Academy Awards of Real Estate

On a night where many people will be watching the Academy Awards of Arts, some of us will be enjoying our own awards ceremony.  While the Academy Awards are a sexy and one of the most attention getting events of the season, the somewhat subdued and less sexy event of Academy Awards of Real Estate, is the real life-changing event.

You see, tonight is the night I am preparing my tax return for my CPA.  Yes, not very sexy at all until I start to go through the numbers of my investments.  $120,000 in yearly rental income?  WOW!   An appreciation of 17% in 2007 or an appreciation of $95,000!  WOW!  And the Academy Awards of Real Estate goes to . . .   (Insert name here)!

Here is your acceptance speech; ” I would like to thank my agent, Mike Dunn, for sticking with me and showing me the little habits that I tried to use daily in search of this lofty goal.  Mike told me not to look at the sexy things and just run the numbers and live within my means.  I have been doing this for three years now and it has worked to perfection.  In seven more years, the property will either be paid off or, I will sell.”

The Academy Awards of Real Estate has many winners and will continue to thrive as long as people are doing it for the discipline and not just for the money.  After all, you must study your craft and immerse yourself to the point where you see beyond the numbers and you are at one with the essence of it all . . . the checks will follow on a regular basis, but the mind will continually expand.

Well, enjoy the show tonight and keep in mind, that what you see on the surface is NOT reflective of what lies within.  if you are a savvy investor, you know the $200,000 single story home you purchase in the humid suburban neighborhood of Houston is giving you $1,200 per month in rent, a 20% increase in value in 12 months and in 10 years it will double in value.  Oh . . . do not forget about that $60,000 tax deduction you took the year you purchased the property.

Yes, you have earned your Academy Award of Real Estate!  Use it wisely.

Happy Investing.

Mike

Posted: February 25th, 2008 under Hot Tips, Real Estate News.
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Real Estate Research and John Wooden! 

What does Real Estate Research and John Wooden have to do with each-other?  Well, with March Madness just around the corner, every year we are reminded about the great UCLA basketball coach John Wooden and his incredible run of 10 straight NCAA basketball Championships.

Yes, I heard you for a second time . . . “What does Real Estate Research and John Wooden have to do with each-other?”.

Well, John Wooden was a detail oriented coach whose drills and speeches contained very specific requirements and bits of information that would mold his players into the player he wanted to gain the most potential.  He emphasized the basic fundamental skills over and over again.

While most of us shudder at the boring details, Coach Wooden would disect them over and over.  In real estate, you must take Coach Wooden’s approach.  Real Estate is not gambling; but rather a matter of repeating the basic fundamental skills over and over.  What is the lowest percentage shot in basketball?  Yes, the 3 point shot.  On average, most teams shoot 35%.  What is the highest percentage shot?  Yes, the slam dunk.  The shooting percentage here goes up to 60%.  In order to get a slam dunk, you must get inside position on your defender.

In basketball you must analyze your defenders move to get inside position.  In Real Estate, you must analyze the properties you have targeted in order to get an edge.

I bought a duplex in Austin, Texas 2 years ago and my agent (Zena Hudgens - Ebby Halliday-Dallas) recommended the duplex for two primary reasons.  1. The development was less than 2 miles form the Dell Computer Headquarters and 2. New home construction for duplexes is very, very rare.

As to reason one, 90% of tenants want to live within a 5 mile radius of their work.  Tenants traditionally do not like driving long distances.  A homeowner will as long as they think their house will go up in value.

As to reason two, something as rare as a brand new duplex, is a unique opportunity because of deferred maintenance and builders warranties.

So, in doing your Real Estate Research, approach it as John Wooden would; with a nose for the details all the while keeping the cash flow and appreciation goals as the priority.  Know this, do NOT fall into the trap of what is sexy!  Do not succumb to that sharp dressed booster or recruiter who tells you you can have a nice car or clothes.  Both those items are depreciating assets, Real Estate Research will show you that Real Estate is an APPRECIATING asset!

Happy Investing.

Mike

Posted: February 23rd, 2008 under Hot Tips, Real Estate News.
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Real Estate Investments in California. 

Real Estate Investments in California are still readily available and will continue to appreciate.  Of course it all depends on where you are looking.  If you are looking in the Riverside or San Bernardino areas, you will find many incredible Real Estate Investments.  The notice of defaults and foreclosures, have risen steadily for the past 6 months.

I would still look in the Orange County areas of Irvine, Tustin, Newport Beach, and Corona del Mar.  Now, if you are looking for cash flow, the Inland Empire may be more conducive to that.  Look at these three Notices of Default in Riverside County:

3 beds, 2.5 baths - 1,380 square feet on a 6,500 square feet lot and the current owner is in default by $17,000 and owe over $377,000.

