FTC slaps Opendoor. Ouch. 🤕

Today’s top stories…

• The FTC plays Robin Hood, refunding $62 million to home sellers duped by Opendoor Labs

• Over 1/3 of February home purchases were all-cash deals

• Millennials are so broke, they're draining their parents' retirement funds

• 💰 Deal of the Day!: 3 bd | 3 ba | Kodak, TN

Today’s mortgage rate (30 Yr. Fixed): 7.01%

FTC Sends Opendoor Labs Packing

The FTC just dropped a bombshell on Opendoor Labs, and it's raining refunds. Opendoor got caught deceiving home sellers with false advertising and marketing claims, promising sellers they could make more money and save on costs by selling to Opendoor instead of the traditional route. But it was all a big fat lie!

In reality, most sellers who went with Opendoor ended up losing thousands of dollars compared to the traditional process. It was a total raw deal. The FTC wasn't having it and slapped Opendoor with a final administrative order, forcing them to pay up and quit their shady tactics.

Now, the FTC is playing Robin Hood and sending out nearly $62 million in refunds to 54,689 consumers who got duped. If you're one of the lucky ones getting a check, make sure to cash it within 90 days. And if you've got questions, hit up Epiq Systems or check out the FTC's FAQ.

In 2023 alone, the FTC's actions led to over $324 million in refunds to consumers nationwide. That's some serious dough!

The moral of the story? Always do your homework and be cautious of too-good-to-be-true offers in the real estate game. And if something smells fishy, trust your gut and report it to the FTC.

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⏰ Quick Tips

You asked. I answered. Here’s quick tips…

How do I get started in real estate investing?

To get started, educate yourself by reading books like "The Millionaire Real Estate Investor" by Gary Keller, "The Book on Rental Property Investing" by Brandon Turner, and "The ABCs of Real Estate Investing" by Ken McElroy. Take online courses on platforms like Udemy or BiggerPockets, and attend local real estate meetups through websites like Meetup.com to network with experienced investors. Oh, and keep reading Keys.

Over 1/3 of February Home Purchases Were All-Cash Deals

According to a new report from Redfin, more than one-third of homes were purchased with cold, hard cash in February. That's right, no mortgages, just straight-up benjamins!

This all-cash buying frenzy is getting close to the record high of 38% set back in 2013. But why the sudden surge in cash purchases? Well, it turns out that mortgage rates are still pretty darn high compared to those sweet, sweet pandemic lows.

To make matters worse, home prices also jumped 6.6% in February compared to last year. So, what are buyers doing? They're shelling out bigger down payments to keep their monthly mortgage payments in check. In fact, the median down payment for a house skyrocketed to $55,640 in February, a whopping 24.1% increase from the previous year!

But here's the catch: not everyone can afford to drop that kind of cash on a home, especially first-time buyers. As Redfin's economics research lead, Chen Zhao, points out, these high mortgage rates are widening the wealth gap between different races, generations, and income levels.

It's like adding fuel to the fire that was already lit by the crazy home prices during the pandemic. Now, in many places, only the wealthy can afford to buy homes, while everyone else is missing out on a major opportunity to build wealth. And that, my friends, could have some serious financial implications for generations to come.

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Millennials Are Draining Their Parents' Retirement Funds

A whopping 68% of parents with adult children have made at least one financial sacrifice to help their kids, according to a recent Bankrate survey. And we're not talking about skipping a latte here and there. No, no, no. We're talking about:

Dipping into emergency savings (over 50% of parents)

Putting off paying down debt (nearly 50%)

Sacrificing retirement savings (more than 40%)

In fact, 16% of parents reported significantly delaying their own financial milestones to prioritize their children's needs. Talk about a retirement dream killer!

But let's be real, millennials and Gen Z have had it rough. The Great Recession, a global pandemic, skyrocketing home prices, and student loan debt have all taken their toll. No wonder parents are stepping in to help!

According to Ameriprise Financial, 78% of millennials received some kind of financial boost from their families, with 27% getting at least $25,000 in help. That's a down payment on a house in some parts of the country!

But before you go writing checks to your adult kids, listen up. Financial experts say it's like putting on your own oxygen mask first. You've got to take care of your own financial security before you can help others.

Marcy Keckler, a bigwig at Ameriprise, says it's natural to want to help your kids, but you also want them to have the pride of standing on their own two feet. Preach, Marcy!

And get this: it's not even the boomers who are sacrificing the most. It's Gen X parents (ages 43 to 58) and lower-income households earning less than $50,000 a year.

As Ted Rossman from Bankrate puts it, offering too much financial assistance can backfire and create a "vicious cycle" where parents jeopardize their own financial security and end up needing help from their kids later on.

So, real estate investors, let this be a cautionary tale. Help your kids, but don't forget about your own financial future. You don't want to be the one moving into their basement when you retire!

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💰 Deal of the Day!

Price: $719,000

Address: 372 Grandview Dr, Kodak, TN 37764

This contemporary A-Frame, boasting significant recent remodels including a fresh interior and exterior paint job, new kitchen and bathroom upgrades, and stylish furnishings, combines modern luxury with excellent income potential from its strong rental performance, making it an ideal vacation rental. With its versatile living options, ample parking, and prime location poised for value appreciation due to nearby developments, not to mention the array of amenities like mountain views, a private backyard fire-pit, and a hot-tub, it offers a perfect blend of investment opportunity and leisure retreat.

Airdna data:

Estimated monthly payment: $4,061/month (if financed)

Estimated monthly revenue: $4,075/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

Thanks and see you tomorrow!

✍️ Brett