Welcome to the world of home ownership, besides feeling like you signed your life away-how does it feel? You may find yourself feeling pride of ownership, because you now in fact own something. But with great power comes great responsibility-home maintenance. One of the best resources for you, even after the transaction, is going to be your real estate agent. Chances are, if you need a specific kind of vendor-they have one they trust and can refer you to. Home maintenance falls into two categories: Keep it clean and keep an eye on it. Review the maintenance needs for your home once you are settled in plan for regular service. If you notice something different, investigate it and fix it. A small problem not treated turns into a massively more expensive problem when ignored. Be sure to also read your home warranty, some of the repairs that come up may be covered. Also, have reserves set up for “Life Happens” situations. Finally, the most important part, Housewarming Party! Nothing w...

So by now, you have found your house and have reached an initial agreement with the seller. To close the deal though, you must remove contingencies. But how do you feel comfortable enough to remove them? You do due diligence. If you discover a reason you should not be purchasing this house in doing due diligence, you are saving yourself a lot of heartache and money and removing yourself from the transaction while you are still able to. One of your first major inquiries will be for: homeowners insurance and property inspections. While this may cause another round of negotiations-these steps are to protect you the buyer. In regards to your home owners insurance policy, here are some things to think about: 1.       How much coverage do you need? 2.       Replacement cost or actual cash value? 3.       What the named and unnamed perils? 4.       Do you need personal property ins...

Can you say open house? I can. So many open houses! So many people walking through all of your potential houses! Before we figure out what houses to look at, we need to figure out what is important to find in your home. What do you value most? 1.       What do I want my neighborhood to be like? What do I want my home to be close to? 2.       How much space do I need? What do I need space for? 3.       What is most important-location or size? 4.       Would I be interested in a flipper Upper? 5.       How important is appreciation? 6.       How important is neighborhood stability? 7.       Would I be interested in a condo? 8.       Would I be interested in new home construction? 9.       What features do I need? What amenities do I want? ...

Now that we have made the decision to buy your first home, scary I know-time to find a real estate agent to help you do it! What does a real estate agent do for you exactly? They are your market consultant, home guide, your liaison for other partners in the home buying process, negotiator, and the closer. They wear a lot of hats, for this reason it is a very good idea to have conversation with them and get to know them as a person and as a professional. Here are some great questions to ask them: 1.       Why did you become a real estate agent? 2.       Why should I work with you? 3.       What do you do better than other real estate agents? 4.       What process will you use to help me find the right home for me? 5.       What are some mistakes that you think people make when buying their first home? 6.       What are ...

A person’s firsts are so iconic-your first car, your first kiss, and especially your first home. It is the most memorable and equally terrifying experience for buyers. You can ask any buyer, even if the process is the same for buying each house there is no time quite like the first time. One of the biggest reasons to purchase your first home is to start building your wealth. What are some fears about buying your first home? I can’t afford to buy a home right now. I should wait until the real estate market gets better. I don’t have the money for the down payment. I can’t buy a home because my credit is not good. I can’t afford to buy my dream home. I should wait to buy a home until I get married. Buying a home seems way to complicated. You can’t afford to not buy a home right now. If you don’t own-you rent right…and you will pay less owning a home monthly than renting with tax savings. There is never a wrong time to buy the right home. Real estate is a long term investment and tryi...

This is the last installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Over the last two centuries, about  90 percent of the world’s millionaires  have been created by investing in real estate. This has created incredible 'political cover' to be a part of that 'millionaire's club'. What I mean is that, so many people have come to rely on real estate for their past and present fortunes, that it is unlikely major legislation would change its tax-advantaged, and political-advantaged position. Today will be a much more abstract topic, it relates to legacies, dynasties and how your blogger sees the world. What defined the  Middle Ages was land . What defined a noble was being a land-lord (as they still are). It is my, possibly unpopular, belief that our country may be on the tail end, or just past the  Pax Americana , a...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Today we will cover some of the most common tax reasons to have real estate. This article is not intended as tax advice, please do not make tax decisions based solely on the content here. The biggest tax reason to hold real estate is because it shelters income. The asset produces expenses, most of which are tax deductible, while the gains can be deferred or offset, a common way is by a  1031 exchange , but even if one did not pay it, their long-term 'capital gains' rate is either 15% or 20%, versus up to 37% for federal. When deferring with a 1031 exchange, the goal is to 'defer until death', at which point the real estate will 'step up' by about either $11.4M (single) or $22.8M (married). This means that only equity above this amount is subject...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Building is a straightforward way to add value. There are really two classifications of it. Either remodeling or constructing. In terms of remodeling, as mentioned in a prior post, it is important to find a 'quarterback' that knows what and who to ask. Improvements should be thought of in terms of how much value it will bring, it has been said that kitchen and bathrooms are the highest return on investment. https://www.remodeling.hw.net   has a very good annual report ( linked here for Los Angeles, see last page ), some highlights is that a MINOR kitchen remodel returns 105% of the money put in. Other things include the expected, Grand Entrance (108.1%), Garage Door (123.8%) and perhaps unexpected, Deck Addition, wood (98.8%), Windows, double pane (102.6%)New ...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  There are a few advantages to real estate investing in this way, one notable one is the use of leverage. If investing in an alternative asset class, such as stocks, you would buy "on margin" for 50%, meaning, you put up $1 and you borrow $1. In real estate, traditionally, you put up 80%, meaning that that you put up $1, and the bank puts up $4. It technically means that you are the junior partner in this joint venture and you should expect the senior partner to ask for more assurances. For residential real estate, 1-4 units, government-back loan, is no fundamental reason that real estate should have a 30 year repayment term. If you think about, the repayment term is the amount of time that a bank is committed to lend you money at a certain rate. They cann...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Alas, today we will be discussing the main thing people think about when they think about real estate investing, selling the asset high after buying low. The biggest advantage to selling real estate is the value added you can do yourself. There is no requirement to hire anyone to do any repairs on the property, as real estate is sold as is. You can do your own marketing, your own negotiating, there does not have to be anyone between you and the market unless you choose for there to be. You choose your partners at terms you both agree with. With that great power, comes great responsibility. Though you can do it yourself, it is more advisable to partner with those who do it every day, rather than every so often. Consider that a real estate transaction employs a...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Today we are exploring using real estate as a rental property. It is the most common use for investment residential real estate, the first question is whether to go with short-term rentals, or long term (fixed term) rentals. For short-term rentals (Airbnb or similar), first make sure about city ordinances, for example,  City of Anaheim  has extremely restrictive rules relating to short term rentals. The rules can be many, burdensome and ever-updating, in fact, I would not recommend doing short term rentals in Anaheim at all. In addition to cities, HOAs (Homeowner's Associations) are common in areas that have high Airbnb demand, and  they have not been friendly to it either . Secondly, please note that short-term rentals have the primary com...

Today's topic is a bit of a macro topic, we would like to look at why exactly is real estate such a good investment. Please consider this 7-part blog post to be a primer rather than the authority on the topic, its purpose to think about things in a new way. There are seven things we can do with real estate: Use it  Rent it Sell it Finance it Improve (Build on) it Tax Benefits Legacy Today we talk about 'using' real estate. As simple as it sounds people do not fully appreciate home-ownership as a concept; there is really only 4 living status you can have: own, rent, live with family, homeless. The road to homelessness is not as far as people think.  78% of Americans are living paycheck-to-paycheck . If a renter lost their job, eviction proceedings will likely begin 3-5 weeks from when the rent is due, depending on landlord. If a homeowner (in California) is laid off, they have up to 3 months to pay prior to receiving a notice of default, then 3 months before ...