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Red Blue Realty Blog

Read, Learn, and enjoy everything that is Real Estate

By Christopher Rosiak | Agent in Los Angeles, CA
  • Selling a Property with a Tenant inside – What You Need To Know

    Posted Under: Home Buying in Hollywood Hills, Foreclosure in Hollywood Hills, Investment Properties in Hollywood Hills  |  February 7, 2013 12:21 PM  |  318 views  |  1 comment

    Selling a tenant occupied home may prove quite challenging but it is possible. Most agents recommend that you wait till the expiration date of the lease before listing the home. However, sometimes you may not be willing to keep the house vacant for some months while the property is on the market. There are some important considerations that you need to make before listing your occupied home in the Hollywood Hills real estate market.

    Make reference to the applicable regulations

    The first thing you ought to do is to go through the tenant-landlord rules used in your local area. These rules vary from one jurisdiction to the next. You will need get the necessary guidance on what the law says about selling your home in accordance with tenant laws. Many times a landlord has gotten into a heap of trouble because they were not aware of rent control laws or section 8 laws.

    Try selling to the tenant

    You should also begin the sale process by talking to your tenants and asking them if they would like to buy the property. Even if trying to have your tenant buy the house may be a shot in the dark, it is worth trying. They could be renting either because they cannot afford a house of their own or simply are not interested in buying a property. If the tenant agrees to acquire the house under seller financing but later on fails to keep up with the payments, you can still take back the house. This type of transaction is similar to ones that the bank does everyday. It is also very important to check within the lease contract that the tenant does not have the first right of refusal.

    Secure the cooperation of the tenant

    Some tenants may agree to move and allow you sell the home, but some may become hostile. It may be wise to give clear explanations on why you wish to sell the home and then come up with a protocol of when and how buyers will view the home. You need to assure the tenant that keys will not just be given to anybody and you or your agent will always accompany the buyers.

    When listing your occupied property as one of the Hollywood Hills homes for sale, you need to secure the cooperation of the tenant. Remember, apart from your tenant having to vacate each time buyers come for viewing, they also have to keep the home clean and in good condition. For this cooperation from your tenant, landlords often offer incentives of 50% percent off monthly rent for their cooperation and assistance with the sale process.

    Issue notices to the tenant accordingly

    Follow the right procedure. You should never list, advertise and invite buyers to view the house without issuing your tenant a reasonable notice on all occasions. In some areas, you may also have to organize the viewings only during business hours. Where you and the tenant cannot agree on what is ‘reasonable’, seek legal help.

    Whether you are using a Hollywood Hills real estate agent or not, when selling an occupied home, you should also provide the buyer with the existing lease. This should be done just before they make any offer or during the contingency period at the latest. It is also essential to notify the tenant of any transfer of deposit, so that they may know the right people to contact once the sale is done. Seek out your attorney if there are any concerns about tenant-landlord laws and confidentiality requirements when giving out personal information to prospective buyers about tenants.

     

     

     

  • Scams commonly associated with real estate and how to avoid them

    Posted Under: Home Buying in Northridge, Foreclosure in Northridge, Investment Properties in Northridge  |  February 7, 2013 12:19 PM  |  342 views  |  1 comment

    Like with the case in many other industries, real estate is not immune from scams. Despite the fact that most Northridge real estate professionals are honest and try to operate in an ethical manner, still there are criminals out to just make extra money from unsuspecting people.

    Real estate scams are largely attributed to the large amount of money involved. Below are some of the most common scams.

    Home equity fraud

    In this case, a lender offers you a home equity loan which sound like a very good deal – nothing like a scam. The loan may come with very attractive rates which the lender may reduce continually while slipping in hidden and outrageous fees each time. After some time you may just realize that your equity is gone, you owe more than the house’s value and can’t make the payments. The final result is that you lose your home to the lender.

    To avoid this type of scam, it recommended that you should not accept any loans you do not need. Even if you feel attracted by the low rates, it is important to have a certified attorney look at the terms before you sign anything.

    Deed forgery

    When seeking to acquire one of the Northridge homes for sale, it is also crucial to be aware of the existence of deed forgery. You may see a newspaper ad that seems just right, meet the ‘owner’ and view the house. One thing leads to another and within no time, the sale is done. Just when preparing to settle in the new home with your family, a stranger shows up and it turns out that you bought the home from a thief.

    It is important to always seek the identification of whomever you transact business with along with sufficient paperwork that proves that there is validity to the transaction. Using an escrow company can help to alleviate some of the risks involved.

