THE SECOND STORY | August 22nd, 2019


I like trees. I like older trees. But I don’t like trees that are located close to or over a property line (owned by other folks), or trees that have gotten so huge that they become a danger to people or to property.

As I’ve said before, the good news is that with the heavy rains this past winter, the drought is over! The bad news is, that the drought is over.

That means it’s time to assess what’s growing where. Or what trees are dead but nobody is around to care.

Recently, I’ve seen two examples of where a tree on one lot has done damage to a sewer line running through another lot. And the other is an overgrown tree  undermining other folks’ pavement and even undermining the tree owner’s garage.  However, both of these owners own units, live out of town, and seem to subscribe to the saying ‘If I don’t see it then I don’t know about it.’

I asked permission to go over to one owner’s property with a Certified Arborist and we were shocked at what we saw: 2 super tall dead trees and the yard was a mess. Garbage bins were strewed all over. Obviously, the property manager never looked at it. And the tree that started this, was outgrowing the dirt around it, crammed next to the garage, with branches hanging well into 3 neighbor’s yards.

Enough complaining. On to the next item.

Alameda Real Estate this Week

Broker Tour Tuesday 11

Active listings 55 (including 1 Back on Market, 2 Active Contingent, 9 Price Changes)

 Pending 12 (including 2 Pending Sale want Backup Offers)

 Sold 12

For this week’s sold properties:

DOM 37   Low 1  Average 14  Median 13

Have a fun weekend! Feel free to contact me if you have questions about the Alameda market!

best, marilyn

my ‘for fun’ blog… 

THE SECOND STORY | August 20th, 2019

Invest in Equity Build-up


Equity build-up could be one of the biggest advantages to buying a home. There are two distinct dynamics that take place to make this happen: each house payment applies an amount to reduce the mortgage owed and appreciation causes the value of the home to go up.

It is easy to make a projection based on the type of mortgage you get and your estimation of appreciation over the time you expect to own the home. Even conservative estimates can produce impressive results.

Let’s look at an example of a home with a $270,000 mortgage at 4.5% for 30 years and a total payment of $2,047.55 payment including principal, interest, taxes and insurance. The average monthly principal reduction for the first year is $362.98. If you assume a 3% appreciation on the $300,000 home, the average monthly appreciation is $750 a month.

The total payment of $2,047.55 less $1,112.98 for principal reduction and appreciation makes the net monthly cost of housing, excluding tax benefits, $934.57. If this hypothetical person was paying $2,500 in rent, it would cost them $1,565.43 more to rent than to own. In the first year, it would cost them over $18,000 more to rent.

Together, the items in this example contribute over $1,100 to the equity in the home . This is one of the reasons a home is considered forced savings. By making your house payments and enjoying increases in value, the equity grows and the net cost of housing decreases by the same amount.

In this same example, the $30,000 down payment grows to $133,991 in equity in seven years. While this is equity build-up, the extraordinary growth is attributed to leverage. Leverage is an investment principle involving the use of borrowed funds to control an asset.

To see what your net cost of housing and the effect of leverage will have on a home in your price range, see the Rent vs. Own. If you have questions or need assistance, contact me at (510) 908-9021.

THE SECOND STORY | August 15th, 2019

Warrior time….(not quite yet)

Somebody’s getting ready for basketball season! 








I  think it stands for ‘no whiners.’

Regarding my “local knowledge quiz” about bridges (3 weeks ago?) I realized that the Fruitvale Bridge has a Railroad Bridge as well.

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Let’s get down to biz.

Alameda Real Estate this Week

Broker Tour Tues 8

Total active listings 55 (including Active/Contingent 1), and 1 BOM (back on the market) 

Total pending 49 (including 13 pending sales – want backup offers)

Total sold 18

DOM (average days on market)

High  143

Low 7

Average 39

Median 29

Have a fun weekend!  We are weather wimps here, in A-town. Too hot, we complain. Too cold, we complain. We want it ‘just right.’

This evening was just right!

best, marilyn

THE SECOND STORY | August 13th, 2019

America Still Considers Real Estate the Best


35% of respondents, in a recent annual Gallup poll that dates back to 2002, identified real estate as the best long-term investment option compared to 27% who identified stocks.

The top choices included real estate, stocks, savings accounts and gold. Even with the remarkable prices of the different U.S. stock indices recorded in 2019 through April and May, homes have the highest confidence in the minds of the respondents.

This seems to be based on the stability of the housing market and the expectation that home prices will continue to rise. Homeowners build equity from both appreciation as well as reducing principal with each payment made. These same factors exist for investors of rental homes in predominantly owner-occupied neighborhoods.

Real estate has another dynamic working to produce favorable investment results due to leverage. Leverage occurs when borrowed funds are used to control an asset. When the borrowed funds are at a lower rate than the overall investment results, positive leverage occurs which can increase the yield from an all cash investment.

