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First-Time Home Buyers: Their Biggest Mistakes and Regrets

FROM REALTOR.COM: Life is full of regrets. There are those unfortunate fashion choices, there's your crazy ex. (What were you thinking?) And then there's everything you did wrong when you bought your first home.

The biggest regret of first-time home buyers was that their new abodes turned out to be too small to accommodate their needs, according to a recent Porch survey. The online network that connects homeowners and professionals surveyed just under 1,000 people to come up with its results.

"They bought homes in neighborhoods they could afford at the time," says Porch spokeswoman Amanda Woolley. "As time passed, their circumstances changed—[their] family grew or incomes increased—and [they] could now likely afford more/different types of home."

Other things that buyers wish they had done differently included having more savings before closing on their home—millennials in particular copped to this one (15%). But millennials and baby boomers were equally likely to report that they'd underestimated the costs of home buying (14%). Gen Xers were slightly more savvy, with only 12% underestimating the costs.

Of course, the cash outlay doesn't end with closing. About 52% of buyers didn't plan for additional maintenance in their first year of homeownership. And that maintenance can add up quick.

"There are also a lot of hidden costs that come with home buying, either not anticipating closing costs or the actual cost to upkeep a home that buyers might not have budgeted for," says Woolley.

Where are first-time home buyers spending their money?

Making the financial situation worse was that about 46% said they went over budget on their home, by about $6,650. Just 16% stayed within their target range, and 38% spent less than they had expected, by about $3,615.

Those who overspent still had to contend with getting their new residences into livable shape. So what did they blow the most dough on?

New homeowners spent the most money on new appliances. (Hey, that old fridge had to go.) Next up was replacing their roofs, followed by installing new furnaces and air-conditioning systems, landscaping, and replacing the floors.

"A general guideline to home maintenance is having 1% of the home’s value in savings to address home improvements," says Woolley. "When purchasing a home, it can be tough to anticipate what might be an issue in the future, so ensuring you have a budget to address those necessary improvements is crucial."

What made first-time buyers choose their homes?

So why did first-time buyers have their hearts set on their particular abodes? The most popular reason was simply that the home fit their budgets. That was followed by the property being move-in ready and in a good neighborhood.

Millennials and Gen Xers prioritized the home being the right size and located close to their jobs and in good school districts. Meanwhile, baby boomers were more likely to be concerned with being close to family and the home having good resale potential.

"Buyers should make a list of aspects of a home that are important to them and then make a decision about what features/aspects that are negotiable," says Woolley. "The one thing about a home that can never change is its location, but you can always remove wallpaper or add space, potentially."

WRITTEN BY CLAIRE TRAPASSO FOR REALTOR.COM: https://www.realtor.com/news/trends/worst-first-time-home-buyer-nightmares/

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Algorithm vs. Appraiser: Estimating a Home's Value Is Complex. Here's What Sellers Should Know.

What’s your house worth? To whom? When, and how?

FROM THE CHICAGO TRIBUNE: The moving parts that go into the estimated value of a house are legendary. Factors from the obvious (location, size and condition) to those only in the eye of the beholder — that the stained glass is just like grandma’s — play into the ultimate validation of value: the sale price. (Written by Joanne Cleaver). 

As the 2019 home-selling season opens, sellers and buyers have more valuation tools than ever at the ready. But confusion is growing along with the number and type of tools. While automated valuation models (AVMs) are used often, real estate professionals agree that only an experienced, well-informed agent or appraiser can craft a compelling case to support a sale price that will be accepted by a lender.

AVMs are computer algorithms — i.e., formulas — that estimate the value of a house based on millions of pieces of data. AVMs draw information about recently sold houses similar to the house in question; price trends in that neighborhood; and other factors available from public sources, such as building permits. When a listing website offers to give you an instant estimate of your home’s value, it is offering data generated by an AVM.

AVMs sound coldly indifferent, but they do deliver different results depending on how they are designed, say executives at the companies that design and sell them.

Different AVMs are designed to deliver different types of valuations. And therein lies confusion.

Consumers don’t realize that there’s an AVM for nearly any purpose, which explains why different algorithms serve up different results, said Ann Regan, an executive product manager with real estate analytic firm CoreLogic. “The scores presented to consumers are not the same version that is being used by lenders to make decisions,” she said. “The consumer-facing AVMs are designed for consumer marketing purposes.”

For instance, more accurate models used by lenders do not include outliers — properties that sold for extremely high or low prices and that consequently would skew the averages and the comparable sales for a particular house, like yours. But models used by consumer websites, such as brokers’ sites and national listing sites, scoop in as much “sold” data as possible when concocting a valuation, because then they can claim to include all available data. That’s true, said Regan, but it’s more accurate to weed out misleading data.

AVMs used by lenders send along “confidence scores” that indicate how firm the estimate is. That is a factor typically not included alongside consumer AVMs, she added.

Revving Up the Algorithms

AVMs are most relevant for cookie-cutter properties, such as condominiums in a building or similar houses in a subdivision. Such properties often are sufficiently similar that a homeowner might wonder if it’s a waste of money to get a real, live appraiser at all.

Several key federal regulators now agree. In November, the Federal Deposit Insurance Corp. (FDIC) and two other agencies proposed that AVMs be used instead of on-the-ground appraisals for some types of houses. If approved, lenders for some types of houses with sales prices of $400,000 or less would accept a computer validation of the sale price instead of the current standard, which is an appraisal completed by a human. There is an exception: The rule would not apply to loans for houses that would be federally insured, such as through the Veterans Administration, Fannie Mae, Freddie Mac or the Federal Housing Administration.

That’s a big loophole, considering that just Fannie Mae and Freddie Mac together own or insure at least 46 percent of residential mortgages.

Still, that AVMs would be officially accepted at all has sent a shiver down the collective spine of property appraisers.

Professional eye

Homeowners are often distracted by valuations that bob up and down with monthly market trends. But when it’s time to actually put the house on the market, they drill down to the factors that actually determine reasonable asking prices. “Once they are selling, people look at the facts about the market,” said Salahuddin. “Once they are serious about selling, they’re in a different frame of mind.”

AVMs against humanity

The AVM-as-hobby is largely due to Zillow, the Seattle-based real estate listing supersite that came about because its founders were annoyed by how hard it was to dig up publicly available property sale data.

Zillow has injected more transparency into its value estimates. Now, house hunters can click on “Zestimate history and details,” which appears below the value estimate. Clicking reveals the logic behind an estimate: the comparable properties, tax assessments and recently sold properties that the company’s model used to arrive at the value estimate.

And, it’s important to bear in mind that the Zestimate is more a range of likely values than a single bull’s-eye, explained Emilly Heffter, director of communications, reputation management, for Zillow and its chief Zestimate wrangler.

“It’s a starting point; it’s not an appraisal, “ she said. “It’s a computer, and we haven’t been in your home. We haven’t seen your new kitchen.”

Not yet. In its never-ending mission to quantify every aspect of homeownership, Zillow now includes estimates of the impact of nearby highways, air quality and other environmental factors in its valuations. Soon, it will be “adding new technology that looks at the photos of a home and can see what types of counters you have,” she said.

Any listing is only as accurate as the agent completing the listing form for her local multiple listing service. An error in the property description — for instance, mislabeling a fireplace as gas when it is woodburning, or “accidentally” counting a closet-free room as a bedroom — can touch off a cascade of misinformation as the error affects automated valuations. After all, square footage doesn’t tell anything about layout, which determines how well the space is organized. 

Written by Joanne Cleaver for the Chicago Tribune READ THE FULL PIECE: https://www.chicagotribune.com/classified/realestate/ct-re-property-valuation-0113-story.html

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SLOWER & STEADIER: What Should You Expect From Home Sales in 2019?

By Jenna Herron for USA TODAY: Forget fevered bidding wars and snap home-buying decisions. Slower and steadier will characterize next year's housing market.   That follows a 2018 that started off hot but softened into the fall as buyers – put off by high prices and few choices – sat out rather than paid up. Affordability issues will remain a top concern going into 2019, exacerbated by rising mortgage rates. But some of 2018's more intractable issues will begin to loosen up. The volume of for-sale homes is expected to rise and diversify, while the number of buyers is forecast to shrink.

"For home sellers, they need to recognize those days of frenzied market are over. They must price competitively to sell their home," said Lawrence Yun, the chief economist at the National Association of Realtors. "For buyers, there will be challenges when it comes to rising interest rates, but they don't have to make hurried decisions anymore."

Still, some cash-strapped first-time buyers will simply be priced out, while a cohort of potential move-up buyers will decide to stay in their existing home, make renovations and enjoy their current low, low mortgage rate. Price increases will moderate and everyone in the market will need to adjust.

Finally, more homes to choose from

One of the biggest complaints among buyers in the last several years is that there weren't enough homes for sale. In fact, the supply of houses hit historic lows in the winter of 2017 and has yet to rebound substantially. That fueled bidding wars, price increases and frustration.

The supply crunch is expected to ease some in 2019 with inventory rising 10 percent to 15 percent, according to Yun. But the increase will be skewed toward the mid- to high- end of the market – houses priced $250,000 and higher – especially when it comes to newly built houses, said Danielle Hale, chief economist of realtor.com.