3 beds, 2 baths - 1,100 square feet on a 5,700 square feet lot and the current owner is in default by almost $10,000 and owes $350,000.

4 beds, 3.5 baths - 2,100 square feet on an 8,300 square feet lot and the current owner is in default by almost $15,000 and owes $382,000.

Keep in mind, when doing your research, check the comparable sales.  All of the above properties are NOT worth the amount that is owed on them; this is a large problem.

Real Estate Investments in California are not dependent on the price you buy for the property, but rather the appreciation.  The appreciation levels vary much more in California then other parts of the nation.  Real Estate Investments in California should be made in good family oriented neighborhoods with close proximity to all three school levels and with easy access to parks.

Keep those items in minds and you will always make a wise decision.

Happy Investing.

Mike

Posted: February 23rd, 2008 under Hot Tips, Real Estate News.
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Hot Real Estate Properties! 

There are some Hot Real Estate Properties out there and this one is one of the best:

31 Arborwood features almost a half acre lot size and is one of the largest non-custom lots on the Irvine ranch.  With a potential to add two more rooms and make this 4,200 square feet, this property is one the greatest finds in the Northwood Pointe area of Irvine.

This Hot Real Estate Property, also features a custom built step-down BBQ with outdoor fireplace, a salt water rock sldie pool with spa an waterfall grotto, a golf putting green and a basketball or sport court with still plenty of grass for the little ones to roam.  A Hot Real Estate Property like this does not come along every day.

Upgrades  include, imported Italian travertine, imported Italian gold inlayed marble, granite counters throughout the kitchen, coffer-ed ceilings in dining, kitchen and family rooms.  More incredible upgrades on the Hot Real Estate Property,include granite and travertine in all bathrooms, custom built-in cabinets in all the closets and state of the art security system.

Go to www.MichaleDunn.comfor more details on this property or cll me at 949-533-2581 to arrange a private showing.

Happy Investing.

Mike

Posted: February 20th, 2008 under Hot Tips, Real Estate News.
Comments: 1

Foreclosure or not Foreclosure!

Foreclosure or not Foreclosure, that is the question!  In this adjusting market, many buyers are looking for tremendous real estate deals.  In this search for great deals, buyers have been salivating over foreclosures.

While there are great deals to be had in foreclosures, more times than not, the deals are not as sweet.  Let’s look at what a foreclosure is: A foreclosed property is a property where the borrower failed to make any payments for approximately 6 months and the bank has filed to sell the property at the court house steps.  Once the auction date has been set, potential buyers must pay the bid amount in CASH.  Yes, in CASH.

As an example, let’s assume you are buying a foreclosed property that is valued at $500,000 on the open market.  The amount owed on it is $400,000.  You must pay the entire amount of $400,000i n cash.  Now if you know for certain, you can flip this property the next day and make $100,000, then do it.  But when analyzing Foreclosure or not Foreclosure, let’s see what happens if you purchase a Bank owned property.

A Bank owned property is a property which passed through the foreclosure process without a buyer.  When this property comes out of foreclosure, the bank gets an appraisal and is willing to sell for 10% less than the appraised value.  Even better, you do NOT have to pay cash; you can finance the property.  This gives you leverage to purchase other properties.

In Foreclosure or not Foreclosure, examine the discount you are getting.  There is no hard and fast rule on percentages, but look at the leverage of your money in general.  If you are looking to flip the property, you must have some room for error.  In the $500,000 example we used, you have a 20% cushion in case the market goes down. 

Also, some foreclosures are not located in the best neighborhoods and the values are not going to rise as much as if you purchase a non-foreclosure property in a good neighborhood.  if you are strictly looking for rental property at the foreclosure sale, make sure the property is tenant friendly.  by this I mean 3 things:

1. Tenants do not like to drive long distances so make sure the schools an shopping are close.

2. Tenants like amenities offered by the community (pools, recreation)

3. Tenants want easy access to get to work (freeways, large surface streets)

In conclusion, Foreclosure or not Foreclosure, is an important question that needs to be asked whenever you are considering putting in an offer.  Take time to answer this question carefully.

Happy investing.

Mike

Posted: February 18th, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Deal! 

If you are looking for the best Real Estate Deal, then you must look at the following three houses in the Northwood Pointe and Pelican Hill areas of The Irvine Ranch. www.NorthwoodPointeIrvine.com

The first fantastic Real Estate Deal is in Northwood Pointe’s Somerton neighborhood built by Standard pacific Homes in 1999.  This neighborhood features 104 homes; all on cul-de-sac streets with private access to a hiking trail.  The first Real Estate Deal here is 31 Arborwood.  This home sits on a 17,000 square feet lot and features a built-in BBQ, outdoor stone fireplace, salt water pool with waterfall grotto and spa, basketball court and a golf putting green.  One of the best features is the floor plan which consists of 5 bedrooms and 5 bathrooms; each room has it’ own bathroom. 

