So Cal Real Estate News

(10/24/2011)During his stop in Nevada today President Obama will announce major changes to the Homeowner  Affordable Refinance Program (“HARP”) designed to help more homeowners refinance to today’s  lower rates even if they owe more than their home’s worth.

Here’s what we know so far:

1. The program will now be available regardless of (more…)

Living within a budget is like flossing your teeth–everybody knows how & knows they should but nobody has the time.  If you need to save up a down payment to buy, or if you’re behind on your mortgage or other bills, it’s time to make the time!

The secret of the best seller, The Millionaire Next Door is simple:  spend less than you make.  To do that, most of us need to either reduce spending or increase income, or (more…)

(3/30/2011)  We received an e-mail a few days ago from Deborah,  who’s in a pretty common situation:  Our So Cal real estate downturn is crimping her retirement plans.  In her case, she had planned to pay off the loans on three rental properties by selling some raw land she owns.

Although the specifics vary, the general advice in our response applies to enough people that we decided to post Deborah’s question and our response, in the hopes it might help others trying to decode what to do in Southern California’s uncertain real estate climate:

Question: I have 3 properties in Hemet; all of which . . . I can probably sell for what I owe.  My goal is to pay all 3 off with land I own (also devalued at this point) for retirement.  I have 20-acres in Sage which I plan to split.

I want to pay off the properties and have retirement income but have to wait for the land to appreciate to apply toward the mortgages. I would like to hear your instinct for the real estate market in 2016 and if there’s any appreciation anticipated, about how much?

Our reply:

Deborah,

With home prices down 15- 35% in Southern California, we are increasingly encountering clients who don’t know what to do when they need to sell or refinance in today’s troubled real estate and mortgage markets.

Of course, if you’ve got enough equity in your home, selling or refinancing is not such a problem, although you’ll net less cash out than you would have a year or two ago. We’ve got lots of ways to help sellers maximize their net in today’s market, but that will have to wait for another post. (If you can’t wait, call us at 562 822 6532 or post a question in the comments below & we’ll give a brief summary.  You can also e-mail us by using the”contact us” link at the top of this page.)

The real crunch comes when you owe more than 90% of what your home’s worth. For refinancing, that’s because 100% refinance loans have largely disappeared.

For sellers, it’s because the total cost of selling a home today generally runs between 8 – 12% of the sales price (escrow, commission, termite, title, home warranty, & often points and incentives).

As we see it, homeowners with little, no, or negative equity have at least (more…)

It's your money!

Yesterday I gave you detailed information about filing to get your Orange County, CA Property Tax reduced.

Since informal appeals for the 2009-2010 tax year must be postmarked today, here’s the instant version:

3 Quick steps to find out if you should file:

(more…)

Living in Earthquake Country

(July 29, 2008)  I experienced my first Southern California earthquake as an infant almost two years of age.  It happened at night, and my parents rushed in to check on me.  I guess we California natives just come wired for these things:  I’m told I was perfectly calm, lying in my crib singing “Rock-a-Bye Baby!”

I’ve experienced dozens of earthquakes here in the Los Angeles basin since then.  To me, they’re kind of fun, as long as nobody gets seriously hurt.

While quite a few of those earthquakes provided a real “E-ticket” ride, only a few of them were very significant.

Perhaps most memorable for me was the 1971 San Fernando Valley quake which I rode out on the top floor of UCLA’s Rieber Hall dorm one morning.  As we swayed back and forth seven stories above the gound I quickly figured out that a bookcase over a dorm bed isn’t a real good idea in earthquake country.

We were living in Lakewood when the Norwalk quake struck nearby.  It wasn’t a big one, but it was close enough to knock a lot of things off of shelves and damage a few chimneys and walls.  It struck in the morning as I was about to go out the door for a jog.  I stood in the middle of our kitchen, pushing cabinet doors shut and trying to keep things from raining onto the floor.  Our elementary-school aged daughter did what she had been taught and stood under a doorway, and then called upon me to do likewise.

That Norwalk quake went on for a fairly long time and knocked out the power, but never got real violent.  Still, it panicked one of our friends, who ran out into the middle of her street half-naked.

Earthquake Preparedness:  No time like the present!

Ironically, I had just printed up about 500 “What to do in an Earthquake” flyers to pass out in my “farm.”  (A “listing farm” is a specific neighborhood a Realtor, known as a “farmer,” cultivates with regular flyers, gifts, and notepads.)

So, as soon as I figured out how to get into the vault-type garage when the electricity to the opener’s off, I went on my jog and passed out the flyers as I went.  Back then it took about a week to get a good flyer printed up, so folks wondered where I got the inside tip about the quake.  The response was so good that for a while I just kept an earthquake flyer ready to pass out after the next one.

