If you’re new to 1031 exchanges, let’s start from the top. 

What is a 1031 exchange, how do they work, and what are the benefits?
A 1031 exchange (sometimes also referred to as a Starker exchange or a like-kind exchange) is a tax deferral strategy used by many successful real estate investors. If you’re currently an owner of an investment property, a 1031 exchange might be the ideal real estate transaction for you if you want to purchase another property while selling off your current one.

What are the benefits of a 1031 exchange?
The primary benefit of a 1031 exchange is the obvious tax deferment.

With a 1031 exchange, you can defer taxes on the investment properties you own or manage indefinitely until you sell, exchanging from one property to another.

This is especially profitable when you consider what this permits you to do, and it opens up a whole collection of added benefits.

Who qualifies to do a 1031 exchange?
The qualifying parties are pretty much all-inclusive. You can do a 1031 exchange if you’re a property investor or you simply own a business property.

And you can perform a 1031 exchange if you’re an:

• Individual
• C corp
• S corp
• Partnership (general/limited)
• LLC
• Trust
• Or any other taxpaying entity

How Does a California 1031 Exchange Work?
In California, a 1031 exchange allows you, as a real estate investor, to defer the federal and state income tax that would normally be incurred from selling real property, by using the proceeds of the sale to immediately purchase another ‘like-kind’ property.

What are the 1031 exchange rules? 
These are some of the specific rules for 1031 exchanges that occur in the state of California:

Needs to be like-kind property - the new property you’re purchasing needs to be “like-kind” the property you’re selling. 

Must be the same taxpayer - both the property being sold/exchanged and the property being bought need to be purchased by the same party. If the names on the sale property and the exchange property are different, it won’t be accepted.

Needs to be investment or business property - A 1031 exchange can only be performed with an investment or business property. There was previously a loophole that allowed the use of personal property in some cases, but due to recent changes with the 1031 exchange law, that’s no longer the case.

Property must be of equal or greater value - This one isn’t a full requirement, but it will eat at your tax deferment and essentially nullify the whole purpose of the exchange.

Must follow the 1031 exchange timeline - One of the most confusing aspects of this whole process is the 1031 exchange timeline you have to perform the exchange. 

There is a 45-day identification window where you will have 45 days from the close of the sale to find as many as three like-kind properties. And there is a 180-day purchase window where you will have 180 days to purchase a replacement investment property and complete the 1031 exchange. 

Ready to take advantage of the 1031 exchange in California? 
If you feel like a 1031 exchange is right for you, it’s essential that you know what you’re doing and follow all of the rules. The first step is to always ensure you have the right agent by your side. 

Avoid rushing into the purchase of a property because doing so puts you at a severe disadvantage and weakens your negotiating position. Keeping all the legalities straight can also be very challenging which is why having the right agent by your side will make all the difference in 1031 exchanges.

At Marty Real Estate, we have years of experience and can optimize every step of the investment process. By offering competent investment ideas and guidance, we put our clients' investments first. We provide a premium investing experience and help our clients achieve maximum value and often greatly increased cash flow from rental income. Contact our team today to chat with us about your financial goals for 2023 and your 1031 exchange options. 

The three most important factors when buying a property are location, location, and location.

Making judgments based on the property itself rather than the location is something we hear people mention far too frequently, and for us, this is actually a huge mistake, especially when it comes to commercial real estate.

So why is location such a key factor in real estate investing?

Consider this: A property's pricing and condition are subject to change. Even the property's size is adjustable. The location of the property is the only thing that cannot be altered.

Here is why it’s important for private buyers, sellers and corporate investors to do proper research and development (R&D) in a purchased location: 

• You are able to weigh your options. Without adequate research, you'll likely choose the option that's easiest or most appealing from the get-go. This is a big no-no as you may miss out on a great deal that you could benefit from, whether now or in the future.

 

• You have enough time to understand the ins and outs of your prospective purchase. Whether you are working with a high or low budget, performing extensive R&D prior to making a decision will allow you to verify if the property will be profitable for you long-term. Find out every detail that you can about the property and its location that you’re interested in and ensure that you're completely satisfied with all that it has to offer. After all, you don't want to spend a significant sum of money only to discover later on that it isn't exactly what you wanted.

