Monthly Archives: May 2017

Real estate investors Increase Property Values

This is true with any business, but what makes real estate such a great business and a great investment, is the number of ways you can add value and cash in on big profits. Here are three ways you can add value to your properties.

Upgrades and Repairs: OK, this is the obvious one and is the reason fix and flippers can make money. Some repairs add a lot more value than it costs to do. The more creative you are with the improvements, the more value you can add. For example, I have a client that adds square footage to every house he buys. He really likes the inner city properties because they are the hardest to add square footage. You either need to finish an unfinished basement, or add a second story. There is not typically enough land on the lot to add an addition by increasing the foot print of the property. This client does a lot of basement finishes and “pop tops,” but where he has made the most money is the basement that is only 5 or 6 feet deep. He will go in and dig out the basement to a full 8 or 9 foot height and then finish it. Something most investors would not think of, so he is able to get the deal most other investors pass on. I have also seen some investors find houses that don’t really fit into a neighborhood and they make them fit. This could be limited bedrooms or bathrooms or funky floor plans.

Owner Finance: I love this one because it is so easy to add value with very little to no work. You will need to wait to cash in on your profits, but it is a way to increase a sell price significantly. You can also use this strategy to defer tax gains over a few years, instead of taking a big hit all in one year. When you have a property for sale there are a limited number of buyers for the house, although right now that pool of buyers seems pretty big. If you can increase the pool of buyers, the demand for that one house increases, which forces the price to go up. Someone that cannot qualify for an ordinary loan, limiting the supply of houses to choose from for that buyer, will likely buy your property.

Shared Units: This is one area of real estate that I have not dabbled in, but it is extremely inviting. The idea here is to sell your property to multiple buyers. You are seeing this a lot in resort towns. It is always a vacation or second home. Have you ever been to a time share presentation? They are pretty enticing aren’t they? About 13 years ago my ex wife and I were in Florida and got sucked into a time share sales pitch. We decided to go because they offered us free tickets to Disney. We sat there for about an hour and a half and then the hard sale came. They were very good at selling the “idea” of the time share and had my ex wife sold. She asked me to move forward with the deal, but I could not bring myself to do it. I told her that I was not comfortable with an emotional purchase and that we needed time to think it through. I started thinking about the math. Each unit can be sold to 52 different people because your purchase only gets you 1 week a year. Add that to the annual maintenance fees and the numbers are staggering. I know people who have flipped time shares successfully,

Housing for the Middle Class

Especially in the Indian real estate market, affordable housing has a connotation for housing for the lower income group (LIG), by which they too can enjoy a comfortable living and security. With the incumbent government’s focus on this section and more on the affordable housing, it seems like the real estate sector has been able to get the boost that it had been waiting for of late.

However, there is an important trend that needs to be taken note of before the government claims that its affordable housing project is a success. The term affordable housing, in different contexts, also has a local meaning. According to this, affordable housing includes housing options for a segment of population that can become potential home buyers in a city. If we take this definition into consideration, there is a sizeable population in every city, which although it will not identify with or fall under the LIG, is equally incapable of allotting a large budget for buying homes. It is not only sensitive and cost-wary but is looking forward to finding a house of a decent budget-size within the realms of the city. A typical example is of the residential flats in Gurgaon, which although are well-furnished, but do not still fall under the budget for the middle class

There is an urgent need for developers to come up with budget housing projects in the larger cities. As modern India moves towards development and rising aspirations, affordable housing and the security that comes with it, is increasing. This appears to be a very high opportunity for developers who can count on a boost in the real estate industry. More absorption of the housing projects in the urban cities is also a strong indicator of the socio-economic growth in the country

Not only will the affordable housing for the middle class prove to be a sustainable business model for the future, it will also allow more cities to come up to ranks. More affordable housing projects will assure developers that they do not struggle with inflation or even setbacks in the economy. Another trend that one needs to channelize is that more real estate investors are now eyeing budget and affordable housing projects. Where luxury homes and premium homes find it hard to make it through a rough economy, affordable housing is still on the move. The healthy demand in addition with more money coming in steady from investors means a healthy micro-economy

Home Closing Costs

After all, one of the hottest markets in all of Los Angeles. Not just the obvious neighborhoods like Glendale and Pasadena, but in smaller, lesser-known neighborhoods.

