How Should You Use the Equity in Your Home?

If you have a lot of equity in your home, keep reading. I’ve got some great tips for how you can use it to create even more wealth.

If you have equity in your home and you’re looking for different ways to use it, I’ve got a few
recommendations for you today.

First, you can get a line of credit. Depending on the institution you’re working with, you could
use that line to take out money via arbitrage. You could also invest in stocks, such as the S&P
500 Index, which returns about 9.7% per year historically.

One of the best ways to use your current equity to create more wealth is by investing in
real estate. Nowadays, you can get a great return cash on cash and with appreciation. Since 1980, we’ve
seen roughly 6% appreciation every year. A $500,000 home appreciating conservatively at 5% will gain you
$25,000 a year in value. That return is pretty spectacular on paper.

Finally, for those preparing for retirement, you can use your equity to get a reverse
mortgage. This will allow you to make one large down payment and not have to make a
mortgage payment. You will have to cover yearly property taxes and insurance, but there will be
no monthly payment.

As you can see, there are a ton of different ways to use your equity. If you have any questions for
me about this topic or about 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.

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.

3 Advantages to Having a Checkbook Control Self-Directed IRA, LLC

Today I’ll be shedding more light on checkbook self-directed IRAs, LLC after receiving some questions from a few of you.

Unlike more traditional self-directed IRAs, where your funds are held by a custodian who acts as
an authority on each transaction, the owner of a checkbook self-directed IRA, LLC possesses full
control, which is commonly referred to as “checkbook control.”

There are three benefits that set checkbook self-directed IRAs, LCC apart:

1. You’ll be able to keep more from a fix and flip. If you’re looking to use funds from your IRA
to fix and flip a piece of real estate, you’ll preserve 100% of your gains because you won’t have
that 40% taken right off the top due to the income tax you’d ordinarily incur from an ordinary fix and
flip.  

2. You can skip the excessively long process of a 1030 exchange. If you’re a rental property
owner and you want to upgrade to a new property, you would typically be stuck going through a
1030 exchange, which can be a slow-moving process. But with a checkbook self-directed IRA, LLC,
you’ll eliminate those long waiting periods because you’ll have full autonomy to write checks for
the necessary services and expedite the buying process.

3. You’ll have fewer fees to worry about. Rather than having to pay the litany of fees, such
as asset-based fees, that come with normal self-directed IRAs, you’ll simply pay an annualized
custodian fee that tends to be much more reasonable.  

If you’d like more information or would like to be pointed in the direction of a custodian to hold your
IRA, I’d love the opportunity to help you. Give me a call or email me today!

What I Learned About Our Market at a Recent Conference

I attended the largest default servicing conference in the country. Here are three things that I learned

I recently spent three days in Dallas attending the largest default servicing conference in the country.
Here are three specific takeaways from this conference that I want to share with you:

1. Fannie Mae has reported a very healthy gain. They have returned $193 billion to the treasury of
the $119 billion that they took out as a loan. At the height of the great recession in 2010, they had
a 170,000 home inventory. Right now, they only have an inventory of 22,000 homes.

2. Future trends. As you might recall, from 2012 to 2014 we saw the initial rate cast down to 2.5% for

five years. Now, those have been recast back up to 5% or 6%. Will homeowners be able to afford this?
We should know about a year from now, however, this won’t affect the market much aside from an
increase in distressed properties.

3. Demographics. This has a very important impact on our marketing and the economy. There are 75

a million millennials out there aged 19 to 34 and peer research has shown that over 50% of them are
still living with their parents. This explains why the home building industry hasn’t recovered like it has
in the past after past recessions.

Currently, the housing market is healthy overall, but there are definitely things to keep an eye out for

in the future. If you have any questions for me about the market or any of these takeaways that I’ve
discussed, don’t hesitate to give me a call or send me an email. 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.

The Demographics of the Market

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.

A Tip for Homeowners Over Age 62

We’ve got a great tip for senior homeowners today. Have you ever heard of a reverse mortgage?

As promised, I want to discuss a few tips for any senior homeowners in the market to buy or sell a property in the near future. They will help you compete in this crazy market.