Maybe “Mother Nature” provides us these modest tremblors to spur us to do the needed preparation should that legendary “Big One” ever hit close to home.  In any case, now’s a good time to check your earthquake preparedness.  Some steps are real easy, and they might not be the ones you’re thinking of, either:

• Do you have comfortable shoes, a blanket, flashlight, some first aid supplies, and an extra half gallon of two of water in the trunk of each car?  (Some granola bars aren’t a bad idea, but lack of water’s a much bigger threat for most of us than lack of food in an emergency.)
• Got a working flashlight and sturdy slippers by every bed in your house?
• Is anyone in your home sleeping next to a bookcase, heavy wall hanging, etc.?
• Does everyone know how and when to shut off the gas and is a shut-off tool or large wrench wired to your gas meter?
• Is your water heater strapping up to current standards?

Additonal Online Information:

California Dept. of Conservation on “What to Do Before, During, and After an Earthquake,” with additional links.

L.A. Fire Dept. Emergency Preparedness Guide

Los Angeles Building Dept. has an pdf file on steps to strengthen your home structurally .

Please feel free to suggest helpful links you might have found by adding your own comment at the end of this post.

How Big a Risk?

I much prefer living with earthquakes than the floods, hurricanes, and tornadoes that plague other regions of the country.  Not to mention the humidity or the cold.  A little preparation goes a long ways to minimizing the risks.

But if you’re going to worry (which is never a good idea), chloresterol, fat, and bad drivers are far bigger risks than earthquakes.  Actually, worry’s a greater threat than an earthquake!

So shake it off and get on with your life!  Right now it’s about 2 p.m. and a blamy 77 degrees with a pleasant breeze, and the Angels have beaten the Red Sox six games in a row.  Why on earth would I ever want to live any place else?

Today another chaotic day on the world’s various “Wall Streets” coincided with mop-up operations for me on a six unit apartment building. By the end of the day I was reminded that the basics work in any market.

As Solomon put it 3,000 years ago, “Be sure to know the condition of your flocks, give careful attention to your herds; for riches do not endure forever. . . .” (Proverbs 27.23-24).

Or, in my case, to the condition of your fire extinguishers. Today I figured out that my procrastinating on some fire prevention upgrades on this building may have contributed to the loss of four of the units and to making five families temporarily homeless. Fortunately, there were no serious injuries.

As I walked through the rubble with the insurance adjuster this morning, what saddened me most was the ruined possessions of the families that lived there. Ash covered family photos and drawings taped to the charred walls. A heart with a child’s printed “I love you” tossed in the rented dumpster. Clothing & furniture tossed, by residents I knew had no renters’ insurance to reimburse them.

Then came the conversation with the the resident who attempted to put out the grease fire on his neighbor’s stove. “If only we could have found a fire extinguisher, we might have been able to limit it to the stove,” he told me.

Ironically, three hours before the fire started, I was in a fire prevention store ordering fifteen fire extinguishers. Delivery is scheduled for next week. I’d intended to get around to it months ago. I thought we had some extinguishers in the office, but also thought we should try some wall mounts outside, in cases, to see if we could make them more accessible while minimizing vandalism.

I had been thinking about mounting one just outside the door of the unit where the fire started. A $60 expense that might have prevented a $100,000 loss. Solomon got it right–pay attention to the basics. Know what’s going on. Don’t get so caught up in what the market’s doing or in what’s new to neglect the basics.

We still need to keep up with current trends. We’re getting more resident leads from Craig’s List today than from newspaper ads, for example. But the basic, unglamorous things like fire safety, grounds keeping, resident selection and screening, cost containment, client satisfaction are still what will make or break any business. That goes for rental property and for home ownership.

Part of the problem is that the Urgent is rarely Important, and the Important is rarely Urgent. But that “stitch in time” still can save nine stiches later.

The city Fire Chief recommended 5 pound (net) rechargeable fire extinguishers with metal heads & spouts, rated ABC (trash/wood, grease, & electrical fires). Actually at least 2A10BC. Around $40 at Lowes, slightly less in quantity at Maintenance USA. Roughly another $35 for the safety case. You might want to pick up one to keep near your kitchen or garage at home. And at least one more for any rental properties you own.

The same principal applies to what’s much more important than possessions: Family, relationships, health, friendships, our walk with God. Pay attention! Don’t neglect the important for the urgent. Keep your priorities straight. Do some preventative maintenance. It’s easier to install fire extinguishers than to gut & rebuild apartments, but apartments can often be rebuilt much easier than relationships. It’s far easier to fix ruined buildings than ruined lives.

That’s not to say there isn’t hope for even the most hopeless situation. That’s just one of the many wonderful messages of Easter. Just today I passed a church with a sign, “Nothing is Too Hard for God.” Guess someone knew I needed that today. Just like eleven discouraged disciples 2,000 years ago, after their Messiah was arrested, unjustly convicted, and crucified. But, as one of my favorite sermons says, “It’s Friday, but Sunday’s coming!” God can redeem any situation if we let him.

But the first step could be to prevent the situation from getting any worse. Take it from someone who learned that lesson the hard way!