April 5, 2021

Real State Investing For Beginners

Real estate investing 101

Real Estate Investing For Beginners California-The Importance Of A Real Estate Mentor

Real Estate Investing 101

Learn to Invest in California Real Estate for Beginners

Investing in anything can be completely discouraging with no guidance especially getting started in real estate investing. Real estate investing is the purchase of a property with the intent to sell, flip, or rent for profit. Currently 90% of the world's millionaires owe their wealth to holding or purchasing real estate. Which makes it an attractive investment for beginners; however, going in blind and without a mentor will set you up for failure.In this interview with Sam Weaver a real estate educator and investor he goes over the important things you need to know when getting started in real estate investing and what tips will save you money and time.

Important Lessons To Start Your Real Estate Career

Working for free to gain as much knowledge in the beginning is very important, as well as finding a mentor to guide you through the right direction and answer any questions you come across as well as investing time one on one .Learning to listen is also key in real estate, you will come across numerous of back and forth negotiations with the seller and being able to fully hear them out and comprehend will benefit both parties.One last piece of advice is to not be afraid of a major flip opportunity.

What Is Considered A Good Flip Opportunity ?

A major or “good” flip opportunity is when a house is not in the best condition. Homes with major foundation issues especially within the L.A market located in The Hills due to earthquake damage.If you’re buying properties within MLS it is best to purchase homes with numerous damage if you are buying directly from the homeowner it all falls down to your negotiation skills.However a major fixer is not always better than a light fixer; its all about your ability to come to an agreement with the seller. Direct to homeowner buying is also more preferable by staying consistent with bandit signs, door knocking, mailers, voiced ringless voicemail, text messaging, as well as realtor relationships. Although door knocking is the most effective.

The Possible Down Of Flipping A Home

Flipping homes is seen as a quick profit for many investors not looking for a long term commitment.However it does come with its downfalls, when looking for a major fix in foundation work it could potentially be a huge money factor and limit one's profit. Sometimes ‘new’ fixes in a property done by the previous owner could be unpermitted, or not up to code hiding huge set backs.It is key to show up to projects and ask contractors questions, learning construction costs can save you money and limit the chances of you getting overpriced. Also the demand on rehabs to a property being top notch due to high expectations set upon by popular TV shows on HGTV is through the roof.

The Benefits Of Establishing Relationships With Relators

When investing in real estate and not being a realtor it is very important to establish relationships with them.Realtors withhold the best marketing on zillow as well as knowing their F.A.R.M (fixed area real estate market)area very well.By investors and realtors helping one another out it comes in handy when times get tough in the market.

Advice To New Real Estate Investors

A final piece of advice for those interested in investing in real estate is the importance of a mentor being first priority.Having someone to walk properties, help raise money, and knowing when and how to fire a contractor.There is a lot of competition and you need someone to guide you in the right direction as well as be by your side to negotiate.Real estate investing 101 allows you to grow your wealth. It is up to one in how they choose to go about it and the resources in which they decide to take advantage of.


 

Feb. 16, 2021

GME Short Squeeze Explained - Stock Market Manipulation By Hedge Fund Billionaires vs WallStreetBets

GME Short Squeeze Explained -WallStreetBets vs Hedge Funds.

GME Short Squeeze Explained-Stock Market Manipulation By Hedge Fund Billionaires vs WallStreetBets

Short Squeeze Explained-Stock Market Manipulation

GME and AMC Short Squeeze Explained-Did Retail Traders Change The Stock Market ?

For someone who isn't into The Stock Market or aware of how it works they must have missed the opportunity to make insane gains from Reddit users “WallStreetBets” skyrocketing the price of Gamestop stock and causing hedge funders a great amount of debt and chaos.

How Does The Stock Market Work ?

There is different types of traders and styles to investing: Day Trader- Buy and sell a stock within that same day whether it be in 5-10 min or by the end of the trading day Swing Trader- Buy a stock and hold onto it for days weeks or months then sell their position. Positional Trader-Hold long or short positions based off of the stocks performance for 6 months to a year. Long Term Investor- Any stock held for more than a year. Options Trading- Borrow 100 shares placing bets on it trending up or down

How to Get Started in The Stock Market ?

