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Tina Lam - Real Estate Blog

Residential Realtor for the SF Bay Area - 408.320.5261

By Tina Lam | Agent in San Jose, CA
  • The Shocking Truth about the HGTV Show "Flip It to Win It"

    Posted Under: General Area in San Jose, Home Buying in San Jose, Celebrity Homes in San Jose  |  April 3, 2014 5:03 PM  |  35,977 views  |  26 comments

    As a long-time resident and local Realtor, I was enormously excited to see HGTV base their latest house flipping show "Flip It to Win It" in Silicon Valley.  While the rest of the country knows this area as the home of tech giants and office parks, this is the first time that any flipping show showcased the Bay Area outside of San Francisco.  I very much welcomed this increase in our visibility as one of the best places to live in the world. 

    After watching a couple of episodes, however, I was quickly disappointed and realized that like all reality shows, "Flip It to Win It" is very heavy on the "show" element and light on "reality".

    The show features six 2-person teams, including a couple of well-known flippers in the Bay Area. Each episode typically shows three flip projects scattered around the South Bay.  The show tells you the street name and the city of these projects, usually in very desirable locations for the average homeowner.  Since I flip houses with my clients, I was naturally very curious about checking out these projects. 

    Right away, I felt something was off, since I did not recognize any of the street names they mentioned. Maybe the show wanted to protect the privacy of the sellers and buyers.  I'm fine with that.  Still, as some of the featured properties were literally around my backyard, I did not recognize the home styles or streets.  What really tipped me off that something was wrong was the show’s purchase of a $300K country home on well-water in Sunnyvale.  For locals, that verged on insulting.  There is literally nothing available for $300K in Sunnyvale and certainly no two-acre country homes in a high-density urban city like Sunnyvale.  The median price of Sunnyvale is $800K and even the shabbiest lot will set you back $550K, if you can even find one.

    After a quick check of property records, I found the real addresses of all the properties.

    The Sunnyvale country house actually turned out to be in Concord.  That is a world away from Sunnyvale and is extremely misleading.  It does a real disservice to the TV audience and all local Realtors.  The last thing I want is to have an eager buyer come to me after watching the show and demand that I find him a similar house in Sunnyvale for under $400K.

    The show begins every episode with the teams supposedly scouting out properties in the morning, minutes before the 10am courthouse auction.  They check out the houses in a rush, determine the condition from the exterior, and risk trespassing into garages or backyards just to gain a little insight. They often run into other teams competing for the same properties.  Then at the steps of the courthouse which looks like the one in downtown San Jose, they vigorously bid against each other for the same properties.  A lot of drama ensues and makes for good television.  But it's all fake. 

    The first giveaway is when the auctioneer uses the fake street names given in the show.  If it were a real trustee's sale, the real street names have to be used.  Second giveaway is that properties from different counties are sold at the same auction.  This is completely wrong.  Trustee's sales are done by county and take place within that county.  In fact, upon double-checking the public records and MLS listings, I found none of the houses were bought at auction, even though it's actually very feasible to do so.  These were all regular purchases through the MLS.

    The scurry to check out houses before the auction, the bidding war, and the drama from the auction are all staged, just made for television.  The reality is that the South Bay housing market is so hot and homeowners have so much equity that we hardly have any foreclosures or distressed homes in the area.

    While the show’s purchase prices, the lengths of the projects, and the costs of renovation are generally correct, the most glaring issue comes at the end, when the show runs down the final sale prices of the projects and the profit on the flips.  The claimed sale prices are actually list prices, not closed sale prices.  In several cases, the houses had price reductions, sold at $50K to $100K below the list price.

    Then the show does a grossly over-simplistic calculation to determine the profit on the flip, like other reality shows.  They just subtract the purchase price and renovation cost from the inflated sale price and claim that is the profit.  That is miles from the truth.  In every real estate transaction, there are closing costs like commissions for listing and selling agents, escrow fees, title insurance, county and/or city transfer tax, recording fees, appraisals, etc.  In Santa Clara County, those costs add up to around 6-7%.  On top of that, there is a carrying cost for the duration of the renovation, like property insurance, loan interest, utilities, etc.  Many of these flippers depend on private lenders for their purchase money and operating fund, paying upwards of 10-15% in annual interest and fees.  That steep interest expense quickly eats up their profits even if the project is only 3 months end-to-end, a lightning fast turn-around.