    Internet scam

    This is also another type scam specifically targeting home sellers using the Internet.  The con man, ‘residing in a dangerous country’ offers to purchase a house without having to even physically view it. He may then offer to send a check for an amount even higher than the requested price so long as you, the seller, is willing to send the additional amount to his ‘business partner’.

    You will deposit a bogus check and send real money leaving you stuck paying the bank. The rule is, never respond any such requests from foreign countries and any deal where you have to send extra money is a property scam. The best thing is to work with a certified Northridge real estate agent.

     

  • Requirements to qualify for a loan

    Posted Under: Home Buying in Hollywood, Financing in Hollywood, Investment Properties in Hollywood  |  February 7, 2013 12:17 PM  |  412 views  |  1 comment

    Even before you begin to house-hunt, it is important to know how much financing you qualify for. The advance planning can save you time in the long run and eliminate chances of making loan applications which will be turned down. Knowing what the lenders require to determine the eligibility of prospective buyers in Hollywood real estate market is vital even before looking for a home to buy.

    Individual budget

    The use of the annual gross income of a loan applicant to determine how much they qualify for has, over time, proved unreliable. Most of the lenders today prefer to consider a prospective home buyer’s individual budget to determine how much they have to spare and the monthly repayments. When figuring out affordable mortgage repayments, factors like taxes, insurance, maintenance and others are considered.

    Employment history

    Some lenders are normally sceptical about advancing loans to applicants who are newly employed. They prefer those who have stable employment with reliable sources of income. When having troubles getting financing to get your hands on one of the Hollywood homes for sale, you may have to wait till you gather an employment history with a new employer.

    Assets

    Loan applications will also request for information on your assets. These include details of your savings, cars, investments and other properties. It is worth noting that for each asset you list, you have to offer verification e.g. bank accounts and branches, title deeds, vehicle log books and other relevant ownership documents. A list of your mutual funds or stocks plus the relevant paperwork may also be requested for.

    Credit history

    Lenders like to look at credit histories by requesting credit bureaus to provide the borrower’s credit file. This helps them make more informed decisions in terms of loan prequalification. It is through the report that the lenders get a borrowers’ credit score also referred to as FICO. The score is the data summary of all that is contained in the credit report. It also includes the number of outstanding debts against the borrower’s income.

    Banks will, apart from looking into your credit history, ask you to state all the information on your debts. It is advisable to be honest about all the consumer debts, credit card balances and any other debts. A good Hollywood real estate agent will tell you that if you have numerous creditors, taking even a year to concentrate on promptly paying your bills will considerably reduce your debt load.

     

  • Shaping Environmentally Friendly Los Angeles Homes

    Posted Under: Home Buying in Los Angeles, Home Selling in Los Angeles, Property Q&A in Los Angeles  |  January 31, 2013 1:31 PM  |  301 views  |  No comments

    Los Angeles real estate is increasingly going green. Home owners are growing more committed to shaping homes that are ecologically sound, not only for the good of the environment, but to enhance home curb appeal. Los Angeles environmentally friendly homes are proven to attract more buyers, increase market value, and sell more rapidly than less “green” properties. And along with increasing value, Los Angeles environmentally friendly homes also save homeowners money by reducing costs for conventional electricity, gas, and water bills.

     

    The increased interest in making a home that can owners can comfortably eco-exist in has resulted in more easy to utilize tools for doing so. Water saving techniques like plumbing and sprinkling systems that recycle water, heating and cooling cost reduction tools such as the installation of spray foam insulation, metal roofing, and solar panels are joined by home upgrade features such as Energy Star appliances, programmable thermostats for heating and cooling, and the use of recycled material in flooring and counter tops.

     

    Simple green-friendly choices such as replacing standard incandescent bulbs with compact fluorescent bulbs have become such a part of every day living that creating an overall green home is just a logical step for home owners and sellers.

     

    Los Angeles real estate that employs some or many environmentally beneficial items is simply recognized as financially prudent. And the fact that these environmental tools drive buyer interest and increase home value makes them even more attractive.

     

    There are many popular eco-choices available for sellers of Los Angeles environmentally friendly homes that are almost as easy as changing out the style of light bulbs in a home. A

    programmable thermostat is one. This temperature control tool allows a choice of temperature for every individual room of a home. The control is automatic, eliminating any concern for remembering to turn the heat down or the air conditioner off. Inexpensive, at less than a hundred dollars, these thermostats easily pay for themselves in energy savings, and are a solid attraction for home buyers.

     

    Sustainable home gardening, with high maintenance, non-native plants replaced by native plants are another attractive Los Angeles real estate feature that’s easy to adapt. Saving water costs, reducing maintenance, and freshening the look of garden also results in less plant waste and chemical pesticide use, too. Perennials lasting more than one season and reducing costs are a good and simple choice to make landscaping eco friendly.