If you're interested in the stock market and want to start trading it’s in your best interest to gain some knowledge from educational books. Other than taking calls from online day traders on your first day in the market. After gaining some education on the stock market your next step would be to set-up a brokerage account. Below are a list of brokerages to choose from:

  • Robinhood
  • Webull
  • TD Ameritrade

WallStreetBets on GME and AMC

Once you're trading and feel as though you want a community of other traders to get ideas and trades from you'll see there's a rally of retail traders under various forum “trading groups”. There are platforms like Stocktwits,Private Discord Groups,and Reddit communities. One of these groups being “WallStreetBets'' whose reddit users made history with GME and AMC. WallStreetBets reddit forum holds millions of members whose daily numbers are up to 800,000. With those numbers the amount of influence one has over the market is uncontrollable which led to the GME and AMC spike.

What Is Shorting And Why Did Hedge Funders Do It ?

Short selling: An investment of trading strategy that speculates on the decline in the stock or other security price advance strategy that should only be taken by hedge funds or experienced traders. Short selling can only be done by a margin account which is leveraged money borrowed from a broker. Hedge funds that held these margin accounts and were short selling GME and AMC were Citadel,Melvin Capital, and Point72.

WallStreetBets Vs. Hedge Funds

WallStreetBets noticed the short selling of these stocks by hedge funds and decided to go against causing a short squeeze.This got the attention of other trading group forums by seeing the price of these stocks rise and became a rally of support. The downfall came when brokerage Robinhood ruled against forum traders by halting these specific stocks to be traded.Which caused GME stock specifically to fall dramatically from $400 down to $122 within the span of an hour due to the suspension by brokerages and traders panic selling their shares.Which benefited hedge funds, the amount of people panic selling and Robinhood restricting their users in purchasing more shares for days.

Advice For New Traders

After seeing the downfall and what comes with riding the wave off a meme stock it is important to educate yourself before diving into a brokerage account and blowing money that you can't afford to lose. Always have a stop loss in mind when getting into a trade or have a practice stimulator with paper money not your own. Educational websites on trading:

  • Investopedia.com
  • Marketwatch.com
  • StockMarketwolf.com

 

Feb. 10, 2021

Prefab Modular ADU Southern California ~~ Best Builders of Modular ADU ~~

Prefab ADU Southern California

How to Build an ADU in California for HALF the Price!?

Prefab Modular ADU Southern California

Manufactured ADU in Southern California

Owning a single family home in Southern California can be costly and hard to come by, that’s where ADUs come to play. An ADU better known as an Accessory Dwelling Unit is any secondary or accessory livable permitted rentable dwelling unit that sits on the same parcel as a single or multi family home. Which is great for California's housing crisis in communities that are in need of it.

Types of ADU

  • A basement converted into a secondary permanent dwelling unit would be an Attached ADU.
  • A converted garage would be an Attached ADU and Conversion ADU
  • A Detached ADU is a completely separate structure from the primary home.
  • A Junior ADU- is a subtype of ADU, less than 500sq ft and must be attached to the primary residence fitting within the existing envelope of the home. Very difficult to rent them out for example they can only have a kitchenette rather than a full kitchen.

January 1, 2020

On January 1, 2020 The State of California passed a new legislation that made not only ADUs more feasible in terms of getting them permitted to build but encouraged development. Before this date it only was valid for owner users to build ADUs it is now applicable for investors as well. There has also been a Ban formed to prohibit owner occupancy requirements for ADU permits. Although that ban is not applicable for Junior ADUs there is still an owner occupancy requirement. To rent out a junior ADU you must live in residence or live in the Junior and rent out the primary residence.

Prefab ADU vs Regular ADU

With the different types of ADU comes the building style differences, which consists of: Stick building-wood framing installation, lender comfort, built in series step by step. More money, high skilled labors, not buying materials in bulk. Custom design, ton of delays.

Prefab modular- Built all or some of the unit offsite in a factory and then shipped to home. Half the time and less expensive due to machine work instead of man labor. Built to state and local codes.

Manufactured housing- Fast and easy to get approval, cost of construction lowers and universally accepted anywhere. No delays, everything moves on schedule.

Manufactured ADU Process: Step 1

  • Fill out a web form for ADU companies
  • Site visit to view property and lot for feasibility
  • Work up a permit package and then submit permits
  • Site demolition and grading
  • Build foundation
  • Utility connections
  • Once approved down payment or deposit.

Manufacture ADU Process: Step 2 Permits

Done by the ADU company, submit plans to the city, multiple departments approve or reject your plans.

