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If you read my June blog “Are South Bay Income Properties Safer than U.S. Bonds,” you may have been surprised by the insane asking prices of income properties in the Beach Cities. Since I wrote that post, a few things have changed: The featured six-unit property (3302 Manhattan Avenue) reduced its price by $800,000 It now yields a return of just over 3.4% after a price reduction to $5,095,000 The 10-Year Treasury went from 2.8% to almost 3.1% So as U.S. Bonds climb higher, it will push apartment sellers to offer better returns in order to catch buyers. Hermosa Beach Income Property Market With the conclusion of the third quarter, there has been interesting data surrounding
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The Palos Verdes Estates sub-market of Monte Malaga, known for its high-priced estate homes and stunning views, is beginning to offer lower-priced homes for first time home buyers. Surprised? When most Palos Verdes Estates (P.V.E.) residents think of homes in Monte Malaga, they think of streets like Via Visalia, Via Rincon, Paseo Del Sol, Via Arco, Paseo La Cresta, and of course, New York Hill, a.k.a. “Allende El Mar”. These streets are lined with gorgeous estates, stunning views, and some of the highest prices on The Hill. High-priced sales of note this year include: 1414 Paseo La Cresta: $8,00,000 (the almost 10,000 sq. ft. home named “Versailles on the Hill”) 1409 Via Arco: $4,757,000 (the custom
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North Redondo Beach new construction town home sales are always interesting to discuss. New construction is not only easy on the eyes, but has been one of the hottest aspects of the South Bay housing market over the last five years. Today, I will be reviewing both three-on-a-lot and two-on-a-lot town homes. Three-on-a-Lots Muted Sales Year Over Year Three-on-a-lot sales in North Redondo Beach were on fire a few years ago. Developers were pumping out units and buyers were eager to pay record prices. Since then, sales have been muted for reasons neither good nor bad. In 2017, there were 10 new construction three-on-a-lot sales. With 2018 coming to an end, there have only been four sales.
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Each quarter I mail out a newsletter to my clients with a recap of the South Bay real estate market. Now that the third quarter of 2018 has come to an end, I thought I would give all my readers a sneak peek and show some interesting data points from the MLS. Palos Verdes Peninsula Affordable homes have been trending in Palos Verdes the past few years. Rancho Palos Verdes tends to offer some of the most affordable real estate on The Hill and was on fire during the first three quarters of 2017. This year, Rancho Palos Verdes price gains seem to be decelerating and up only 3 percent. After price declines for the past
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Just two weeks ago, one of the most stunning homes on the Manhattan Beach Strand closed escrow. In only nine days, the gorgeous 1204 The Strand found a buyer, which closed 30 days later in an all-cash transaction. You do not see Strand listings selling that quickly in today’s Manhattan Beach market, but this sale makes sense due to the fabulous construction quality and aggressive pricing relative to past sales. In this past blog post, I have documented softness and supply issues in The Strand marketplace. As a result of the price data, I commend the Sellers on their sale by not being greedy, pricing appropriately, and making a quick sale that seems very fair to
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You often hear from real estate agents and investors that owning property is a great investment because it allows one to use leverage. Leverage, if implemented correctly, can make you a lot of money. But, it is important to note, not all leverage is created equal. Lower risk leverage can make anyone wealthy over the long term and will almost always outperform other real estate investments. Types of Leverage The standard leverage types you see in the Greater Los Angeles real estate market are the following: The standardized home loan used by homeowners Hard money loans generally used by flippers Construction loans used by spec developers The Standard Home Mortgage The 30-year fixed loan is the
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The American Dream of owning your own home is still alive and well here in the United States. Most Americans believe owning your home is the surest path to wealth and financial freedom. This might be correct, but is it truly the most efficient and profitable way to grow wealth through real estate? In my opinion, the answer is no. Your home is not a true asset until it is sold. True assets are earning profits or growing in value regardless of your personal circumstances. If you lose your job and cannot work, you may lose your home if you don’t have savings to pay the bills. If you lose your job and cannot work, you
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When most people speak about depreciation and real estate, they talk about the tax benefits. Often, you will hear a new real estate investor or some real estate guru say, “You can earn cash flow tax-free because in real estate there is depreciation!” The problem with this statement is that depreciation is very real and tax benefits are given to allow property owners to consistently invest in aging real property, like a new roof, updated plumbing, or new electrical systems. Depreciation Rules For commercial property, the life and deprecation schedule granted by the IRS is 39 years. Have you ever seen a commercial property that has not been upgraded in 39 years? It is about as
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There is much to debate about off-market deals in present day residential real estate. Over the past 10 years, I have seen the good, the bad, and the ugly. In today’s blog post, I will illustrate my opinions on off-market deals and hopefully give you some good insight.   One: Leave the off-market deals to the professionals “Listen, here’s the thing. If you can’t spot the sucker in your first half hour at the table, then you ARE the sucker.” This famous quote by Mike McDermott (Matt Damon) in the 1998 poker cult-classic, “Rounders,” helps to personify residential off-market deals. The reference is made to describe a newbie poker player (a.k.a. a “fish”) trying to play
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For many, Labor Day weekend marks the beginning of school, football season, and Fiesta Hermosa. In real estate, it is the unofficial kick-off to the the fall selling season. Fall Season & New Listing Contrary to popular belief, fall is one of the best seasons to sell in the South Bay. That’s right, much better than the dog days of summer in July and August and only behind the famous Spring selling season as the best seasonal time to list one’s home. Some agents and sellers choose to bring out new listings over the holiday weekend and others choose to list the weekend after. Each strategy has its own merits, which I can get into another
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