EXIT CEO Tami Bonnell: Windows of Opportunity
Tami Bonnell is the dynamic CEO of EXIT Realty, where she’s been at the helm for 20 years. In her Revaluate Stage at NAR presentation, Tami shared several unique real estate growth opportunities for agents, teams brokers and brands. Her presentation in its entirety is viewable below. Here we drill into one of the opportunities from her presentation.
Windows of Opportunity: Investors
The role of the Real Estate agent is constantly changing – frequently due to outside forces. Technology companies may cause disruption, governments may change laws and fewer people are moving now than at any point in recorded history. Realtors need to seek opportunities to improve and reposition themselves in order to grow. The opportunity may be for short periods of time or for decades. Therefore, it’s important to look for and find windows of opportunity that may appear, so that we can leverage our assets to take full advantage.
Only 11% of people move each year in the US according to the US Census.
Currently, some windows are closing while there are several new windows opening with lucrative investors.
Investor business will be around forever. In booms and busts they are focused on the math, to make the ROI work. Depending on the individual, the real estate investment mechanism may look vastly different. Todays investors may fix and flip, focus on multi family units, first time home buyer duplexes, multi generational homes, shipping containers for micro homes and some buy condos specifically for divorcees. All together, investors typically account for 25-35% of the market and won’t change anytime soon.
Investor Home Flipping is cooling
Popularized by dozens of tv shows, flipping homes has been hot recently. Nationally, the number of homes and condos flipped is at a 3.5 year low and 12% down year over year. Perhaps in part due to increased cost, ROI and Gross Profit on those flips has reduced significantly. This trend is somewhat cyclical and demand in some markets does not mirror the national average.
The “Investing in Opportunities Act”
Very few people are aware of this hidden gem, the Investing in Opportunities act, S-293. Introduced in 2017, it can save your investors hundreds of thousands.
Here’s how it works: When selling a property, you frequently have capital gains taxes. With this program, you can divert the taxes by investing for seven years (paying 15% fewer capital gains) by investing in an opportunity zone. With opportunity zones, you must invest for 10 years. It’s an area where there’s been a flood, fire, hurricane, tornado or low income / poverty neighborhoods where the government wants to encourage investment to help the locals. In these areas, you can invest in franchises, businesses, or even residential real estate.
When the investor turns over that investment, they pay no tax. Zero. This allows investors to give back to the community and get back revenue at the same time.
For some time it seemed as if the whole United States was on sale to foreign investors. This demand has reduced significantly recently and leveled off as a whole. But there is plenty of opportunity for expertise in the area going forward as people want our quality of life. Fortunately, the exception to the decline has been with our friends to the North, Canadians. Perhaps because we are close by, Canadians frequently want to put their children through university here, buy a second home here, perhaps to retire in the US. While much smaller in population, (38x smaller) Canada is second only to China in terms of US foreign investment, and China primarily invests in commercial real estate at this time.
Know your investors
Hang with your investors or prospects in person – this is a people business – but also follow, like, share connect, and link with them online. They don’t want to be a “number” – they want to matter. You have to provide value and help them make their life better. Find out what’s going on in their lives and give them what they need.
Even with investors, at its core, Real Estate is still a relationship business.
“It’s the human element. That’s why I love what Revaluate does. People’s circumstances change, and that’s exactly why they move…That’s why I love this so much, it’s the humans behind the transaction, and ultimately it’s us (real estate professionals) relating to our clients on a human level”