THE SECOND STORY | July 25th, 2017

Other People’s Money for College

Consider the goal of funding a child’s college education in the future. If “other people’s money” in the form of a scholarship is not a possibility, there still may be another way to use some “other people’s money.”26458431-250.jpg

A $25,000 investment into a mutual fund paying 5% would earn $1,250 in the first year. Alternatively, the $25,000 as a 20% down payment to purchase a $125,000 rental home appreciating 3% a year would have gone up by $3,750 or three times that of the mutual fund in the first year.

The mutual fund’s growth depends on the value of the money invested. Rental real estate benefits because a 20% down payment controls a much larger asset because you’re using “other people’s money.” Leverage allows the investor to profit not only from the amount of cash invested but from the value of the investment.

With a 20% down payment and current interest rates, a typical rental would have a positive cash flow. In ten years, the equity could be $75,000. On the other hand, the $25,000 initial investment in a mutual fund earning 5% annually would only grow to about $40,000 in the same 10 years. It would require an additional $2,700 each year to reach the same $75,000 value.

Leverage is just one of the many benefits that make rental real estate the IDEAL investment. Whether you are saving for higher education, retirement or wealth accumulation, consider rental real estate. Using single-family homes as investments are attractive because homeowners have a better understanding than many other investments and self-management is a possibility.

THE SECOND STORY | July 20th, 2017

Beach & umbrella weather!

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What a great weekday view!

I took this while on a bike ride, and it looks like I didn’t stop…but I did!

On to the business at hand! I hosted a broker tour this Tues so I only got to see one other property. I think I saw the best and the worst.

Alameda Real Estate this Week

Broker Tour Tues 14

New 16

BOM back on market 1

PCH price change 4

Pending 7

Sold 15

Alameda Real Estate Awards

Yep, I’m giving the Winner of the Week to my new listing @

1404 Sherman 

Click on the link above to see the drone video. You can see the 3D Virtual our on the column to the right!

Note, that there are 4 price reductions this week. Also note that there is one BOM. I think this is saying this market is not necessarily what buyers want!

Let me know if you have questions about Alameda real estate…if those questions mean something to you, then there should be an logical answer out here somewhere!

I’ll be holding 1404 Sherman open this Sunday 2-4pm. It was a busy open house last Sunday!

best, marilyn

THE SECOND STORY | July 18th, 2017

Assumptions are an Alternative

FHA VA Assumption.png

In the late 80’s, both FHA and VA began requiring buyers to qualify to assume their mortgages. The main reason there haven’t been many assumptions in the past 25 years is that interest rates have been steadily going down and if a person has to qualify, they might as well do it on a new loan and get a lower interest rate.

Based on projections by Fannie Mae, Freddie Mac, the MBA and NAR, rates for the second half of 2017 and 2018 are expected to be higher. When interest rates on new mortgages are higher than the rates of assumable FHA and VA mortgages in the recent past, it becomes more advantageous to assume the existing mortgages.

FHA and VA loans originated with lower than current interest rates have great advantages for buyers and sellers.

  1. Interest rate won’t change for the qualified buyer
  2. Lower interest rate means lower payments
  3. Lower closing costs than originating a new mortgage
  4. Easier to qualify for an assumption than a new loan
  5. Lower interest rate loans amortize faster than higher ones
  6. Equity grows faster because loan is further along the amortization schedule
  7. Assumable mortgage could make the home more marketable

An Assumption Comparison can help determine the savings and financial benefits of an assumable mortgage with a lower rate.

THE SECOND STORY | July 15th, 2017

YIMBY….

 Add nytdirect@nytimes.com to your address book.
The New York Times
The New York Times

