One of the most hotly debated topics I discuss with my clients is the concept of using a loan to assist in a purchase.  The concept of using other people’s money in order to finance a purchase is called leverage….and there’s quite a few reasons why this topic is debated so frequently.  Some of my clients are either in their later years near retirement and don’t want the responsibility of a mortgage payment.  Some of them...

As I discussed in my “Investing Terms Part 2” video, Net Present Value — or NPV —  means to convert all the future cash flows into today’s dollars.  Which even for me is still a bit of a confusing way to understand it.  For a quick recap on how we calculate this figure, let’s look at a simple example. If you buy a property for $1m, and make $100k/year every year for 5 years, then SELL the property for $1m...

When it comes to investing, some people prefer stocks.  Other prefer bonds.  And of course, there are those that prefer real estate.  One common point I hear from stock traders is the fact that they would LOVE to buy real estate right now but they don’t want to sell their stocks.  Maybe they have Apple and Google stocks?  Maybe their stocks are paying good dividends.  Whatever the reason is, they just don’t want to let it go, which...

Bankruptcy…by just saying it some people feel ashamed.  But did you know that in some circumstances bankruptcy can stall a foreclosure on your property?  It can even be used if you owe more than what the property is worth.  Of course, each state has its own set of laws with regards to foreclosure, but bankruptcy is federal — it’s rule is universal in each of the 50 states.  I’m going to give you some information in...

If you own your own company, whether you are expanding your operations or simply staying where you are, one question has likely come up.  Is it better to own our own space or lease it?  With prices being the way they are, it might very well be the best time to buy your own real estate.  However, owning MIGHT not be the best solution depending on what some of those intrinsic answer turn out to be.  Why don’t we look at a few well-known...

A Deferred Sales Trust is a financial strategy used by property owners when they dispose of their assets, usually because they can’t – or don’t want to – complete a 1031 exchange.  It basically takes the concept of something that is very familiar with even novice investors.  The concept of the seller carry back — or seller financing…that is when the seller has equity in a property and acts as the lender for...

One type of service I offer is commonly called “Site Selection”.  It’s where I use tools that analyze which location, or locations are best for a client’s place of business.  This is all based on a multitude of factors including demographics, household incomes, lifestyle profiles and traffic counts — just to name a few –  of the subject area.  The subject area can be a 3 mile radius, a particular city or...

If you’ve remotely watched or read any news since 2008, you’ve probably heard bits and pieces about Fannie Mae & Freddie Mac.  And if you’re one of those people that have heard bits & pieces about them, you might not know exactly what they do.  Both Fannie Mae & Freddie Mac are government sponsored enterprises, or GSE.  Fannie and Freddie actually played — and still play — a key role in obtaining an...

No one can really tell you with absolute certainty what mortgage rates are going to be, but everyone’s going to try.  Instead of listening to the media and every different news article try to make their predictions, how about I show you a simple way to determine where *SHORT* term rates are likely going? You see, the 30 year and 15 year fixed mortgage follows a trend line.  And that trend line they follow is called a 10 year Treasury...

A very common question I get from my clients is in regards to how they should hold title.  Granted, I’m not an accountant or attorney, so I can get legal or tax advice, but I can give real estate guidance & opinions.  If you’re single, you could always hold title as an unmarried or single person.  Then of course there’s a few different ways to hold title when you’re married, such as community property or joint...

Living in the San Francisco Bay Area, I must admit I am a little biased on one issue.  Be it from California, Berkeley or even San Francisco, we are advocates for using green technology.  If it saves the earth or uses less electricity, these jurisdictions are for it.  But are we getting ahead of ourselves?  Are these huge pushes for “being green” really even worth it?  Personal bias aside, I’m going to give you the facts on...

There’s a small niche market for a certain types of investors.  The types of properties in this niche market are called Value Add properties, and these investors usually have three things.  A great deal of cash…a sophisticated team including their real estate broker and contractors, and the stomach to take some big and risky leaps.  Chances are you’ve seen these properties just in your daily commute.  The empty office...

One type of a loan you can get as a buyer or property owner is called a Hard Money Loan.  A hard money loan is basically an expensive, short term loan used when typical lower rate financing isn’t available.  As of this time, a typical hard money loan will run you about 10-15% or more and will cost anywhere from 4-7 points.  Points are an upfront fee of the loan amount. Also, unlike typical financing Hard Money loans are very short term...

Right now, there’s one particular asset class in commercial investment real estate that’s got everyone talking.  Apartment’s.  Whether it’s a small duplex or a 100 plus unit complex, these assets just seem to be the number one target of investor’s.  Of course, there’s a few reasons for this.  Financing is extremely favorable, almost more so than a primary residence.  Add also the declining vacancy rate and surging rents, it’s no wonder...

I’ve been in multiple debates with both savvy and first time investors about why investing in commercial real estate is or isn’t the best way to go with investment.  Don’t get me wrong, I’m not discrediting stocks or bonds or saying they aren’t good investments – I just have a strong opinion that investing in real estate should play a major role anyone’s portfolio.  Now of course, there are some downsides, but again I feel that the positives...

When it comes to how to purchase a home, most people don’t know how they start looking, what the process is, or even which inspectors to hire. I’m going to answer these questions along with many others you may have as I explain from start to finish the steps needed to buy a home. Preparation is the first step of the home buying process which combines three mini steps into one, mainly because they are all done simultaneously. The...

A large percentage of people when purchasing a home usually do so by obtaining financing. The common misconception is that you need at least 20% down on the home that you’re going to purchase. Even though this will obviously save you money on your mortgage, you can actually put down as little as 3.5% and still buy a home. Although I personally recommend putting down 5 or 10%, anywhere between 3.5% to 20% is completely acceptable. Along...

Welcome to part two of my investing terms video.  We’re going to continue off of the same scenario we were speaking of in my “Investing Terms Part 1” video, which discussed NOI, Cap Rate and Cash on Cash.  As a refresher of what the details were in regards to the property, we were looking at a $2m income property that made $150k NOI.  We figured the cap rate was 7.5%, and that if we used leverage our cash on cash return jumped...

One word you’ll hear thrown around a lot in the property buying process is the word contingency. The American Heritage Dictionary defines the word “contingency” as “An event that may occur but that is not likely or intended”….this might actually get you MORE confused AFTER you’ve discovered what the literal definition is, so let me give you a simple way to think of it.  When you’re buying a...

As I discussed in my “Common Real Estate Tax Benefits” video, one of the key qualities that make real estate investments stand out from other types of investments is the ability to depreciate the actual property — among other deductions.  The rule is that if you own an apartment or multifamily building, you can write off the improvements in a straight line method over 27 in a half years.  If you own any other type of asset...