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March wasn\u2019t a great month for investor home sales. A new Redfin report shows that one in every seven homes sold by investors was sold at a loss. That\u2019s 14% of investor sales or about triple the number from a year earlier, and the highest level of investor home sale losses since 2016. But there is a catch! These sales were mostly for investors who bought more recently and sold after a short length of time, such as flippers. \xa0 Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. \xa0 The housing market has slowed dramatically as home prices and mortgage rates make it tough to buy, and in some areas and for some people, tough to invest. It\u2019s important to remember that the report is based on national statistics, and that six in seven of those real estate investors made money on sales, although their gains may have been smaller. \xa0 Typical Gains for Investor Home Sales \xa0 Redfin says the typical investor who sold a home in March, sold it for about 46% more than they paid. That\u2019s down from a little over 55% in March of last year. Profit will likely be less than that, because of other costs, like renovations. \xa0 Redfin Senior Economist Sheharyar Bokhari says: \u201cYou might wonder why investors don\u2019t just wait to sell until the housing market bounces back. Many long-term investors who rent their properties are doing that, but many flippers\u2013especially those who bought recently\u2013can\u2019t afford to.\u201d She says: \u201cHolding onto homes that aren\u2019t producing income can be expensive because the owner is on the hook for property taxes, operating costs, and in many cases, mortgage payments.\u201d \xa0 Phoenix Redfin agent Van Welborn says: \u201cHome flippers aren\u2019t reaping the gains they used to.\u201d \xa0 Flippers More Likely to Report Losses \xa0 If you narrow the overall results of the Redfin study down to \u201cjust\u201d flippers, Redfin says that one in five sold at a loss in March. Redfin defines a flipper as someone who bought and sold a home within a nine-month time frame.\xa0 \xa0 Holding long-term will likely produce much better results, although the median U.S. asking rent has been slowing. It was down .4% year-over-year in March but that is also the first time it\u2019s gone down in three years. Redfin agents say that Airbnb operators are also hurting in some markets, and have had to sell. \xa0 Flippers Lose More in Pandemic Boomtowns \xa0 Places where investors are more likely to sell at a loss are the pandemic boomtowns like Phoenix and Las Vegas. In Phoenix, 31% sold at a loss in March. In Las Vegas, that percentage was more like 28%.\xa0 \xa0 The report says that many of the sellers are mom-and-pop investors who are worried about where the market is headed, possibly remembering what happened in 2008. But today\u2019s housing market is nothing like it was in 2008, and real estate is still a solid investment over the long term. Many institutional investors see it that way. Instead of selling, many are holding on to their properties and waiting for buying opportunities. \xa0 My Formula for Real Estate Wealth

Redfin says that 10% of the homes on the market right now are for sale by investors. That\u2019s higher than at any time before or during the pandemic but down from a peak of 12.4% last year. My formula for real estate wealth is to buy wisely and hold on to your properties long-term, especially now when there\u2019s such strong demand for single-family rentals.\xa0 \xa0 At RealWealth we encourage the use of a platform called DealCheck for a thorough analysis of a deal before you close on it. DealCheck is a powerful property analysis platform that\u2019s easy to use, and provides instant details on a property\u2019s cash flow, cap rate, ROI, profit from a sale, acquisition cost, and other helpful information. \xa0 If you\u2019re a RealWealth member, just sign into the portal and look for DealCheck under the Resources tab. If you aren\u2019t a member, it\u2019s free and easy to sign up. And, please remember to subscribe to this podcast! \xa0 Thanks for listening! Kathy\xa0 \xa0 Links: \xa0 1 - https://www.redfin.com/news/homeowner-tenure-2022/