Put Money to Work & buy your Home Now

Galaxy Tower Long Beach
photo: Amir Zee, 2013  

Look around you. Your parent, family members and friends all made money by buying real estate.

Simply, real estate is a good investment. Especially when is your primary resident. Here are some of the benefits:

• Interest deduction: Did you know you can deduct the interest you paid on your mortgage from your income. Therefore you pay less taxes. 

• Force Saving:In another word you are investing and saving the same time.

• Leverage: With just 10% down ($40,000) to purchase a home value at $400,000. And annual ROR (Rate of Return) of let’s say 5% is equal $20,000. Leverage is doing more with less. Please note as old saying says; timing is everything.The real estate market has been corrected and 2013 is beginning of appreciation cycle.

• Capital gain relief: if your primary home appreciate “single $250,000 and couple $500,000 “you will not pay any capital gain. Anything over this amount you will pay capital gain. How much? Depend on your tax bracket and other factors. Anywhere from 15% to 30% approximately.

 The ROR (rate of return) of real estate from 1978 till 2010 is 9.1% according to Clarion Partner September 2011 Report. When looking at a more recent period, 2001-2010 which includes both boom and bust periods.  The real estate delivered strong annualized returns of 7.4%, which is higher than stock returns (1.4% for the S&P 500 Index) and bond returns (5.8% for the Barclays Capital Bond Index).

If you decide to buy a home, Please work with professional real estate agent as the process and paper works is tremendously challenging. 

Six years after the sub-prime mortgage meltdown, What Now?

Tamarindo, Costa Rica by Amir Zee

Six years after the sub-prime mortgage meltdown, banks remain tight even with solid borrowers.

First-time buyers and self-employed borrowers must jump through especially complex hoops. Lenders say their cautions stems in part from uncertainty over a tougher new regulatory environment, along with unrelenting demands from government-sponsored mortgage buyers that the banks repurchase soured loans. Salaried professionals with credit scores in the high 700s have the best shot at being approved for a mortgage loan in this environment, along with borrowers who have never missed a payment and want to refinance.  

However, even these borrowers may face stiff documentation demands, including having to explain any bank deposit other than a regular paycheck.

Lafayette a Historic Building at Long Beach, CA 90802

Lafayette a Historic Building at Long Beach, CA 90802

2004 four-story condominium complex with street level retail and subterranean parking to be constructed on the lot directly across the street from Lafayette. Lafayette owners purchase parking spaces in the soon-to-be-built complex.Due to real estate market down turn, this project never built.

Why seller are selling?

Bluff park city sign, Long Beach, CA

Two groups of seller are selling now.

1. The sellers are under pressure and can not make their mortgage due to a hardship. Hardship could be Illness, lost of employment and so on.

2. Sellers who are upgrading. Selling their home and purcahseing a new property. This is the best time to upgrade as you can purchase more expensive homes in discounted price due to market depreciation. Furthermore, mortgage interest rate is record low. This translate into a 4% APR in most cases and better terms such as 30 years fix loan.

Sellers who are comfortable with their mortgage payment and they are not under any pressure, wisely and patiently waiting for real estate prices hiking to reasonable level, then to sell.

In southern California, low inventory of properties is become common problem. Seems the number of investor and first time buyer are more than sellers. Look at this attached report created by CAR (California Association of Realtors) as demonstrate great details of Challenges for Home Sellers.

www.car.org/marketdata/marketsnapshot/mktsnapshot_201301

What to do if you have been victim of Time Share Fraud Scammed?

ConsumerAlert:
 "Latest Time share Fraud" by California Department of Real Estate.
DRE suggest eight steps to report fraudulent Time Share activities.  Please read more...

Real Estate 2006 VS 2013, Are you ready?

Long Beach, CA, View from Signal Hill
Photo by: Amir Zee

According to California Association of Realtor s "CAR" With the California median home price in 2012 surging by double-digit from 2011, there are concerns about the market entering into another period of housing speculation. Discussions on whether the current housing market recovery and the recent asset price boom are justified surface from time to time and the debate will continue in 2013. The environment for housing finance in 2012 required home buyers to be more responsible financially than they were in 2006. As the economy continues to improve slowly but steadily, the housing market condition will remain healthy in 2013. Sales will be strong in the upcoming year as housing affordability hovers at record level.
Please look at this very interesting study, comparing 2006 and 2012 buyers statics.

How to reduce your Monthly Mortgage for you’re newly Purchased Property

Flamenco Building , Bluff park LB 

A strategy home buyer can choose to reduce his / her mortgage is to purchase an income property. Can be a duplex or up to four units property. You can live in one and rent the others. Tenant pays part or in some cases all of your mortgage. here is Pro and con of the process.

• Pro: Leverage, The purchase of an investment property can be financed, reducing the upfront cost to buy the a property.
• Pro: Income Plus Appreciation, Rental property provides investors with a steady stream of income from rental checks. also benefit from the appreciation of a property's value.
• Pro: Tax Advantages, A real estate investor can also avoid the capital gains taxes on an investment property by exchanging the property for another investment property. Process called 1031 exchange. 
• Con: Vacancy & Bad Tenant, A bad tenant can lead to more problems than no tenant at all. Tenant selection is a very important consideration for rental property owners. Rate of Vacancy must be consider during property evaluation.
• Con: Excessive Repairs, Homes need both ongoing maintenance and at times major repairs. A rental home investor should have an emergency fund set aside to pay for unexpected expenses.
• Con: Larger Down payment, for income properties, most lender requires larger down payment 20% or more.