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
April 15, 2020

Understanding Mortgage Relief and the Pandemic’s Impact on Lenders

 

My recent discussion with Frank Salazar of Gem Mortgage covered many bases, from mortgage relief, to the loan application process, to the pandemic’s wider impact on the market.

 

Recently, I was fortunate enough to sit down with Frank Salazar, co-owner and partner in Gem Mortgage, to discuss mortgage relief in the wake of the pandemic. Together, we explored the implications of the CARES Act, and he offered advice as to what may be in a homeowner’s best interest right now (depending, of course, on their specific circumstances). Homeowners should ask their loan servicer two important questions: “What is my repayment plan?” and “Will my credit score be negatively affected?” 

 

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: 

 

2:24 - Does one have to make their mortgage payment? Explaining the CARES Act

 

5:00 - Are all servicers mandated to handle forbearances in the same way? For example, what happens when a forbearance period of 180 days ends?

 

6:55 - What determines whether a loan is federally backed or not? 

 

9:10 - Definition of a forbearance, and how servicers are restructuring the payments from which you’re temporarily excused

 

10:50 - What you should get in writing from your servicer 

 

12:53 - If hundreds of thousands of people are missing their mortgage payments, what effect will that have on the market?

 

14:28 - Why servicers are tightening up requirements 

 

16:09 - Fed funds rate vs. mortgage interest rates 

 

17:47 - We’re still seeing historically low interest rates 

 

19:50 - Does the CARES Act apply to investors? 

 

23:49 - How the coronavirus is impacting renters and landlords

 

26:45 - Why the ‘honor system’ is of the utmost importance right now 

 

29:29 - How real estate agents are helping clients with technology 

 

33:30 - What timelines should borrowers be expecting these days regarding financing?

 

35:55 - How loan officers are triple-checking applications 

 

38:22 - Are there delays with appraisers?

 

40:10 - Handling fears of falling out of escrow 

 

45:30 - Wrapping things up/final thoughts

 

If you have any questions about mortgage relief or real estate in general, please call or email us. We would love to help you.

Posted in Real Estate News
March 5, 2020

Step 1 of Buying a Home

 

If you’re thinking of buying a home, your first step should be to talk to a mortgage professional.

 

From time to time, friends and family ask me an important real estate question: “What's the first step I have to take when buying a house?”

 

My answer is to talk to a mortgage professional. The reason I recommend doing this is they’ll look at your finances, credit score, income, and debt, and tell you what you can qualify to buy and what your monthly mortgage payment will be. If you don’t qualify for a mortgage, they’ll tell you why and formulate a plan to help you eventually buy a home. Whether you’re buying in six months, a year, or some time beyond that, talk to a mortgage professional way in advance. 

 

Also, don’t disqualify yourself. A lot of people convince themselves they don’t qualify because their credit score isn’t that great, or they haven’t been at the same job for two consecutive years, or they have student debt, etc. Once we have these people meet with a mortgage professional, though, you’d be surprised at how many of them do qualify. Or if they still don’t qualify, they only need to do one simple thing to change that. 

 

Even if you’re not planning on buying a home until the next year or so, if you talk to a loan officer and get qualified now, you can pull the trigger if you come across a killer deal on the market. 

 

One of the reasons I’ve been able to build a $7 million real estate portfolio and purchase 41 properties is I’m always ready. Each time I buy a property, I ask a loan officer what I have to do to purchase the next one. I may not be financially (or emotionally) ready at the time to make that purchase, but I do know what I have to do to get there. 

 

"I recommend getting yourself ready now so you can pull the trigger the moment you see a good opportunity."

 

Early last year, I told my wife to refinance some of our investment properties and pull whatever equity we could from them. When she asked why, I told her that I wanted to be in position if a good opportunity arises. At that time, nothing on the market caught my eye, but shortly afterward, a 25-unit apartment in Oxford came on the market. We were able to take the initiative ahead of time, make an offer for it, and close on it. 