That’s good news for move-up buyers, but not so much for the first-time millennial buyer. “There’s still a mismatch on the entry-level side,” she said.

Houses in all shapes and sizes

If you're a first-time buyer, you won’t be completely out of luck if you stay open-minded. If a single-family home is out of the question, consider a mobile home or townhouse as a starter home, both of which are on the rise.

The volume of shipments for manufactured houses – also known as mobile homes –is  expected to finish above 100,000 this year, up from 93,000 in 2017, according to Robert Dietz, chief economist of the National Association of Home Builders. The trend is expected to continue next year.

These homes are also significantly cheaper than other home types. Not including land costs, the cost to buy a mobile home averages $70,600, compared with $257,900 for an existing single-family home and $309,700 for a new home.

You may also consider a townhouse, an attached single-family home located in a community of homes. Construction of townhomes also is experiencing year-over-year growth and is outpacing the single-family detached home market, Dietz said.

“The market is being supported by millennials moving from renting to their first-home purchase,” he said. “If you’re in a high-cost area with wage and job growth, townhouses are appropriate for entry-level. And they still get that suburban feel with their own front door.”

Affording a home remains hard

Housing values are still expected to increase next year, but not at the gang-buster pace seen in recent years. NAR’s Yun forecasts modest price growth between 2 percent and 3 percent, down from close to 5 percent this year and over 5 percent in 2017.

At the same time, mortgage rates are expected to hit 5.5 percent by the end of 2019. Both factors make it more expensive for buyers to purchase a home. Hale estimates that the expected increase in prices and interest rates translates to an 8-percent rise in the average monthly mortgage payment.

Interest rate trap

Shrinking affordability will convince some buyers – especially first-timers – to sit out the market altogether next year because they can’t make the numbers work.Homeowners considering selling their home may also stay put because of rising mortgage rates – a so-called interest rate trap. Most outstanding mortgages have an interest rate of 4.5 percent or less, according to a report this year from Black Knight, a data analytics firm. "They have a nice low mortgage rate, lower than the current rate, so there’s no reason to move,” said Mark Fleming, chief economist of First American Financial Corp., a provider of title insurance. “It’s essentially more expensive to buy their own home back.”

Tax worries linger

The first few months of 2019 will reveal exactly how the new tax changes affect homeowners. One key rule is the new cap on the mortgage interest deduction.Before, homeowners could deduct interest they paid on up to $1 million in mortgage debt – including interest on home equity loans and lines of credit – reducing their taxable income. Now, you can only deduct interest on up to $750,000 in mortgage debt. Interest paid on home equity loans and lines of credit is deductible only if the funds were used to pay for home improvements or renovations.The only taxpayers who will exceed those limits are high-end homeowners and buyers and those with multiple homes with mortgages.The bigger question mark is if and how the $10,000 limit on state and local taxes deduction – known as SALT – will affect housing markets in high-tax states such as New Jersey, New York, Connecticut and California. 

Here's the bottom line

If you're a seller: Price realistically and be ready to cut the listing price or offer other incentives to get a deal done. “It’s still a seller’s market but not like it was,” Hale said. “Sellers need to be mindful of competition, especially for more expensive properties.” If you're a buyer: Don't worry about going slow when making decisions. “There is less buyer competition and more inventory,” Yun said. “Buyers can take time to find the home that fits into their budget.”

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18 Awesome Events Happening This Holiday Week in SoCal

FROM LAIST.COM: There are many ways to celebrate (or not celebrate) the holidays, so you do you. There's the traditional: the L.A. County Celebration, a screening of It's a Wonderful Life and a Feast of the Seven Fishes. And there's the not-so: a Christmas Day hot dog bar, a Halal Indo-Chinese and Chinese Jewmas Dinner, a Kwanzaa rap battle and a MatzoBall. For non-holiday related events, check out Sri Lankan art, a screening of The Deer Hunter, classic cartoons and music by Erykah Badu.

MONDAY, DEC. 24; 3 - 6 p.m. 59th Annual L.A. County Holiday Celebration The Music Center's Dorothy Chandler Pavilion — 135 N. Grand Ave., downtown L.A. L.A.'s largest holiday celebration is a family-friendly afternoon with performances by more than 20 music ensembles, choirs and dance companies. The lineup includes the Gay Men's Chorus of Los Angeles, Infinite Flow - An Inclusive Dance Company, Kayamanan Ng Lahi Philippine Folk Arts, Lorenzo Johnson & Praizum and Tres Souls. Doors at 2:30 p.m., seats are on a first-come, first-served basis, but people can come and go throughout the show. If you can't make it in person, the show will be broadcast live on both PBS SoCal and KCET and streamed at pbssocal.org. COST: FREE; MORE INFO

MONDAY, DEC. 24; 9 p.m. - 2 a.m. The Original MatzoBall Los Angeles The Argyle Hollywood — 1600 Argyle Ave., Hollywood Party like it's 5779! The Society of Young Jewish Professionals throws a huge shindig. Get ready to mix, mingle and dance all night long. Ages 21+. Table packages available. COST: $40 - $50; MORE INFO

MONDAY, DEC. 24; 4 p.m. - midnight Tiki Christmas Beelman's — 600 S. Spring St., downtown L.A. Skip the milk and cookies while waiting up for Santa. Head to DTLA's plant-based pub, which will offer all its Tiki drinks for $8. COST: Varies; MORE INFO

THROUGH JUNE 23, 2019 The Jeweled Isle: Art from Sri Lanka Resnick Pavilion at LACMA — 5905 Wilshire Blvd., Mid-Wilshire This exhibition, which opened earlier in December, is the first comprehensive survey of SriLankan art presented and organized by a U.S. museum. The exhibition includes nearly 250 works — from decorative objects to photographs — that encompass 2,000 years of the South Asian country's history. While LACMA is closed on Christmas Day, it is open on Wednesday this week. COST: General admission: $16 - $25; MORE INFO

Sri Lankan art is on view at LACMA, including this 'Entrance to the [Palace Complex Housing] Buddhist Temple,' Kandy, c. 1880-90. (Digital image © Museum Associates/LACMA)

MONDAY, DEC. 24; 10 a.m. It's a Wonderful Life The Vista — 4473 Sunset Dr., Los Feliz Yes, this 1946 Frank Capra film is sentimental and sappy but we love it. Watch in 35mm as George Bailey (Jimmy Stewart) tries to leave his hometown of Bedford Falls to lasso the moon. He never does. Thinking his life is a failure, George contemplates suicide on Christmas Eve until an angel shows him what life in Bedford Falls would've been like without him. COST: $12.75 - $20; MORE INFO TUESDAY, DEC. 25; 7 - 9 p.m. Halal Indo-Chinese and Chinese Jewmas Dinner Revolutionario North African Tacos and Halal Restaurant — 1436 West Jefferson Blvd., Exposition Park This sounds like a can't-miss meeting of cultures and cuisines on Christmas Day. Podcaster and events organizer Joshua Heller teams with Revolutionario to present a night of Indo-Chinese and Caribbean Chinese dishes. The menu includes General Tzo's chicken, chili crab, Gobi Manchurian cauliflower, Schezwan fried basmati rice, Hakka Chow Mein and the restaurant'stacos. Reservations highly recommended by emailing or calling 424-223-3526. COST: Varies; MORE INFO

MONDAY, DEC. 24; 5:30 - 10:30 p.m. Feast of Seven Fishes Nerano Beverly Hills — 9960 S. Santa Monica Blvd., Beverly Hills The Festa dei sette pesci aka "The Eve" is an Italian-American celebration of Christmas Eve with seafood. The restaurant serves up seafood items reminiscent of Southern Italy including: braised octopus, tuna tartar and squid ink pasta. COST: Varies; MORE INFO

MONDAY, DEC. 24; 11 a.m. - 5 p.m. Southern Eats Yardbird Southern Table & Bar at the Beverly Center — 8500 Beverly Blvd., Suite 112, Beverly Grove The restaurant serves brunch all-day long — with a few special southern items including a muffuletta, a Nashville hot chicken sandwich, St. Louis pork ribs and green eggs and ham. COST: Varies; MORE INFO

TUESDAY, DEC. 25; 6 p.m. - 1 a.m. Christmas Hot Dog Bar Spring St. Bar — 626 S. Spring St., downtown L.A. If all you wanted for Christmas was a tricked out hot dog bar, then get to this neighborhood pub, pronto. COST: Tickets start at $40; MORE INFO

Through March 31, 2019 Uncaged: Hero for Higher Culver Center of the Arts at UCR Arts — 3824 + 3834 Main St., Riverside This exhibition analyzes Marvel's Luke Cage character as a representation for black men and masculinity in American comics culture. The works on view also present the formal expressions of the character since his creation in 1972 as well as the negative meaning projected onto a black superhero. The venue is closed on Christmas Eve/Day as well as New Year's Eve/Day. COST: Free - $6; MORE INFO

WEDNESDAY, DEC. 26; 2 and 7 p.m. The Greatest Cartoons Ever Alex Theatre — 216 N. Brand Blvd., Glendale The 8th annual edition of the cartoon event celebrates Mickey Mouse's 90th birthday by screening two iconic shorts: Plane Crazy (1928) and Through the Mirror (1936). Watch other classic cartoons from the Fleischers, Chuck Jones and Hanna Barbera. COST: $13 - $17; MORE INFO