Regardless of how big or small a budget you have for investing in real estate, it's always smart to conduct sufficient research before making a business decision. Quality R&D not only makes entering the real estate market easier, it can also make it more profitable. Understanding communities — their economic and societal trends, as well as their patterns of supply and demand — means you can better forecast property value and buy and sell when the time is truly right, not just convenient. 

Ready to make a move on a property that is outside of your desired location? 

Ensure you do your homework so you can reap worthwhile returns.

Many times, our clients will buy/sell a property because they want to be 'closer' to something. Whether that's school, work, or their favorite hang-out spots, location is always a motivating factor for people. When you're ready to buy or invest in a commercial property make sure the location of it is your top priority and you will find yourself in a great situation in the long run. 

Contact our team today if you want to learn more about how to conduct a comprehensive R&D or market analysis that will yield fruitful and satisfying results.

​Wondering what the housing market in Montclair, CA is like today? The newly released market statistics from Realtors Property Resource (RPR) are in, showing recent real estate market activity in Montclair, CA. 

Here’s a detailed breakdown of the statistics generated on October 31st, 2022.

​If you’re a homeowner looking to finance a home-remodeling project, consolidate credit card debt, and/or pay for big-ticket purchases, you may want to weigh the benefits offered by a Home Equity Line of Credit, or HELOC. In this article we’ll explore HELOCs and how to determine if they are right for you.

What Is a HELOC?

HELOC is an acronym for a home equity line of credit. It's a line of credit consolidated by the equity in your home, which gives you access to a line of credit that you can use for significant expenses. The interest rates for HELOC loans are considerably less when compared to other loans.

HELOC often has a draw period of ten years, and at this time, you can borrow any amount you want. After the draw period ends, the repayment period, which is generally up to 20 years, begins. Your house is the collateral for the loan.

So instead of paying out in full at closing like an average mortgage, a HELOC is a lender’s promise that the lender will advance the borrower's loan for a set amount of time of the borrower's choosing. The market value of your property decides how much you can take out in HELOC.

For instance, if your property value is $500,000 and you’ve paid up to $300,000 in mortgages, you may qualify for $40,000 to $140,000 dollars in HELOC. It all depends on your credit score. An excellent credit score increases your eligibility.

Factors to Consider When Determining If a HELOC Is Right for You

While a HELOC offers a flexible way to unlock funds from the equity in your home, it’s important to do your homework to determine if it is the right choice for your financial circumstances. When considering a HELOC, and shopping for a lender, understand features including:

Draw periods: During this term, also known as the borrowing period, you may spend, or “draw” funds from a HELOC to pay for expenses as you see fit. This period may range from five to 10 years, based on the lender. Once it concludes, you may no longer spend funds from the HELOC.

Repayment periods: At the conclusion of the draw period, the repayment period—or period where you pay back both the funds you used and accumulated interest—begins.

Interest rates: Interest rates for a HELOC vary among lenders but are generally lower than you would pay on a credit card. Many lenders offer either a fixed interest rate (which remains the same throughout the loan) or a variable interest rate (fluctuates based on changes initiated by the Federal Reserve).

Credit line amounts: This total loan amount is determined based on the equity in your home as well as your current financial health according to your credit score, income, debts, assets and other factors. Most lenders limit maximum HELOC lines of credit to around 80 percent of your home equity.

Applying for a HELOC

The process of applying for a HELOC is similar to what you likely experienced when applying for your home mortgage. Initially, you will complete and submit an application online. Then, for verification purposes, you may also need to provide documents including:

• Most recent tax returns
• Recent pay statement from your employer
• Mortgage documentation
• Financial institution statements for your checking and savings accounts
• Credit card bills
• Lists of money market accounts

You’ll also need to factor in a range of closing costs for your HELOC such as appraisal fees, attorney fees, origination fees, and application fees.

Overall, HELOCs can offer homeowners a flexible option to help pay for big-ticket items or consolidate high-interest debt. Be sure to understand the features, as well as any associated costs and fees, before finding the one right for you.

