Covina, CA Real Estate Podcast

Investing in real estate is a much more secure option than investing in stocks, and today I’ll explain why. As you’re likely already aware, the economy can change dramatically in just a few years.  For instance, while the value of the American dollar remained fairly static between 2000 and 2009, money invested into the S&P 500 during that decade would equate to a significantly lower sum, thanks to the high fees and inflation. These factors could easily erode a $100,000 investment into about $70,000 worth of value.  "It’s clear to see that real estate is the superior option for growing long-term wealth." Over that same decade, the median home price in Los Angeles County rose from $227,000 in 2000 to $400,000 in 2009. This means that while money invested in the S&P 500 brought a negative return, money invested in real estate saw growth of more than 7.6% each year—or roughly 38% leveraged annual return on your initial 20% down payment.  Most people probably aren’t aware of the stark comparison between these two investment paths, largely thanks to Wall Street’s advertising engine, but it’s clear to see that real estate is the superior option for growing long-term wealth. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What is tenant-in-common ownership and why has it become so popular lately? Let’s discuss. When multiple people purchase a property together, but each only maintains a certain percentage-based portion of ownership, this is what’s known as being “tenants in common.”  Because of the rising cost of housing and the lack of available inventory in and around Los Angeles, tenant-in-common homeownership has become increasingly common in our area lately. Therefore, many former landlords are converting multi-unit properties into tenant-in-common properties to be sold with multiple titleholders.  This is an especially popular move in light of tight inventory on core city areas and cumbersome housing regulations, which would make condo conversion more difficult, if not impossible. So how is ownership divided among tenants?  Well, while this can be negotiated however the tenants see fit, most people choose to divide ownership (and the costs associated with it) equally. This means if a home was occupied by four tenants in common, each person would own 25% of the property. Tenant-in-common ownership is popular among former landlords, sellers, and buyers alike. Not only does this make for a more equitable living situation, it also ensures that each person carries an equal amount of responsibility for living expenses, like utilities and maintenance. Better yet, one particular bank here has even made it possible to finance a tenants-in-common loan for as little as 10% down with an interest rate around 4.5%.  In short, tenant-in-common ownership is popular among former landlords, sellers, and buyers alike.  If you have any other questions or would like to learn more, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Interest rates have come back down from where they were earlier this year. Here are some of the latest numbers you should know. In my recent email about the state of the market, I mentioned that we are shifting to a buyer’s market, where homes are sitting longer on the market.  When the Federal Reserve increased the federal discount rate, the interest rate moved up to nearly 5%. Recently, we’ve heard talk of the Fed decreasing this rate by 0.5% and the market has reacted pretty well. Mortgage rates are down 1% since and now sit at around 4% on average. The jumbo rate is around 3.6% too. What does this mean for you if you’re on the fence about selling your home? Well, it might not be a better time for a while. Inventory is still low and sellers can still get a great price without having to discount your home. "Don’t get discouraged if you’re a buyer. This is good news." What does this mean if you’re a buyer? Don’t get discouraged. This is good news. With lower interest rates, you can afford 20% more of a home and with increased inventory, you have more to choose from. If you’re a first-time homebuyer, you should know that a mortgage credit certificate is a good idea and pretty easy to qualify for. This is also a useful tool for those looking to refinance. With this mortgage credit certificate, you can deduce up to 20% of the interest you pay annually against your tax liability. Let’s say that you have an annual interest payment of $16,000. This gives you $3,200 you can use to write off on your tax liability. If you have any questions for me about the market, the mortgage credit certificate, or anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Do you want to boost your cash flow while reducing your tax liability? Today’s message will teach you how you can. Today I’d like to share how you can improve your cash flow by 20% without any additional money out of pocket by investing in a Qualified Opportunity Zone.  Through the Qualified Opportunity Zone program, you can invest in multiple assets while reducing your tax liability on all capital gains, including gains from stock and business. With this program, your tax liability is reduced depending on the amount of time you retain an asset.  If you hold onto an asset for five years, you get a 10% reduction. If you hold onto an asset for seven years, you get a 15% reduction. And, finally, if you leave your money in an asset for 10 years, any appreciation above the acquisition and improvement costs will be tax-free.  Investing in a Qualified Opportunity Zone, as you can see, can be a great way to boost your cash flow while reducing your tax liability.  If you have any other questions or would like more information, feel free to give me a call or send me an email, I look forward to hearing from you soon.

