What’s the Best Way to Determine How Much Your Home Is Worth?

I’m offering you a free home evaluation that is much more accurate than a Zestimate.

Thank you all for your great feedback on my last blog post regarding the state of the market, where
I compared what we saw in 2018 to 2017.

As we have all learned, the market has pretty much reached its peak. Many of you have
done well in terms of your net worth by accumulating equity on your properties, though a few of
you have called me to say that while your equity looks nice on paper, it hasn’t given you any sort
of return yet.

Well, with that in mind, I have something to offer you:

I’m offering you a free home evaluation that’s accurate within 1.5% to 2% of the sales price
of the home. You might ask why you should go with my home evaluation instead of, say, the one
provided by the popular website Zillow’s valuation tool, the Zestimate.

The truth is that Zillow’s own site says that only 91.6% of the homes listed in the Long Beach area
sell within 20% of the sales price—that’s not a very high accuracy. Zillow may be a good tool
for a ballpark estimate, but you can’t rely on their Zestimates for an accurate estimate of your
home’s actual value. Remember that Zillow’s own CEO sold his home for 40% less than what
his Zestimate called for.

If you would like to know your home’s exact value, please reach out to me. I’m more than happy
to provide you with a complete report on your home so that you can review your current financial
information and prepare for the next step toward your real estate goals.

How to Take Advantage of Your Self-Directed Individual Retirement Account

I recently had the chance to meet with some old colleagues and friends of mine. During our
get-together, I was asked what I do with my individual retirement account (IRA) money.
I shared with them what I do.

I took my IRA money out and, combined with my wife’s IRA, we now have a self-directed

IRA. We've turned this into a checkbook controlled self-directed IRA LLC, and with our IRAs,
we are the owners and managers of the LLC. We’ve been using this fund since 2007 and
invested in a rental while most of the money goes toward flipping homes.

By using our own IRA money for the last 10 years, we’ve been able to grow our nest egg

by 300%. We just filed our tax returns and we can see the assets between 2007 and
2017, which showed about a 30% increase each year. My friends were definitely excited
after hearing what we were able to turn our IRAs into.

If you’re looking to leverage your IRA into a good income, I’d love to speak with you and go over your options. We can talk about getting a return by investing some of your retirement money. I look forward to hearing from you.

How Has the Southern California Market changed in a Year?

The latest statistics are in for the Southern California market.

Here’s what we’ve been keeping an eye on.

Today I’ve got the latest numbers from our Southern California real estate market and I want to bring
that data to you. Our market is defined from Monterrey Park and Pasadena to the west, Rancho
Cucamonga to Eastvale on the east, and along the 60 and 210 freeways.

In summary, our real estate market is very healthy. Here are a few reasons why. For starters, our
unit sales have decreased by 4.75% in 2018 from what we saw from January to July in 2017. In
addition to that, the average price has increased by 6.43% from last year.

Last year in July, the average home sold for $633,000. Today, the average home is selling for
$665,000. That’s an 8.1% price increase in the summer market alone. This is partially a result
of increased demand. The average days on market has played a big role as well. We saw it drop
from 26 days last year to 18 days this year.

Another thing I wanted to bring up is our inventory levels. Our inventory is a measure of how long it
would take to sell all the homes on the market if no new homes were listed. This year, our inventory
has dropped from 2.87 months to 2.8 months.

That’s my real estate report in a nutshell. If you have any questions for me or want to know more
about the numbers for rental properties or the numbers in your specific area, I’d be happy to assist
you. I look forward to hearing from you soon.

How Accessory Dwelling Units Help Resolve Our Housing Shortage

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.

What Can the Dream Home Finder Program Do for You?

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.

Locating a Great Investment Property

When looking for your next investment property, how do you know you’re going to turn a profit? The best way to determine that is by using the 1% Rule.

When looking for a great rental property that you can purchase as an investment, there’s a tried and true trick to ensuring that you’ll get great returns. Before I dive into that, I wanted to help you get familiar with a few terms that we used in the investment world:

Capitalization Rate: The rate of return on a real estate investment property based on the income that the property is expected to generate, and is determined by taking the Net Operating Income / Current Market Value.

Cash Flow: Also called cash-on-cash, your cash flow is usually the proceeds from rent payments after you’ve subtracted any monthly expenses. This cash flow is the return on the money you put in as down payment.

Return On Investment: Every year you pay back 1.5% of your principal balance and add onto your equity.

A good way to identify a great investment property is to look at the value of the property and use the 1% Rule.

A good way to identify a great investment property is to look at the value of the property and use the 1% Rule. For example, if a $500,000 property is generating $5,000 monthly in profit, or 1% of the total value price of the property, then it is considered a great investment property. 

If you find a “One Percenter,” you have an 8% capitalization rate, 12% cash flow, and 16% return on investment. These values go up if the original percentage is higher. However, in California, these types of properties are hard to find. In this current market, finding a property that is priced the same at $500,000 but is taking in $4,000 in monthly profit is still a great investment.