    Factoring in all the closing and carrying costs, I found that only one in five of the projects in the show actually made any money.  The rest barely broke even or lost money, sometime significant amounts. As I say in the beginning, some teams in the show are prominent flippers in the area.  They have to make money somehow to sustain their businesses.  But the projects they do on TV are definitely not making money for them.

    In the end, I am disappointed that the show sacrificed almost all the truth for sake of entertainment. The reality is that house flipping is not anywhere as easy as the show may have you think.  Just like the old saying - don't believe everything you see on TV.  There is a lot of
    money to be made in real estate, just not the way you see on TV.

    For an example of an actual project, come check out my listing in North San Jose:

    828 Cape Breton Place
    San Jose, CA 95133

     
    http://www.archershomes.com/idx/mls-81431922-828_cape_breton_pl_san_jose_ca_95133

  • Milpitas – Top destination for first time homebuyers

    Posted Under: General Area in Milpitas, Home Buying in Milpitas, Home Selling in Milpitas  |  February 23, 2014 3:43 PM  |  1,688 views  |  1 comment
    Milpitas City HallWhile the definition of a starter home varies slightly from one part of the country to another, the prices of those starter homes vary dramatically.  In the South Bay Area, first time homebuyers tend to look for modest 3-bedroom, 2-bathroom ranch homes with about 1500 square feet of space in good school districts.  However, even with generous budgets of up to $750K, which can get you a mansion in much of the country, these homebuyers find themselves priced out.  Those modest looking homes in top school districts are often going for $1M and up.  Hence, many homebuyers are now discovering the great hidden bargain of living in Milpitas and calling it home.

    Milpitas is a little city by the foothills of the Calaveras Mountain, just north of San Jose.  With a population of 68,000, smaller than Mountain View, Sunnyvale or Santa Clara, its claim to fame had been the Great Mall located off Highway 880 and Great Mall Parkway.  The Great Mall started as a low-end outlet mall.  But, in the past 5 years, many high-end shops such as BCBG, Coach and Neiman Marcus Last Call, moved into the mall and has become a major shopping destination, especially during the holidays.  As the image of the Great Mall improved, so has the image of Milpitas.  


    Today, what really attracts first time homebuyers is the excellent value that Milpitas offers with its affordable homes and good schools.  The median price of a home in Milpitas is only $661K, right around the median for the entire Santa Clara County.  It’s far lower than the median prices of Mountain View, Sunnyvale, and Cupertino, and over a million dollars lower than that of Palo Alto.  Meanwhile, the Milpitas elementary union and high school have steadily improved in recent years to be comparable to Sunnyvale and is closing the gap with Evergreen.


    In addition, there is not one but two game changers coming to Milpitas. The first is the new BART station being built by the Great Mall on Montague Expressway and Capitol.  For a discussion on the positive impact of new BART station, check out this blog post.  The second is the re-development along McCandless Drive between Great Mall Parkway and Montague Expressway.  Called the District, the planned development will build over 1700 townhomes and condos, together with commercial and retail space.  This is one of the largest re-development plans in the South Bay at the moment.  It’s already attracting a lot of young families and high-income young professionals into the city of Milpitas.  It is a development concept similar to Rivermark in Santa Clara and we can see how it became a very desirable neighborhood with all the new homes. If you are in the market for a home, give Milpitas a closer look, especially the District.  The neighborhood is popular with first time homebuyers and has the potential to emerge as a high end neighborhood.  Take South Sunnyvale for example.  Entry level homes were selling for $700K back in 2008 and was highly sought after by homebuyers.  In today’s recovery, its reputation and momentum continues to build, quickly surpassing the $1M mark.

    Like every city, some neighborhoods in Milpitas are more desirable than others and will give you better return.  This applies down to specific projects of a neighborhood and even the specific plan in the project.  If you need help in selecting the best property for your need, just drop a note below or feel free to contact me.
  • KB Home's Berryessa Crossing - First Arrivals at Berryessa BART Station

    Posted Under: General Area in San Jose, Market Conditions in San Jose, Home Buying in San Jose  |  November 13, 2013 2:46 PM  |  5,170 views  |  9 comments

    KB Home Berryessa CrossingFor those living or working around Milpitas and North San Jose, the construction of the BART extension to Silicon Valley is making significant progress.  Still, BART service to Silicon Valley, with the Milpitas and Berryessa stations, is 5 years away, scheduled for 2018.  Meanwhile, KB Home has begun building a new home community called Berryessa Crossing, at the northern parking lot of the current San Jose Flea Market, just across the street from the future BART station.

