South Bay Realty Blog

We all want to accumulate wealth and retire rich, here is the financial planning tool you'll need!

Now, I usually don't recommend something to anyone unless I believe in it myself. I've been told by my broker and many other industry colleagues that this new book is a must read for anyone with a mortgage, considering to purchase a home, and even the seasoned professional.

Take a few minutes to read the editorial review...

With the Baby Boom generation on the cusp of retirement and younger Americans increasingly worrying about the future viability of social security, the issue of retirement planning is prominent in the collective consciousness of Americans. Unfortunately, some Americans have stuck their heads in the sand and simply assume that the future will take care of itself. Perhaps more tragic, according to authors Pete Mitchell and Jim Pidd, many Americans are actively trying to prepare for retirement but they are missing out on a dynamic wealth building opportunity that is resting at their financial feet. In their new book The New Mortgage Investment Advisor Mitchell and Pidd tackle the conventional wisdom regarding how Americans view their home mortgage and turn that wisdom on its head. Examining the historical, social, and psychological motivations for why Americans aggressively pay down their home mortgages, the authors demonstrate the serious financial impact that this traditional financial strategy has on accumulating wealth. With in-depth analysis to serve the financial professional, yet practical enough to stimulate and provide clarity to the financial layman, the authors address key issues such as: How mortgages can be structured to maximize income tax deductions. The financial viability of interest only, Traditional Option ARM, and Secured Option ARM loans. Arbitrage and the powerful savings techniques that can generate tremendous wealth without any additional investment capital than what you are already using. How accumulating equity in one's home is NOT an investment. How to unlock the investment potential of trapped home equity. Preparing one's retirement nest egg to avoid or minimize tax liability upon withdrawal or inheritance. Why traditional 401k and IRA investments may leave you tens of thousands of dollars short of your expectations when it comes time to retire and withdraw funds, and much more. Whether you are a Baby Boomer with retirement looming, a younger American with decades still to prepare for retirement, or a financial professional looking for new and improved ways to better serve your client's retirement needs, The New Mortgage Investment Advisor can provide strategies to help make the golden years of retirement truly golden.

Order your copy today! The New Mortgage Investment Advisor: Structuring Your Mortgage to Work as a Financial Planning Tool

Except in Alaska subterranean termites are found throughout the United States and are especially common in the Southern California and pacific coastal states.

I recently had my own home fumigated, honestly it's not one of the highlights in the home selling process. Although few states require a termite inspection, many lenders won’t make a loan without one. The best thing you can do is take preventative measures.

Start by having an inspection annually. Most professional companies will perform a FREE inspection. By taking advantage of this service once a year, you can stay on top of any concerns regarding termites. Believe me, it is stressful enough to prepare your home for sale, let alone find out at the last moment that you need to spend thousands on termite treatment and repair and possibly have to vacate your house for several days during tenting.

Here are some tips to prevent termites:

Warning: Drink some coffee before you read this boring entry...

Two important tax dates are quickly approaching! But there are also two important tax deductions that may help you feel a little better when it comes to paying taxes.

Your income taxes this year are due by Tuesday, April 17, 2007. And the 2nd installment of the dreaded Los Angeles County Property taxes become delinquent after 5pm on April 10, 2007. At least we don't have to pay the Easter bunny on April 8th. Well, actually you should probably go to church and pay tithings. But let's not confuse church and state.

The good news, as home owners we can deduct mortgage interest (not principal) that you pay on a loan secured by your primary residence or a second home. Also note that most Recreational Vehicles, "RV's" are considered a 2nd home. To claim the deduction, you must be obligated to pay the debt and you must actually make the payments on this mortgage.

You can even deduct taxes you pay on real estate you own that is not used for business. If you have a mortgage on the property, the annual mortgage statement (Form 1098) you receive from the bank should include both the amount you paid in real estate taxes for the year and the interest and points you paid for the year (your mortgage interest deduction).

Lastly, if you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, your mortgage or rent and depreciation.

