stands. Identify your strengths, along with any areas that may need improvement. Here are some questions that can guide you in making an informed decision:
What to expect from a real estate marketing company?
If this is your first time considering a real estate marketing company, it’s natural to wonder what to expect. Most importantly remember that specifics can vary from one provider to another — there is no one-size-fits-all marketing firm. However, there are certain fundamental features you should look for when working with a vendor of any kind, including:
Is real estate marketing the same as lead generation?
No, they are not the same — though there is some overlap. Lead generation is a targeted strategy to attract potential clients by providing information or incentives. Marketing, on the other hand, is about building your brand, telling your story and creating awareness about the value you offer. Marketing can generate leads, but its primary purpose is to establish your reputation and trustworthiness. For example, a Facebook ad campaign offering a free home valuation is lead generation, but it becomes more effective when backed by strong branding and marketing efforts that make people familiar with your name and the quality of your services.
Our methodology
HousingWire is the destination for industry leaders and decision makers to stay informed and stay ahead of what’s going on in the constantly evolving U.S. housing industry.
To determine which real estate marketing companies are best for industry professionals, HousingWire analyzed dozens of products and platforms, weighing the pros and cons of each alongside both quantitative and qualitative data like price, special features, ease of use, return on investment, client support, and customer reviews.
We crawled the web so you don’t have to, analyzing a wide sampling of reviews across social media, the Better Business Bureau (BBB) and online discussion forums.
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Taking a closer look at the reasons seniors ‘unretire’
More U.S. seniors are working today than ever before, a trend marked either by older Americans choosing not to retire, or choosing to actually rejoin the workforce after an initial retirement. This year is also set to see the U.S. population grow older at a faster rate. The trend was the subject of a recent book, “Unretired: How Highly Effective People Live Happily Ever After,” written by journalist and management consultant Mark Peabody.
Walton shared some of his observations about the unretirement phenomenon in an interview with Yahoo Finance, including perspectives about what motivates people to keep working beyond retirement age.
“Engagement and contribution are the keys,” Walton said, saying his book was targeted primarily at people who have become accustomed to a certain level of success throughout their lives. “The idea of discontinuing work that matters to them and discontinuing the ability to make a contribution is a very painful thought. So what motivates them is fascination and love for their work and the desire to continue to make a contribution.”
Walton describes observing the trend of more senior participation in the workforce over the past several years, an observation that bears out according to previous research and data. But he became more curious once he started hearing from these older workers who were telling him it’s not necessarily all about money.
“I found it’s college graduates who are driving this thing, and it’s professional women,” he said. “That’s what’s changed in the last 30 years.”
Walton writes that much of the anxiety older people may feel about retirement centers on the lost social elements that it could bring, which they may see as a retirement “pitfall.”.
“The first pitfall is a loss of personal identity,” he said. “Nobody really pays much attention to it. But they’ve invested their lives in something that matters to them, and their identities are tied up with that work. Pitfall number two is loss of daily structure and schedule. And that’s no small thing.”
A third “pitfall” is a “loss of friends and social networks,” he said, suggesting a link between daily routines, interactions and cognitive performance. Isolation and loneliness do have links to cognitive decline.
Walton says that this trend is likely here to stay for a long time to come.
“If you are one of those growing millions of people who find that the track of life that’s been laid down, this idea of going to school, going to work, and then tuning out, is not right for you, you’re not alone,” he said. “Your interest and desire to continue to work and express yourself, rather than being lost in a lifestyle that doesn’t work for you, is something that you ought to pursue. It’s very possible to continue to work and succeed and express yourself to a very old age. This is the future.”
There are instances in which a phenomenon of an older worker influx has not fully materialized. Recent data from the Federal Reserve Bank of St. Louis and the U.S. Bureau of Labor Statistics (BLS) suggests that as many as 2 million baby boomers who were predicted to return to work in the years following the onset of the COVID-19 pandemic are choosing to remain in retirement.
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Altos: More sellers and price reductions, but fewer homebuyers
Price reductions ticked up this week for the first time since November in the face of rising mortgage rates. Inventory is rising across the country as home-buying affordability takes another hit. The pace of sales inched down, too. We can see the impact of higher mortgage rates slowing homebuyer demand. As demand slows, inventory grows.
Last year at this time, we were seeing surprising homebuyer demand with rates having fallen to the low 6s. Now, mortgage rates are 100 basis points higher. As a result, inventory is higher and future sales price indicators are also softer than they were a year ago.
We still see more sellers than last year. Each week, there are more new listings than a year ago, allowing inventory to build and eventually leading to more home sales this year than last. But that sales growth rate is fragile too.
If mortgage rates stay in the 7s or keep climbing, you can see what’s going to happen to home prices. A week ago, I mentioned that some of the price signals were softening. Home prices aren’t falling but the growth signals are definitely softening. That trend continues this week.
The housing market data has been changing very rapidly this year. The economy has continued to be strong, so mortgage rates have defied expectations and climbed higher.
Inventory
There are now 498,000 single-family homes available unsold on the market around the U.S. That’s 70 basis points more than last week, and 16% more than last year at this time. This the first inventory increase of the year. The market will continue to build unsold inventory from here for the rest of the season. There’s nothing in the data that shows inventory declining from here this spring. You could get a little bounce up and down, but the trend is quite clear.
Mortgage rates are roughly 100 basis points higher than last year at this time and inventory is 16% more. Rates are 400 basis points higher than two years ago and inventory is 53% higher. Higher rates creates more inventory.
Many mortgage rate forecasters are still expecting a rate reversal, but until that actually comes to fruition, we will watch higher mortgage rates drive up the available selection of unsold homes.