It seems opportunity zones are a real hit, so today I'll share some more info on this. Welcome back, everyone!  Because I received some excellent feedback from my recent message on opportunity zones, I’ve decided to explain how they work a little more and where they’re found in our local communities.  Just to recap, opportunity zones are economically depressed areas that the government incentivizes investment in. Unlike a 1031 tax exchange where you have a mere 45 days to identify a property and 180 days to close on that desired property, you have a 31-month safe harbor to put your money into an opportunity fund. Additionally, you’re not locked into that fund—you’ll have the freedom to move assets from one fund to another for up to a year.   Hopefully that answers one of the questions I was asked regarding the risk you’d be subjected to by investing in one of these zones.  As far as Los Angeles is concerned, there are 274 opportunity zones within the area—all of Lincoln Heights and the area surrounding LA County and the USC Hospital are a few examples. Beyond that, some other zones lie in pockets of Santa Clarita, South LA, and Orange County. I could go on and on.  Also, there are some marvelous neighborhoods in and around Riverside, and you might be surprised to learn that many of them are designated as opportunity zones. Keep that in mind if your son or daughter is an aspiring UC Riverside student and you’re considering a move.  Today I just wanted to shed light on some local opportunity zones, but these are just a few of the thousands dispersed throughout the country. To see a full map, you can click here. And if you’re curious whether your home falls within an opportunity zone, all you have to do is click here and enter your zip code.  If you have any additional questions or feedback for me, you’re welcome to reach out anytime. Until next time, stay safe and stay happy!

Today I’d like to cover a few key points that California homeowners should know about accessory dwelling units. Accessory dwelling units (or ADUs) are creating a lot of buzz in the market lately. They even have the blessing of the state legislature in the form of Assembly Bill 2299 and Senate Bill 1069, which Governor Jerry Brown signed into law in 2017. This legislation has unified all disparate municipal codes in terms of the legality of ADUs. The purpose behind these bills is to address housing availability. As you likely know, California is seeing a housing shortage of more than half a million units. Accessory dwelling units help to resolve issues related to this shortage. Elderly people who have an in-home healthcare worker, for example, are just one demographic that benefit from the pieces of legislation I mentioned earlier. Also, land is expensive. This makes accessory dwelling units an attractive option, since they are built onto an existing structure or property. In turn, this eliminates additional expenses such as those related to utilities or sewer connections. Land is expensive, which makes accessory dwelling units an attractive option. There are three types of accessory dwelling units: detached, attached, and those that repurpose an existing structure—in other words, an existing home can be remodeled so that certain rooms become classified as their own unit. This last type of ADU is particularly interesting because it is something the city of Chino has allowed homeowners here to pursue long before recent statewide legislation came into play. But how large can ADUs be built? Well, according to state law, an ADU may be no larger than 1,200 square feet. And ADUs attached to an existing structure may not exceed 50% of the total building. There are a number of options for adding an ADU to your property. Adding an ADU above your garage, for example, is another route homeowners may take. And parking restrictions will not apply to these properties, as on-site parking is not required so long as the property is within a half-mile radius of public transportation. Of course, before you settle on any of these options, it’s important to determine whether adding an ADU will be legal for your specific property. Zoning requirements stipulate that the current residence on the property must be a single-family home. If you have any other questions or would like to learn more about ADUs, feel free to give me a call or send me an email. I look forward to hearing from you soon.