In this Real Estate Deal, there is potential for another two bedrooms or a bedroom and a bonus.  By adding the bonus and the extra bedroom, the square footage will go up to over 4,000 square feet from 3,700 square feet.  The best thing about this Real estate deal, is the incredible upgrades such as: imported Italian travertine, marble and granite, coffer-ed ceilings in kitchen, family and dining rooms, custom crown molding, stainless steel appliances, gold embossed and inlaid marble counter tops in the bathrooms. Call for pricing.

The other fantastic Real Estate Deal, is in the Mayfield neighborhood of Northwood Pointe built by award winning Taylor Woodrow Homes in 1996.  back in 1996, Taylor Woodrow Homes was run by a different group of professionals that included some of the most creative architectural plans ever conceived in the building industry.  23 Woodhaven is a unique lot located in the guard gated community of Canyonwood and features an almost 10,000 square feet lot less than 50 yards to the Hicks Canyon Hiking Trail and one of two state of the art swimming facilities. 

This Real Estate Deal consists of almost 3,400 square feet and features 4 bedrooms, all with their own bathrooms, and a large bonus room separating two large bedrooms upstairs.  it also features a rare 3 car side by side garage.  Upgrades include wood floors, custom built-in entertainment system, Galaxy granite counters, plantation shutters and a built in outdoor BBQ with waterfall feature.  Call for pricing.

Last, but not least, is Real Estate Deal in the exclusive guard gated community of Pelican Hill.  This community is home to some of the most influential minds of the California Riviera.  1 Gallery Place sits at the end of a three home cul-de-sac and features over a half acre of usable land. www.ThePelicanEstates.com

This custom designed home enjoys a Southern Ocean view of San Clemente and Santa Catalina Islands.  The home consists of almost 7,400 square feet and features 6 bedrooms plus an office, home gymnasium and home theatre.  Three bedrooms are downstairs and upstairs are 3 bedrooms plus a gym off the master bedroom.

This Real Estate Deal is the lowest priced home in all the custom home community and is less than 1 mile from the world renowned Pelican Hill Golf and Resort, which anticipates completion by early 2009.  Call for pricing.

As usual, DON’T WAIT TO BUY THE REAL ESTATE DEAL, BUY THE REAL ESTATE DEAL, THEN WAIT!

Happy Investing.

Mike

www.MichaelDunn.com

Posted: February 18th, 2008 under Hot Tips, Real Estate News.
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Real Estate Investment 

When looking for Real Estate Investment, look no further.  67 Darlington in the Northwood Pointe community of Irvine on the Irvine Ranch, is one of the best decisions you can make.  Not only is the general community one of the best areas to live in, but the specific construction and architectural design of this property is better than any attached townhome I have ever seen as well as sound Real Estate Investment!

As a Real Estate Investment, 67 Darlington features 3 bedrooms and 3 baths in almost 1625 square feet with a 2 car direct access garage.  What is most impressive is it features a bedroom and full bath downstairs and two separate master suites upstairs.  This is the ideal floor plan for roommates and this makes an ideal rental for college students with The University of California at Irvine and Irvine Valley College less than 5 miles away. 

For a family, this is also ideal as the award winning Canyon View Elementary and Northwood High Schools, are less than 2 miles away.  This Real Estate Investment also features two swimming facilities.

Now let us examine the numbers on this Real Estate Investment.  The asking price is $599,000.  This unit will lease for at least $2,500 per month.  if you put 20% down, your loan will be $480,000, within the new conforming loan guidelines of $729,000 for a monthly payment of around $2,400 per month.  if we include taxes and HOA dues, your payment will be around $3,200 per month.  if you decide to not live on the property and lease it, you will be positive when factoring the tax benefits. 

Remember, at the peak this Real Estate Investment sold for $725,000!  Yes, $725,000.  So, jump in and start building some equity and an amazing return on your investment in the heart of the greatest area in Southern California!

Happy investing.

Mike

Posted: February 16th, 2008 under Hot Tips, Real Estate News.
Comments: none

Steroids and Real Estate

You may wonder what Steroids and Real estate are doing in the same sentence.  Well, today’s Congressional hearing involving Roger Clemens and his personal trainer Brian McNamee, have brought steroids to the forefront.  Why do I mention Steroids with Real Estate?

Steroids are a substance used by regular people and athletes to either battle a disease or gain strength and endurance in a short amount of time.  The reason I bring steroids up with real estate, is because there is a pervasiveness in general society for shortcuts.  As evidenced by the steroid hearings, we see athletes trying to gain an edge by shortcuts. In their attempt to gain an edge, some athletes suffer from “roid rage”, others develop cancer tumors, others become addicted and overuse them and have serious side effects. 