 

A lot of people wait until they see a good opportunity to start the qualification process, but I recommend getting yourself ready now so you can pull the trigger the moment you see a good opportunity. 

 

In my case, had I not refinanced some of my properties beforehand, I might not have been as confident making an offer for that apartment complex because I wouldn’t have known how much equity I could gather. Not only that, but I might’ve lost out on it to someone ready to buy.

 

If you’re anything like me, you want to be ready when a good opportunity comes along, so talk to a mortgage professional now and make sure you don’t miss out on a great home. 


As always, 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. I’m here to help. I also invite you to visit my blog or Facebook page. Make it a great day!

Posted in Real Estate News
Feb. 27, 2020

What Is A Home Warranty?

 

Welcome back to Episode 27 of “The Morales Group Show!” Today, Tamara Rossie-Melina from First American Home Warranty joins me to answer some of the most common questions she gets about home warranties.

 

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

 

1:00—What is a home warranty?

 

1:51—How long do home warranties last?

 

4:57—Are pre-existing conditions covered under a home warranty?

 

6:23—If you have an issue covered under the warranty, how do you get it fixed?

 

10:20—What types of services does First American Home Warranty offer to sellers?

 

13:41—How do you choose the right plan?

 

16:48—What’s the difference between a home warranty and home insurance?

 

20:47—A summary of what is covered under a home warranty if it’s included in your contract

 

21:51—Should sellers pay for the buyer’s home warranty?

 

23:35—Why get a home warranty at all?

 

24:39—Should someone get a warranty for a new construction home?

 

26:15—Wrapping up our discussion

 

If you’d like to contact Tamara to address any other questions you have about home warranties, give her a call at (805) 573-0698.


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.

Jan. 30, 2020

The Story of the Ventura County Market From 2000 to 2019

 

Today’s real estate market update will span the last two decades in Ventura County. From 2000 to 2019, I’ll examine the number of home sales, new listings, the average absorption rate, and the median absorption rate for each year. What these numbers mean and how they compare to each other will give you a good idea of where we stand entering 2020.

 

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: 

 

1:16—Total yearly home sales from 2000 to 2019

2:58—Total yearly new listings from 2000 to 2019 

3:53—The yearly average absorption rate from 2000 to 2019

5:51—What the average absorption rate indicates for our market 

7:01—The yearly median absorption rate/wrapping things up

 

If you have any additional questions about our Ventura County market, or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you. 

Posted in Real Estate News
Jan. 20, 2020

Home Sale Tax Implications

 

Do you have to pay taxes when selling your home? What are the tax implications of selling a primary residence, second home, or investment property? For Episode 26 of the “Jose Luiz Morales Show,” I’m joined by CPA Andrew Kiefer to answer these important questions. This is a topic not many people think about when selling their home. Selling high and buying low is a great strategy in theory, but there are tax payments that need to be factored into it that may impact your real estate goals.

 

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: 

 

1:56—Tax laws that apply to the sale of a primary residence

2:50—What is considered a gain?

4:39—Documenting the expenses related to your primary residence 

5:34—Cases when you might be audited

6:29—What happens if you sell a home you haven’t lived in for two of the past five years?

8:15—Defining “prorated” taxes 

9:37—How the capital gains tax changes according to different homeownership timelines  

13:27—Why future sellers must know what the market will do in the next three years

14:56—How investment (rental) properties are taxed 

17:10—Passing an investment property onto your children for them to sell

19:35—Is there a limit to how many properties can have a step-up basis?

20:13—Using 1031 exchanges to nullify the taxes your heirs would have to pay

22:35—Planning for and understanding inheritance taxes 

24:06—Tax strategies to explore 

25:24—The importance of having an estate plan

26:17—Tax laws that apply to secondary homes

28:28—What if you move into a rental property after renting it out for many years?

30:45—Taxable gains are considered capital gains 

32:41—Final thoughts

 

If you have more questions about this topic or would like to get in touch with Andrew, you can email him at akiefer@cbiz.com or call (805) 988-3222. 