WEDNESDAY, DEC. 26 - THURSDAY, DEC. 27; 12:30, 4 and 8 p.m. The Deer Hunter: 40th Anniversary The Frida Cinema — 305 E. 4th St., Santa Ana Michael Cimino's violent and chilling take on the aftermath of the Vietnam War won five Academy Awards. It follows the lives of three Pennsylvania steelworkers — played by Robert DeNiro, John Savage and Christopher Walken — who are forever changed after they're captured and tormented by the Viet Cong. COST: $7 - $10; MORE INFO

WEDNESDAY, DEC. 26; 8 p.m. A Kwanzaa Rap Battle UCB Franklin — 5919 Franklin Ave., Franklin Village Kwanzaa takes place from Dec. 26 to Jan. 1, so celebrate its first night by watching comedian make fun of each other in a comedy rap battle. Hosted by Zora Bikangaga and Shaun Fisher, battlers include Cart Tart, Ronnie Adrian, Leonard Smith Jr., Sherry Cola, Ross Bryant and Sam Epstein. COST: $7; MORE INFO

THURDAY, DEC. 27; 1:30 p.m. Timeless Melodies: Famous Movie Songs Bowers Museum — 2002 N. Main St., Santa Ana Music historian and aficionado Larry Maurer presents a cinematic survey of songs that helped imprint unforgettable scenes on screen. The first lecture in the series includes songs that helped usher in the "talkies," sustained America during the Great Depression and through two world wars. COST: $9 - $12; MORE INFO

THURSDAY, DEC. 27; 8 p.m. Erykah Badu The Novo DTLA — 800 W. Olympic Blvd., downtown L.A. Badu shares her mix of soul, funk and jazz, performing selections from her 20+ year career, which launched in 1997 with the release of Baduizm. All ages. COST: Tickets $75 - $125; MORE INFO

THURSDAY, DEC. 27; 8 p.m. Boast Rattle: Was It Really That Bad? Dynasty Typewriter — 2511 Wilshire Blvd., Westlake Do you think the year was a complete downer? Head into 2019 with a new attitude as comedians try to compliment 2018. They'll take turns talking about a positive, funny or ridiculous thing that brought them joy in the last year. Hosted by Kyle Ayers with surprise guests, the lineup includes Sara Benincasa, Ron Funches, Kara Klenk, The Puterbaugh Sisters, Dave Ross and Blair Socci. The show is 18+. COST: $10 - $15; MORE INFO

THURSDAY, DEC. 27; 7:30 p.m. The Shop Around the Corner / Christmas in Connecticut Aero Theatre — 1328 Montana Ave., Santa Monica Watch the 1940 Ernst Lubitsch romantic comedy in 35mm. It stars Jimmy Stewart and Margaret Sullivan as co-workers who anonymously fall in love through letters. The film inspired Nora Ephron's You've Got Mail. Introducing the film is Lubitsch's daughter, Nicola Lubitsch. The double-feature concludes with Peter Godfrey's 1945 comedy starring Barbara Stanwyck. COST: $12; MORE INFO

THURSDAY, DEC. 27; 8 p.m. Sofia Wolfson / Sharon Silva / A.O. Gerber Bootleg Theater, Bar Stage — 2220 Beverly Blvd. Westlake Listen to music from young, up-and-coming artists, headlined by singer-songwriter Sofia Wolfson, who played her first gig at 13 and released her first album at 16. Also on the bill are other L.A. musicians Silva and Gerber. This event is 21+. COST: $10; MORE INFO

WRITTEN BY  BY CHRISTINE N. ZIEMBA FOR LAIST.COM https://laist.com/2018/12/24/18_awesome_events_happening_this_holiday_week_in_socal.php?_ga=2.136730038.701895143.1545667881-1943127460.1545667881

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EXPERT OPINION: The 8 Need-To-Know Things To Prevent Real Estate Money Loss

What are the factors that prevent someone from losing money in real estate?

Written by David Greene for FORBES: We all know some who frequently lament their decision to invest in real estate. Constantly blaming the market, or real estate as an industry, they believe the entire process is predicated on luck and timing, an exercise in chance. For people who have lost money investing, it’s easy to sympathize with them-but are their beliefs regarding results being beyond their control actually accurate?

Many who bought property between 2001 and 2007 lost money. These were years where prices aggressively increased, largely due to loose lending practices that allowed people to buy homes they could not afford using loans that were only temporarily manageable. Prices continued to climb until these loans reset, at which point houses fell into foreclosure, prices continued to drop, and the overall housing market spiraled into chaos. But was this truly unavoidable or impossible to predict? Is it justified to live in fear of something like this happening again? If you believe the answer is “yes”, you’re not likely to get started investing in real estate. The constant fear of an anvil dropping on your head like a looney toons cartoon will prevent you from ever taking any serious type of action. This will also prevent you from having any serious chance of success. The consequences for incorrectly assuming real estate investing is a gamble are grave.

If you believe the answer is “no”, it begs the question-what are the factors that prevent someone from losing money in real estate? Is it just a matter of timing the market? Is it found in getting only great deals? Or are there more pieces to the puzzle?

If we can understand what causes folks to lose money in real estate, we can take preventive measures to ensure it doesn’t happen to us. While no investment is without risk, smart investors understand there are certainly precautions that can be taken to mitigate that risk. In my nearly ten years of investing in real estate I’ve found there are certain steps to take that have a big impact on avoiding the wrong deal. I’ve spent a considerable amount of time listening, interviewing, and speaking with real estate investors. I’ve found patterns in what went well, and I’ve also seen patterns in what led to things going horribly wrong.

The following is a list of the things I’ve noticed often lead to catastrophe. Avoiding these mistakes will greatly increase your odds of real estate investing success.

Negative Cash Flow

If you want to make money in real estate, you should plan on holding an asset for a long period of time. Good things happen when real estate is owned over the long haul. Loans are paid down, rents tend to increase, and the value eventually goes up. The number one problem preventing investors from winning the long game is buying a property that loses money every month. Don’t buy real estate assuming the price will go up and you can sell it later(this is an issue I’ll cover a little later). Nobody knows what the market is going to do. This is why trying to time the market is a bad strategy to base your decisions on. Instead, only buy properties that generate more income each month than they cost to own. By avoiding “negative cash flow”, you are protected from market dips or stalling home prices. You only lose money in real estate if you sell in unfavorable conditions or lose the asset to foreclosure. Ensuring you earn positive cash flow each month will put the power for when you exit the deal back into your hands.

Lack Of Reserves

If lack of cash flow is the number one culprit for losing money in real estate, lack of reserves is number two. Too many variables are involved in owning rental property to be able to accurately determine when unexpected expenses will hit, and how much they’ll be. Whether it’s an HVAC unit going down, a roof leak, or a water heater busting, there will always be something you need to repair or replace.

None of this takes into consideration evictions, destroyed property, and more. While you’ll eventually end up positive if you hold a property long enough, there will be times when your bleeding cash. Having a sufficient amount of reserves during these times is crucial to your success. Conventional wisdom suggests keeping six months of expenses in reserves for each property. While this number can vary for individual people with unique financial situations, make sure you have enough set aside to comfortably weather the storm when Murphy’s law hits.

Following The Herd

As Warren Buffet stated, “Be fearful when others are greedy and greedy when others are fearful”. While many of us know this to be true, the fact remains too many people still follow the herd. Many bad decisions are made when they are based on what others are doing, rather than basing them on sound financial principles.

It may be tempting to follow the herd, but understand it is a false sense of security. Just because everyone else is buying doesn’t mean you should too. In fact, it may be the opposite. The best deals I ever bought were purchased when no one else was buying. The only reason they were for sale is because someone else lost them who originally bought them when everyone else was buying! Make decisions on fundamentals like cash flow, ROI, equity, and a solid long term plan-not on what you see everyone else doing.

Betting On Appreciation

This is the number one reason I’ve seen for those who lose properties to foreclosure. Amateurs buy a house assuming it will go up in value and they can sell it later. Professionals buy under-valued properties in solid locations that produce positive cash flow. This gives them the flexibility to exit the deal when it makes financial sense to do so. When someone bets on appreciation, doesn’t have positive cash flow, and doesn’t keep accurate reserves, they are gambling on the market continuing to rise to bail them out from a risky investment.

Buying in Bad Neighborhoods

While we all know the first rule of real estate (location, location, location), there is also still the temptation to buy a questionable property in an area that seems too good to be true. When it seems too good to be true, it usually is. While homes in undesirable locations can look great on paper (read, in a spreadsheet) the reality is they almost always look better in theory than they’ll be in practice.

When you buy in an area where good tenants won’t want to live, you’ll be forced to rent to less than desirable tenants with lower credit scores, less reliable income streams, and a worse rental histories. The cons just won’t justify the pros. Having to pay for multiple evictions, destroyed homes, and theft will cause even the most stalwart investors to lose their cool. Avoid the temptation and only buy in areas where reliable tenants want to live.

Underestimating Rehab Costs

Whether you’re a total newbie or a seasoned pro, everybody makes this mistake. Experienced investors assume their rehabs will go over budget and over schedule. They prepare for this by writing these overages into their budgets and planning for them accordingly.