​If you've never bought a home before it can be overwhelming. One of the most important part of homebuying is finding a great mortgage lender. But what does a good lender look like? Here are some tips when finding a lender!

Open Communication
A great lender will always keep in touch with you and communicate effectively. They must have extensive knowledge of the industry and be able to give you up to date information on the market. If you don't understand something in a disclosure you should ask your lender, and they should be able to explain it to you. 

Works with you
You should be able to be open with your lender on what budget you are comfortable with and a good lender will be able to give you information and find the right loan program for you without pushing your boundaries. 

Reputation matters!
Always ask around when you are looking for a lender. Your ideal candidate should have a proven successful track record. Do your due diligence and see what kind of experiences have they provided to their clients. 

Honest and Direct
A good lender should be able to tell you their rates, loan terms, down payment requirements, mortgage insurance, closing cost and fees. They wouldn't need to keep things vague and ambiguous or hit you with hidden fees later on. 

A good lender is important but there are things you can do to ensure success when applying for a loan. 

Credit Scores
Take a close look at your credit score and if it is not where you want it to be, then look for ways to improve it. If your score is not at the ideal spot when you are looking to buy a home then you need to keep in mind the rates and requirements for applying will be harsher on you. 

Do your research!
It is always a good idea to get multiple estimates from different lenders. Shop around and compare these rates to each other. You can do a preliminary online search prior to meeting with lenders as well. 

Know what you need
There are many different types of mortgages. Before you are able to look for the right lender you need to figure out what type of mortgage you want and it will be a good starting point for you to try and find the right lender to be able to help you get that loan. 

One of the most important question in business is, when is it time to expand and the answer might not be very clear. Here are some tips for you!

Do you have the demand?
Before thinking of expanding your business there must be a demand for your service. If your home base is in one city but you have many customers inquiring from another area then perhaps it is time to expand to another location. 

Can you do your job efficiently?
As demand for your business grows, there will be more responsibilities for you to take of. If there is more demand for house showings and consultation then you can hire an operations manager to help organize your activities. Likewise, it might be a good idea for you to hand off other aspects of your organization to a professional such as marketing!

Do you have a lot of cash? 
Having a safety net of cash is great however too much of it can be inefficient. The money that you have should be reinvested back into your business to help it grow. You can also use this money to invest in other ventures that support your current business. Perhaps you can start a real estate photography business on the side. 
​

How to expand your business

Invest in a CRM
A CRM is a Customer Relationship Management system. This is crucial in real estate because it will help you organize your leads and establish a system to make the home buying or leasing process easier and more efficient. 

Create a website for you business
If you haven't already done this as a realtor then you must. In this day an age, everything is done online. Before contacting you, your clients will want to be able to see your work and let you advertise what you do at the comfort of their own home. It also makes a good point of reference when they need to contact you or while choosing a service. 

Referrals and Networking
In the real estate industry, a connection can get you far. Make it a point to attend networking events and when you network with someone make sure to follow up. Nurture those relationships and ask for referrals. The best part about referrals is that it is free marketing!

Be on top of your stuff! 
It is a competitive market out here and you need to be aware of the ever changing landscape. Being in the know about the market will give you good insights on how to better market to your audience. If it is a seller's market how can you market this to home owners and if it is a buyer's market how can you make it more enticing for home buyers? 

There are many more ways to  to expand your business these are just a few ideas to get you started!

The opportunity zone program was created by the Tax Cuts and Jobs Act of 2017 to revive economically distressed communities using private investments. 

What are Qualified Opportunity Zones?
The opportunity zone program is intended to stimulate positive growth in certain communities. So there are restrictions on the investments which an Opportunity Fund can invest. These types of investments are called “Qualified Opportunity Zone Properties,” which are:

• Stock ownership in businesses that conduct their operations within a Qualified Opportunity Zone.
• Partnership interests in companies that operate within a Qualified Opportunity Zone
• Real estate located within a Qualified Opportunity Zone.