     

    And since the outside of the home is what a potential buyer sees first, such replanting lets prospective buyers observe the ecological look of a home immediately. Less visible but a perfect water saver for water-saving Los Angeles is the the use of a grey-water sprinkler system in the garden. Such a system recycles water from sinks, showers, or washing machine, to use for plant irrigation.

    Consumers also are drawn to several other simple choices to enhance a home’s ecological curb appeal and save money. Energy efficient heat pumps reduce electrical consumption as much as fifty percent from conventional heat systems. And this purchase can qualify homeowners for a tax credit, as well. And insulation improvement can also earn a tax credit. Homeowners unsure if housing has sufficient insulation can have walls examined through thermographic inspection to eliminate needless energy loss.

     

    Solar panels, both photovoltaic or thermal, also reduces cost and use of fossil fuels and can result in tax credits. Solar systems are relatively easy add-ons to a home.

     

    Energy star cooking and cleaning appliances such as stoves, dishwashers, washer and dryers save water, electricity, and gas. Completely easy to install, upgrading to these modern appliances saves money and forges a modern, eco-friendly look for any home. On demand water heaters, also lower utility bills caused by unnecessary water heating costs.

     

    As homeowners continue to utilize these tips to shape a more environmentally friendly and sustainable home, home value and buyer interest increase in Los Angeles real estate.

     

     

  • Landlords illegally renting out foreclosed homes

    Posted Under: Crime & Safety in Hollywood Hills, Home Buying in Hollywood Hills, Home Insurance in Hollywood Hills  |  January 31, 2013 1:25 PM  |  525 views  |  No comments

    Fredie Mac – the second largest mortgage money provider has issued a warning on post-crash fraud. Scammers are illegally renting out foreclosed or for-sale homes to unsuspecting tenants. These bogus landlords do not own any property and therefore should not offer them to anyone. However, they use Craigslist and other Hollywood Hills real estate websites to advertise rental properties.

    Normally, the rent rates offered in this type of scams can be very tantalizing – sometimes as low as $1200 for a 3-bedroomed home in an area where the same home commands double the amount. Some of the terms of the transaction require are that a security deposit plus one or two month’s rent upfront is paid. The payment is always to be made in cash or money order before getting the keys.

    The fraudsters sometimes change the locks and also remove the lockbox installed by the real estate company marketing the house on Fredie Mac’s behalf. When a prospective tenant raises questions on the real estate sign offering the house for sale, they will be told that the firm tried but failed to sell the house and hence decided to rent it out.

    According real estate agents associated with Freddie Mac, this type of scam possesses the capability to milk hundreds and thousands of dollars out of unsuspecting tenants, some of whom already lost their homes to foreclosures. The fake landlord takes the money and disappears with the tenant being forced to leave the property.

    In other cases, the tenants do not even receive the keys. They are made to fill fake lease forms while giving sensitive personal data like Social Security numbers and financial information. They then send money and never hear a thing again. Sometimes, they move in before being discovered by property agents who advertised the Hollywood Hills homes for sale. If they refuse to vacate the house, they are evicted even though this may take quite some time in some areas.

    One of the reasons why foreclosure rental scams are becoming a major problem is the sheer number foreclosed homes for sale. As of June 30, Freddie Mac had over 53,000 homes spread over California to the East Coast, either for sale or being readied for sale. According to Hagberg, dozens of homes have recently been affected by these types of scam.

    For consumers looking for properties it advisable to first confirm that a house has not been listed for sale especially where one has not involved a certified Hollywood Hills real estate agent.

     

  • Important Contingencies You Need For Your Home Purchase

    Posted Under: Home Buying in Los Angeles, Financing in Los Angeles  |  January 31, 2013 1:21 PM  |  280 views  |  No comments

    There are lots of unknowns in the Los Angeles real estate market, and once you have acquired a property, you will be committed for years. Contingency clauses are very important in every home purchase contract as they remove some of these unknowns. These clauses clearly spell out the conditions that must be met before closing takes place.

    Financing contingency

    A financing contingency will offer you the additional security when buying a home. It states that a home buyer will try to obtain a particular kind of home loan which may be conventional, Veteran Affairs, Federal Housing administration, etc. These financing contingencies state that the mortgage should be at or below a certain interest rate as well as a certain percent of the purchase price, usually 80-97.5%, by a particular date before closing.