There is no use in running out of money with 10% of your rehab left to go! You can’t rent out the property and can’t generate income unless 100% of the property is ready to be dwelled in. Don’t be the person who makes the mistake of buying a property then running out of money before it’s ready to be rented out. Don’t bet on contractors, don’t bet on estimates, and don’t bet on numbers in a spreadsheet. Make sure you bet on yourself and have enough money set aside to finish your rehab, even if you’re told that’s unnecessary.

Planning on Doing The Work Themselves

All too many people have assumed they would save on a deal by doing the rehab work themselves rather than paying someone else. While there are some people who can pull this off, it’s a mistake to assume you can pay too much for a property, or not have enough in reserves to pay for the work, simply because you plan on doing the work yourself.

It’s been said “The man who represents himself in a court of law has a fool for a client.” The same can be said of the person who assumes they’ll do the rehab work themselves to avoid budgeting correctly. You don’t know which direction your life will take, what time you’ll have later, or what unexpected problems will be uncovered once you start the rehab. If you’re able to do the work yourself, consider that icing on the cake-just don’t count on it.

Failing to Educate First

The final lesson I’ve learned from those who have lost money in real estate is that they didn’t understand what they were getting into until after they had committed to purchasing a property. Certain decisions like buying a property, starting a rehab, or putting money into a deal, can’t be taken back once they are made. The time to realize you’re not prepared, or it’s the wrong deal, is before you pass the point of no return.

If you want to invest in real estate, that’s great! Start by educating yourselfnow, before you’re committed, then use that information to help you make the best choice possible. I wrote the book “Long Distance Real Estate Investing: How to Buy, Rehab, and Manage Out of State Rental Property” to help save others money by learning from my mistakes. I document my systems, strategies, and the criteria I use to make my own decisions so others can avoid catastrophe. This is just one example of ways you can invest a very small amount of money to save yourself thousands of dollars in mistakes.

Reading articles like this show a propensity for avoiding mistakes and saving money. I encourage you to read as much as possible before jumping in. Other resources include websites like BiggerPockets.com, podcasts, and online blog sites where you can learn from the wisdom of others.

No investment is without risk, but that doesn’t mean we need to live in fear. Start by avoiding the eight mistakes I’ve outlined here and you should be well on your way to growing wealth through real estate. Written by David Greene for FORBES.com

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New Lyft app will give directions to scooters & public transit across LA

As Lyft launches e-scooters in Los Angeles today, the ride-hailing company announced it has expanded an app update to help residents find its dockless vehicles and connect to public transit in LA.

Users in LA who have updated the Lyft app will see a feature where they can view nearby transit routes with real-time arrival information, as well as the distance to the nearest Lyft scooters, which will start out on the Westside in Venice, Westwood, Sawtelle, Mar Vista, and Brentwood.

Instead of routing a car to the user’s location, typing in a destination will allow users to switch between modes, and provide walking or riding directions to the nearest scooter or transit stop.

The new app feature, originally launched in September as a complement to the rollout of scooters in Santa Monica, marks a notable shift in Lyft’s strategy. Although the startup was purportedly founded with a goal of reducing car ownership, in recent years Uber and Lyft have been blamed for making traffic worse by adding more trips to already-congested cities and taking riders away from transit.

Now the ride-hailing company is providing data and access to vehicles that can make it easier for its users to avoid cars altogether.

Adding transit and scooters is part of Lyft’s mission to take 1 million cars off the road by the end of 2019, according to a blog post by Lyft co-founder John Zimmer. Recently the company announced that it was offsetting all its emissions with renewable energy in an effort to go completely carbon-neutral.

In September, Santa Monica launched its 18-month scooter and e-bike program with recently selected partners Uber, Lyft, Bird, and Lime. It was the second city to debut Lyft’s scooters, which launched in Denver earlier that same month. Lyft also has a permit to deploy e-bikes in Santa Monica, but hasn’t launched them yet.

Lyft’s e-scooters and e-bikes will be direct competitors to Uber’s Jump e-bikes, which are also on LA’s Westside now, and Jump scooters, which the rival ride-hailing company debuted in Santa Monica in October.

Many trip-planning apps are providing more multimodal information. Uber recently redesigned its app with an option to toggle to “bike or scooter” and plans to add transit and rental car information as well.

WRITTEN BY ALISSA WALKER FOR CURBED LA

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IT USED TO SNOW in Los Angeles with Some Regularity--  That Ended in 1962. Here’s why.

Los Angeles is in the middle of a 56-year snow drought, and with each passing year snowfall becomes increasingly less likely. (FROM KCET.COM).

Snow once fell on the Los Angeles coastal plain with some regularity – on average, about once per decade. Since official records were first kept in 1877, the downtown Los Angeles weather station observed measurable snowfall three times, in 1882, 1932, and 1949, and news reports recorded snowfall elsewhere in the Los Angeles Basin in 1913, 1921, 1922, 1926, 1944, 1957, 1962 – and then never again, for 54 years running.

Los Angeles City Hall towers over slushy streets on Feb. 21, 1944. Photo courtesy of the Los Angeles Times Photographic Archive, UCLA Library. It’s still technically possible in 2016 - snowfall at higher elevations and in inland valleys is more common; a 1989 system dropped several inches on the San Fernando Valley but missed the coastal plain, and a 2007 storm dusted the canyons above Malibu with powder and dropped hail-like graupel on L.A.’s Westside.

“Given the right meteorology we could still have a ‘White Christmas,’” Bill Patzert, a climatologist at NASA’s Jet Propulsion Laboratory, told me. “but In 2050, no way!”

Of course, snowfall has always been relatively unusual on the coastal lowlands of Southern California. “Because of our proximity to the Pacific,” Patzert said, “below-freezing temperatures are very rare. Our Mediterranean climate makes us mellow meteorologically. It smooths out the extremes in weather.”

An L.A. blizzard, in other words, has always inhabited the margins of possibility, but a snow drought of this length seems to be unprecedented. For generations, Angelenos could count on waking up, at least once or twice in their lives, to a wintry scene: children pelting each other with snowballs beneath powder-dusted palm trees.

Snow on the Cahuenga Pass, February 7, 1948. Photo courtesy of the USC Libraries – Los Angeles Examiner Collection.   No storm incited as much wintry chaos as a January 1949 system that lingered for three days and dropped several inches of snow on the lowlands. Icy conditions forced the CHP to close the Pacific Coast Highway. White powder dusted the tops of palm trees from Santa Monica to Laguna Beach. In the San Gabriel Valley, orange growers burned smudge pots in a futile effort to protect their crops from frost, and in the Santa Monica Mountains the canyon roads became impassable; an accumulated foot of snow trapped nearly twenty automobiles in Laurel Canyon. The Southern California Gas Company reported record demand as nighttime lows dipped into the 20s and furnaces blazed around the clock.

It was a Jan. 21, 1962, storm that last deposited even a trace amount of snow on downtown Los Angeles. Only flurries fell on the Los Angeles Basin, but the snowfall was much heavier in the Santa Monica Mountains and San Fernando Valley. The 101 freeway became a slushy, treacherous skid zone through the Cahuenga Pass. Highway crews were caught off guard; Topanga Canyon Road closed until a snowplow could arrive, as did Sepulveda Boulevard. And no one was caught more unprepared then Richard Nixon, then campaigning for governor, who that day appeared in Sunland-Tujunga’s March of Dimes parade. Sitting in an open car in his light summery suit, Nixon waved to thinning crowds as sometimes-heavy snowfall chilled the parade route.

Why do such wintry scenes now seem to be a thing of the past?

KCET asked three scientists to speculate about the causes behind L.A.’s snow drought: JPL’s Patzert; Eric Boldt, a meteorologist with the National Weather Service’s Los Angeles office; and Daniel Swain, a climate scientist at UCLA’s Institute of the Environment and Sustainability.

Skiing on the UCLA campus during the 1949 snowstorm. Photo courtesy of the USC Libraries – Los Angeles Examiner Collection. They cautioned me that they could only draw tentative conclusions from the limited data. “Part of it could just be luck,” Boldt noted. Swain echoed him: “It’s often hard to come to conclusions about trends in the occurrence of events that were very rare in the past, and potentially have become even more so.”

But all three pointed to a culprit you’ve no doubt already suspected: a warming climate.

Los Angeles today is roughly five degrees Fahrenheit warmer than it was a century ago, according to Patzert. We can attribute about half that increase to the urban heat island effect – artificial ground surfaces soaking up more thermal energy than natural ground cover. “The other half,” Patzert said, “is man-made global warming.”

Swain pointed to a “strong atmospheric warming trend California has experienced since the 1950s “It’s pretty easy to see that temperatures have drifted progressively farther away from the freezing point over that interval.”

And Boldt noted that minimum temperatures have been especially sensitive to the warming trend. “We routinely see [them] breaking records more so than high temperatures,” he wrote. Our nights, in other words, are getting even warmer than our days.

We might never see another snowy day in Los Angeles.

Five degrees of warming may have pushed a weather phenomenon from the margins of possibility into the realm of pure fantasy. We might never see another snowy day in Los Angeles.

