Tuesday, October 21, 2014

An Introduction to Self Directed Individual Retirement Accounts, by Jesus "Jesse" D. Gonzalez Jr.

A Guest Blog by Jesus "Jesse" D. Gonzalez Jr.

What is a Self Directed Individual Retirement Account?

Before we get started in answering what a SDIRA or Self Directed IRA is, first we must 
know what an IRA or Individual Retirement Account is. An IRA is an individual retirement 
account, that gives tax advantages for retirement savings. For right now, let’s keep it simple. 
For the purposes of our discussion today, all you really need to know is an IRA is a Individual 
Retirement Account that comes with tax advantages.

IRAs come in several types, some of which you may be familiar with because they are offered to 
you by your employer or you struck out on your own, contacted a bank and opened one up. The 
two most common are the Traditional IRA and the Roth IRA. Some other types of IRAs are the 
SEP or Simplified Employee Pension IRA and the Simple IRA. Of course, let’s not forget the 
least known amongst the IRA family and the purpose of our conversation today and that is the 
SDIRA or Self Directed IRA.

Where a SDIRA differs from the other members of the IRA family is the fact that a SDIRA 
allows owners to invest in a much broader array of investments. Other than investing in your 
banks typical, approved IRA investments like, stocks, bonds, mutual funds and CDs a SDIRA 
allows you to choose alternative investment options. For example, you can choose to invest your 
retirement money in real estate, tax liens, mortgages, franchises, private equity, partnerships or 
even precious metals. For this very reason, a SDIRA is an attractive option for investor looking 
to diversify their retirement funds and more specifically use their personal knowledge of a 
permitted investment to grow wealth.

So, by now, you are likely wondering to yourself, why haven’t you heard of this SDIRA 
option...right? Well, that’s actually a pretty simple question to answer. Your large financial 
institutions that govern or administer retirement savings are in the business or selling their own 
stocks, bonds, mutual funds and CDs. Essentially, they make more money by selling you their 
own “approved” products versus allowing you to go out and use your money to invest in real 
estate. In other words, they don’t make enough money off of you to make it worth their time 
to offer you the ability to invest in alternative investments. If you aren’t buying their products, 
they aren’t interested in having you as a client. The second reason is more of a practicability 
issue. You see, these banks have standardized their processes and procedures in order to reduce 
cost and by doing so, alternative investments like, real estate, aren’t able to be standardized 
and therefore, it’s really not feasible for them to allow their investor to invest in alternative 
investments. Essentially it would just cost them too much. Alternative investments don’t net 
large financial retirement institutions the money they want to make it attractive for them to offer 
alternative investing as an option for their clients. This is the only reason you haven’t heard of 
the SDIRA option.

A key difference between a SDIRA and the other members of the IRA family is that a Self 
Directed IRA is Self Directed. In other words, if you don’t log in and, make investment decisions 
on behalf of the fund, the fund will not grow, it will be stagnant. Understanding the role you play 
in a SDIRA is essential to your success because, unlike the other IRAs who are administered 
and controlled by your bank, a SDIRA is administered and controlled by you. You must take an 
active participatory role in a SDIRA to be successful.

A third difference a SDIRA has in comparison to the other IRAs is the fact your retirement 
money isn’t held in a bank. Unlike the other IRAs, normally the SDIRA funds are held with a 
custodian who isn’t a traditional bank. SDIRA funds are normally held in trust, with a trustee 
who acts as a custodian of the account. The custodian’s duties are extremely limited so, it’s very 
important when deciding what trustee or custodian to partner with, you do your research and 
learn about account minimums, fees and charges. They will all very greatly so, be informed. 


To sum it up, the three key differences with a SDIRA versus the other IRAs are....

1. SDIRAs allow for a broader range of investment opportunities

2. SDIRAs require their owners to make investment decisions otherwise, the fund doesn’t 
grow

3. SDIRAs funds are held in trust with a trustee who acts only as a custodian.


Now that you understand the three major differences between a SDIRA and other IRAs, let’s 
now talk more specifically about how to invest using a SDIRA.

