San Bernardino 5 units apartment building with great cash flow for sale

Very well priced 5 unit property for sale on very nice street in San Bernardino. 10.5 GRM on existing rents! Garage parking for most units. Low density street and property. 10,000 sf lot. Asking $550k. Let's go see this property today.

3 Great Apartment Investments: Costa Mesa, Newport Beach & Pasadena

Two 2 bedroom & 1 bath units in West Costa Mesa each with their own 2 car garage. Excellent area and ideal rental configuration. Good location in the neighborhood near single family homes. Very good property for an owner occupant. Rent upside of $300 per month as per rental comps in the area. $939,000 for the duplex.

Newport Beach 2 unit with short term rental designation possible. Very good price per square foot for the area. $1,775,000. Very good owner-user property.

Pasadena 2 unit property for sale as a Short Sale. Very good value at $930,000. Large 9,004 square foot lot. Wonderful area of Pasadena. Short sale is approved at the list price.

For information on these 3 hot listings - or any other rental investments in Los Angeles or Orange County give me a call at 415-269-6249.

USC area 4plex Fixer Apartment Building for Sale

4 one bedroom units near USC sale - needs extensive remodeling - but good value. Let me know if you want to see it. $689,000 * 2,224 sf * 6,510 lot size * built in 1920 * large usable lot for parking or expansion.

I am not a CPA - nor am I CNN - these are my thoughts as a Broker in California on the new Tax Bill

The conclusions by CNN on this new tax bill need more analysis. Article here: http://money.cnn.com/2018/01/10/real_estate/tax-reform-home-prices/index.html

1. Most people are getting a lower tax rate - this means more money in people's paycheck  - including as of this first pay period. It may be small but it is an increase. Some larger earners are getting bigger increases felt already.  It is these larger earners who are most affected by the reduction on loan interest deductions to $750,000 from $1M.  But they are the ones who will feel the increase in net income the most. More net income yields more savings for down payments, which will offset the reduction in interest deductions.

2. There has long been a cap on loan interest deductions at $1M. Buyers of homes primarily over $1,250,000 have made decisions to buy those homes despite not being able to fully deduct the interest on their loans. ($1.25 range and up is based on $1M loan cap and an approximate 20% down payment)
     - Many buyers in that >$1.25M price point are trading up with equity.
     - Many buyers are paying in cash or with large down payments.
     - Consider the math: At 4% interest rate, the $250,000 difference is $10,000 of deduction, which at 30% tax bracket is $3,000 of net income or $250 per month. Many buyers are getting loans between 750-1M will get a blended hit - not as bad. And many buyers who are taking much higher loans $1.5M - $3M in many coastal areas will not feel the impact of $250 per month. And all of these buyers will be getting lower overall income tax rates.

3. A higher standard deduction will have less people itemize. OK - maybe true. But those affected by the lower caps on interest deductions and property tax caps absolutely will itemize. The standard deduction is not prevalent in the high cost coastal areas. If you are filling out a 1040EZ - I would suggest talking to a CPA or tax-preparer to see if you can save money by itemizing. The higher income earners definitely do!

4. Most high income or high net worth individuals buying $1.25M+ properties have made their ability to buy those homes through self-employment, investing in real estate or having good additional incomes. If they are high income employees - most have good guidance from CPA's to reduce tax liabilities. All of these high price point home buyers will weather the new tax guidelines well. Most will end up benefiting from lower income tax rates which will offset the deduction limits.

5. Have you seen an impact in the your 401k? Have you noticed what the stock market is doing? Corporate earnings will be up and corporate net incomes will be up. This will greatly impact high price point buyers over the rest.

6. One of the greatest financial grievances over the last couple years by higher income earners has been the cost of health insurance. Those additional hundreds of dollars per month allocated to health premiums - especially if you have employees - has dampened higher priced home sales. Those premiums going down with proposed plans may very well help the real estate markets.

7. There is a connection between the entry level $300,000 buyers in California, the mid range $500k-$800k buyers, and the & the $1M+  buyers. If this tax bill spurs the first time buyer, that will spur a trade up transaction into the mid range and that will impact the next tier. Not all transactions happen this way, but more lower priced transactions will impact the higher levels positively.

That's all for now. Let me know what you think. It will be interesting how this plays out.

Hot Huntington Beach 6 Unit Apartment Building for Sale

Excellent opportunity to own an outstanding location apartment building in premier Huntington Beach. Walk to the pier and Main Street. Owner occupied style townhouse units. Surf City is undergoing a re-gentrification visible in many smaller SFR homes and cottages being expanded or rebuilt. Interest in the area is coming from Newport Beach developers and buyers who are being priced out of that market. With this resurgence in development, rents on the smaller existing apartment stock will rise. The timing is good to get into this market.