Manufactured ADU Costs:

  • 1 bedroom 1 bath 450 sq. ft = $179k
  • 3 bedroom 2 bath 1200 sq. ft=$269k

Financing a Manufactured ADU:

  • To qualify you need equity in your existing residence.
  • Renovation loan
  • Home equity Co-investment example: Companies like Point and Unison providing financing for home improvement. Buying in as a partner into your property, giving you the money to build with interest or monthly debt.

Manufactured ADU Benefits:

  • Lower Base prices due to not hiring an architect or engineer.
  • More efficient permit process due to expedited federal approval process.
  • Much more predictable due to manufactured construction.
  • A-Z quotes with no upcharges or change, which means quotes consist of permits, foundations, site work, utilities connections, unit itself , finishes, etc
  • 6-9 months process from proposal to key In hand.

To learn more about Manufactured ADU contact:

erik@habitatadu.com or Habitatadu.com to schedule an assessment on your property.


 

Feb. 4, 2021

How to Invest in Self Storage ~ TIPS to Start Investing in Self Storage Units

How to Invest in Self-Storage Real Estate

Learn Self Storage with Scott Meyers

How to Invest in Self Storage

Investing in Self Storage

As someone who’s interested in investments, owning a Self Storage Facility is one of the two real estate investments without tenants. Why and How to Invest in Self Storage?

Benefits of Self Storage

These facilities unlike real estate don’t require a waiting period. If someone doesn't pay after 6 days you lock them out after 90 days you sell their stuff and recuperate your money. Self Storage facilities require little grime work due to it being a metal box. Sizes range from 5x5 to 10x30, unlike the difficulty of removing an old tenant in real estate. Prices varying from a controlled climate storage facility being $75-$225 a month to a standard storage facility being $60-$180 a month.

Buying Opportunities for Self Storage

Similarities to real estate are when looking for a buying opportunity on a storage facility you do have brokers focusing on self-storage as well as sending mailers to individual owners willing to sell and looking through listing sites that people put their facility on. Websites that offer these services are selfstorages.com, and listselfstorage.com being the top two. The best market to look into for self-storage investing is always in your own “backyard”.

To model out and find the competition on your own you get census data by going on citydata.com and googling other facilities within a three-mile radius or hiring a consultant that can do a desktop study for you for a few hundred dollars in the beginning then further down the line prices may increase. When looking for the best zoning area look for what it zoned for and see if it is approved for self-storage by seeing what category it falls into either C1 or C3. If not approved you can stop in and make an appointment to ask someone about the possibility of approval or getting the appropriate zoning.

Financing Self Storage

The average rates being $40-$45 dollar per square foot all-metal single-story buildings not inclusive of the land vs climate-controlled facilities averaging $55-$90 per square foot. When financing a self-storage facility it is the only real estate industry that the SBA offers loans on that is because they see it as a business. SBA loves self-storage facilities due to it having the lowest loan default rate.

There are also many community banks, credit unions, savings, and loans that are for self-storage facilities. As you can see it is not very difficult to get a loan for self-storage. After securing a loan it is also very important to do your own due diligence in self-storage by requiring historical financial information from the seller or broker and walking available units as new investors in self-storage facilities neglect to do so.

Why Invest in Self Storage

Investing in self-storage facilities is a viable source of commercial real estate income for those not interested in dealing with tenants and a low repair cost. For more information on self-storage investing feel free to visit Selfstorageinvesting.com or Passivestorageinvesting.com


 

Sept. 24, 2020

Q: What Are the Different Types of Commercial Leases?

 

In this latest episode of “The Morales Group Podcast,” we’re joined by special guest Joe Nuñez, an attorney practicing real estate law, estate planning, and civil litigation at Westford Law Group. Joe shared his insight regarding what you, as a consumer or a landlord, need to watch out for when doing a commercial real estate lease in this ever-changing COVID-19 environment. It’s important to know the types of leases available, everything that’s outlined in the tiny print, and best practices. 

 

There are different types of commercial leases out there, and sometimes, tenants sign a specific one thinking that it’s their only option. “That’s nonsense,” Joe said, “It’s a contract, and the contract can be negotiated. It may be the landlord’s base contract, and that’s fine, but that doesn't mean the tenant doesn’t have the right to negotiate some of those terms.” 

 

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch the full message or use these timestamps to skip to topics that interest you most: 

 

2:08 — The different kinds of commercial leases available, and lease expectations 

 

7:32 — Joe recounts a client’s nightmare scenario (without disclosing names, of course) 

 

13:11 — Defining the term ‘junior anchor,’ and the importance of knowing your leverage 

 

15:53 — Understanding percentage leases

 

18:36 — Are there certain lease types that better suit certain types of enterprises? 

