Covina, CA Real Estate Podcast

Investing in real estate is a much more secure option than investing in stocks, and today I’ll explain why.As you’re likely already aware, the economy can change dramatically in just a few years. For instance, while the value of the American dollar remained fairly static between 2000 and 2009, money invested into the S&P 500 during that decade would equate to a significantly lower sum, thanks to the high fees and inflation. These factors could easily erode a $100,000 investment into about $70,000 worth of value. "It’s clear to see that real estate is the superior option for growing long-term wealth."Over that same decade, the median home price in Los Angeles County rose from $227,000 in 2000 to $400,000 in 2009. This means that while money invested in the S&P 500 brought a negative return, money invested in real estate saw growth of more than 7.6% each year—or roughly 38% leveraged annual return on your initial 20% down payment. Most people probably aren’t aware of the stark comparison between these two investment paths, largely thanks to Wall Street’s advertising engine, but it’s clear to see that real estate is the superior option for growing long-term wealth.If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What is tenant-in-common ownership and why has it become so popular lately? Let’s discuss.When multiple people purchase a property together, but each only maintains a certain percentage-based portion of ownership, this is what’s known as being “tenants in common.” Because of the rising cost of housing and the lack of available inventory in and around Los Angeles, tenant-in-common homeownership has become increasingly common in our area lately.Therefore, many former landlords are converting multi-unit properties into tenant-in-common properties to be sold with multiple titleholders.  This is an especially popular move in light of tight inventory on core city areas and cumbersome housing regulations, which would make condo conversion more difficult, if not impossible.So how is ownership divided among tenants? Well, while this can be negotiated however the tenants see fit, most people choose to divide ownership (and the costs associated with it) equally. This means if a home was occupied by four tenants in common, each person would own 25% of the property.Tenant-in-common ownership is popular among former landlords, sellers, and buyers alike. Not only does this make for a more equitable living situation, it also ensures that each person carries an equal amount of responsibility for living expenses, like utilities and maintenance.Better yet, one particular bank here has even made it possible to finance a tenants-in-common loan for as little as 10% down with an interest rate around 4.5%. In short, tenant-in-common ownership is popular among former landlords, sellers, and buyers alike. If you have any other questions or would like to learn more, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Interest rates have come back down from where they were earlier this year. Here are some of the latest numbers you should know.In my recent email about the state of the market, I mentioned that we are shifting to a buyer’s market, where homes are sitting longer on the market. When the Federal Reserve increased the federal discount rate, the interest rate moved up to nearly 5%. Recently, we’ve heard talk of the Fed decreasing this rate by 0.5% and the market has reacted pretty well. Mortgage rates are down 1% since and now sit at around 4% on average. The jumbo rate is around 3.6% too.What does this mean for you if you’re on the fence about selling your home? Well, it might not be a better time for a while. Inventory is still low and sellers can still get a great price without having to discount your home."Don’t get discouraged if you’re a buyer. This is good news."What does this mean if you’re a buyer? Don’t get discouraged. This is good news. With lower interest rates, you can afford 20% more of a home and with increased inventory, you have more to choose from. If you’re a first-time homebuyer, you should know that a mortgage credit certificate is a good idea and pretty easy to qualify for. This is also a useful tool for those looking to refinance.With this mortgage credit certificate, you can deduce up to 20% of the interest you pay annually against your tax liability. Let’s say that you have an annual interest payment of $16,000. This gives you $3,200 you can use to write off on your tax liability.If you have any questions for me about the market, the mortgage credit certificate, or 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.

Do you want to boost your cash flow while reducing your tax liability? Today’s message will teach you how you can.Today I’d like to share how you can improve your cash flow by 20% without any additional money out of pocket by investing in a Qualified Opportunity Zone. Through the Qualified Opportunity Zone program, you can invest in multiple assets while reducing your tax liability on all capital gains, including gains from stock and business. With this program, your tax liability is reduced depending on the amount of time you retain an asset. If you hold onto an asset for five years, you get a 10% reduction. If you hold onto an asset for seven years, you get a 15% reduction. And, finally, if you leave your money in an asset for 10 years, any appreciation above the acquisition and improvement costs will be tax-free. Investing in a Qualified Opportunity Zone, as you can see, can be a great way to boost your cash flow while reducing your tax liability. If you have any other questions or would like more information, feel free to give me a call or send me an email, I look forward to hearing from you soon.

It seems opportunity zones are a real hit, so today I'll share some more info on this.Welcome back, everyone! Because I received some excellent feedback from my recent message on opportunity zones, I’ve decided to explain how they work a little more and where they’re found in our local communities. Just to recap, opportunity zones are economically depressed areas that the government incentivizes investment in. Unlike a 1031 tax exchange where you have a mere 45 days to identify a property and 180 days to close on that desired property, you have a 31-month safe harbor to put your money into an opportunity fund. Additionally, you’re not locked into that fund—you’ll have the freedom to move assets from one fund to another for up to a year.  Hopefully that answers one of the questions I was asked regarding the risk you’d be subjected to by investing in one of these zones. As far as Los Angeles is concerned, there are 274 opportunity zones within the area—all of Lincoln Heights and the area surrounding LA County and the USC Hospital are a few examples. Beyond that, some other zones lie in pockets of Santa Clarita, South LA, and Orange County. I could go on and on. Also, there are some marvelous neighborhoods in and around Riverside, and you might be surprised to learn that many of them are designated as opportunity zones. Keep that in mind if your son or daughter is an aspiring UC Riverside student and you’re considering a move.  Today I just wanted to shed light on some local opportunity zones, but these are just a few of the thousands dispersed throughout the country. To see a full map, you can click here. And if you’re curious whether your home falls within an opportunity zone, all you have to do is click here and enter your zip code. If you have any additional questions or feedback for me, you’re welcome to reach out anytime. Until next time, stay safe and stay happy!