Call me for my updated list of best apartment investments in the area you want. I routinely monitor the market and highlight the best deals. Today in Huntington Beach there are 42 rental properties for sale - I like 12 - and of those 3 are prime values.

Hot new listing in Irvine for 1031 exchanges into a super strong school district: Northwood High School, no busy streets, interior location, 3 bed, 2 bath, 1,739 sf, 5,000 sf lot, $849K, Consider that very few detached SFRs are being built new in Irvine on lots this size! The older stock of SFRs on decent lots in Irvine schools will continue to be expanded, renovated or torn down for new construction. It happened in Cupertino and it is happening here. This is a great time to get into this market segment before the huge wave of buyers hit. Most buyers are looking at new construction here for now.

Perfect Owner User / 1031 Exchange on Iconic Balboa Island

Three units for sale on the best retail street in Balboa Island. One residential unit over two retail stores. Both stores are leased with >$6,000 monthly income. The 2 bedroom residential unit has just be completely renovated to a very high standard. This would be an ideal investment property with personal use benefits.

Mixed use properties are more difficult to finance, but that may be an opportunity for a cash rich buyer or someone who can find alternative ways to finance.

Listed at $2,350,000. Call me for details.

Rental Property Investments Orange County, CA

Let's talk about the investment opportunities available to you within a 1 hour Southwest flight south. Most of Silicon Valley and the Bay Area has become very expensive to buy investment properties.  Good alternatives can be found surrounding one of the best growth cities in SoCal: Irvine. 

Why Irvine?  This city is master planned and very pro-business. It is building many new office parks and buildings to attract great companies. This would be a perfect place to buy a rental property but not possible in the multi-family arena. The city did not build 4plexes or small apartment buildings. If so, they are owned by The Irvine Company - essentially the developer of all of Irvine since the 1950s.

There are very good opportunities for duplex, fourplex and small apartment building purchases in surrounding cities such as Santa Ana, Anaheim, Costa Mesa, Huntington Beach, Garden Grove and Westminster. Vacancies are low, rents are strong and new apartment growth is limited. These class B & C buildings are in excellent locations, stable and can be upgraded to increase rents. Quality property management is also readily available. I am sure you will find the rates of return better than Bay Area options.

Aside from straight rental investment options, consider the benefits of a rental property in a top beach location. There are small rental investment properties in great beach towns such as Huntington Beach, Newport Beach, Laguna Beach, San Clemente and others in Orange County. A purchase of a fourplex can be a great investment plus you can allocate one unit for family (or AirBnB) use.

Let's have a conversation about your goals. I am sure there are some good options here for you.

Dana Point Duplex for Sale and a Family Planning Guide

 

This duplex in Dana Point could be the ideal 1031 exchange or straight purchase for long term use.

($995,000 price, great area and condition, 2,198 square feet)

 

I am a big advocate of future planning. Many homeowners buy their first house, sell it and trade up when the kids arrive and then eventually face retirement in a large empty house. What is the next step? Sell the home and look for a nice condo near the beach? While all that is achievable, it does add stress, coordination and tax implications to the mix when you may not want them.

 

My simple plan:

 

Once you own your first starter home, and before the family starts growing, buy a rental property somewhere. It doesn't need to be in Dana Point or some other luxury location. It just needs to be a deal that will increase in value and cash-flow over time. As a current Orange County resident, I would look at small SFRs in Santa Ana, Long Beach, Westminster, Garden Grove. There are many other places to consider - I happen to like the growth patterns there.

 

Keep the house rented and in good shape for 10+ years. Sell eventually when the market is hot in that segment and 1031 trade into a 2 unit (in this case in Dana Point) where the market is less hot.

 

Now keep that property for another 10+ years until the kids go off to college, finish college and can support themselves. Be careful not to downsize too soon - some kids come back!  You probably have traded up the small starter home and bought a larger home in that same time frame. Assuming it is in a good neighborhood, rent it out. Move to the duplex in Dana Point.

 

Why?

 

If you have a nice house in a good neighborhood with low property taxes, you stand to get good, stable rental income and are advantaged by Prop 13 taxes and you get tax depreciation. All with no sales costs to eat into your equity.

 

Your duplex in Dana Point is also Prop 13 tax advantaged, sitting in a nice location where your family will want to come visit and again no new purchase hurdles and costs.