Read the full article, written by Nathan Masters for KCET here: https://www.kcet.org/shows/lost-la/why-hasnt-it-snowed-in-los-angeles-since-1962

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TAXES: Six Deductions You'll Lose on Your 2018 Return

TO SUMMARIZE: 

The Tax Cuts and Jobs Act raised the standard deduction, did away with personal exemptions and curbed a slate of itemized deductions.

Before the tax overhaul, about 30 percent of taxpayers took itemized deductions, according to the Tax Policy Center.

The 2017 tax year marked the last time you could file under the old code, so 2018 tax returns will follow the new rules.(from CNBC.com)

If you were hoarding receipts in a shoebox with the hope of claiming a big break on your 2018 taxes, prepare to be disappointed.

That's because the Tax Cuts and Jobs Act placed steep limits on itemized deductions, including lesser-known breaks for the fees you pay your tax preparer and unreimbursed employee business expenses.

The new tax law also eliminated personal exemptions and nearly doubled the standard deduction to about $12,000 for singles and $24,000 for married joint filers — which will likely result in fewer people taking itemized deductions on their 2018 returns.

"The standard deduction is so high," said Cari Weston, CPA and director of tax practice and ethics at the CPA institute. "You might not itemize in the future if you were itemizing before."

Here are six itemized deductions that are capped or gone altogether from your 2018 return.

State and local taxes

If you reside in New York, New Jersey or California, odds are you're feeling the squeeze from property tax, real estate taxes, and state and local income levies.

Meanwhile, 45 states and the District of Columbia levy statewide sales taxes — and municipalities in 38 states add on a layer of local sales taxes, too, according to the Tax Foundation.

Before the tax overhaul, you were able to nab an itemized deduction — known as the state and local tax deduction or SALT — for these levies.

Kiss those breaksgoodbye — at least to a certain extent. The new tax code places a $10,000 cap on SALT deductions, which could dent returns for people living in high-tax areas.

In 2015, the average SALT deduction for New Yorkers who claimed the tax break was more than $22,000, according to the Tax Policy Center.

Medical and dental expense

The tax overhaul temporarily lowered the threshold for the medical expense deduction.

For the 2017 and 2018 tax years, you're able to claim an itemized deduction for out-of-pocket health-care costs to the extent they exceed 7.5 percent of your adjusted gross income.

Starting in 2019, that threshold will leap back up to 10 percent — where it had previously been for most taxpayers.

Bear in mind that while the IRS has lowered the bar for the amount of medical expenses you must incur in 2018, fewer people all around are likely to itemize their deductions due to the higher standard deduction.

As a result, this break may no longer be available to you.

Tax prep fees and more

If you hoard receipts, you're probably familiar with the grab bag of tax breaks, known as the miscellaneous itemized deductions.

Back in 2017, before the tax overhaul, you were able to deduct unreimbursed employee costs, tax preparation fees, investment expenses and more — as long as they exceeded 2 percent of your adjusted gross income.

Under the new tax code, these breaks are out of the picture as of 2018.

Home mortgage interest

Prior to the Tax Cuts and Jobs Act, you were able to write off the interest for up to $1 million in mortgage debt. If you took out a home equity loan or line of credit, you were also able to deduct the interest paid on loans of up to $100,000.

Now you can only claim a deduction for interest on up to $750,000 in qualified residence loans — that is, the combined amount of loans you use to buy, build or substantially improve your dwelling and second home.

The IRS has also applied new restrictions to interest claimed for home equity loans and lines of credit: You can only take the break if you were using the money to build or improve your home.

The deduction is off the table if you took a HELOC to use for personal expenses.

Charitable giving

The IRS continues to reward taxpayers with philanthropic inclinations — as long as they give generously.

The charitable donation deduction is still on the table, even after the tax overhaul. The only difference now is how many people will be able to claim it.

A combination of higher standard deductions and limitations on itemized deductions means that fewer people will be itemizing on their 2018 returns.

In turn, that could put the charitable deduction out of reach for those taxpayers.

If you fall just short of the new standard deduction of $12,000 (single) or $24,000 (married and filing jointly), you might be able to itemize in 2018 if you "bunch" multiple years of charitable donations and get over the hurdle.

Casualty and theft losses

Winter is especially dangerous when it comes to house fires. Half of all home heating fires take place in December, January and February, according to the National Fire Protection Association.

Under the old tax code, you were able to claim an itemized deduction for property losses that aren't reimbursed by insuranceand that occur unexpectedly. This would include damage from fire, accidents, theft and vandalism, as well as natural disasters.

You were able to deduct the losses to the extent they exceed 10 percent of your adjusted gross income.

Now, you can only claim personal casualty losses if the damage is attributable to a disaster declared by the president. This change is in effect from 2018 through the end of 2025. The 10 percent threshold of AGI still applies.

In 2016, the most recent year available, 154,274 tax returnsclaimed a casualty or theft loss deduction, according to the IRS.

WRITTEN BY DARLA MERCADO FOR CNBC.COM

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MARKET NEWS: Existing Home Sales Rise 1.4 Percent; First Increase in 6 Months

“As more inventory enters the market, home price growth slows more meaningfully- this allows for much more manageable, less frenzied buying conditions.” FROM HOUSINGWIRE.COM

Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.4% from September to a seasonally adjusted rate of 5.22 million in October, according to the latest report from the National Association of Realtors. However, the report revealed sales are 5.1% below October 2017's rate.

“After six consecutive months of decline, buyers are finally stepping back into the housing market,” Yun said. “Gains in the Northeast, South and West – a reversal from last month’s steep decline or plateau in all regions – helped overall sales activity rise for the first time since March 2018.”

The median existing home price for all housing types increased to $255,400, climbing 3.8% from last October’s rate of $246,000. This marks the 80th straight month of year-over-year gains.

Total housing available for sale declined from September, retreating from 1.88 million existing homes on the market to 1.85 million in October. But it's up from last year’s total of 1.80 million.

Unsold inventory rests at a 4.3-month supply at the current sales pace, decreasing from last month’s total of 4.4. The total was 3.9 months a year ago at this time.

“As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully,” Yun continued. “This allows for much more manageable, less frenzied buying conditions.”  

Properties stayed on the market an average of 33 days in October, moving up from 32 days in September but still down from 34 days in 2017. The report states that 46% of homes stayed on the market for less than a month.

The report states, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed from 4.63% the month prior to 4.3% in October and the average commitment rate for all of 2017 remained at 3.99%, according to Freddie Mac.

“Rising interest rates and increasing home prices continue to suppress the rate of first-time homebuyers. Home sales could further decline before stabilizing,” Yun explained. “The Federal Reserve should, therefore, re-evaluate its monetary policy of tightening credit, especially in light of softening inflationary pressures, to help ease the financial burden on potential first-time buyers and assure a slump in the market causes no lasting damage to the economy.”

First-time buyers were 31% of sales in October, a decrease from 32% in September and October of last year. NAR revealed that the annual share of first-time buyers remained at 33%.

“Despite this much-welcomed month over month gain, sales are still down from a year ago, a large reason for which is affordability challenges from higher interest rates,” NAR President John Smaby said. “Prospective buyers looking for their dream home in this market should contact a Realtor as a first step in the buying process to help them navigate this more challenging environment.”

Single-family home sales edged up from a seasonally adjusted annual rate of 4.58 million in September to 4.62 million in October 5.3% below 4.88 million a year ago. The median existing single-family home price was $257,900 in October, increasing 4.3% from October 2017.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 600,000 units in October, rising 5.3% from September, but down and 3.2% from a year ago. The median existing condo price was $236,200 in October, slightly decreasing 0.2% from 2017.

Existing home sales in the Northeast grew 1.5% to an annual rate of 690,000 in September, which is a 6.8% above a year ago. The median price in the Northeast increased 3% from October 2017 and came in at 280,900.

In the Midwest, existing-home sales inched back from the prior month at an annual rate of 1.27 million and 3.1% below October 2017. The median price in the Midwest was $197,000, increasing 2.4% from this time last year.

Southern existing-home sales moderately rose 1.9% to an annual rate of 2.15 million in October, down from 2.3% last year. Notably, the median price in the South was $221,600, increasing 3.8% from October 2017.

Existing home sales in the West increased 2.8% to an annual rate of 1.11 million in October, which is a whopping 11.2% below October 2017. The median price in the West was $382,900 increasing 1.9% from this time last year.

TIAA Bank Executive Vice President John Pataky said this report doesn’t inspire too much confidence in the existing home market but isn’t as gloomy as it might have been.

“One trend that could be helping is the fact that rising rates, coupled with prohibitive prices and supply in new homes, might be driving some buyers to the existing-home market,” Pataky continued. “We’ve found that new home buyers in particular are attracted to urban markets with a high concentration of existing properties, which may also be buoying these numbers.” WRITTEN BY ALCYNNA LLOYD FOR WWW.HOUSINGWIRE.COM

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LOCAL: Larchmont Village Neighborhood Considers HPOZ

FROM LARCHMONT BUZZ: Dozens of residents attended the semi-annual meeting of the Larchmont Village Neighborhood Association at Van Ness Elementary School to learn more about the possibility of placing a Historic Preservation Overlay Zone (HPOZ) over the more than 1200 residences in the neighborhood of single and multi-family homes.

