OH, THE PERKS OF LIVING HIGH!
When you buy high, expect more! Besides the expected bedrooms (10) and accompanying baths (11), when you buy this penthouse you get other “unusual” perks that may make the sale price of $85 million worth the while and much easier to shell out. For instance, a yacht, 2 Rolls Royce Phantoms, a Lamborghini….. and much more, including 2 tickets to space! Check it out here and pick up your jaw from the floor. This is so beyond my sphere of comprehension that it just shot me off to space by itself. Guys, what is this world coming to?
SWEPT AWAY ON THE TIDES OF ATTRITION
On the other side of the spectrum, you have that sad, sad story of what can happen when Mother Nature is not happy with us and commands the sea to start eating away at our prized beachfront property.
The article also states that some towns plan to use taxpayers’ money to haul in sand in an effort to stave off the inevitable. Did you see the projected cost? Hmmm. I would have a little problem with the government using my hard earned, grudgingly paid, taxpayer money to help these wealthy enclaves protect their land. What do you think?
As a cross between a normal rental and a short time Airbnb rental, this company, Bungalow, is starting a new service – repurposing older homes to fit renters who will co-live with the existing owners on a lease contract basis. Is this an example of creative ingenuity, or what! Combine a fad (Airbnb) with housing needs (tenants’ stable rental ) and throw in the ability to make some fixed income (house owners) and voila! Here is the article.
I am amazed that someone can come up with this concept and, more importantly, try to make it work! You can check them out on bungalow.com. My question is: How does the funding and investment into this project pay out monetarily for Bungalow.com?
SAN FRANCISCO’S SECRET CONCLAVE
To all family and friends who live north of the Central Valley, I ran into this nice little article about a “secret conclave” in the city of San Francisco. Here is the description of this little town called Bernal Heights. Now, granted that I don’t know much about anything north of the 210 freeway (don’t laugh), but my first thought was, “Great! There are actually affordable homes near San Francisco!?”
Then my second thought was – “How affordable is affordable? Are we talking tech industry affordable? Or are we talking about public school teacher affordable?”
My next thought was – San Francisco is a City and a County, all of itself. To keep up with infrastructure requirements, they have to draw on revenues that they generate right within this little City-County. Are there other costs that are specific to living there? What kind of added bonds and assessments are tacked onto their property tax bills? And how is their infrastructure keeping up?
And further, San Francisco is known for high property transfer tax costs. Although sales tax on goods is 8.5%, their transfer tax upon sale of property is on a graduated increased level, with $7.50 per $1,000 of the sale price when the sale price is between $1M and $5M. And if you are lucky enough to sell a property that is over $5M, you get to pay to the County transfer tax at $22.50 per $1,000 of the sales price. Yes. You calculated right. On a $5M property you pay $112,500.00. Cough. Cough. Gasp.
So, the purpose for my write up on Bernal Heights is that there are lots of things to consider before jumping in to buy, cute cafes notwithstanding.
A NEW ERA IN FLIPPING HOUSES?
Brokerage firms flipping? A month ago I saw an article regarding the firm OpenDoor which was starting a program to sell Buyer a new home, buy the home that this Buyer wanted to sell and sell it to another party, handle the mortgage, the title, the escrow. In fact, one-stop real estate shopping. From this article, it looks like Coldwell Banker is also jumping on this bandwagon. They will buy the Seller’s property in a fast transaction, refurbish it and then sell it. They already have their own mortgage, title and escrow affiliate companies so again, one-stop shopping. If Coldwell Banker and all its subsidiaries are doing this, you can bet that all the other big real estate brokerage firms will follow suit.
Depending on how desperate or how quickly the Seller wishes to sell his property this might be a solution that can be considered. Just don’t expect to get top dollar though.
Why do I get this feeling that the small real estate brokers are going to be in for rough years ahead? Another more important question is, “If the real estate broker will take over all facets of the transaction, who will be looking out for the client’s welfare?”
MULTIFAMILY RENTAL PROPERTY INVESTMENTS ARE ON THE RISE
Holy Rich Crazy Asians! Singapore is the latest in a slew of countries whose citizens are looking to buy into apartment complexes in the United States, particularly complexes that are middle grade (Class B). According to this article, they consider these types of investments stable and will be more profitable in the long run.
If you or your clients have a nice couple hundred unit multifamily property you want to sell, you might want to look up these investors They aren’t crazy, that’s for sure.
LOAN FRAUD! FAMILIAR?
Ugh. Fraud. Hate that word. Let me tell you about this huge scam which the FBI and FHFA are presently investigating, involving a few individuals who were defrauding lenders with fake rent rolls, fake incomes and fake mortgage on multifamily properties to borrow hundreds of millions in loans. Here is the report from HousingWire that gives the summary of the fraudulent activities that these people were willing to practice in the name of greed. Incredible. This is like the 2005-2007 years when so many loan apps and W-9s given to qualify for loans were faked, borrowers didn’t really have the wherewithal to pay the mortgage, foreclosures ensued, the market crashed….Yes, you remember. This scam is on a much larger scale. Let’s hope the FBI and FHFA nip this in the bud and makes an example of these fraud perpetrators.
ECONOMISTS PROJECT THE END OF THE WORLD
No, just kidding. The end of the boom cycle. That’s the 10-year cycle after we hit rock bottom in 2007 with the worldwide economic crash. The economy has risen in the years thereafter, unemployment has dropped to its lowest points, and the pocketbook is still surviving inflation. But there are signs that we have come to the end and a recession is going to hit. The tariff wars are going to be the straw that broke this particular camel’s back. Even without that war, many economists are predicting 2020 as the end of this cycle. The first sentence of this article about forecasting is “…the jury is finally in: Most economists predict this up cycle will end in 2020.”
The signs are here, the warnings are here, the wars are here, what will we do to prepare ourselves?
CONSUMER SCAM ALERT FROM FTC
A public service announcement from your Federal Trade Commission: Your social security number isn’t ever suspended. Do not fall for that scam! Here is the link.
THREATS TO ESCROW – CHECK FRAUD AND IDENTITY FRAUD
Last month I included a short video of Part 1 of my 4 part series on “Threats to Escrow” – Wire Fraud. This month I released Part 2 and Part 3 which you should have received if you are on my subscription list. If you didn’t, here there are:
Part 2 – Check fraud in a Real Estate Transaction
Part 3 – Identity fraud in a Real Estate Transaction
Here is a funny for the month, compliments of the great Will Rogers:
“ After eating an entire bull, a mountain lion felt so good he started roaring. He kept it up until a hunter came along and shot him. The moral: When you’re full of bull, keep your mouth shut.”