 

Finally, your large rental house is a great asset to keep up with rising living costs. Rents should increase every year and you continue to build equity. If values are going up 3-5% per year and your house if worth $800k - that is $24,000 - $40,000 of equity growth that you earn in your sleep.

 

Plan for the margaritas by the beach in your 60s now before it gets there too soon!

 

- Mario, almost 50...

 

 

Orange County Apartment Investments for Sale

The small apartment market in Orange County, CA is hot! There are not many listings and most are in escrow. That being said, I keep a short (and ever-changing list) of attractive deals.

4 units Lake Forest, CA: large, owner-occupied quality four units with ideal amenities: garages, large unit mix, quality design, clean street, great OC location

3 units Huntington Beach - townhouse style side by side units with garages walking distance to the pier and downtown

4 units Huntington Beach - super large 4 units of 8,000 square feet! Great water side location. High quality architecture, custom built - ideal for owner-user.

For an updated list of investment properties, connect with me anytime!

Mario's cell in OC: 415-269-6249 call or text

Loans for Investment Properties

There are many restrictions to financing a rental property - including the following:

Having more than 4 mortgages or more than 10 mortgages
Cash out over 4 mortgages
Cash out over 10 mortgages has a different level of restrictions
Purchasing an investment home over 4 mortgages affects amount of down payment
Loans over the conforming rate limit $417,000 or $625,500 in certain areas of California
Residential / commercial mixed use properties
Properties with 5+ residential units
Rental condos in buildings with a high renter ratio
Down payments fluctuate depending on all of the above scenarios.
FICO levels affect all of the above in cost and rate.

For help understanding the best financing available for your currnet home or investement proprty, please give me a call.

Mario Pinedo
Banc of California
Cell 415-269-6249
Office 949-381-2901
NMLS 1029116

Coming Soon: Cupertino Office Condo For Sale

We are putting a commercial office condo on the market this week in Cupertino. Approximate details: 1,700 square feet, 10 years old, two story unit with interior staircase, Monta Vista area of Cupertino. Offered at $735,000.  For more details please call me direct at 415-269-6249.

Expensive Apartment Investment Market in West Valley

It's amazing how expensive the apartment investment market has become in West Santa Clara County. As of today on the MLS, between Los Gatos, West San Jose, Campbell, Saratoga, Cupertino, Santa Clara and Mountain View, there are only two available four unit buildings for sale. One is in premier down town Los Gatos - but priced at approximately $891 per foot (that's rich) and the other is on Temple near Almaden Expressway and Blossom Hill - a fourplex listed for $1,250,000 (that's rich too). There are 10 buildings in escrow in those same areas from 3 units to 22. So basically, whatever hits the market generates an acceptable offer quickly.

It's definitely a good time to sell to maximize value!

Now we should talk about where to buy an apartment building investment property. I have a few suggestions.

There are other parts of California to consider (LA County, Orange County, San Diego County) that have high occupancy rates, good economics and increasing rental rates at far lower costs to acquire. Example: for $799000 you can easily acquire a four unit building in Orange County, Consider 3,100 square feet on a 9,500 sq lot with $57,600 in current rents.

Remember Southwest Airlines costs $72 per leg if you book in advance! Let me know if you want to review some real time examples.

7 Unit Walk to Beach Apartment Building for Sale in Santa Monica

I just reviewed a wonderful 7 unit fully occupied apartment building, walking distance to the beach in Santa Monica. This is an excellent property for a long-term hold. Existing rent control in Santa Monica means that when tenants do vacate, old rents will go up to market rents. In some cases this is over $1,000 per unit. The location and the quality of the building also makes for a perfect building to keep  one unit for personal use. Flights on Southwest Airlines are $120 round trip if your book early! The building is offered at $2,500,000 and will require a very hefty down payment of $1,500,000 due to the low existing rents. But, to be able to buy a building in that location at $357,000 per unit and $402 per foot is rare. This is an excellent opportunity for a patient investor.

Adjustable Rate Mortgage ARM vs. 30 Year Fixed Rate Loan?

"Always get a 30 year fixed rate loan!" or "Don't pay the higher interest rate on a loan that you will refinance later" or "You will sell that home when you need more space so why get a 30 year loan" - Have any of these advices been offered to you when considering which loan term to choose?

Those three suggestions are wise and unwise depending on your situation now and what you plan to do in the future. Can you predict the future? The answer is no and yet,  you can give probabilities to the future to help your decision.