New pendings
We’ve been sharing how the sales rate has been trying to expand for 2024. Unfortunately, rising mortgage rates have not been cooperating. Last week showed good growth in sales over 2023, and I mentioned that it might be fleeting. And sure enough the number of new contracts started this week dipped. With 59,000 new home sales started this week, that’s 2% fewer than last week. It’s just a fraction fewer than the same week in 2023.
Any week where we have negative sales growth from last year is a disappointment. But this is where you see the affordability and demand hit from higher mortgage rates.
It is important to note that we can have rising inventory and rising sales rates, which is what I expect. I just wish the sales rate were climbing more quickly and reliably.
Price reductions
Perhaps the most notable signal this week is that price cuts, the percentage of homes that have reduced the asking price from their original list price, ticked up from last week. There are now 30.4% of the homes on the market that have taken a price cut. That’s up from 30% last week.
We are in the normal range with price reductions, meaning sellers are generally fine, generally getting their prices. There’s no signal of prices falling. The uptick just shows us slowing momentum.
In a couple weeks, we could be behind of last year. More sellers with price cuts than a year ago. Last year at this time, we were seeing surprising home buyer demand with rates in the low 6s. Now mortgage rates are higher and we see the opposite trend happening. If we see this year’s line curve towards the top of the gray band quickly, that would be the next indicator of home price weakness.
But we’re not there yet. This isn’t a catastrophic call for home prices. It is simply very clear evidence of how home buyers wait when mortgage rates stay higher for longer.
Price of new pendings
The price of the homes that went into contract this week dipped a little too. The median price of the newly pending single family home sales was $375,000 this week. That’s down from $378,000 last week. Almost 1% dip. And is still 2% higher than last year.
It’s normal to have a bit of noise in the newly pending price, a little up and down across the year. It’s not a straight line. But it is maybe unusual to be in this key part of the buying season and see a downtick week. That’s something to keep an eye on.
Home prices
The median price of single family homes in the U.S. is $429,000. That’s up almost 1% from last week and is a couple percent higher than 2023 at this time.
The median price of the new listings this week is $410,000. That’s a pretty big jump from the week prior.
I’ve shared a few signals for prices “softening.” I use the word softening, to be distinct from “falling” or “declining.” Home prices are up over last year and do not show any signs of declining in 2024.
It can be hard to communicate all this with buyers and sellers. There are folks on the sidelines waiting for rates to drop so they can swoop in for sudden bargains. But they may not realize how much competition is waiting right along with them. And meanwhile mortgage rates are actually rising.
Mike Simonsen is the president and founder of Altos Research.
Download the free Altos eBook: “How to Use Market Data to Build Your Real Estate Business”
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RE team rev increased, net operating percentages decreased in 2023: Streamlined
Upon examining the financial performance across various gross revenue categories, 2023 reveals a distinctive pattern in net operating percentages as they relate to increasing revenue levels, according to the Streamlined Quarterly Team Benchmarking Report, which looked at the financial performance of more than 200 teams across the nation.
This report covers the Q4 2023 and the year at a glance. Steamlined, based in Arizona, has a roster of hundreds of U.S. real estate teams and individual agents as clients for their accounting and bookkeeping services. The firm confirms actual financial and operational details of these businesses and assemble the data in useful benchmark studies to help their clients assess how effectively they are operating.
A clearer understanding of the performance of teams helps everyone understand the impact of the growth of the organization and performance of teams.
For 2023, initially, the net operating percentages are considerably high, starting at 40% for the lowest revenue category. This indicates a positive net income percentage, especially for businesses at the beginning stages of revenue generation.
However, as revenue increases, there’s a general downward trend in net operating percentages, confirming that higher revenue levels might be associated with increased operating costs or other factors that diminish the proportion of revenue retained as operating income.
As a reminder, in our years of experience and analysis, a larger net income percentage is not equal to more money in the bank. When given the opportunity, most business owners would take 10% of a large revenue number over 40% of a low revenue number. Despite this trend, the net operating percentages remain positive, underlining efficient operational management is key to continued success.
The latest financial insights for the residential real estate teams and agents present a picture of resilience and strategic adaptability, even in the face of shifting economic landscapes.
The seasonality effect, particularly in Quarter 2 and Quarter 3, plays a pivotal role in enhancing the annual averages of net operating percentages. This seasonal uplift lead to improved financial performance and contributed to a more robust annual net income percentage. Such seasonality can be attributed to factors such as market demand, operational efficiencies, and strategic marketing efforts tailored to capitalize on seasonal trends.
Furthermore, the analysis highlights the consistency of lead generation costs, which remain about 9% of revenue across all categories. This consistency is notable, as it suggests a stable and effective marketing strategy that scales proportionally with revenue.
The ability to maintain lead generation costs at a steady percentage of revenue is indicative of strategic planning and execution in client acquisition efforts, contributing to the overall financial health and sustainability of this industry.
While there’s a noticeable decrease in net operating percentages with increased revenue, the overall financial health of businesses remains strong, encouraged by positive net income percentages, beneficial seasonal trends, and effective lead generation strategies. These elements combined suggest a well-managed operation capable of navigating the complexities of scaling and market fluctuations, positioning the business for sustained growth and profitability.
Streamlined, RTC Consulting and HWMedia are teaming up to share this data with our readers to help create transparency in the results of over 200 teams. We will publish these results on a quarterly basis roughly 45 days after the end of each calendar quarter.
David Pittiglio is the CEO of Streamlined Business Solutions.
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Who Cares About the Number of Doors You Have—Cash Flow Is What Actually Matters
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.
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Rocket lost money last year, so why are its shares up?
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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