Last time, we discussed the increased number of sales from 2016. A big portion of those sales is coming from seniors who are looking to downsize. There is a lot of demand for homes like this, especially from first-time homebuyers. First-time homebuyers are a great demographic to attract for home sellers because they often have no home to sell contingencies, hence a big source of competition for seniors looking to downsize.

Even if you have had a previous bankruptcy or bad credit, you can still qualify for a reverse mortgage.

If you’re a senior that’s looking to sell your home and move to something a little smaller, you should consider a reverse mortgage. You can use a reverse mortgage to buy a new home before your current home is sold, then use the proceeds from the eventual sale to pay back the lender.  Even if you have had a previous bankruptcy or bad credit, you can still qualify for a reverse mortgage, which will eliminate the need to make a monthly mortgage payment. However, you do have to be age 62 or older.

Remember that if you’re thinking about selling, you become a buyer just as soon as you become a seller. If you’re thinking of buying a home in the near future or have any other questions for me, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.

How My Experience Stacks up Against the Zestimate

You may have heard that the Zillow Zestimate is inaccurate. Today I’m explaining why using an expert like myself to determine value is a much better option.

Many of you have likely heard the news that Zillow is being sued over their Zestimate feature by a dissatisfied homeowner. 

This homeowner is demanding that either Zillow remove or amend the Zestimate on her property’s webpage. 

As you are probably aware, a home’s value is determined by a number of things including its neighborhood, style, age, size, and amenities. These qualities can therefore be used as parameters for creating a fairly accurate estimate. However, according to the woman who filed the lawsuit, Zillow’s Zestimate for her property was inaccurate.

She believes this is in part a result of the Zestimate comparing her property to homes in neighborhoods and styles not relevant to her own. 

Experts have found that 25% of all Zestimates misjudge a home’s value by around 10%. Whether this is 10% more or less than a property’s true value, there is certainly an issue with accuracy. In fact, around 10% of all Zestimates are off by approximately 20%. 

For the past 13 years I’ve provided accurate property valuations to both individual and institutional clients.

This subject is very personal to me. For the past 13 years, I’ve provided accurate property valuations to both individual and institutional clients including banks, asset management companies, credit unions, financial companies, as well as a law group.

I have also been asked to use my expert opinion providing real estate estimates in circumstances where attorneys became involved with the potential foreclosure of a commercial property. 

So even before automated estimation tools like the Zestimate were introduced a few years ago I was responsible for giving my BPO (Broker Price Opinion) in order to determine a number of things such as a property’s value, whether to foreclose, or whether to put it on the market. 

Also, as of 2006 I am proud to say that I’ve been admitted by the county of Ventura Superior Court as a Superior Court receiver. Because of this I can provide my services in front of the Superior Court for many different types of cases. 

With all of this experience I can confidently say that my valuations are very accurate. While Zillow’s Zestimate is sometimes off by up to 20% my valuations are consistently within a 2.5% range of accuracy. 

Not only is using an expert like myself more accurate, but I personally can offer my services free of charge. 

So if you need to know your net worth, home value, or your FICO score, or if you have any other questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

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

Buying a SoCal Home? Search all Homes for Sale
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!

You Still Have Options After a Distressed Home Sale

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.

Most of us know someone who has been foreclosed, has had a short sale, or a deed in lieu in the 6 years since the housing crisis. Many people feel there is no hope of becoming a homeowner again in the near future - but there are options out there.

We offer a loan that allows homeowners who have had a distressed home sale become a homeowner again. Additionally, if you or someone you know is in the process of a pre-foreclosure or a short sale and has been denied a loan modification multiple times or has a notice of default pending, there is still hope.

We have a rent to own program designed to help struggling homeowners. You sign a lease with an outside entity in order to stay in your home. In essence, you do a short sale, but don't have to move out of your home. After 3 years you are eligible to buy your home back without ever having to move out. It's a contract like any other - you lease your home from a new entity that will be on the title of your home. If your home is in foreclosure, that entity will sign an option for you to buy it back when you are eligible for a new loan again. When you have a short sale foreclosure, the entity will lease the home back to you so you are ready to buy it, instead of having to move.

Don't lose hope if you are in the process of having a foreclosure, a short sale, or a deed in lieu. There are options available to you! Simply give us a call or shoot us an email, we would love to help!