LVNA President Charles D’Atri introduced HPOZ Steering committee member Karen Gilman who has been leading the effort to investigate the process with the City as well as gauging the level of interest among residents..Gilman reported that over two years ago, volunteers had started a preliminary survey of residences in the area between Melrose Avenue and Beverly Blvd and between Arden Blvd and Wilton Place,  noting that at the time,  approximately 75 percent of the structures would be considered historic to the period of construction the mid 1920s.

(Photo courtesy of Larchmont Buzz/ www.larchmontbuzz.com) According to ken Bernstein, City Planner at Office of Historic Resources there are over 21,000 properties in Los Angeles’s 35 historic districts, second only to New York, with 100 historic districts with over 33,000 properties.  

He commended the association for the outreach they were doing to residents and the initial survey work they completed which Bernstein said is the first step to designating a historic district. Not every individual property needs to be  historically significant, explained Bernstein. But the collective properties, when taken as a whole,  make the case that the neighborhood has significant, unique character and sense of place that contributes to the sense of character of the city of LA.

CD4 Senior Planning Deputy Emma Howard said her office usually gets involved when people are having issues. “We love community self-determination, we love preservation of single family homes because Los Angeles is a city of neighborhoods,” explained Howard.  “There will always be a debate about individual rights versus communal benefits,” said Howard.  “The HPOZ can be a way to keep neighborhood character but it can also be a challenge for individual homeowners. An HPOZ is a big lift, and we want to see that you want to take on that lift.”

Howard told the group of her office’s experience in Brookside where she said she told them to go door to door and sometimes they got two responses.“This is an opportunity to sit down and decide who we are and if we really want this,” said Howard.

In closing the discussion, association president, D’Atri said the association will be waiting to hear back from residents to determine if there is support to proceed with further work to secure an HPOZ and encourage residents to send in their forms.

FOR THE FULL ARTICLE WRITTEN BY PATRICIA LOMBARD FOR LARCHMONTBUZZ.COM GO HERE: 

https://www.larchmontbuzz.com/featured-stories-larchmont-village/larchmont-village-neighborhood-considers-hpoz/

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MARKET: Nearly all Homes in San Francisco are Worth Over $1 Million (Plus more CA stats)

New study ranked 100 U.S. metro areas by how quickly they are adding million-dollar homes, year-over-year.

A whopping 81% of the homes in the metro San Francisco area cost $1 million or more, according to a new report from the housing website Trulia. That’s an increase of 13.7% since October 2017.(FROM MARKETWATCH.COM)

Trulia ranked 100 U.S. metro areas by how quickly they are adding million-dollar homes, year-over-year. San Francisco didn’t come out on top of that ranking — its Bay Area neighbor San Jose just edged it out for the No. 1 spot, with a 14.2% year-over-year increase in million-dollar homes. (LOCAL NOTE: Los Angeles Ranks at Number 6 with 19.6% of it’s homes over a million).

But San Francisco tops the list of cities when it comes to the highest percentage of million-dollar homes overall in 2018.

In San Jose, 70% of the housing stock is valued at $1 million or more, good for second place, and in yet another Bay Area city, Oakland, 31% of homes are worth more than $1 million. From there, the list drops off sharply, with no other metro area topping 20%.

These million-dollar cities are anomalies in the U.S.: Just 3.6% of all homes nationwide are worth $1 million, Trulia found.

Of course, a major reason San Francisco has become so pricey: well-off tech workers are moving in and fighting for a limited supply of homes. And, to be sure, San Francisco’s smaller size and population compared with other pricey cities -- notably, New York City -- makes for particularly extreme results in the data.

The spike in the city’s housing prices has happened fast.

In 2012, as the U.S. was still recovering from the 2007-09 recession, just 24% of San Francisco homes were worth $1 million or more. That climbed to 34.7% by 2013 and continued to steadily increase until 2018.

Prices in San Jose followed a similar pattern. In 2012, just 21.7% of homes there cost $1 million or more. That rose to 27.6% in 2013, 32.1% in 2014 and continued to rise until 2018, when 70% of homes in the city are now worth $1 million or more.

Many would-be home buyers would likely balk at those price tags. Nationwide, fewer people say they are planning to buy homes, according to the National Association of Home Builders, a trade group. Just 13% of Americans say they plan to buy a home within the next 12 months, marking the third quarter in which fewer and fewer people say they plan to become homeowners.

This is happening as mortgage rates continue to rise: The 30-year fixed-rate mortgage average is now near an eight-year high of 4.94%, as investors expect the Federal Reserve to continue raising rates.

But for San Franciscans, buying a home is just the beginning when it comes to cost of living. San Francisco is also the No. 1 most expensive metro area for raising a family, according to the progressive nonprofit think tank Economic Policy Institute. The basic budget for a two-parent, two-child household in the area is $148,439 per year, EPI found. The median family income in the U.S. is just $38,203 per year.

Many of the cities that boast the highest number of million-dollar homes are in California, and not just in the Bay Area. Some 20.2% of the housing stock in Orange County, Calif., and 19.6% of homes in Los Angeles are valued at or above the $1 million mark.

That’s one big reason a million more people moved out of California from 2006 to 2016 than moved in, according to the Census Bureau.

WRITTEN BY MARA LAMAGNA FOR MARKET WATCH: https://www.marketwatch.com/story/one-stat-reveals-the-absurdity-of-san-franciscos-pricey-housing-market-2018-11-12

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CITY: The Beverly Center Unveils its $500-Million Makeover

Traditional malls are a dying breed in the U.S. ---that statement has been said so many times by industry experts that’s it’s almost taken as a fact. But the owners of the Beverly Center in Beverly Grove strenuously disagree. (FROM THE LA TIMES & THE REAL DEAL LA)

Taubman Centers Inc. just completed a massive $500 million renovation of the 36-year-old, eight-story mall at 8500 Beverly Boulevard. The company is betting that modern food options, art, and the addition of large windows and skylights will help bring in shoppers, according to the Los Angeles Times.

The project — which the company announced on Friday was complete — is a risk and not one many other mall owners have taken.

Taubman also set up the mall’s central area as a stylish seating area around a three-story-tall LED screen. The screen is currently showing art by artist Refik Anadol. The Brutalist-style exteriors of the mall also got a makeover.

Food options were also significantly improved, with new additions like Italian restaurant Cal Mare. San Francisco chef Joshua Skenes is also set to open a three Michelin star restaurant next year.

The hulking structure was the height of urban chic when it opened in 1982 in a choice location next to Beverly Hills and West Hollywood, not far from the fashionable Rodeo Drive and Melrose Avenue retail strips. The eight-story mall boasted the first Hard Rock Cafe in the United States and was a magnet for tourists as well as prosperous locals. But tastes changed in recent years in favor of sun-drenched outdoor “lifestyle” centers that combine shopping with dining and entertainment, and many struggling traditional malls opted for makeovers. Beverly Center’s closest competitors, the pioneering Grove lifestyle center and the recently revamped Westfield Century City, take advantage of Southern California’s sunshine and encourage visitors to dine, meander and kick back in the outdoors when they’re not browsing in stores.

Like other indoor urban malls of its era, the Beverly Center was also tightly focused on customers arriving by car, turning a blank face to the streets surrounding its oddly shaped block: 3rd Street and Beverly, La Cienega and San Vicente boulevards.

“We were like a bunker,” Taubman said, “and we didn’t connect to 3rd Street or the surrounding community.”

As part of the makeover, the owners punched an entrance into 3rd Street that has a wide drop-off station, optional valet parking and Room Service, a members’ club catering to stylists who assemble wardrobes for film and television shoots or wealthy clients.

READ THE FULL LA TIMES ARTICLE, BY ROGER VINCENT HERE: 

http://www.latimes.com/business/la-fi-beverly-center-renovation-20181029-story.html

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URBAN UNICORNS: Top Buyer's Bargain Neighborhoods in U.S. Biggest Cities

Just how high can home prices go in America’s biggest cities? That’s the question many prospective buyers are asking as they wait on the sidelines of the nation's top housing markets—watching for that magical time when crazy-high price tags get slashed and they can sprint toward homeownership. FROM REALTOR.COM

That day hasn't come yet. Sure, the pace of home price growth nationally has slowed a bit in recent months. However, we’re still far from an overall buyer's market, with prices continuing to move upward in most places. And that climb has been the most pronounced in the big cities. 

However, here are neighborhoods in the country’s biggest cities where home buyers have the upper hand—places where prices are affordable, plenty of homes are for sale, crime is relatively low, and the work commute is reasonable.

The Realtor.com data team set out to find these urban unicorns. To come up with the list, Realtor.com analyzed the ZIP codes in the nation's largest cities, measured median prices, days on market, and the share of homes for sale. And included only ZIP codes with at least 12 homes on the market in any given month.To ensure these were places where folks would actually want to live, we eliminated neighborhoods where commuting to the city center by car or public transit takes more than an hour in rush hour, and we knocked off places with high crime rates. Let's take a tour of the secret (and safe!) big-city neighborhoods that won't break the bank

1. New York, NY

Median city list price: $800,000 Buyer's haven: Astoria, Queens (ZIP code 11105) Median ZIP list price: $444,300 

For the past few years, Queens has been touting itself as the "new Brooklyn" as prices in that ultra trendy borough have gone nuts. There are still a few refuges here where folks can find reasonably priced homes, relative to the rest of New York City, and enjoy top-notch ethnic restaurants, craft cocktails, and plenty of fun things to do.Enter the Ditmars-Steinway section of multicultural Astoria.