    In case the prospective homebuyer fails to get a loan at the stated terms, they can back out of the agreement, and receive back the earnest money deposit. Not only do mortgage contingency protect buyers, the sellers also receive some protection. For instance, if a buyer is unable to secure financing by a specific date and still fails to inform the seller, the buyer has the obligation to buy the property even without a mortgage.

    Moreover, where the buyer can’t and won’t get financing for one of the Los Angeles homes for sale he or she chose, the seller is permitted to assist in finding a loan for the buyer. Home sellers can also draft the contingencies to secure them in other ways. For example, they may modify the deadline for the financing contingency to be a few weeks before closing. This will prevent the buyer from quitting at the last minute and providing the seller with some extra security.

    Appraisal contingency

    This type of contingency also goes hand in hand with the financing contingency. The appraisal contingency basically requires that if the borrower is getting financing on the property, the lender will get an appraisal to ensure that the property is actually worth the amount they are lending. If the property does not appraise for at least the purchase price, or sufficient amount to cover the loan, the buyer will be unable to acquire financing and must be able to back out of the deal without losing the earnest money deposit.  Cash buyers also hire an appraiser to value the property because appraisals typically provide an accurate dollar amount of a property’s value.

    Inspection contingency

    A common and vital contingency in the sale of a property is the one that gives buyers a right to send professionals to carry out an inspection at least once before a particular date. Some of the experts the buyer can use to carry out the inspection include general contractors, pest exterminators, home inspectors, plumbers, etc. If the house is in a neighborhood prone to earthquakes and other natural disasters, inviting experts in that field is highly recommended and a report can be prepared by a local firm for a relatively cheap price.

    The inspection contingency usually gives buyers between 3 to 14 days to inspect the home and all other aspects of the property including permits, property condition, city violations, etc. After the buyer has inspected the property and confirmed their interest, the buyer must remove the inspection contingency. After the inspection contingency has been removed, buyers may lose their earnest money deposit should they decide to back out of the agreement for reasons that should have been worked out during the time allowed for the inspection contingency.  

    Hiring the services of a good Los Angeles real estate agent is always an absolute must especially where most buyers do not have the experience needed when dealing with contingencies of a real estate transaction. The right agent will also assist you in negotiating the proper time periods for such contingencies.

     

  • How to Become a Millionaire with Los Angeles Real Estate

    Posted Under: Home Buying in Los Angeles, Rental Basics in Los Angeles, Investment Properties in Los Angeles  |  January 25, 2013 3:51 PM  |  328 views  |  No comments

    With low prices, low interest rates, and a glut of foreclosed homes on the market, now is the time to invest in real estate. Red Blue Realty offers a basic outline to becoming a millionaire off of Los Angeles real estate.

    With the recovery of the housing market on the horizon, now is the time to invest in Los Angeles real estate. Real estate investment is a tried-and-true strategy for becoming a millionaire. It is not, however, a get-rich-quick scheme; to become a millionaire through real estate takes time, energy, and perseverance.

    While there are many potential investment paths, Red Blue Realty recommends the following method as a general guide. Here is what’s required at the bare minimum: first, a clean credit report with a high credit score; second, a stable source of income; and lastly, a good Los Angeles real estate agent with experience in real estate investment.

    The Basic Approach

    What follows is a basic approach to real estate investment, which is simplified for illustration purposes.

    The first step is to buy a property with the intent of charging rent. After purchasing one of the many Los Angeles homes for sale, fix up the property and increase its rent to match the market. Then, roughly one year later, refinance the property and take money out of it to purchase a second property. Next, fix up the second property, charge rent, and pull money out of it.

    At this point, it’s likely that the first property has increased in value due to rent increases, market appreciation, or both. It’s also possible to pull extra equity out of the first property by opening an equity line of credit, which tends to be more affordable than refinancing.

    With the money pulled out of the second property, as well as the new line of credit with the first property, it’s time to purchase a third property. By now, it should be pretty obvious where this is going — rinse and repeat this process. Within ten years or so, it’s possible to own and collect rent on seven to ten properties.

    When it comes to Los Angeles real estate, the total equity position of seven properties can easily amount to — or even exceed — one million dollars. And besides *just* being a millionaire, this simple strategy has many other benefits to consider.

    Owning real estate is, for example, an effective way of minimizing tax liability through means of tax shelters. Another option is to pay off the mortgages on some of the properties as to maximize rent income. With some creative thinking, the possibilities are essentially endless.

    Red Blue Realty offers professional investment services that can facilitate asset and wealth development. We will take the time to sit down with each and every client to help plan, and facilitate a promising strategy. Find out why investors are trusting our expertise and experience today.

     

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