If you need to obtain alternative financing for an investment property, I have a tool on my website that can help you. The key to investing in real estate is to find the right property and the right financing. What if you have the right property but need to find alternative financing, though? For example, most of the properties that I have right now are so-called "good deals,” meaning theyare more or less scratched and dented. Let’s say you have a property with a single-family home infront and a duplex in the back. The single-family home is in pretty good shape and you can prettymuch rent it out right away. The duplex in the back, however, is in a state of disrepair. You can have good credit, good income, and a good down payment, but conventional lenderslike Freddie Mac and Fannie Mae won’t give you a loan because of the condition of that duplex. Ifthe kitchen is worn out or some essential appliances are missing from it, a conventional appraiser willrequire that those deficiencies be fixed before closing. However, in a situation like this, you cannot fix the place before you close. If you do that, you’re at risk because if it doesn’t close, you’ve wasted a lotof money. Secondly, the seller wouldn’t allow you do to that because it would take time to fix thatproperty. There are also liability issues that could arise. This is when you need to find alternative lending. How can you find alternative lending? My website has an “Alternative Loan Search” tool on the left-hand side of the front page whichcan direct you to the right type of financing for the property you’re seeking to invest in.   For example, I recently had a friend ask me about obtaining financing for a vacant piece of land. Ifyou used my website to search for this type of financing, it would probably yield around 10 to 12 results for lenders who could help you and compare the pricing for building a home on that land. Lateron, you can always refinance on a conventional loan and use it for a few months or a few years. This resource is similar to my “Finance Tools” link at the bottom of my website that allows you monitorwhether interest rates are going up or down for conventional loans so you can lock in thebest rate possible. As always, if you have any questions about this topic or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d be happy to help you. In the meantime, stay safe and stay happy.

In today’s hot market, finding the right home to meet your needs can be a difficult task. This is true regardless of your real estate goals. Listings come on and off the market so quickly that many prospective buyers are left feeling a little defeated. Thankfully, I have a solution for this. And today I’m going to share it with you. Allow me to introduce you to the Dream Home Finder Program. This solution allows you to find the perfect property without ever facing competition. All you have to do is write a wishlist of specifications you want in a property, and I’ll take care of searching for you. School district, square footage, layout, and other home features are all attributes you should include when making your wish list. I will be happy to take it upon myself to spend my own time, money, and energy, on making your real estate dreams a reality. I will spend my own time, money, and energy, on making your real estate dreams a reality. Knowing what kind of community you wish to live in and what price level you can afford is key. When you relay this information to me, I will find your dream home within just one month and at a lower price than other properties in the market. If you have any other questions, would like more information, or would like to meet to discuss and develop a wishlist for your dream home, feel free to give me a call or send me an email. I look forward to hearing from you soon.

I’ve got good news for business owners and other self-employed individuals. Keep reading to find out what it is. Today I want to share with you some news that will be of special interest for those of you who are business owners, contractors, and otherwise self-employed. The good news is that if you have had your business for over four years and you have a good credit score of 720 or higher, Fannie Mae and Freddie Mac only require your most recent tax return, as opposed to the last two years. If you know of anybody that this tip could help, go ahead and forward this article to them. The way it stands now, you need a $100,000 average over two years in income to qualify for the purchase of a home. Now, with their new underwriting system, only one year of income over $100,000 is needed to qualify. This will be great savings for you. If you know anybody that this could help, share this with them. If you have any other questions in the meantime or you’re looking to buy or sell a home soon, don’t hesitate to give me a call or send me an email. I would love to hear from you soon.

Market demographics are important. What sorts of people should mature buyers be paying attention to when they want to sell? In previous entries, I’ve discussed creative ways that mature buyers, aged 62 or older, can purchase homes and get financing in order to compete with first-time homebuyers. Since then, I’ve gotten some feedback, and I noticed a number of people asking about demographics. Who are these first-time homebuyers? Based on a statistical survey from the National Association of Realtors, for the last four years, 34% to 36% of buyers coming on to the market have been millennials. This group is defined as the generation of people born after 1981—those between the ages of 37 and 17. Of those 36%, roughly two-thirds are first-time homebuyers, and the other 12% are buyers in their thirties who are often move-up buyers. 34% to 36% of buyers coming on to the market are millennials. We can see the trend of mature buyers selling their homes to move into a retirement home, out of the area, or out of state at the same time that 12% of millennials are moving to a suburban area to look for single-family homes. Demographics are important. The selling season will be starting in the next two months, and the market is heating up. With that in mind, agents should know who their customers are so that when you go to sell, they’ll have an idea of how to cater to the buyers on the market. If you have any questions, feel free to reach out to me. I'd be happy to help you.