The area is easily accessible to Manhattan and boasts plenty of condos co-ops town homes and modest—albeit pricey—multifamily brick homes

. The latter offers buyers a chance to rent out the other housing units to help with their mortgage payments. (Realtor.com looked only at single-family homes in our analysis.) “Proximity to Manhattan is one of the main reasons people like Astoria,” says Paul Halvatzis, a real estate agent with Amorelli Realty. “You can be in midtown in four or five subway stops, and the area is very safe.”

2. Los Angeles, CA

Median city list price: $650,000 Buyer's haven: Sylmar (ZIP code 91342) Median ZIP list price: $508,948 

It's so hard to find a true bargain in Los Angeles, more buyers are exploring areas that are a bit off the beaten path. Sylmar is a more rural neighborhood on the edge of L.A., about 45 minutes from downtown. It sits on the foothills of the San Gabriel Mountains and Angeles National Forest. And buyers there can still score some great deals.“There’s a lot of different types of homes here,” says local Realtor Mel Wilson. “You can get a two-bedroom condo in the $300,000 range or a single-family with property for horses or animals starting in the $500,000s.” The number of homes on the market is lower now than it's traditionally been, but more inventory has become available recently.

3. Chicago, IL

Median city list price: $325,000 Buyer's haven: Ashburn (ZIP code 60652) Median ZIP list price: $184,783 

After a long run of bidding wars, escalating home prices, and an exodus of residents to the low-tax suburbs of nearby Indiana, Chicago’s housing market is starting to come back down to earth. And bargain-savvy city dwellers are beginning to look in the southwestern neighborhood of Ashburn. The neighborhood boasts plenty of brick bungalows and ranches and is close to public transit and highways. Plus, it's just a 30-minute drive from downtown. It's getting an upgrade with beautification projects, lots of home renovations, and a slew of new independently owned stores, cafes, and restaurants.

4. Philadelphia, PA

Median city list price: $219,000 Buyer's haven: Pennypack Park/Holmesburg (ZIP code 19136) Median ZIP list price: $147,546 

Philadelphia’s Great Northeast, appropriately titled for its proximity to the city center, has become an increasingly desirable—and affordable—place to live.This ZIP code, which includes the communities of Pennypack Park and Holmesburg, features beautiful green spaces, old-school commerce corridors, and a swath of great restaurants. That area was founded around a gristmill in 1830. So its classic brick and fieldstone row homeshave long been occupied by hardworking, blue-collar workers.

More recently, as prices have steadily climbed in the neighborhoods surrounding the city's center, this has become an increasingly attractive area for 30-something first-time buyers. They appreciate the easy 20-minute commute to downtown, active civic association, and bigger homes, which often include a coveted garage.

5. Washington, DC

Median city list price: $599,000 Buyer's haven: Dupont Circle (ZIP code 20036) Median ZIP list price: $416,583

Dupont Circle is a safe, gay-friendly neighborhood with good public transit options; a thriving dining, drinking, and shopping scene; and a higher price per square foot that matches its many amenities. A wide mix of younger and older professionals have long called the neighborhood’s

beautiful row houses and brownstones

home. It's also home to embassies from various countries.As nice as it may be, Dupont Circle is considered a balanced market with a healthy mix of buyers and sellers. Prices remain reasonable because many of today's buyers are hotter for larger properties in neighborhoods that are farther out from the heart of DC but still boast a lively nightlife. These up-and-coming neighborhoods, offer more space for the money. As a result, prices in Dupont Circle have been coming down.“

6. Atlanta, GA

Median city list price: $350,000 Buyer's haven: Atlantic Station (ZIP code 30363) Median ZIP list price: $339,4040 Hotlanta has been on fire for the past few years, with prices rising steadily. But there are signs that the housing market is beginning to cool, as condo prices and sales are slowing. That’s making it easier to get into one of the chic high-rises in Atlantic Station with jaw-dropping views of the city skyline. The neighborhood is just north of the Georgia Institute of Technology and about a 20-minute bike ride from downtown Atlanta. There are plenty of single-family homesin the area, which seems a bit like its own little bubble within the city, with an open-air mall, restaurants, and an Ikea all within a 50-acre gulch that used to be an old steel mill.

7. Miami, FL

Median city list price: $399,000 Buyer's haven: Downtown Miami (ZIP code 33132) Median ZIP list price: $416,900

Miami's buzzy downtown also happens to be one of the city's few walkable neighborhoods, packed with world-class nightlife and even a few cultural institutions of note. It’s quite safe, too. That’s partly why the median list price here is slightly higher than the city’s. The other factor is the stronger supply of homes for sale in this part of the city.

As the South Florida real estate market has taken off, developers sought to cash in on downtown’s amenities, putting up high-end condos fast. There are now more luxury condos than there are buyers with big-enough paychecks to afford 'em—exacerbated by the drop-off in the international market. So sellers are lowering prices on condos and trying to attract buyers.

8. San Francisco, CA

Median city list price: $1,400,000 Buyer's haven: NONE

READ THE FULL ARTICLE, WRITTEN BY SARA VENTIRA WRITTEN FOR REALTOR.COM HERE: https://www.realtor.com/news/trends/the-best-value-neighborhoods-in-the-biggest-us-cities/

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THIS SUNDAY: The LARCHMONT FAMILY FAIR is back!! 12-5:30

Our Boulevard’s largest event of the year — the Larchmont Family Fair — is returning bigger and better than ever, while staying true to its small-town roots.

The Larchmont Family Fair – Is taking place THIS SUNDAY 10/28 and runs from 12-5:30 p.m. on Sunday, on Larchmont Blvd. between 1st St. and Beverly Blvd.

Young and old will enjoy a wide variety of booths from local schools and non-profits, along with games, activities, food, a petting zoo, and – of course – the traditional talent show, pie baking contest, pie eating contest, and Halloween costume contest.  Don’t miss it. See you there and Bring your friends and family!!!

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How To Invest Your $1.6 Billion Mega Millions Winnings

Jackpot fever is consuming the nation, but as the saying goes, "you have to be in it to win it". Despite the odds, the fantasy of winning may just be worth the $2 ticket price. (FROM FORBES.COM) One in 300 million. The odds aren’t great, but your chances of winning the massive Mega Millions lottery are as good as the next person. The current jackpot is estimated to be more than $1.6 billion.   According to the USA Mega lottery website, the lucky winner will take home approximately $687 million after taxes if he or she opts for the cash option -- life-changing wealth by any standard. It's fun just dreaming how would you spend or invest the money if you won. The opportunities would be endless. Well, almost.

Once you have shared the wealth with family members and your favorite charities, you would eventually have to get down to the business of investing your windfall. Here are a few suggestions to get you started.

Diversification is going to be the key to preserving your capital. It would include an allocation to private equity, public market stocks, hedge funds, real estate and fixed income --  similar to the model many endowments follow. Within each bucket, any single investment in a company, strategy or fund should not be larger than 3%. There is no need to take outsized bets. You would be in the "stay rich” game, not the “get rich” game. It is impossible to predict what your actual returns would be; but in the long run, you might expect to make roughly 5-6% on your investments annually, depending on your asset allocation blend, market conditions and your advisory fees. That would give you an annual allowance of over $30 million (before taxes) without eating into your principal. There are many tools available for forecasting returns by asset class. The projected gross returns in each asset class described below are from JP Morgan Asset Management.

Cash

Not that you would need “rainy day” money with a net worth of almost $700 million, but having a modest 5% allocation (roughly $35 million) of cash or liquid short-dated investments allows you to be nimble with investment opportunities as they arise. Also, it can come in handy if you find yourself in a situation where you need to quickly buy a yacht, jet or minor league baseball team. All sorts of surprises happen in life. Expected gross return: 2.0%

Real Estate

The allocation to real estate should not include your recently acquired beach mansion or chateaux in France. The primary purpose for an allocation to real estate is for the tax-efficient income and potentially attractive long-term total return. It also happens to give you an inflation hedge, which is important since inflation can be a primary driver of wealth erosion (look to Venezuela to see the devastating effects of hyperinflation). Investments should include both commercial (office buildings, hotels, warehouses, etc.) and residential properties (multi-family complexes like apartment buildings). These investments should also be diversified across geographies. Some of the best opportunities (and potential returns) are overseas. This is the hardest allocation to do-it-yourself. Hire a firm with expertise in the area and be prepared to spend time for due diligence at your chateaux. Expected gross return: 6%.

