The Real Estate Debate

Hello, today's post is about the current state of the California Market. Specifically the Northern California m arket because there are some interesting things happening. Over the last few months there has been very decisive shift in the market from a fairly strong sellers market to a market that is softening and becoming a buyers market. That change caught many off guard and I must admit I too was caught off guard by this shift in the market place. The market was humming along at a very brisk pace coming out of last year, sellers were receiving multiple offers on homes and buyers were finding themselves in bidding wars. Which in hindsight is somewhat on par because typically around the Holidays and Winter months there are less homes on the market and less buyers in the market as well. Which I have always said can create great opportunities for sellers that don't mind having their homes on the market in the Winter and around the Holidays. With fewer homes on the market and the...

Today's post stems from an encounter I had last night while at local Sprint store. I stopped in to see if I could pick up a charger for my watch, so as the guy is looking up my account he notices that I am in real estate sales. He starts asking me questions about the real estate market(as almost everyone does once they find out what I do) and as we are talking be says that his co-worker could buy a house right now and points to him. He says that he didn't though because went out and bought a new car . The guys says it's true he could have bought a house but he didn't see the value in buying a home and opted to buy a new car instead. Rather than start brow beating him with all of the benefits of home ownership, I asked him about his reasoning for buying a new car. I asked him if there was something wrong with the car he had? He said no. So I asked him why he bought the car if not out of necessity and he said that he bought the car because he wanted the enjoyment of driv...

So once again I found myself in a presentation about how the future of real estate is going to be changed forever by this company. Right away I saw the multi-level marketing aspects of this company, as with every multimulti-level marketing presentation and (I have been to dozens). They all start of the same way, they start by talking about how Facebook was started and how the 3 guys that got in with Facebook in the beginning are Billionaires and the 2 that didn't well...you know. As with every multi-level marketing company I have seen, the focus is on recruiting others into the business not providing good service to the customers. Other than talking about how fast the company is growing (which they all do) they spent rest of the time talking about all of the technology they use. Technology certainly is and will have a major impact on the real estate industry but nothing can take the place of great service and providing a great customer experience. One thing is most definitely tru...

Today's post is a bit of a rant, but I have to get this off my chest. People spend money on some of the dumbest things to me. Rather than spend money on investments, they spend money on cars, clothes and a bunch of other things that has no real value. People have become so materialistic and so focused on looking like they have money rather than doing the things to actually have money. I have a term that I use to describe people like that "Hood Rich". Now I am not saying that people are hood or anything like that. It actually doesn't pertain to were you live, it pertains to your mentality. It's like someone driving a $80k car and living in an apartment. Why? I would rather drive a Toyota Corolla and live in a Mansion than drive a Mercedes and live in a 1 bedroom apartment.  I said all of that to say that people need to spend their money on things that will appreciate (increase in value) not things that are worth less money the moment you buy them. Now I am sure t...

There has been a movement of late where today's young people have decided against buying and have decided to rent. There are some compelling reasons that support this thought process however buying a home is still a better option then renting. There is one truth that there is no way around and that is the fact that you are literally throwing money away by renting. If you are paying $2000 per month to rent and the house you are renting appreciates 10% over the time that you are renting you get absolutely nothing other than the bundle of rights you are entitled to as a tenant. If you are purchasing that same house and paying $2000 per month you are entitled to the 10% appreciation. Now keep in mind that if you are renting you don't have to worry about taking care of the maintenance and home care that you do when you are the homeowner. So although homeownership is great you do have to be careful, buying any home is not the answer. That being said in my opinion you won't fi...

I am writing this post with a different audience in mind this time, this post is written to my fellow real estate practioners. I am writing this post to bring awareness to a disturbing trend that I have noticed for quite some time. The trend that I am speaking of is the involement of tech in the real estate industry, there are those that will say that tech has been in the real estate industry for decades. They would be correct, now let me say this right up front. I am not against tech, I actually utilize quite a bit of tech in my business. What I am speaking of is the trend of tech/tech companies coming in and pushing out the real estate agent. Here are a few examples: First off we have Redfin who started out like Zillow, Realtor.com and Trulia and now they have a Brokerage side to their business now and are directly competing with Brokers/Agents using the information that we provided to them. Now they leverage that information to procure buyers and sellers themselves. Zillow takes ...

Good morning Friends, Welcome to the next installment in the Investment Series, today we will be talking about how to analyze a Buy and Hold investment property. Simply because there are multiple types of investment properties to Buy and Hold the first step is to determine what type of properties you prefer, be it Single Family homes, Duplexes, Triplexes or Apartment buildings. Once that determination has been made then as you locate properties you want to find out the Gross Rental Income and the Monthly Expenses. You will need to know the monthly expenses to get the Net rent income, that's important info to determine the Cap Rate for the property. The Cap Rate is the rate of rate of return you can expect a rental property to generate based on the net income produced. The formula is Net Operating Income (NOI)/Current Market Value = Cap Rate and its a great starting point for analyzing a rental income property. Let me be clear, it is not the only factor in determining the v...