SDIRA investing can be a bit tricky because, unlike traditional investments like stocks, bonds, 
mutual funds or CDs, the broader range of investment opportunities may simply lack the 
necessary information required to make a prudent financial investment decision. Think back 
to the last time you logged into your retirement plan with your bank. The bank should have 
provided you a booklet called a prospectus. This prospectus outlined all the investment facts 
about that fund, bond, mutual fund or CD you needed to know. Sure, most of you likely never 
read it but, all that important performance information was available to you to make a prudent 
investment decision. With SDIRA investments, you don’t get a prospectus. Stop and critically 
think about what I am saying. For example, if you decided to invest in livestock, do you really 
think the farmer is going to hand you over a prospectus of the livestock’s performance over the 
last 10 years? Nope, that’s not going to be happening. In fact, short of getting to go out to the 
farm, look the livestock over....that’s about as good as it is going to get. Let’s hypothetically say 
the farmer did have a prospectus of his livestock, would you be able to truly rely on its accuracy? 

Better yet, do you think he paid for an independent audit of his prospectus to verify it? I don’t 
think so. Keep in mind, your SDIRA trustee or custodian doesn’t research your investments 
either so, when determining on what to invest in, you are truly on your own....hence the word, 
Self Directed. You also need to know that because a serious lack of information exists with 
SDIRA investing, it does make SDIRA investors a big target for fraud schemes. With all that 
being said, you may now be wondering, why in the world would anyone invest their retirement 
savings using a SDIRA?

SDIRA investors typically have personal unique knowledge of the investments they participate 
in. For example, let’s take myself. As an experienced real estate broker, I would use my SDIRA 
to invest in things like, real estate, deeds of trust, mortgages and real estate tax liens. I use 
my personal, unique knowledge and experience of these topics to use my SDIRA to invest in. 
You wouldn’t see me investing my SDIRA in Livestock. I have absolutely no knowledge of 
Livestock and wouldn’t know the first thing about Livestock to consider. On the other hand, I 
have completed enough real estate transactions in my 10 years as a licensed agent, to determine 
if a house, or a piece of land, or a deed, or a tax lien is a wise investment. I can almost do that 
with my eyes closed. Now, most of you out there listening or reading this will think to yourself, I 
don’t have any experience in real estate so, I guess I am out of the SDIRA game however, that’s 
not true.

Some SDIRA investors who want to diversify their retirement and grow it quicker than they 
could with their bank will sometimes hire professionals to assist them with investing in a 
particular type of investment. For example, let’s take myself again. I have several SDIRA 
investors who have learned how to invest in real estate by using me as their agent. Because I 
myself use a SDIRA to invest with and I myself have been successful investing using a SDIRA 
for real estate investing, I can give potential SDIRA investors insight into my own experience. 
So, if you want to use your retirement to invest in SDIRA alternative investments like real 
estate, find yourself a qualified, experienced SDIRA real estate investor agent to help you out. 

For that matter, you don’t have to just stick with real estate, I am sure you could find a similar 
experienced SDIRA investor in any type of approved alternative investment you want to invest 
in, if you just ask around.

The Internal Revenue Service doesn’t give us a list of approved SDIRA investments, the list 
would be too long however, they do give us a list of prohibited investment, these you need 
to stay away from. For a list of prohibited SDIRA investments, you really need to visit the 
IRS website. That website changes often so, I didn’t give you a direct link to the prohibited 
investments but, it’s not that hard to search for on the IRS site. In the search engine, just type 
IRA and that whole section comes up. Not to mention, most custodians will give you a list of 
prohibited investments, so no worries, you will know what to stay away from, either way.

Finally, let’s talk about custodians. It has been my experience that they are not all created equal. 
Truth is, I learned the hard way that some are much better than others.....by leaps and bounds. 
I have finally settled on a custodian that I love. They have very low fees, very good customer 
service, incredible turnaround times and best of all, an education resource that has truly been 
beneficial to me. They aren’t paying me to be an advocate so, I won’t advertise for them for free 
in this blog but, who knows....I may become a paid spokesman in the future....lol.

