Apple Tree Realty

Zillow just announced the top home design/home amenity trends in 2024. Some of these have been talked about for a while: cold plunges and pickleball courts. But other items on this list are new trends coming into the limelight: sensory gardens, interior home murals, and Murano glass chandeliers. https://lnkd.in/g4k7W9Ui

Tip For Something To Watch In The Upcoming Weeks In Real Estate: TLDR: Bonus depreciation is being phased out and the Tax Relief for American Families and Workers Act of 2024 is looking to bring 100% bonus depreciation back. 100% bonus depreciation an incredibly powerful tool for real estate investors to significantly reduce, or in many cases, completely eliminate their taxable income. The full story: The Tax Relief for American Families and Workers Act of 2024 was passed with bipartisan support of 357 to 70 votes and is now awaiting a vote in the Senate. A date for that vote has yet to be set. Included in this tax bill is an update to section Section 168(k), extending 100% bonus depreciation until the end of 2025. What does that mean for real estate investors? Accelerating bonus depreciation is arguably the most powerful tool that real estate investors have to offset a significant portion, if not all, of their taxable income. The process for accelerating bonus depreciation in real estate includes assessing the value of all eligible items in a property for bonus depreciation and writing the allowable percentage of those items off in the first year of use by the owner. Bonus depreciation is currently being phased out and went from 100% of eligible items for accelerated bonus depreciation to be written off in year one from 2017-2022 and the rate was reduced to 80% for property placed in service in 2023, reduced to 60% for property placed in service in 2024 and is set to be further reduced to 40% in 2025, 20% in 2026, and zero in 2027. Items eligible for bonus depreciation includes: • Appliances: Refrigerators, stoves, dishwashers, and laundry machines that are used in the rental property. • Furniture: If the rental is furnished, items such as beds, sofas, dining tables, and chairs could qualify. • Land Improvements: This includes landscaping, fencing, driveways, sidewalks, and parking lots, provided they are separate from the building structure. • HVAC Equipment: Heating, ventilation, and air conditioning systems, if they are distinct from the rental property's structural components. • Security Systems: Alarm systems, security cameras, and related installations that are not integral to the building structure. • Roofing: Certain roofing improvements or replacements, excluding structural components of the roof. • Flooring: Removable carpeting or other non-permanent floor installations. • Outdoor Features: Items like sheds, patios, or decks, assuming they are not considered structural components of the building. • Technology Systems: Wired or wireless network equipment, smart home devices, and entertainment systems provided for tenants' use. If the Senate votes to pass the Tax Relief for American Families and Workers Act, it will go to the President where he will almost undoubtedly sign the Act into existence and will make real estate an even more appealing investment.

Realtor.com just released their 2024 real estate market forecast and their findings can be summarized as follows: The 2024 housing market forecast suggests a shift towards improved affordability. Home prices are expected to dip slightly, while mortgage rates and home sales remain relatively stable. The decrease in home prices, along with lower mortgage rates and income growth, is predicted to enhance overall affordability. Existing home sales are likely to stay steady but low, and the inventory of homes for sale is expected to continue decreasing. Additionally, rent growth is forecasted to experience a slight decline, reflecting a balance between supply and demand. https://lnkd.in/ekpQhWAT

New Fed Survey Released by CNBC Yesterday CNBC interviewed 35 economists, strategists, and analysts and got the following results. • More than half of the respondents expected rate cuts by June 2024. • By July 2024, 69% of respondents expected rate cuts. • The probability of a "soft landing," where the economy slows down without are recession, increased to 47%. • The probability of a recession in the next year decreased to 41%. • The average forecast suggests about 85 basis points of cuts in 2024, roughly equating to one 25 basis point reduction per quarter. This projection is less aggressive than the 120 basis points currently priced into futures markets. • The expectation is for the unemployment rate to rise to 4.5% next year and the GDP to be just below 1%. • Lastly the survey suggests that the Federal Reserve might halt its quantitative tightening (QT) around November 2024, with a split in views on the exact timing. With all that being said, Apple Tree Realty firmly believes that now is an excellent time to invest in real estate. Due to a significant decrease in buyer demand, those who are still actively looking to purchase properties are finding themselves with increased leverage against sellers. Furthermore, with a high probability of rate decreases beginning next June, we anticipate another surge in buyer interest soon after the rates drop. And we are putting our money where our mouth is. We are full steam ahead in acquisition mode. https://lnkd.in/gANYFhMW

Apple Tree Realty's BRRRR Success Story in Little Village, Chicago The BRRRR strategy, an acronym for Buy, Rehab, Rent, Refinance, Repeat, is a powerful approach in real estate investing. It involves buying a distressed property, renovating it, renting it out, refinancing to recover the investment, and then repeating the process. This strategy is beneficial because it allows investors to force equity appreciation, meaning the after-repair value of the building is higher than the total cost of purchase and repairs. Apple Tree Realty is thrilled to share our latest BRRRR success story. We purchased a property for $125K and invested an additional $165K in rehabilitation and construction loan interest payments. With a total investment of $290K, the property was recently appraised at $404K, reflecting a forced appreciation of $109K. A key component of BRRRR is the cash-out refinance. This process allows investors to secure a new mortgage on the improved property at its higher value. In this scenario, with a 70% Loan to Value (LTV) refinance, Apple Tree Realty obtained a new loan based on 70% of the new, appraised value after renovation. Therefore, with a new, 30-year fixed mortgage of 70% of the appraised value ($404,000 * 70% = $282,800), we were able to pay off the construction loan in full and recoup most of our initial capital. Approximately $12,000 of our initial capital remained in the deal, representing the difference between the total investment and the amount received from the cash-out refinance process ($290K - $282.8K), including $5K in loan origination fees. The exciting part is, Apple Tree Realty now owns a cash-flowing, fully renovated property worth $404,000 and in excellent condition for essentially just $12K down. This total process of acquiring, renovating, and refinancing the property took four months. If you or anyone you know is interested in partnering with Apple Tree Realty on a BRRRR, fix-and-flip, or long-term buy-and-hold real estate investment, please don’t hesitate to reach out via the form at the bottom of our website which is linked below! https://rb.gy/8qmz7i #RealEstateInvestment #BRRRRStrategy #AppleTreeRealty #PropertyTransformation #WealthBuilding

Check out our founder, Ben Sussman, on the Straight Up Chicago Investor Podcast sharing his story of how he got into real estate investing, how he scaled up his rental portfolio, and his thoughts on the Chicago real estate market. https://lnkd.in/enNttn9M

Check out our founder, Ben Sussman, in the media talking about his experience getting started in real estate investing and sharing his thoughts on the Chicago real estate market! https://lnkd.in/enNttn9M

As we get to the end of the year, it's that time again for companies to start releasing their 2024 real estate market predictions. At Apple Tree Realty we recommend the below three reports to get a good snapshot of what industry experts expect in the upcoming year. https://lnkd.in/edvW6zc2 https://lnkd.in/gNvGrGnV https://lnkd.in/e_QpZVay