 

25:16 — Why tenants should try negotiate an exclusive use for their business and build options

 

28:50 — Do you have a force majeure clause? 

 

33:29 — The continuous operation clause 

 

38:09 — Who bears the responsibility for keeping a building operational, and is that negotiable? 

 

46:07 — Recourse versus non-recourse

 

51: 30 — COVID’s impact on commercial real estate and solutions for those struggling 

 

A huge thank you to Joe Nuñez for helping us make sense of commercial leases; hopefully you found this discussion as enlightening as I did. If you have questions about anything mentioned in this blog or have real estate needs I can assist you with, reach out by phone or email. I’m always happy to be of service! 

 

Aug. 20, 2020

Q: What Do You Need to Know to Build an ADU?

 

Welcome back to episode 39 of “The Morales Group Show!” Today, Mike Figueredo, the owner of Viridi Construction, joins me to discuss one of my favorite real estate topics: constructing ADUs (accessory dwelling units). Mike works on ADUs every day, so he’s a specialist in this field. Today he’ll provide us with valuable information and give us some insight into the ADU process from the construction side.

 

Learn all you need to know about building ADUs by watching the video above, or else feel free to use the timestamps below to navigate the conversation at your leisure. 

 

3:00—What exactly is an ADU?

6:00—The difference between a JADU and an ADU

7:05—Can you convert a condo or townhome to an ADU?

8:25—Can you convert a single-car garage to an ADU?

9:19—Financing ADUs

10:53—Secured loans versus unsecured loans

15:05—What’s the process look like for someone thinking about building an ADU?

17:00—How long does it take the architect to submit the plans to the city?

23:30—The cost of a typical permit, plus some tips about to avoid being taken advantage of

27:40—What modifications are required to convert a two-car garage into an ADU?

31:30—What sort of costs can people expect to crop up during the process?

33:15—Is there a benefit to someone trying to manage this project on their own versus hiring a professional?

38:40—Is it more expensive to convert a two-car garage into an ADU or to just do ground-up construction?

40:00—What is a reasonable price per square foot for the standard plan?

43:08—Could someone who converted a one-car garage into an ADU add onto it to make it larger?

44:20—Is the ADU process or the new construction process faster?

48:30—Will an owner have to start from scratch if an aspect of their ADU isn’t legal?

49:35—Will an ADU change the property taxes for the homeowner?

50:55—Can you have separate meters for an ADU?

53:35—Do ADUs come with a separate address from the main property?

54:30—Wrapping up the conversation

 

Many people don’t think about ADUs not because they don’t want to build one, but rather because they don’t understand the process they’d have to undergo. That’s why this conversation with Mike Figueredo is so important—he’s helping people move one step closer to making more informed decisions about the kinds of things homeowners can do with their properties.

 

To learn more about the ADU construction process, visit www.ViridiConstruction.com or call (833) 484-7434.


Don’t forget to check out my blog and Facebook page for regular videos and advice about all things real estate! In the meantime, if you have any questions about buying, selling, or investing in Ventura County real estate, don’t hesitate to reach out to the Morales Group.

July 30, 2020

The BIGGEST Mistakes Made by Beginners in Commercial Real Estate

 

I got together for an exclusive interview with Sam Newell, an expert in Commercial Real Estate. He shared the number-one mistake all real estate investors make. We discussed a couple of other strategies for Commercial Real Estate, including tax benefits, debt coverage ratio, and more! To hear our whole interview, watch my latest video. 

May 28, 2020

Q: What Is Escrow?

 

Escrow officer Danita Barroso and I answer your escrow FAQs.

 

I recently had the pleasure of sitting down with one of my favorite people in the whole wide world, Danita Barroso, who works with Contact Escrow as an escrow officer. She helped me tackle some of the most common questions I receive relating to escrow, such as, “Do I have to pay my mortgage or property taxes if I’m currently in escrow?” and “What does it mean when an escrow officer sends me a ‘net sheet’?” 

 

From addressing the real threat of wire fraud to the importance of loan documents, Danita and I cover it all. 

 

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch it in its entirety or use these timestamps to browse specific points at your leisure: 

 

1:34 -  Defining escrow—what does it mean to be a mutual third party?

 

3:33 - What ‘going into escrow’ looks like from the buyer’s and seller’s perspectives

 

4:53 - The importance of the earnest money deposit in a real estate transaction 

 

6:03 - What happens after a buyer submits their earnest money deposit?