    In previous blog postings, I have discussed the appeal of living near public transportation.  For the past few years, I have been seeing many first-time homebuyers and investors snatching up condos and townhomes close to BART and Caltrain in Mountain View, Fremont and Dublin.  With the current urbanization trend, this preference should continue for the next 3-5 years.  KB Home, one of the biggest homebuilders, agrees and has been trying to capitalize on this trend. 

    For years, the City of San Jose has been planning a community of up to 3000 homes across from the future Berryessa BART station, together with in-place services like shopping centers, schools and parks.  KB Home is the first to strike a deal with the city for its 10 acre site.  Berryessa Crossing consists of 242 homes of townhomes and single family residences.  It is divided into three communities: The Town, 2-3 bedrooms townhomes starting in $500Ks, the Residences, 3-4 bedrooms 3 story single family homes starting at $600Ks and the North Village, 3-5 bedroom 2-story single family homes in the $800Ks. 

    The model homes are still under construction, but KB Home is planning its first release before Thanksgiving.  Generally, the first release is priced the lowest for a new home community.  Coupled with the seasonal effects on housing market, buyers will likely get a very good deal.  Of course, this also means that competition for the first release will be intense.  To have the best chance at getting a home, you should work with a Realtor familiar with the community and the new home purchase process.  Make sure you have your trusted Realtor accompany you on your first visit to ensure your Realtor is allowed to represent you and negotiate the best deal.

    For the latest update to BART to Silicon Valley extension, you can go to

    VTA BART to Silicon Valley Website

    Update 9-3-14: Now that the first phase of Berryessa Crossing is mostly finished, home prices have climbed about 20% from where they started earlier in the year.  Now, their 2-story single family homes have breached $1M or about $500/sqft, a new high for Berryessa.  The 3-story single family homes are more affordable at around $850K with no yard. 

    For a compelling value in the same neighborhood, check out my listing:

    http://www.archershomes.com/idx/mls-81431922-828_cape_breton_pl_san_jose_ca_95133

    With nearly 3,000 sqft of space, this large, executive home offers 4 bedrooms and 2.5 bathrooms with a huge bonus room.  The entire home has been fully remodeled with upgraded finishes: solid wood cabinets, granite and marble countertops, stainless steel appliances, natural stone and wood flooring, and LED lights in every room.  Located within a quiet cul-de-sac on over 10,000 sqft lot with mature trees, this home offers true value at less than $325/sqft.  Come check it out at the open houses this weekend.

  • Centered by Trumark Offers a Fresh Take on Townhomes

    Posted Under: Home Buying in San Jose, In My Neighborhood in San Jose, Investment Properties in San Jose  |  September 3, 2013 10:42 AM  |  5,436 views  |  1 comment

    Thanks to the recent housing recovery and a sharp uptick in Bay Area home prices, national and regional builders are breaking ground on multiple projects, with 2 to 4 bedroom townhome communities being the most popular.  This is in direct response to the demand for brand new entry-level townhomes favored by first-time home buyers.  While there are many projects around the South Bay, home buyers quickly find that most communities look alike, from exterior elevations to interior finishes to floor plans -- especially the floor plans.  With their focus on optimizing returns while meeting the needs of general buyers, builders have confined their product offerings to a familiar set of floor plans.  When I take my clients to see the model homes, it is easy enough to flip through the nearly identical floor plans of other neighboring builders so that it is really "You've seen one, you've seen them all."  So when I see that the townhouse development Centered on Capitol by Trumark Homes is bringing a somewhat unique product to the market, it is worth talking about.

    Based in Southern California, Trumark is a relative newcomer to San Jose.  They started their first project with Capitol Station by Capitol Ave and Mabury Rd in San Jose.  They took over an aborted project from Pinn Bros, inheriting the site plan, design and floor plan of that community.  Hence the project has the conventional design and look favored by large builders.  Centered on Capitol, their second project that went on sale just recently, is also in the Berryessa neighborhood, just north of the Capitol Station by Capitol Ave and Sierra Rd.  Trumark started with a clean slate with this project and brought refreshing new elements to this project.