The reason for this is because many areas in California are not rent-controlled. This includes Los Angeles and parts of Southern California. When you invest in a property that doesn’t meet the original 1% Rule, all you need to do is improve the property and you’ll be able to raise the rent. Even so, without the improvements, a property like the one I described above is still seeing a 6.2% capitalization rate, 5% cash flow, and 8.9% return on investment. Those are great numbers.

So the only thing you need to do next is to start looking for those One Percenter investment properties. Even if you can’t find them and you land on a “Point-Eight Percenter,” I can help you restructure your investment to meet your 1% goal.

If you have any other questions about this or any other topic, please don’t hesitate to reach out to me. I look forward to speaking with you soon.

Struggling to Afford a Down Payment in LA?

I have good news for buyers in LA County who have struggled to put together a down payment for a home in our hot market. A new loan program allows you to buy a home with just 1% down.

Today, I have good news to share.

Many of you have asked me about the affordability of housing. Currently, the median price in LA County is $550,000, making the down payment needed to buy a home very high. The good news is, right now, we have a 1% down loan available. It comes from Freddie Mac's Home Possible program that requires 3% combined with a 2% grant from a nonprofit. This 2% grant doesn't need to be repaid, either.

Unlike FHA or conventional loans, this one doesn't require mortgage insurance.

A 680 FICO score is required, and your income should fall within the average median income of $62,000 in LA County, $61,400 in San Bernardino, or $85,000 in Orange County. If you fall into those parameters, you don't even need to be a first-time home buyer. You can even be a boomerang buyer—someone who had a foreclosure or short sale previously.

Another thing that makes this program great is that unlike FHA or conventional loans, you won't be required to have private mortgage insurance if you put less than 20% down. That can save you a lot of money in the long run.

If you want to learn more about this program, talk to your lender soon. If they don't offer it, don't hesitate to give me a call or send me an email. I'd be glad to refer you to many lenders who offer this program at this time. I hope to hear from you soon!

Southern California Real Estate Agent: 6 ways to avoid home transaction disaster

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Selling a SoCal Home? Check out our FREE Home Value Report

As we head into the summer months, the hottest time for buying and selling a home is here. Although it’s a great market to get a deal done in, there are plenty of ways for your deal to fall apart. Here are six areas to focus on so you make sure that doesn’t happen to you:

1. Credit: A lot of loan officers and Realtors forget to have important discussions about credit with their buyers. If you've been pre-approved for a home loan, you should not be using your credit card to make any large purchases. It could affect your credit score or your debt-to-income ratio just enough to cause your loan to be denied. 

2. Home inspection: A home inspection helps both buyers and sellers figure out what is wrong with a home. If defects aren’t well explained by an inspector, they may be overblown. Buyers and sellers need to work together to compromise on who is going to pay for what fixes. 

3. Pre-qualification letter: This letter means nothing if you don’t have a proper pre-approval. They will go into your credit and income more in-depth in the pre-approval. 

4. No money: When you don’t have a proper pre-approval, you don’t realize how much cash you’ll need for the transaction. You’ve got to pay for fees, inspections, closing costs, and have cash reserves. If you run out of money, your loan will get denied.

5. Not keeping calm: When you don’t have a level head, you are much more prone to making personal or irrational decisions that aren’t in your best interest. 

6. Cold feet: After the excitement fades away, many buyers get cold feet when they have to write a check for closing costs, appraisal, and more.

“

Although it’s a great market, there are plenty of ways for your deal to fall apart.

”

Any of these six problems can cause a deal to go by the wayside. We just want you to be prepared and have the right expectations throughout the process. If you are thinking about buying or selling, give us a call or send us an email. We would love to hear from you!

Southern California Market Update

 Buying a SoCal Home? Search all Homes for Sale

Selling a SoCal Home? Check out our FREE Home Value Report 

As we move into the fourth quarter, many have asked us how the market is. Today, I’ll share some statistics with you. Luckily, the numbers are good! Specifically, I’ll be looking at data taken from January to September of this year. The area I’ll focus on will be from Alhambra to Rancho Cucamonga east to west and Pasadena to Anaheim north to south. This covers regions within the San Bernardino and Orange counties.

In this area, we’ve sold 12,946 homes. This is about 827 homes more than last year! That’s a 6.8 percent increase of sales.

The median price now is currently at $580,500. Interestingly enough, this average has also increased 6.8 percent compared to last year. Last year, it was $543,200 during the same time.

The market is healthy. Remember if you put twenty percent down on a house, that 6.8 percent translates back to 34 percent return on your money. If you have an investment in real estate, you now have a 34 percent increase.

Next time, we’ll talk more about investment. Why is Southern California a great place to invest? Find out next time!

What Is "Good Debt"?

Buying a SoCal Home? Search all Homes for Sale

Selling a SoCal Home? Check out our FREE Home Value Report

Very early on in my investment career, while I was still in college, I got an investment opportunity from a woman. She wanted me to give her $1,000, which she would pay back every month at 4%. I was intrigued, but my first thought was that it was a scam. So I asked her, "Why such a high interest rate?" She shared an eye-opener with me.

  
What this woman did every weekend was drive down to San Pedro to buy frozen shrimp from a whole-seller. She would then drive up to places like Fresno and Bakersfield, and sell them over the weekend in a refrigerated truck in a supermarket parking lot. 