 

7:34 - What type of documentation does a seller receive at the beginning of the escrow process?

 

9:27 - What do buyers receive at the beginning of the escrow process?

 

10:28 - The next big steps in the escrow process after documents are filled out and returned 

 

11:34 - What exactly is a seller’s ‘net sheet’?

 

12:57 - Understanding the risk of wire fraud 

 

15:00 - How are loan documents typically signed, and how important are they?

 

17:15 - After the buyer safely wires the money to the escrow officer, what happens next?

 

19:00 - What options does a seller have for receiving the money once escrow closes?

 

22:34 - What are the types of fees someone could see on their net sheet?

 

23:38 - Do you have to pay your mortgage or property taxes if you’re in escrow?

 

26:27 - Calculating escrow costs

 

28:00 - Who selects the escrow officer?

 

29:00 - What type of transactions require an escrow? 

 

35:10 - Wrapping things up 

 

Hopefully, you found our conversation enlightening. Reach out to Danita Barroso and the Contact Escrow team—they do amazing work. As always, reach out to me if you have any real estate questions or concerns. I’m here to help!

May 15, 2020

Q: What’s the Difference Between Forbearance and Forgiveness?

 

Here’s everything you need to know about mortgage forbearance.

 

We’re back for Episode 33! Today, we're joined by special guest Jason Gordon of Amerifirst Financial. A lot of people have been asking me lately about the difference between mortgage forbearance and mortgage forgiveness. Jason was kind enough to take time out of his day to give a fantastic, wide-ranging presentation on this topic and all of the other implications of mortgage forbearance in the real estate and mortgage worlds.

 

Feel free to follow along in the video above or use the timestamps I’ve provided below to navigate the discussion at your leisure:

 

1:35- A quick background on Jason’s career and accomplishments

 

5:30- How our current market compares to the previous housing crisis in 2008

 

8:14- Identifying the players and terms involved in a mortgage transaction

 

11:20- What do mortgage servicers actually do and how do they utilize loss mitigation?

 

16:00- The definition of forbearance

 

18:14- The difference between forbearance and deferment

 

19:44- The dangers of forbearance repayment

 

22:00- The debt-to-income implications forbearance could bring with it

 

25:55- Credit implications of forbearance

 

27:10- Why are there different types of forbearance agreements?

 

33:20- How unemployment is compounding the issues for mortgage servicers, and how their leverage is different from what they had in 2008.

 

41:00- Ripple effects that have caused changes to mortgage programs

 

46:35- Which mortgage programs have been eliminated for the time being?

 

48:20- The impact of these changes on divorcing homeowners

 

54:00- How to reach Jason if you have any questions

 

56:00- Wrapping things up


If you have any additional questions for me, don’t hesitate to reach out via phone or email. I look forward to hearing from you!

May 4, 2020

Breaking Down the SBA’s ‘10K’ Relief Plan

 

David Albanese joins me today to take a look at two important COVID-19 relief programs designed to help America’s small businesses.

 

As some of you may already be aware, the Small Business Administration launched a COVID-19 disaster relief program that can give eligible business owners an advancement of $10,000 and a subsequent loan to help them stay afloat. How is the money disbursed? What challenges are business owners facing when they try to apply through a bank’s SBA representative? 

 

David Albanese, a local business owner, agent, and investor, has helped several business owners navigate this process already. He and I tackled a lot of the questions swirling around this program and also the Payroll Protection Program (PPP). 

 

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch it in its entirety or use these timestamps to browse specific points at your leisure: 

 

3:20 - Understanding the disaster relief program offering up to $10,000: Who actually qualifies?

 

6:00 - How the money is disbursed 

 

11:30 - How the Small Business Administration (SBA) is dealing with the overwhelming number of applications 

 

15:34 - The key to surviving this pandemic as a small business and why this relief program is so important

 

19:45 - Explaining the Payroll Protection Program (PPP) 

 

28:19 - Can the PPP loan be used for anything other than payroll?

 

32:41 - Are you able to apply more than once if you have multiple companies? 

 

39:00 - Can real estate agents apply for these programs?

 

43:50 - How we use these programs to help others and grow our networks in the process

 

45:00 - Wrapping things up 

 

If you have any questions about what was discussed in this message, or if you’re interested in buying or selling a home soon but aren’t sure how to proceed in these times, reach out to us. We’re always here to help, and we look forward to hearing from you. 

Posted in Real Estate News