You might be in love with the schools in Mt. Washington, the housing inventory in Highland Park or the neighborhoods of Eagle Rock, but you have to work through some of these details before you can call any of those places home.

Much is made about closing costs in real estate transactions, and yet these vary for several reasons. The single largest expense, the real estate commission, is covered by the seller (who pays the commission in a split between the buyer’s and the seller’s agents).

Fees the buyer will need to pay at the closing come with some variation; the following are the largest of such costs at closing:

  1. Homeowner association fees – If the property is a condominium the seller might be in arrears with the homeowners association, in which case you will find this out before entering the sales contract. In distressed circumstances (foreclosures, near-foreclosures and short sales), these fees might amount to thousands of dollars.
  2. Private Mortgage Insurance (PMI) – If your down payment is less than 20% of the price of the property, you will be required to insure the mortgage at between 0.3% and 1.15% of the loan amount.
  3. Origination fee to the lender – Even while you fix your dreams on a Victorian in Glassell Park, a two-unit duplex in Garvanza or fixer-upper in Hermon, you have to go through a large amount of paperwork with a would-be lender to prove your creditworthiness. And yes, they do charge fees at closing for all that fun.
  4. Points – These enable you to change the terms of the loan to your favor if you pay one or more percentage points toward the mortgage amount. If you have the cash and plan to own the property for a decade or longer, paying a point or two upfront can save you much more over time.
  5. Prorated property tax – As the LA tax year begins on July 1, you will need to cover whatever remains in the year in advance from the day of the closing.
  6. Insurance premiums – Protecting the property (as required by all lenders) from damages and liability is required at closing also.
  7. Escrow fees – Third parties performing escrow services need to be compensated for that work. Note that fee structures are not fixed or regulated by the state of California, but are generally set according to the size of the transaction.

Technically speaking there are multiple fees that will be part of the buyer’s closing costs but which the seller automatically pays for in a reimbursement. These include the city transfer tax, documentary transfer tax to title and the owners title policy.

Real Estate Social Media Marketing

Why do we need to spend time to promote my business here?

Let us put it in a simple concept – so, instead of having BBQ parties, inviting 30 of your clients, friends and families to network and tell them “don’t forget to refer business to me… and I got this great new listing… ” Kind of annoying, but you got to be whatever it takes to get some leads, right? So, with social networking for real estate, you would simply network through a social media platform to efficiently announce your real estate business, post your new listings, reduced price listings, post informative real estate information, and establish your real estate expert authority. So then, your posts will be viewable by your colleagues, your friends, family members and their connections. We are talking about hundreds and potentially thousands of people in the network. And making connections are just as simple “what is your Facebook account?” Now, we can understand what this real estate social networking buzz is about!

Anyways, I encourage you to take advantage of the power of social networking for your real estate business. Following are some great social media tools to enhance your real estate business. Check it out now!

Klout

Klout is the ultimate social media scorecard and the online community has been already abuzz about it. It ranks your influence online through social media sites like Twitter and Facebook, and gives you a detailed breakdown of your presence there. Once you enter your information Klout will give you a score. It will tell you who you are influenced by, and who you influence online, by showing you how many people comment on your posts, follow you, retweet your content, etc. It is a great tool to see just how effective you are with your social media efforts. It even tells you what categories your information falls into.

SocialBios

This site allows you to upload your photo and bio information, including all your social media information. It then presents all this in a beautiful page which you can upload to your website for your “About” page. All your social media links are posted right there, and there is a live feed from Twitter or Facebook on your page. Visitors can click to connect with you instantaneously via your social media sites. Even better, when people visit your SocialBio page they can see which friends of theirs are connected to you.

The Real Estate Referral Group on Facebook: Broker Jonathan Rivera, also known as the Real-Tech Guy, created the Real Estate Referral Group for agents across the country to share referrals. The great thing is that it actually works. If you “Like” the page on Facebook you can read all about it and post your information so if a referral becomes available in your area you can try to work it. It’s a great tool.

The MLS App for Facebook

 A savvy young designer named Jimmy Mackin has created an MLS app for Facebook that allows you to add an MLS search to your business Facebook page. How great is that?! Some MLSs are already using this app,but it is not available everywhere as of yet. Hopefully soon your MLS will grant approval so that you can add this to your Facebook page. You need to let your MLS know that you are interested in having The MLS App technology available. I notified my MLS, and I can’t wait to get this tool on my business Facebook page