For every $1,000 she spent on the shrimp, she made $400 in gross profit, more than enough to cover my measly split of $40 a month in interest. So I gave this woman my $1,000 investment from my student loans, and she is now a successful supermarket owner.

The lesson I learned here is that there is a big difference between cash flow and an interest rate. This is why she wasn't afraid to pay me a 4% interest rate, because she is going to make 400% profit in cash. She could make $1,600 a month, just from doing this, and only has to pay me back $40. A good debt is a debt that generates positive income. 

Bad debt, on the other hand, is the debt you are most used to hearing about. Bad debt is using your credit card for everyday purchases and not paying off the balance every month. That's how you go broke. 

If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!

Why is it so Hard For Small Business Owners to Refinance?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

Today I am talking about a hot topic in the finance world. Our former federal reserve chairman, Ben Bernanke, has recently had a bit of a tough time refinancing his home in Washington D.C. Although Mr. Bernanke makes over $200,000 per speech, the fact that he is a small business owner has resulted in him being denied refinancing on his home. 

Nowadays, the federal reserve is more geared toward salaried workers and those with W-2's instead of the small business owners and their 1099 tax returns. 

So if you are a small business owner and filing a 1099 return, we think that it would be a good idea if you instead filed as an employee with a W-2. You can pay yourself the same amount, but if you give yourself a paycheck with a W-2, it will make things a lot easier when you try to qualify for a loan. 

Rates right now are really good. Five-year fixed loans are right around 4.75% and seven-year fixed loans are right around 5.25%.

So, if you are planning on purchasing a new home or refinancing, get your W-2 pay stubs as opposed to your 1099, and make sure to keep your FICO score above 700. 

Until then, keep safe and be happy.

4 Alternatives to the Traditional Loan

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

If you're considering purchasing a new home, you are going to need a loan. The question is, what type of loan is right for you? There are many alternative loan programs that can help you borrow even if you've had trouble doing so in the past. Here are 4 you should consider:

1. For those who have income that doesn't show up on tax returns. There are 5- and 7-year fixed-rate loans that you are eligible for. You must have a FICO Score of at least 660 and have an income that qualifies. Depending on your down payment, interest rates are anywhere from 5.25% to 7.75%. 
2. For those in business shown as a wage earner. In this case, 60-80% of the loan amount is based on 12 months of bank statements. 
3. For those with VOE. All that is needed for this type of loan is verification of employment (VOE). You don't need pay stubs, tax returns, or your W-2 to be eligible. 
4. For foreign nationals. If you are looking to by a home, we can can refer you to the right loan agency.

If you have any friends, family, or co-workers that might be interested in getting a loan, I would love to help. For more information on our alternative loan programs, send me an email or give me a call. As always, stay safe and stay happy.

Free resources for you to track your credit score

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

Last time I spoke with you about credit and how to rebuild your score after a short sale. I told you about various places where you can get free credit scores. After doing some research, I have found even more services that can offer you free credit scores. 

You can visit www.quizzle.com or www.equifax.com to get your free credit scores. 

Another great place where you can get a free credit score is www.creditsesame.com. These websites allow you to track your credit score and they can notify you when it changes. 

Knowing your credit score can make for a much more efficient real estate transaction when you're trying to get financing to purchase your dream home.

As always, if you have any questions about real estate in Covina or Los Angeles, please do not hesitate to contact me. I would be glad to assist you in any way possible.

Is Buying a Home for Your College Student a Good Idea?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

Purchasing a Home for Your College-Bound Child...

It's spring time, and with the blooming flowers also comes lots of high school seniors preparing to go off to college. This will cause a lot of decision making, from where your child is going to college, to where your child is going to live in college. Some choose to house their children in dorms, but I have another option that might work well for you.

I am talking about purchasing a home for your college student. I will point out 4 advantages to purchasing a home for your college student to live in.

1. Rent-free living: This will save you lots of money over your child's college career. College is extremely expensive, and this is one way to cut the costs down.
2. Extra Rooms can be Rented Out: This will allow roommates to pay for rent, and this money will go directly toward your mortgage, taxes, insurance, and utilities. 
3. Depreciation of rental property: Instead of losing value as a rented property, this property will continue to gain value if the tenants take good care of it and then you can sell it again at the end of your student's college career. 
4. Security & Surveillance: You can keep track of whether or not your student is abusing the new found privileges of home-ownership and throwing lots of parties. This is of course just another way to protect your child and your investment property. 

I have done this for my clients' children and they have had positive experiences with it. Also, as part of the National Association of Realtors, I can provide you with information about this process and refer you to other realtors if you are doing business outside of the Los Angeles, Riverside, Orange County, or San Bernardino areas. 

I am also a member of the Century 21 Systems, so I have access to reputable agents that I can refer to you, and my information as a professional realtor is sure to benefit you in your search. 

If you need any information about real estate in the towns that your children are heading to, feel free to contact me for advice and consultation. We can talk about whether it will make sense to purchase a home or find another way for your child to live comfortably in college.  

So just give me a call at (626) 643-7090 or email me at reoagent@shawnluong.com