First some facts:  The average home in the US is owned for approx 7-10 years. The average condo is owned for less than that. So - that may rule out the 30 year fixed rate loan immediately, A 30 year fixed rate loan today may have a 4.5% interest. A 7 year fixed rate loan today would be around 4%. So, if you are keeping the home for a shorter period of time, why pay approximately $500 extra per year for each $100,000 that you borrow? (I am sure somebody reading this is thinking what is $500 over 1 year - that is worth the comfort of a fully fixed rate loan)

Most shorter term fixed rate loans today are fixed for 3, 5, 7 or 10 years, amortized over 30 years and typically become annual adjustable rate loans after the fixed rate period.  There are different structures with other ARMs (adjustable rate mortgages) but this structure is very common.  The comfort of knowing exactly what your payment will be is either 3, 5, 7, 10 or 30 years depending on which fixed term you choose. The amount of interest rate that you pay rises typically from the shortest term to the longest term. It would be safe to say that you can get a mid 2% rate in the 3 year range and a 4.5% rate in the 30 year range. That difference may be significant depending on  your current and future plans for the property.

Let's say you are buying a small starter home with plans to want a larger home in 3 years. If you plan to sell the home in 3 years, then a 3 or 5 year fixed rate loan may be perfect. But... what if you decide to buy a larger home in a few years as planned and keep this first home as a rental property? Now, you have a loan which will start adjusting every year (or monthly) which fluctuates your cash flow.Future hindsight may tell you that a 7 or 10 year fixed rate would be better. It's sad that we cannot rely on future hindsight now!

Now take my mom as an example (sorry Mom!). She is retiring in the next few years. A 30 year fixed rate loan may be the best choice for her. Refinancing or dealing with an adjustable rate payment when going into retirement (fixed income) is not ideal. Solid, secure financing makes sense then.

Where are you in this spectrum of home ownership? Let's talk and flush out the best plan for you. Mario cell: 415-269-6249 call or text

Or see my site:  www.HomeLoans.LA

Duplex Fourplex Apartment Building Statistics in Santa Clara County

At this week's Bay Area Apartment Broker's Forum meeting in San Jose, guest speaker Tom Scott of Cambridge Management Company brought some interesting statistics from the Santa Clara County Recorder's office.

2-4 Unit Properties:  15,144 total properties - 787 sold in 2013 - 5.2% of the inventory sold - 19 year average hold

5+ Unit Properties: 5,719 total properties - 554 sold in 2013 - 9.0% of the inventory sold - 11 year average hold

There is almost a double hold period for duplexes and fourplexes compared to larger apartment buildings.This could mean that the ease of ownership on a smaller building is greater and therefore those owners hold the properties longer. Or, someone with a 5+ unit property makes more money faster and therefore sells in a faster time frame. Those are my two suggested reasons.

What do you think?

Owner Occupied Duplexes for Sale in Silicon Valley

Today there are 25 duplexes for sale in Santa Clara County that are listed under the maximum loan amount for FHA financing. What does this mean?

For 3.5% down payment, you can buy a duplex in Silicon Valley, live in one unit and rent out the other unit. This provides you with maximum financing ability, a tenant who will pay you rent to offset the mortgage and tax depreciation on the rental unit to offset taxes. This is a great way to start your investment portfolio. Call me for details - Mario Pinedo, CCIM 415-269-6249

Two Large Lot Mid-Century Aparment Investments in Orange County for Sale

Probate sale of two nearby multi-family properties - all bungalow style duplexes on large lots in Orange, CA. These are well located fully occupied investment properties available for sale via an approved probate process. The large lots, single story, duplex/bungalow units generate longer term tenancies due to more personal space and no up/down tenants. Perfect properties to have private patios & yards. Excellent parking too. Outstanding 1031 exchange replacement properties. For more info on these rare apartment properties, call Mario Pinedo on his cell 415-269-6249.

3 Multi-Family Rental Investment Units for Sale in Grass Valley, CA

There is a very nice rental property investment in Grass Valley, CA for sale. On one lot is a single family home + a duplex building behind. Three stabilized rental units for $357,950.  Excellent 1031 exchange replacement property. Professionally managed currently and can be continued. Beautiful foothills town of Grass Valley is a retirement destination for many San Francisco Bay Area residents. For more info, please call 415-269-6249.

Nice 4plex for Sale in San Jose!

4,088 square feet on an excellent street in San Jose's Cambrian area for $1,279,000 just hit the market.  Very nice quality property and size for the $$$. For more deals that I like in Silicon Valley, The Bay Area or abroad - give me a call 415-269-6249.