Gold and savings accounts must be funded with cash. The maximum borrowed funds allowed for stocks is 50% and generally, at a rate higher than typical mortgage rates.

Homes are a particularly attractive investment because you can enjoy them personally by living in them. The interest and property taxes are deductible and gains on the profit are excluded up $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly.

Many people consider an investment in a home for a rental property an IDEAL investment: Income, Depreciation, Equity Build-up & Leverage.

If you have questions or are curious about the process, contact me at marilynschu or (510) 908-9021.

THE SECOND STORY | August 8th, 2019

And this is why we like Alameda….


Photo of SF, was taken this week from the Alameda coastline!

Alameda Real Estate this Week

I had the opportunity to close a sale for some lovely Buyers, this week. They were up against 6 offers. They wrote such a clean offer (no contingencies – including no loan/appraisal). It’s such an honor to work folks like these.

Total active listings: 51, including 1 AC (active contingent), 1 BOM (back on the market), 4 PCH (price changes)

Total pending listings: 64, including 16 pending sales – backup offers wanted

Total sold 12

You may notice that one of the price changes was from $26,000,000 down to $2,600,000. It was clearly an error…but….we sometimes make them when inputting listings into the MLS.

I thought the following might give you an idea of DOM (days on market), per the MLS, as of tonight:

This doesn’t include commercial (storefront) properties…of which some have been on the market for well over a year.

DOM (days on market)

High 135 days

Low 7 days

Average 33 days

Median 24 days 

Have a great weekend! Call me, text, leave an email for me if you have questions about the Alameda market. I’m not a genie so I don’t have all of the answers, but I might be able to give you an idea of what’s going on.

best, marilyn


THE SECOND STORY | August 6th, 2019

Determining Property Type


The Internal Revenue Service considers four different types of real estate. Specific types of properties have benefits based on their classification. The determination does not depend on the property itself as much as it depends on how the property is used and what the owner’s intentions are.

Principal Residence … a principal residence is the place a person lives or expects to return if they are temporarily away from it. It could be a single family, detached home or condominium or a duplex, tri-plex or four-unit. The owner(s) can deduct the qualified mortgage interest and property taxes on the schedule A of their tax return. There is a capital gains exclusion on profit of up to $250,000 for a single taxpayer and up to $500,000 for a married taxpayer.

Income Property – is improved property that is rented or leased to tenants as opposed to using it personally. It can include houses and condos, apartment buildings, office complexes, shopping centers, warehouses and other commercial buildings. Depreciation is allowed on the improvements. For property held more than one year, the profits are taxed at long-term capital gains rates. This type of property is eligible for a tax deferred exchange.

Investment Property … can be raw land or improved property that is not rented or leased. This property is not subject to depreciation. If the property is held for more than one year, the profits are taxed at long-term capital gains rates. It is also eligible for a tax deferred exchange.

Dealer Property … this type of property is primarily considered inventory because the intention is to sell it without intentionally holding it for more than a year. It could be new construction such as a home builder. It could be an investor who buys a property and expects to sell it for more. There is not a requirement to make improvements. The profits on dealer property are taxed as ordinary, “sweat of the brow” income. Dealer properties cannot be exchanged.

A second home is like a principal residence in that you can deduct the interest and property taxes on your Schedule A, up to the limits. A second home, as well as a principal residence, can be rented out up to 14-days a year without threatening the status of the property. Seconds homes are not eligible for exchange because personal use properties are not allowed. A second home is not a principal residence and profits are taxed like an investment property. If you own it for more than a year, it is taxed at long-term capital gains rates.

Vacation homes are rented for more than 14 days a year and are like income property but with some additional rules that apply. If your personal use is 14 days or less or 10% of the time it is rented, your expenses can be deducted in excess of income. If you use it for more than 14 days or more than 10% of the number of days it is rented, it is considered personal use and your expenses are limited to the amount of income collected with no losses being deductible.

Taxpayers can strategically change the property type based on their intentions. A principal residence can be converted to income property. Dealer property could become a principal residence. A rental property could become a principal residence.

Professional tax advice is always recommended to be able to understand the information and how it applies to your specific situation.

THE SECOND STORY | August 1st, 2019

Winner of the week, Get me to rehab…..

I’m not sure when or where I took this photo..but it was recently. I’m sure I was somewhere on the island and the sun was filtering through the leaves on the tree, over a brick patio! Amazing what I see when I look down! I think I was riding my bike and stopped somewhere. I do NOT take photos while I’m actually riding my bike.

Way back in the day, maybe 3-4 years ago, I used to give names to properties that were on the Broker Tour: Winner of the Week, Get me to Rehab, etc.

I decided that it was too personal for me to give names to the properties. Every motivated Seller would like to have a motivated Buyer whether it’s a palace or a dump. Plus, it’s not my job to say what I think…it’s always about the people, not just about me.