Friday, July 14, 2017

A Spreading ‘Yimby’ Movement
By MIKE MCPHATE
A pro-development movement has flourished in San Francisco's high-cost housing environment.
A pro-development movement has flourished in San Francisco’s high-cost housing environment. Jim Wilson/The New York Times
Good morning.
Today’s introduction comes from Conor Dougherty, who reports on economics from the Bay Area.
It’s like Woodstock, but for housing activists.
Over the past two years the rising cost of housing in the San Francisco Bay Area and elsewhere has created a budding movement of pro-development “Yimby” (yes in my backyard) groups that advocate for building more housing in hopes of easing exploding rents and home prices. On Friday a group of 200 or so activists from around the country, as well as Britain and Canada, will convene in Oakland for the “Yimbytown” conference.
“The goal is to get people together on how to build housing and bring those ideas back to those people’s cities,” said Kieryn Darkwater, an organizer with East Bay Forward, a pro-development group whose members are regulars at City Council meetings in Oakland, Berkeley and other east-of-San Francisco cities.
The conference is another sign of momentum for the Yimby movement, which has clashed with the Bay Area’s liberal establishment. A year ago most Yimby groups were tiny ragtag operations, but today they are pushing bills in Sacramento and have attracted enough money from Silicon Valley and elsewhere that many activists have been able to quit their day jobs to do politics full time. Scott Wiener, the state senator from San Francisco who is pushing a bill that aims to force California cities to ramp up housing production, is scheduled to speak at the conference on Saturday.
This is actually the second Yimby meeting. The first such gathering was last year in Boulder, Colo., and was organized by a group that included Will Toor, Boulder’s former mayor.
“It is great to see a second national Yimby conference bringing together activists from this burgeoning movement,” Mr. Toor said. “It is clearer than ever that if we really care about solving big national issues like inequality and climate change, tackling the lack of housing in thriving urban areas, caused largely by local zoning restrictions, is key.”
California Online

THE SECOND STORY | July 13th, 2017

And these are just 2 reasons that I like Alameda.

Follow me on my ‘For Fun’ blog – 

Boomer-Chick-Musings.com

1.The tree-lined streets. It’s fun on a summer day, to get relieft from the heat, by riding my bike down tree-lined streets. Nothing like a brief breeze (self-generated) to cool down in.

2.Watching somebody maintain these old houses. Notice the ladder of this beauty to the right of the photo. This gentleman never allows this house to be less than pristine. He hand-paints it whenever it’s needed. I wish I was that into painting..but no.

Home Is Where The Heart Is

So let’s get with the program.

Alameda Real Estate this Week

Yes, I did get on my bike this past Tues and I saw 6 of the 14 listings. It was about time!

Broker Tour Tues total 14 on tour

New 16

Pending 11

Sold 15

Withdrawn temp (then put back on as NEW)

(then put back on the market, see New Listings).

Alameda Real Estate Awards this week

Winner of the Week

Cute, Charming

Alrighty! That’s a wrap…look for me at an open house for a new listing on Sunday. Won’t say what address…it’s about to be published in the mls sometime tomorrow!

best, marilyn

THE SECOND STORY | July 11th, 2017

Family & Friends Mortgage

Anytime a lender and borrower can agree on rates and terms, it can be a good match but IRS has specific rules that govern the transaction especially when the parties are family or friends.26614035-250.jpg

The loan must be done in a business-like manner with a written note specifying the loan amount, interest rate, term and collateral. IRS requires that the mortgage be a recorded lien to allow the interest deduction.

Sometimes, a friends and family situation might have a less than normal interest rate on the mortgage. However, the rate charged in the note is regulated by the minimum applicable federal rate which is published monthly by IRS based on current Treasury securities. For July 2017, the rate is 2.57% for terms over nine years.

The seller must report the interest paid to them along with the name, address and Social Security number on schedule B when the buyer uses the property as their principal residence. A mortgage between family and friends can be good for both parties. It may allow the borrower a slightly lower rate without the expenses of a traditional lender while giving the note holder a higher rate than they can earn in available investments.

Your tax professional can guide the transaction whether you’re a buyer or a seller and your real estate professional can help arrange to have the documents drawn and filed.

THE SECOND STORY | July 6th, 2017

Mayberry by the Bay & the Alameda Parade.

Military and minions!

You need to be old(er) to remember that Andy Griffith was the sheriff in Mayberry, a very small town with folks that were characters.

But back when we got married, Carl and I referred to Alameda as ‘Mayberry by the Bay.’ And we loved A-town, complete with the Navy folks walking around, complete with Ole’s on Park Street (just like now, still owned by the daughter of the original owners), the ancient Alameda Theatre (vs the rehabbed and gorgeous Alameda Theatre now), and with a lot of tatoo shops, which catered to the military not to hipsters these days, who come here to roost. (Maybe you need to go off the island to get the best tatts.)