    Lets start with the floor plans.  Centered has 8 floor plans, ranging from 2 bedrooms of 1400 square feet to 4 bedrooms of 1900 square feet.  Of the 8 plans, half are entirely customized for this community.  They are designed for small young families who value an open central gathering and entertaining space for the entire family.  For the rest, though they are based on existing floor plans, they have been optimized for space and efficiency.  There is hardly any wasted space in any of them.

    The focus on young and modern home buyers is also reflected in the choice of the interior finishes.  The choice of kitchen cabinets, faucets, windows or even down to rail banisters is contemporary.  The staging in several of the model homes strive to visualize the more modern take on the interior design.  Meanwhile, all interior designs have plenty of choices for customization by individual buyers.

    The first few phases of Centered on Capitol are attractively priced and lower than competing communities which are more advanced in their development.  It is certainly worth a look.

  • 49ers at Levi's Stadium - Good or Bad for Home Prices in the Area?

    Posted Under: Quality of Life in San Jose, Home Buying in San Jose, In My Neighborhood in San Jose  |  May 18, 2013 4:38 PM  |  11,737 views  |  1 comment
    49ers Stadium in Santa Clara

    Last week, the Santa Clara 49ers stadium has officially been named Levi's Stadium.  This is another step closer for the 49ers to take residence in Santa Clara.  When the San Francisco 49ers made it into the Super Bowl this February, it woke the South Bay from sports-apathy into football fanatics.  While the 49ers did not win this time, the game brought a ton of new excitement to the new 49ers stadium in Santa Clara.   

    While still under construction, the stadium has become a fixture in the Silicon Valley skyline, appearing prominently as a crown of lights from higher vantage points around the South Bay.  Now the million dollar question is how the new stadium will affect Santa Clara real estate prices?  Most of the real estate agents I've come across have been quite negative, citing additional noise and traffic as major impairments.  But I strongly differ.  

    Real estate is about location.  Location can be the physical location in geography and all the environmental characteristics associated.  Location also refers to availability of facilities in the immediate neighborhood that contribute to the well-being of the residents.  School district quality is the most familiar.  Proximity to restaurants and shops that enrich the lifestyles of residents is becoming more important as younger buyers move into the area.  A gleaming new football stadium will greatly encourage the establishment of new restaurants and bars nearby. 

    All the new development and features will increase property values, as evidenced by the popularity of new condos and townhomes around Santana Row and downtown Mountain View.  Besides, there is a brand name factor.  It is especially true for the City of Santa Clara, which does not host many major corporations or award winning schools.  Association with major sports team brings recognition and reputation.  

    If the critics are not convinced, the best example is AT&T Park.  AT&T Park sparked the revitalization of the China Basin district.  What was once a deserted industrial area has now turned into a much desired residential neighborhood of luxury high-rise condos and trendy restaurants.  That is the gem of San Francisco and envy of every city.

    The City of Santa Clara is in final stages of getting the hosting rights for Super Bowl 2016.  That will put the City of Santa Clara, and entire larger area under an international spotlight for a good month and forever put Santa Clara on the national radar.  As a San Jose resident, i feel proud as a neighbor; as a real estate broker, I am giving it a Buy.


  • 3 Pitfalls to Avoid as a Landlord

    Posted Under: Home Buying in San Jose, Home Selling in San Jose, Rentals in San Jose  |  November 10, 2012 8:09 AM  |  7,276 views  |  1 comment
    For RentAs the rental market heated up this year and rents in San Francisco Bay Area climbed in the double digits, many real estate investors seized the opportunity and bought rental properties for the steady cash flow and future equity gain.  However, with the handsome return also comes liability.  Being a landlord entails more than posting a for-rent ad and collecting the rental checks.  California has numerous laws on rights and responsibilities for both tenants and landlords. Before you dive head-first in becoming a landlord, you should be aware of the liability and potential pitfalls.  Here are the top three you should avoid.