That’s it. It really is that simple. You have now been introduced to SDIRA. I will be working 
on another blog a little later this week about some investment strategies using a SDIRA. To 
get automatically updated when that blog comes out, join my SDIRA Investment Network, 

Jesus "Jesse" D. Gonzalez Jr. Realtor, BBB Accredited Business
Principal Broker / Owner
Liberty House Realty LLC
1709 Ridgemere Ct.
Hermitage, Tn 37076
Designation / Certification: REOPro, RDCPro, NFSTI, PSC Pre-Foreclosure Mastery, PSC HAMP Mastery, PSC HAFA Mastery, PSC FDCPA Compliant, CDAT, HRC, Short Sale Specialist
EMATR Ethics Standard Grievance Committee Member

How Much should I Offer For a Downtown San Jose Condo?

Anyone trying to buy a condo in San Jose right now knows that it is a very different market. There are more buyers than sellers and many Downtown San Jose condos sell with multiple offers  over list price. Some homes go as much as 20% over asking, but some do not. How does a buyer make the decision about how much to offer to have the winning bid in a Downtown San Jose condo multiple offer situation and not overpay?
The answer is not simple, and sometimes it is not a question of price, but terms, like contingencies, length of escrow, length of rent back, etc.
 
But for right now, let's just discuss price. Here are some things to keep in mind when you make an offer on a San Jose condo in a multiple offer situation,
1. In my opinion the most important thing is, how much is this home worth to you? In other words, what price would you offer so that if it sold for $1000 more you would not be sorry because you do not want to pay that much. It may be that you would pay more than your offer if you could, but you can't so you are just doing your best. But if that is not the case you need to decide how much the house is worth to you so that if you do not get it you will not have regrets.
2. How is the asking price of this condo compared to market value? If the condo is listed low it will get multiple offers and sell for much more. If it is listed at or above market value it will not. This is not rocket science. Figuring out market value can be a little tricky since there are many variables, and the market is a moving target, but a good San Jose real estate agent should be able to help you analyze comps. Once you know the market value you will have to offer more in an appreciating market like we are in now. Sorry, but that is the truth.
3. What is the style of the listing agent? Does he or she like to list condos very low to get as many multiple offers as possible on their listings? Does the agent over value a home to try to get more money for their client, or just try to win out on a competitive listing? Does the agent like to work with multiple counter offers, or accept the the first best offer?  Your agent should be able to give you insight into what other San Jose real estate agents like to do.
 
In the end, the final offer price and terms will be your decision, but if you have a great San Jose real estate agent he or she can help guide you through the murky waters of Downtown San Jose condo multiple offers.
If you have any questions about buying or selling a condo in Downtown San Jose please feel free to contact me.
If you would like to search for condos for sale in downtown San Jose click here.
 
Marcy Moyer
marcy@marcymoyer.com
Ca B.R.E. 01191194
650-619-9285
dowtown san jose condo multiple offers

Monday, October 20, 2014

The Villages Golf and County Club San Jose Market Report: Sept. 2014


Villages san jose home sales
As you can see from this chart in Sept of 2014 homes in the Villages San Jose sold for just over 101% of list price on average. There were 14 closed home/condo sales in The Villages Golf and Country Club in San Jose ranging in price from $330,000 to $884,000. The average days on market was 10 days.
Prices in the Villages San Jose have not yet reached their peak from 2006 but things are picking up. In the same period of 2013 there were 14 Villages of San Jose sales the same as in September of 2014. In September of 2013 the average sale price at The Villages San Jose was $517,750  with an average list price of $522,000. In September of 2014 the average sale price at The Villages San Jose was $555,500 with an average list price of $544,475.
The trend for sales in the Villages San Jose is definitely up. This seems to be particularly true for the homes that do not have any stairs to enter, either up or down. These homes are generally selling in a week or less. Last month's average days on market was 10, as compared to 29 for June through Aug. This shows a real uptick in interest in prople buying in the development. There is also a $100,000 increase in average price sold which is a huge jump in one month.
It will be interesting to see how this plays out over the next year as there are more people reaching the age of 55 and who are looking to live in a home with less maintenance than most of the homes in the Silicon Valley.
Right now there are 9 homes on the market ranging in price from $299,000 to $905,000. If you would like to see the current inventory of condos for sale in The Villages of San Jose click here.  If you would like to see the current inventory of single family homes for sale in The Villages of San Jose click here.
If you have any questions about buying or selling a home in The Villages Golf and Country Club please feel free to contact me.
Marcy Moyer
Cal BRE 01191194
650-619-9285

Friday, October 17, 2014

This Palo Alto Condo Has No Reserve Fund, Can I Still Get A Loan?