I'm no professional when it comes to tax counseling, so please consult with your CPA, Tax Man or Woman and all tax laws for further information! And if you need a recommendation or have a referral, I'm always here to talk. So please give me a call or send me an email. Hey, ever wonder why our streets are not paved in gold with all these taxes we pay?

Written by Greg Hetrick, REALTOR®
Wednesday, March 21, 2007

I've got a friend who refuses to upgrade his 7 year old computer; he's waiting for the latest technology and for prices to come down. This also happens to be the same guy who didn't buy a house 7 years ago, even though he had the income status, money in the bank for the down payment and the deposit. At that time, he told me he was waiting to see what the market does. Meanwhile he's been paying rent religiously. Does this sound familiar?

Now, I'm not telling you that this is the best time to buy a home, but when is it ever the best time? My point is, if you're NOT in the game, how can you play? If you're serious about becoming a home owner some day and are still currently renting then you need to ask yourself some questions.

If you wait to buy, you'll still need to pay rent in the meantime, so holding off will cost you too. Meanwhile, a buyer's market gives you leverage to get the most out of your offer. Sellers are more willing to make repairs, leave newer appliances and amenities to help seal the deal. The seller may even carry back a portion of the loan that you need to buy the house.

Of course, in any market, it pays not to get in over your head. If you have to get a really short-term adjustable-rate mortgage in order to afford a home, you could run into trouble if interest rates rise as your mortgage adjusts and house prices fall.

Bottom line, if you can afford to make the purchase now and you're planning to be in the house for at least five years, I wouldn't be worried about buying a house in today's market. After all, you need to get "in" at some point, take the plunge!

Written by Greg Hetrick, REALTOR®
Wednesday, March 14, 2007

Southern California: Who Wouldn't Want to Live Own Here?

If you're a first-time buyer you are not alone. But you're no dummy; I don't have to tell you something you already know. Just drive through any South Bay neighborhood on a sunny weekend afternoon and you'll find many open houses packed with young couples and families seeking to buy the American dream. I know first hand, I use to be one of them not long ago. You're tired of your tiny apartment, or sick of paying rent on a highly valued ocean view condo, or maybe it's your parents wondering when you'll ever move out and take your newlywed with you!

Don't be discouraged by your "competition", meaning those other buyers who are anxiously browsing a house that maybe you are already picturing yourself living in. You know... the one with the white picket fence, the new paver driveway, a bright green lawn, the sparkling remodeled kitchen with stainless steel appliances and granite counters, a park-sized backyard and a spare room that looks perfect for the expecting baby.

Maybe you are approached by a real estate agent who asks if you are pre-qualified, and you stumble to answer, "Pre-what", you ask. The real estate agent rudely replies, “qualified!”, you know pre-qualified. Or, sometimes you can't find the sales agent because there are so many people viewing the open house it looks like a party without a keg. Wait, I know, you're embarrassed to ask the sales price, assuming the sales agent will think you can't afford because of the way you are dressed, or the car you pulled up in when approaching this house.

If you are serious about buying your first home, then you need not to worry. You'll do what it takes and it'll happen when you've found the right person to work with and have educated yourself on the steps-to-owning. Understand that many of the people you see viewing an "Open House", on a Saturday afternoon are often the neighbors, financially under qualified dreamers, friends of the sellers, other real estate agents and many people just like you (but are they serious and educated about what they are doing?). You can be!

According to the California Association of Realtors (C.A.R.), only 25 percent of households could actually afford to buy an entry-level home in California during the last three months of 2006. Not to mention it takes some financial backing to make such a purchase. Here are the facts from C.A.R.:

"The minimum household income needed to purchase an entry-level home at $477,400 in California in the fourth quarter of 2006 was $96,760, based on an adjustable interest rate of 6.36 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,230 for the fourth quarter of 2006."

If you've read the above and can relate, then you're probably seeking to buy a home in the near future. Be sure to check out the information found within my website. It's packed with tips for the first-time buyer. If you have any questions, please feel free to contact me.

Written by Greg Hetrick, REALTOR®
Wednesday, March 07, 2007