Follow my ‘for fun’ blog Boomer-Chick-Musings 

Alameda Real Estate this Week

No tour this week! It was Tuesday, Independence Day! We had the parade instead!

But real estate was still happenin’!

New 9

BOM 4 (one was the Victorian that was BOM recently…2 down!)

Pending 5

Sold 6 (one was never on the market, so no photos)

WC withdrawn/cancelled 1 (this was just too much $$).

Expired 2

Total active listings 39

Total pending listings 68

Enjoy the upcoming weekend! Should be lovely! Contact me if you have questions about the Alameda real estate market!

best, marilyn

THE SECOND STORY | July 4th, 2017

Down Payment Problem – Are You Sure?

There is increasing difficulty for first-time home buyers to save for their down payment as indicated in the graph. Several factors that contribute to this trend include rising rents, rising home prices, student loan debt and flat wages.down payment graph.png

Some would-be buyers feel they cannot buy a home today but a large part of those decisions may be based on inaccurate assumptions.

Nine out of ten non-owners believe they need ten percent or more for a down payment. The typical down payment for first-time buyers is six percent. VA has 100% loan programs as well as USDA for certain qualifying areas and buyers. FHA is known for 3.5% down payments. And FNMA and Freddie Mac have down payments as low as 3% and 5%.

There are gift provisions available for buyers who have an “angel” who would like to help them with their down payment.

There are ways to borrow against a person’s qualified retirement program for a down payment. It isn’t necessarily limited to the buyer but could include a relative. Interestingly, a son or daughter can borrow against their retirement to benefit their parents.

In some respects, having good credit and sufficient income is more important than the down payment. Don’t rely on “common knowledge.” Get expert advice and counsel to see if there is a way to advance your dream of owning a home.

THE SECOND STORY | June 29th, 2017

Permits? Who needs a permit?

check out my ‘for fun’ blog…Boomer-chick-musings.com 

Image result for 4th of july photos

Can’t believe I’m writing about permits….again.

These days prices are going through the roof. Duh.

On a recent closed sale, a shower starting leaking…alot. For some reason the listing agent either didn’t ask the seller about work done without permits or the seller just kinda didn’t remember.

But the permit situation is addressed directly on the disclosures. Please people, just call a spade a spade, and if it turns the buyers off…move on to the next buyers.

When folks start offering high dollars for a property, it’s incumbent that one of the agents either get a certified copy of the permit history or ask the listing agent to get a certified copy of the permit history.

Now the buyer has lawyered up…that’s also a bad thing. For everybody.

Based on what I see happening in the Alameda real estate market this week…inventory is still low, closed sale prices overall are not jumping through the roof as they once were, BOM’s (Back on Market) are showing up a bit more these days, as are price reductions (PCH), and Withdrawn (Temporarily) or Cancelled.

Alameda Real Estate this Week 

Broker Tour Tues 8

New 8

Price change 2

BOM (back on market) 2

Pending 14

Sold 9

Withdrawn temporarily 2

Withdrawn/cancelled 1

Total active listings on the market 46

Total pending listings on the market 63

Alameda Real Estate Awards this Week

argh! 2 weeks in a row…had appts and didn’t get out on the broker tour! So no awards this week.

Have a happy and safe holiday! best, marilyn

THE SECOND STORY | June 27th, 2017

Don’t Have a CLUE?

If you haven’t heard of a CLUE report, it has nothing to do with the table game searching for a murderer. It is a report showing the insurance claims on your home and car for the past five to seven years.10340976-250.jpg

This database is used by insurance companies to evaluate risks and determine rates. C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. Rates can be increased not only due to legitimate claims but data entry errors also. Sometimes, simply asking a question without filing a claim can be logged as a claim.

For that reason, similar to verifying the accuracy of your credit report, it is important to check out the CLUE report on your home and car. The reports are free and there is a process for correcting mistakes.

An interesting and sometimes costly surprise occurs during the home buying process. The claim experience of the prior seller could impact the price of the premium of the new buyer. For that reason, you can ask for a copy of the CLUE report on the home you’re interested in buying prior to writing a contract.