 

As always, if you have any other real estate questions for me, don’t hesitate to call or email anytime. I’d love to hear from you. 

Dec. 12, 2019

Everything You Need to Know About the 1031 Exchange



Mike Skoczylas is an expert on the 1031 exchange, which can be a very useful tool for real estate investors. That’s why he was the latest guest on the Jose Luiz Morales Show.

 

For Episode 25 of the Jose Luiz Morales Show, we have a very special guest joining us. It’s Mike Skoczylas of Madison Exchange, LLC, who is an expert in 1031 exchanges. The reason I wanted to bring Mike on is because I get a lot of questions from home investors who don’t fully understand what a 1031 exchange is and how it can help alleviate certain tax implications when they want to sell. 

 

Here’s an outline of our full discussion, with timestamps so that you can skip ahead to the section(s) that interest you the most:

 

1:25- What is a 1031 exchange?

3:00- Why investment property sellers can benefit from a 1031 exchange

8:00- What classifies as a “like-kind” property?

11:45- The qualifications for doing a 1031 exchange

17:48- Can you do a 1031 exchange after you’ve closed on your sale?

20:30- Is there a waiting period that you have to observe between 1031 exchanges?

23:55- How long do you have to hold on to a property before completing a 1031 exchange?

25:25- Can the IRS challenge 1031 exchanges?

28:30- What happens when an investment property becomes a primary residence?

31:00- What’s a reverse 1031 exchange and when is one appropriate?

35:20- A few additional pieces of advice from Mike for those considering a 1031 exchange

41:40- Wrapping things up

 

Thanks so much to Mike for joining me and sharing his expertise with all of us. If you have any other questions about 1031 exchanges or Ventura County real estate, don’t hesitate to reach out and give me a call or send me an email. I would love to hear from you.

 

Also, please take a look at other videos and posts on my blog! http://www.myhomeseekers.com/blog/

Nov. 21, 2019

How Donald Trump Pays Zero Dollars In Federal Taxes



In episode 20 of the “Jose Luis Morales Show,” I speak with special guest Yonah Weiss from Madison Specs to discuss saving money on your taxes.

 

Yonah Weiss, today’s guest on the “Jose Luis Morales Show,” has helped me save a lot of money in taxes over time, so who better to help me address some strategies that you can use to save on your own taxes? He works for Madison Specs, a cost-segregation company, which is something that all real estate investors absolutely need to know about. By the end of today’s show, our goal is for you to walk away with your mind blown.

 

Feel free to follow our discussion in the video above, or else you can use the timestamps below to navigate the conversation at your leisure:

 

1:54—A little-known benefit of investing in real estate: depreciation

4:01—Putting depreciation into simpler terms

5:05—How does cost segregation work?

7:55—“Sprinkling magic fairy dust on your taxes”: How cost segregation benefits real estate professionals in particular

10:21—To count as a real estate professional for the purposes of cost segregation, you don’t need a license

12:40—What is “bonus depreciation?”

15:09—How Jared Kushner has a net worth of $300 million but hasn’t paid federal income taxes for 10+ years

16:31—How does cost segregation benefit different asset classes?

20:29—Does cost segregation deduction have to be added back on the sale of the property as well?

22:10—A strategy seasoned investors use to defer taxes

23:45—Is there a minimum dollar amount at which point it doesn’t make sense to do cost segregation?

25:57—A real-life example of the benefits of cost segregation

27:35—What does bonus depreciation look like over the next five to 10 years?

30:25—Would this disable you from qualifying for a loan?

31:30—Can you only do a cost segregation study when they buy a building, or can they do it later after a major rehab?

34:46—On cost segregation and rehabbing

38:20—How to contact Yonah for more advice and answers to your questions

 

I recently worked with Yonah for a cost segregation study that we did, and my experience was nothing but positive. I look forward to working with him more in the future.

 

If you have any other questions about real estate investment, don’t hesitate to reach out to me. I’d love to hear from you.