How investing in opportunity zones works
In exchange for investing in opportunity zones, investors can defer their capital gain taxes till 2026. In addition, investors who hold their investments for at least five years before December 31st, 2026 are entitled to a 10% reduction in their capital gains tax basis. Investors who keep their investment for at least seven years are entitled to a 15% reduction in their capital tax basis. Investors who hold their investment for at least ten years will not have to pay any capital gains taxes. 
 
To access these benefits, investors must invest in Opportunity zones through Opportunity Funds; which are investment vehicles created to take advantage of the opportunity zones program. Opportunity funds must keep their assets in a Qualified Opportunity Zone (QOZ). Opportunity funds can also self-certify to the IRS and do not need any approval from anybody. 

The Best Opportunity Zones in California
California has lots of Opportunity Zones with opportunities to invest. While major Opportunity Zones in California are located far inland, there are several Opportunity Zones in places like San Francisco and Los Angeles.

San Francisco Bay Area: Cupertino, San Jose, and Oakland
Cupertino, Oakland, and San Jose are hosts to multiple Qualified Opportunity Zones. Oakland is a promising investment area, as home values have gone from $309,000 to $734,000 over the last nine years. Much like San Jose, home values have also gone up in seven years, from $487,000 to $1.07 million from 2012 to 2019. The increase in home values has made the market enticing for Opportunity Fund Investors.
 
Los Angeles: Koreatown, DTLA, and The Arts District
The LA Arts District and Downtown LA (DTLA) is one of the fastest-growing urban areas in Los Angeles. Much of Downtown LA is located within Opportunity Zones, providing enticing opportunities for investors. Koreatown is another fast-growing area in Los Angeles. In 7 years, real estate prices in Koreatown went from $333,000 to $637,000, almost double their initial cost. 

​Benefits of Opportunity Zone Programs 
The main benefits of Opportunity Zone programs are projects and businesses in the zones are eligible for investments, and investors are eligible for tax benefits in exchange for investing in projects in the Zone. More benefits of the Opportunity Zone Program include:
 
For Businesses and Projects in the Zone:

• Ability to market their investments and projects from any Qualified Opportunity Fund created anywhere in the U.S.
• Access to a new targeted funding source that can boost business growth

For the Community:

• Access to financing opportunities that may lead to increased investments that can boost business and economic development.

For investor:

• Eligibility to invest in QOFs (Qualified Opportunity Funds) and OZs (Opportunity Zones) located anywhere in the U.S.
• Capital gains tax break in return for investing in opportunity Zones - the longer the investment, the greater the tax break.
• Profitable investments including property equity, partnership interest, and infrastructure.

Opportunity Zones in Orange County 
Orange County, California has 27 designated Opportunity Zones. In total these Opportunity Zones have a population of approximately 170,000. That represents 5% of the county’s total population of 3,200,000.
The median household income for Orange County Opportunity Zones ranges from approximately $39,000 to $65,000.
The adjacent map shows all Opportunity Zones in Orange County. Click on any Opportunity Zone for additional information. Read more here... 

When you buy a home, its care and keeping need to become a priority. One way to ensure that its systems and appliances are taken care of is by investing in a home warranty. However, while warranties can be the key to easy home maintenance for some, they’re not right for everyone. If you’ve been thinking about getting one for your home, read this first. We’ve listed out the pros and cons to help you decide if getting a home warranty is the right choice for you.​

Written by: Tara Mastroeni
Source: https://www.tmrealestatewriter.com/

For the routine inspections, as your management team, I am knowledgeable of what is required and necessary to repair or install prior to inspection date. As for the rent control, good tenants of section 8 are well aware of the market rent and are always willing to pay the listed rent, if the rent listed is reasonable. As for difficult tenants, I mentioned before, we would pre-screen them after they have been approved with SECT 8 . For any reason we need to evict, All our evictions have been successful and can be accomplished within 1-2 month. ​

Source: Homeless Rate:  http://wp.sbcounty.gov/dbh/sbchp/wp-content/uploads/sites/2/2016/08/2017-SBC-Preliminary-Point-In-Time-Count-Report.pdf
Source: Article, How to Become a Section 8 Housing Landlord: https://www.moneycrashers.com/become-section-8-housing-landlord-requirements/