    1. Unlawful discrimination-

    Many landlords have personal preferences for certain tenants.  If you express, even implicitly, some non-financial criteria, you may run the risk of unlawful discrimination.  It is common knowledge that it is unlawful to refuse to rent because of a person’s race, gender, sexual orientation, age or disability.  Lesser known ones are familial status and source of income.  For example, you can’t restrict tenants to adults only.  And if you have a tenant with a disability, then you have to make reasonable accommodations for them, such as installing handicap handrails or allowing service dogs.  If you represent the housing as unavailable when it is, in fact, available that constitutes as refusal to rent as well.  Carefully exercise fairness and honesty when responding to all inquiries.

    2.  Inadequate disclosures-

    California law requires landlords to disclose the presence of hazardous materials to tenants, including but not limited to lead-based paint, asbestos, pest control treatments, carcinogenic material and methamphetamine contamination.  Just like in sales of residential real estate, if there is a death in the unit within the last three years, the landlord needs to disclose the manner of the death.  There are also less common cases that require disclosures, such as if the unit is in rental conversion or if the unit is within one mile of military base with ordinances.  You have to keep yourself informed constantly on what need to disclose as new disclosure requirements may be enacted.

    3.   Lease termination and eviction-

    This is one area which has triggered the most litigation.  California law has well-defined guidelines on the process and the minimum number of days required to proceed on each step.  For starters, landlords have to give a 60-day notice for lease termination should the tenant have occupied the unit for over a year.  A 30-day notice is acceptable if the occupancy is under a year or if the landlord intends to sell the house and has opened escrow.  If you need to evict any tenant as he fails to pay rent or for other reason, then you file an unlawful detainer lawsuit.  It is a complicated procedure and you need to follow it to the letter.

    These are the top pitfalls that you should watch out.  If you want to be a successful landlord in the long run, you should consider retaining the service from a property management company.  That will save you a lot of headaches and troubles.

    Disclaimer:  The above statements are provided for information only and are not to be construed as legal advice.  Anyone viewing the information should not rely or act upon the information without seeking professional counsel.  It is not intended to constitute legal advice or to substitute for obtaining legal advice from an attorney licensed in your state. 
  • Station 361 by Classics - New Townhomes and Single Family Homes in Mountain View

    Posted Under: Market Conditions in Mountain View, Home Buying in Mountain View, In My Neighborhood in Mountain View  |  September 9, 2012 11:07 PM  |  7,351 views  |  No comments

    Just blocks away from Castro Street in Mountain View, Classic Communities' newest development project, Station 361, is a huge hit with new home buyers.  Located across from a CalTrain station on West Evelyn Avenue, Station 361 offers an exciting collection of new townhomes and highly desired single family residences.


    Coming in two phases, the site planners at Station 361 have smartly lined up a tight row of townhomes right along the CalTrain track, creating an effective sound wall and sight-line separation for the more upscale single family residences.

    The townhomes come in two floor plans of about 1700 sqft.  They offer 3 bedrooms on three levels but come with side-by-side 2 car garages, making them similar to the just completed development at Mondrian just down the street.  At a starting price point of about $800K, these townhomes are very competitively priced for their Mountain View location.

    The single family homes offer much more variety in floor plans.  They go from a quaint 2 bedroom cottage with less than 1100 sqft and only a 1 car garage all the way up to an substantial 2400 sqft, 4 bedroom executive home with a loft and courtyard.  Since single family residences have larger lots and better locations than the townhomes, the prices are commensurately higher, with the smallest home starting at just above $1M and the largest in the mid-$1M range.

    Consistent with the premium standard features of other Classics communities, the homes at Station 361 come with hardwood flooring, stainless steel appliances and granite countertop as standard features in the kitchen and includes hardwood cabinetry throughout.  Combined with all the other standard features, the homes are a superior value for the location.

    And, you don't have to take my word for it.  The homes at Station 361 are so highly sought after that buyer aggressiveness reached unheard of levels, even more than during the heights of the last bubble peak.  The demand surprised even the builders as all the 20+ homes in the first half of the project sold out within weeks, months ahead of schedule.  There may be something of a tech IPO effect or just a rush of cash buyers.

    At this point, waiting lists are building up once again as buyers anxiously wait for release of the remaining homes, which is likely to be at the end of the year or even early 2013.  With such pent up demand, the next phase will likely sell out very fast.

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