Private Equity

You can afford to have some illiquid investments when you have hundreds of millions of dollars to put to work. Private equity investments often require a 7-10 year commitment, but the returns have historically outpaced public markets. You can capture the “illiquidity premium” associated with tying up your money for such a long period. Allocations should include a variety of different strategies: traditional buyout funds, timber, private debt, venture capital, etc. Pick roughly ten funds across different market segments and geographies and allocate to them equally. Expected gross return: 7.25%

Hedge Funds

Hedge funds have not performed very well in the last few years compared to the US equity market. There are many explanations (or excuses) for the lackluster returns, but one reason is that most hedge funds are actually hedged! Few hedge funds have 100% long exposure to the stock market because their investors want a different/uncorrelated return stream. If investors wanted 100% beta to the S&P 500, they could simply buy a low-cost ETF. Hedge funds investors are waiting for the day when a dynamic, hedged portfolio outperforms the broad public stock market. Given the volatility of late, such a day may come sooner rather than later. Diversify your allocation to hedge funds by not putting more than a 3% weight to any one manager or fund and spread your money across several strategies: long-short equity, fixed income relative value, distressed credit, event-driven, etc. Expected gross return:  4.25%.

Public Equities

Unlike hedge funds, private equity funds or real estate, you can probably invest in public equities so long as you stick to going long on the market and don’t attempt to pick the next Google or Amazon. Boring, low-cost index funds or ETFs can give you exposure to the entire market. It should include an allocation to international and U.S. stocks in addition to emerging markets. The goal should be to try to get the market return rather than trying to beat the market. Leave the stock picking to the high-priced managers in your hedge fund portfolio. Expected gross return:  6%.

Fixed Income

Yes, yields are low, but you will need a steady source of income for your new lifestyle. Your house staff and army of accountants and lawyers will need to get paid; you don’t want to be in a situation where you are forced to liquidate one of your office towers to meet payroll. Also, fixed income has tended to zig when your other risk assets zag. That won't always be the case, but an uncorrelated return stream is the primary goal of investment diversification and explains why many of the largest long-term investors maintain at least some allocation to the bond market. You should spread the money around the different fixed income sectors: corporate bonds, municipal bonds, US Treasuries, agency mortgage bonds as well as some bonds from higher-yielding emerging market countries. Expected gross return: 3.5%.

As mentioned above, the anticipated blended annual gross return for this asset allocation is in the neighborhood of 5-6%. The goal, remember, is to stay rich and not make investments where you run the risk of losing everything. A 5% return on $687 million is $37 million per year -- sufficient for anyone to live a rock-star lifestyle. 

WRITTEN BY GARTH FREISEN FOR FORBES.COM

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NEW LISTING IN LOS FELIZ: Sophisticated, Mediterranean Estate With a View

NEW LISTING FROM CORE GROUP LA:   Located on THE premiere street in the foothills of Los Feliz, this sophisticated 1928 Mediterranean view estate retains much of its original integrity while being upgraded and meticulously maintained . DETAILS BELOW

DETAILS: 2340 NOTTINGHAM Los Angeles, 90027 www.2340Nottingham.com Listed at $3,700,000 5 Bedrooms 4 Bathrooms Pool 4,472 Sqrft www.coregroupla.com

OPEN HOUSE DATES: Sun. 10/21, 2-5 PM Tuesday 10/23, 11am-2pm

DESCRIPTION: Located on the premiere street in the foothills of Los Feliz, this sophisticated 1928 Mediterranean view estate retains much of its original integrity while being upgraded and meticulously maintained by the same owners for the past 44 years.  This 5 bedroom/3.5 bathroom pool home with a versatile floor plan provides the opportunity to move right in or re-imagine the space.  Dramatic two-story entry with sweeping staircase.  Large step-down living room with fireplace.  Dining room with beautifully appointed paneling.  Published art deco eat-in kitchen.  Separate sitting room with wet bar and wine cooler stepping down to casual family room overlooking the pool.  Pool changing room/maid’s with bathroom.  Guest powder room.  Upstairs:  Master suite with luxurious bathroom, steam shower, and soaking tub overlooking city views.  Office connected to master suite. Three additional bedrooms, one beautifully appointed as walk-in closet, Deco Jack & Jill bathroom.  Separate large office/gym with walls of windows has outstanding city views.  Lushly landscaped and gated property offers superb curb appeal.  Attached two-car garage. 

FOR SHOWING INSTRUCTIONS OR ANY INFORMATION CONTACT:   www.coregroupla.com 323.762.2560 | 323.762.2561 pete@coregroupla.com

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How to Invest in Real Estate WITHOUT Buying Property: 10 Ways

THE STREET.COM: If buying property is too expensive of an investment for you, it's not only way you can add real estate to your investment portfolio. There are plenty of ways to have a stake in the real-estate game.

Here are 10 ways you can invest in real estate without actually having to buy any property.

1. Invest in Real Estate Investment Trusts (REITs)

A REIT, or real estate investment trust, is a company that either owns or finances real estate that produces income. REITs invest the majority of their money into real estate, and it's how they make the majority of their income. There are REITs that focus on both residential and commercial property. Most REITs are equity REITs, but some trade in mortgages instead of actual properties. Perhaps most important for you, the investor, is that at least 90% of the taxable income it pays is via dividends to the shareholders. So researching thriving REITs and purchasing shares in them has potential as a profitable investment. 2. Invest in Real Estate Mutual Funds Real estate mutual funds differ somewhat from REITs. Whereas a REIT is an actual company, mutual funds are simply investments pooled together and overseen by an investment manager. A mutual fund allows investors to have diversified their portfolio both in terms of having a mutual fund and having real estate. Like with other sorts of mutual funds, you can choose ones that are growth-oriented or income-oriented. As a diversified asset, they are designed with the intention of mitigating risk, but they are still vulnerable to the risks inherent in real estate. If a real estate-related risk negatively affects one of the investments in the fund, it's likely to impact a lot of others too.

3. Invest in Real Estate ETFs

In addition to REITs, there are REIT ETFs, or exchange-traded funds. REITs invest in real estate; REIT ETFs invest in REITs.

For example, the Vanguard Real Estate ETF (VNQ) includes some of the most notable REITs within its fund, like Simon Property Group (SPG) and Prologis (PLD) . It could be less risky than investing directly in a REIT, and certainly less risky than actually buying property, but you'll also be getting less of a return back. Still, if risk is one of your biggest concerns when mulling a real estate investment, a REIT ETF is something that should be considered.

4. Wholesaling Houses

Wholesaling real estate is a little similar to flipping homes, but you don't own the home and you don't have to front any maintenance cost.

Wholesaling a house means contracting someone who is looking to sell their house, and quickly taking that contract and selling it to a prospective buyer for a profit, which the wholesaler keeps. No fixing up involved.

If you can actually successfully do this, great! There's much less risk as you're not putting your own money into the operation. The difficult part of doing this is actually finding a house that has been undervalued on the market that you can manage to sell for a profit.

5. Use an Online Real Estate Investment Platform

Much like with other sorts of stocks, there are online platforms that help you make real estate investments as well. Often, these investments you make are part of crowd funding, a way for others to be able to buy property without requiring venture capital. Popular online real estate investment platforms include Fundrise and RealtyShares.

This option tends to be more for those with money to spare, considering the costs necessary to purchase large property.

6. Real Estate Partnerships

Some real estate investments require an exorbitant amount of money. Not everyone can foot that. If you're not the only one involved in the investment, however, it could become more manageable.

Partnerships are a common way to invest in real estate, with each person taking over different responsibilities. Often, this can be used as a way to purchase property at a lower price. You can set the terms - such as simply paying the mortgage, or perhaps handling the down payment for the property. Depending on the terms of your partnership, you may be investing in real estate without doing too much hands-on work of owning property.

7. Invest in Real Estate Service Companies

There are plenty of companies that work primarily in the world of real estate that you can invest in.

Look beyond REITs for your real estate companies. For example, RE/MAX is a company that sells homes via real estate agents. Companies involved in real estate that don't involve actually buying property can be a way to not only diversify your portfolio, but get a good sense of the current real estate market.

8. Invest in Home Construction Companies

Another real estate-related investment that could be worth your time are companies that are involved in the construction of homes.

There are plenty of home building companies whose stock trades on the NYSE every day, such as Lennar (LEN) and D.R. Horton (DHI) . It's an intriguing investment option for those who believe that the construction of homes is something that will continue to increase, because if that's true, business should continue to boom.

9. Become a Real Estate Appraiser

Have you considered employment within the real estate industry? It can not only be an investment of sorts, but prepare you for how the market is doing and when the time is right to make good investments.

One job within the industry to consider is a real estate appraiser. An appraiser can specialize in either residential or commercial real estate, and determine the value of a property. They take specifics about both the property and its nearby surroundings into account to do this. According to the U.S. Bureau of Labor Statistics (BLS), the median salary for a real estate appraiser or assessor in May of 2017 was $54,010. Those with the highest salaries, however, could make over $101,000 a year.

10. Start a Brokerage or Become a Real Estate Agent

You could also get into the game of selling real estate. Real estate agents require some education and training before they can actually get out there and flip houses, but successful real estate agents can take home nice commissions on the properties they sell.

Agents generally work for real estate brokers, and if you'd rather be at the top than out there selling the homes, perhaps consider opening a brokerage and hiring agents. Brokerages get a large part of the commission that the agents make, so having successful agents can bring in a lot of money.

But starting a brokerage isn't simple, and it's incredibly expensive. You need extensive training and licenses to open and maintain one. If you're a successful agent looking for the next step in their real estate career, it could be a great idea. But if you don't have that level of success, knowledge or funding, you may want to start with becoming an agent.

Written By Steve Fiorillo for The Street.com

https://www.thestreet.com/how-to/invest-in-real-estate-14735368