Broker tour Tues 11

Active listings 49 including 1 AC (Active-Contingent, on selling another property),  1 BOM (Back on the  Market), and 1 PCH (Price Change)

Pending 23

Sold 20

Short, sweet!

Let me know if you have questions….!

Best, marilyn

Have a fun weekend!

THE SECOND STORY | July 30th, 2019

Get Leverage Working for You

Leverage is an investment term that describes the use of borrowed funds to control an asset; sometimes referred to as using other people’s money. Borrowed funds can affect the investment in your home positively.

For instance, if you had a $100,000 rental property, collected the rents and paid the expenses and had $10,000 left, you would earn a 10% return (divide the $10,000 by the $100,000.) With no loan on the property, there is no leverage.

If you decided to get an 80% mortgage at 8%, you would owe an additional $6,400 in expenses leaving you only $3,600 net. However, your return would grow to 18% because your investment is now $20,000 in cash (divide the $3,600 by $20,000.)

Leverage, the use of borrowed funds, causes the return to increase in this example. While, most people associate leverage with rental properties, it also applies to a home. The larger the mortgage, the more leverage you have. A FHA mortgage with a 3.5% down payment has more leverage than an 80% loan.

Assume we’re looking at a $295,000 purchase price with 3% closing costs and a 4.5% mortgage for 30 years with a five-year holding period. The following table shows the return based on different down payments and appreciation rates. The initial investment is the down payment plus closing costs. The equity build-up at end of year five is the result of normal principal reduction and appreciation.

Down Payment 1% Appreciation 2% Appreciation 3% Appreciation
3.5% 21% 28% 34%
10% 12% 17% 21%
20% 7% 10% 13%

Another way to look at the 3.5% down payment example with 3% appreciation would be to say that a $10,325 down payment plus $8,850 in closing costs could grow into $82,482 of equity in a five-year period producing a 34% rate of return on the initial investment.

Estimate what your initial investment could grow to using this marilynschu

THE SECOND STORY | July 25th, 2019

Traffic jam…bridges up!

I happened to be at Bay Farm Island on a workday. It was about 5pm and a sailboat (under power, no sails) came motoring through. It’d been a while since I’ve seen these bridges up.

I usually try to avoid the bridges at certain hours: like early morning and late afternoon rush hours. The blessing is that I do have some flexibility, living and working here.

But when I travel out to Pleasanton, for some Realtor meetings or classes…whoa! That’s a whole new ball game. I just pray that nobody gets into an accident and that the drivers will settle down and move slowly, should there be an accident. Slowly beats totally stopped.

Oh, and I’ve learned to take the side streets coming back from Pleasanton. They’re much better than the freeways.  And then I can go to Costco in San Leandro! And I’ll finish my adventure by going over the BFI bridge, back home to A-town.

Alameda Real Estate this Week

Tuesday tour 14

Active listings 50, including 1 AC (active/contingent), 2 BOM (back on market), 4 PCH (price changes)

Pending 69

Sold 20

That’s a wrap…slow down, smell the flowers, get rejuvenated. The one thing that I’d like to do is to wash my car. It’s disgusting. And while the folks at the South Shore Car Wash do a good job ($30+ bucks), the CADEAU is a mess again with bird poop, and who knows what else in less than 1 day. Oh well.

If you have ??? about this market, so do I. The good news is that my Buyers purchased a lovely townhome on the lagoon, this past Tuesday. There were 7 offers. It should close within the next 2 weeks or less. It’s so nice to be referred to lovely people, by a lovely ‘used-to-be agent.’

best, marilyn

THE SECOND STORY | July 23rd, 2019

Delay Will Usually Cost More

Two things can happen when the mortgage rates go up before you’ve found a home or locked-in your mortgage. You’ll either pay the current mortgage rate which means a higher payment, or you’ll have to increase your down payment to keep the monthly payment at the same level.

If the rate were to go up by ½%, the payment on a $275,000 mortgage would increase by $82.87 per month for the entire 30-year term. That would increase the cost of the home by $29,835.

Some people are purchasing the maximum home that they can qualify for. In that case, they cannot qualify for a higher payment and the only way to buy the same price home is to put more money down which may not be a possibility. The other alternative is to buy a lower price home which may not be in the same area or size which will involve some compromises.

The rate is not the only dynamic that affects buyers waiting to purchase. The home they want could sell to someone else. Prices could increase as new homes come on the market. The question that many buyers ask themselves when they become a victim of the consequences of delay is “What could we have spent the money on if we didn’t have to make a higher payment?”

Mortgage rates are very attractive currently and within ½% of the all time low of 3.35% in December 2012. The highest rate was 18.45% in October 1981. Whether you’re purchasing or refinancing, it may not be this low again.

To see how it will affect the payment, plug your numbers into this Cost of Waiting to Buy calculator or call me at (510) 908-9021 and I’ll help you with it.