A lot of the recent problems affecting the real estate market are due to investors trying looking for a shortcut.  The buyers who wanted to buy real estate and hoped for double digit appreciation and make a quick $300,000 or more on their investment, suffered from “foreclosure rage”, developed bad spending habits and ruined their credit for years to come. 

You see Steroids and Real Estate have much in common.  What we all need to realize, is that we all have the same ability to succeed.  We just need to stay within a disciplined approach and stay financially intelligent.  A short 9 years ago, seein a Ferrari on the road was still very rare.  Toady, we see Ferraris, Bentley’s and Mercedes everywhere.  What happened?  The Steroids of Real Estate happened!  As soon as real estate values went up, people started to pull out equity and buy, buy, buy.  But the things they bought, bought and bought, were not the appreciating assets.

Instead of buying more real estate within their budget, they bought consumer goods.  Would you rather buy an $80,000 Porsche or buy four $200,000 properties with 10% down and have positive cash flow?  Most people like the “sexiness” of the Porsche, but in reality, as soon as they drive off the lot, the $80,000 Porsche became a $65,000 Porsche. 

Here is my advice, if you get the urge to drive a Porsche, rent it for $450 per day.  For me, i only get the urge once every two years.  Save the other $79,550 for a couple investment properties and use the positive cash flow to pay for your Porsche trips.

Happy investing.

Mike

Posted: February 14th, 2008 under Hot Tips, Real Estate News.
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Shady Canyon Real Estate

shadycanyoncomps.pdf 

The exclusive custom home community of Shady Canyon located on the Irvine Ranch, features some of the most exquisite designs and floor plans, in the coastal region of Orange County.  At build-out, Shady Canyon Real Estate, will feature over 400 homes custom homes along with almost 100 tract and semi-custom homes.  The styles vary from Tuscan, French Provincial, Santa Barbara to Mediterranean.

The unusually large lots combined with a world renowned golf course in a rural setting, make Shady Canyon Real estate, a tremendously unique place amid the hustle and bustle of Orange County.  Once inside the gates, one feels an instant connection with nature and an affinity for open spaces.

Shady Canyon Real Estate is also at a point where a buyer has a ripe choice of homes.  See the attached spreadsheet for a specific list of homes for sale.  One of the best designed homes in Shady Canyon, is 41 Golden Eagle.  This Santa Barbara style estate is nestled up to the open space which leads to crystal Cove State beach.  This home features 5 bedrooms plus an office, bonus room and home theatre with 6.5 bathrooms in almost 8,000 square feet. 

It also includes a subterranean garage for up to 8 vehicles and sits on an almost 34,000 square feet lot with pool, spa, sports court and built0in BBQ.  This Shady Canyon Real Estate home is available for $6M.  One of the remarkable features of this property is an exquisite master bedroom deck with a panoramic view of the sunrise and Shady Canyon.

Feel free to send me an e-mail Mike@MichaelDunn.com for more specifics.

Happy Investing.

Mike

Posted: February 13th, 2008 under Hot Tips, Real Estate News.
Comments: none

Large Lot Real Estate For Sale

This is it!  if you are a family of 4 or more, this Large Lot Real Estate for Sale on the Irvine Ranch, is for you! 

Large Lot Real Estate for Sale is always going to hold more value than smaller properties.  The main reason, is the replacement value.  As times marches on, construction costs will rise and as a result, developers will build as many properties as possible on as many lots as possible.  Large Lot Real Estate for Sale is one of the best investments you can make.  Specifically, 31 Arborwood in Irvine, offers everything your family wants and needs.

Beginning with the floor plan, this home has 5 bedrooms and 5.5 bathrooms and a 3 car garage.  Each bedroom has it’s own private bathroom in almost 3,800 square feet.  Now are you ready for the good part?

Here we go.  the lot is over 16,000 square feet with a slide pool, waterfall spa, built-in BBQ, built-in fireplace, basketball court and a golf putting green.  The even better side of this, is that the yard is split in two.  One side has the BBQ and fireplace and the other side is separated by the pool and spa with the basketball court and putting green on the far side.

You have a distinct separation where smaller children can safely play without having access to the pool. Another advantage of Large Lot Real Estate for Sale, is that your children will WANT to stay home!  For a family with teenagers, this is the best way to keep an eye on your children.  The smaller the lot, the less likely your children are going to want to stay home. 

As far as the upgrades go, this is basically a Newport Coast custom home sitting on the Irvine Ranch.  Every little part of this Large Lot Real Estate for Sale has been upgraded and the furnishings match perfectly.  So come by for a visit at www.MichaelDunn.com or call me at 949-533-2581 to set an appointment.

Happy investing.

Mike

Posted: February 12th, 2008 under Hot Tips, Real Estate News.
Comments: none