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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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The second half of August can really slug along in the South Bay as agents and clients are wrapping their last summer vacations. Most agents will hold off from listing their new inventory until Labor Day. For this week’s blog, I will be diving into some interesting South Bay sales that all occurred last week.   Manhattan Beach 2200 Harkness Street sold for $2,780,000 (5 bed, 5 bath, 3,578 sq. ft., new construction) This Liberty Village new construction sale is a perfect example of Manhattan Beach buyers’ insatiable appetite for new construction. In April, a comparable sale at 1401 Lynngrove Drive sold at a record price of $2.68 million, but Harkness, only four months later, cleared
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In North Hermosa Beach,  it is very tricky to generalize market value. There are a variation of lot sizes, town homes, property views, and income properties, which makes it difficult to give a perfect breakdown of this sub-market. That said, the majority of single-family home sales in this area sit on a 2,500 sq. ft. lot, so for today’s blog, I will focus on these properties to give you a general guide on the area’s value.   Newer Construction with Views As many readers have learned over the years, new construction drives the market by the beach. Since the blow-out sale of $5.25 million at 230 34th Street back in 2016, the market has delivered three
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Most of my blogs consist of analyzing sales, appreciation, and under-priced deals. Today, I want to focus on a market that is larger than the for sale market in Los Angeles County: Rentals! Rentals are an extremely important part of the real estate economy and should be considered as part of anyone’s real estate strategy.   Renting in Palos Verdes Estates Palos Verdes Estates tends to be heavily dominated by owner-occupants, so leases in this area are harder to find than in the beach cities or surrounding South Bay communities. Even though rental supply is restricted in Palos Verdes, the demand is not as high as you might think because most people moving to The Hill
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August in the South Bay tends to be a slower month for real estate. During this slow time, I thought it would be beneficial to examine different home offerings under $1 million. Palos Verdes Peninsula This may surprise some readers, but Palos Verdes does in fact have inventory under $1 million. Most of these listings exist in Rancho Palos Verdes on the east side of The Hill. Asking $1 million on the dot, 5320 Ironwood Street is located in the popular Silver Spur area. This home can certainly be had under that $1 million price tag if you are looking for a fixer in a great school district. You will not find single-family homes under $1
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Golden Hills Redondo Beach Golden Hills homes are hot! I didn’t even have time to write a blog about my gorgeous remodeled listing on Steinhart Avenue because it was gone in a week…with multiple offers…over asking. These homes are flying off the shelves. In the last six months “tall and skinny” homes, more specifically in the northern part of Golden Hills, have averaged just about 14 days on market…that’s nuts! There have been 21 sales, and of those sales, 15 have sold over asking price. Like I said, this market is hot. But is it hot enough to make a quick sale on busy Ford Avenue? Ford Avenue Listings During the past six months there has
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