I have a client who made an offer on a condo in Palo Alto at Tall Tree Estates downtown. I love this building. When I first came to Palo Alto in 1981 my dance teacher lived here. I thought it was the most elegant apartment I had ever seen. It was about 7 years old at the time, the building not me.
Since my clients are planned on writing an offer we got the disclosures, along with the home owner association docs to review before the offer. One thing stood out to me which is this Palo Alto condo has no reserve fund.
Palo Alto condo for sale
A reserve fund is generally part of a Palo Alto condo complex budget. The complex will collect money every month as part of the HOA dues. A portion of this money will not be used for day to day expenses, but rather be put aside in a reserve fund. This fund is used to pay for major expenses like a new roof, exterior painting, or replacing the elevator.
Occasionally a complex will decide that instead of collecting money for major repairs and replacement costs in advance the complex will keep the dues lower and collect for these expenditures as they come up. This plan can have advantages as well as disadvantages.
When a Palo Alto condo does not collect dues in reserve the monthly HOA dues will be much lower than in a building that does collect. Most complexes collect $150-$300 a month for their reserve funds. The owners of this Palo Alto condo building decided that instead of paying this amount monthly, they would be responsible themselves for saving the money for the capital expenditures. In the case of Tall Tree Estates they have had 3 assessments in the last 18 years. If you take $250 a month for 18 years that comes out to $54,000, a figure far above what the assessments during that time period added up to.
The downside here is that if someone sells, and then the next year there is a large assessment, the new owner will have to pay for a lack of past collections. If they hold their Palo Alto condo for a long period of time they will make money in the long run.
The biggest question a buyer of a Palo Alto condo without reserve funds has to answer is, "will my lender lend on this complex?" Different lenders have different requirements with respect to reserve funds and whether or not they will loan money. If you are planning on buying a Palo Alto condo without a reserve fund be sure and ask your lender what the regulations are before you make your offer.
Fortunately my clients had a lender who would make the loan and their offer was the winning bid. They are looking forward to many happy years in this downtown Palo Alto condo.
If you have any questions about buying or selling a condo in downtown Palo Alto please feel free to contact me.
If you want to search for condos for sale in Palo Alto click here.
Marcy Moyer
Cal BRE 01191194
650-619-9285

Wednesday, October 8, 2014

San Jose Condo For Rent: Dog Under 35 Lbs &Well Behaved Owner Wanted

1060 S 3rd #131
San Jose, CA 95112
Pets Under 35 lbs. And Responsible Owners Welcome


Price:$1,750.00
Bedrooms:1
Bathrooms:1.00
Square Foot:667
Lot Size:750 sq.ft.
Community:The Brickyard
County:Santa Clara
Property Type:Rental
Year Built:2005



click for more information and pictures
Property Description
Beautiful 9 year young condo downtown San Jose for rent on first floor in gated complex with direct exterior access. Condo features pergo floors, large balcony, granite kitchen and bath counters, gorgeous cabinets, in unit washer and dryer, central heat and air, walk in closet. Complex has pool, fitness room, common yard.

This Plogging® (property blogging) is brought to you by an Agent Marketing Plogger®
Features List
• 1 bedroom• 1 bath• Granite counters
• Pergo floors• Inside washer/dryer• Central Air
• Central Heat• 1 car parking• Security building
• Fitness Center• Pool• Common yard
• Great location!• 1 year lease
Equal Housing Opportunity.

How Much Should I Offer On A Home In Cupertino With Multiple Offers?

cupertino multipl offers
Anyone trying to buy a home in Cupertino right now knows that it is tough out there. There are many more buyers than sellers and many Cupertino homes sell with multiple offers way over list price. Some homes go as much as 30% over asking, but some do not. How does a buyer make the decision about how much to offer to have the winning bid in a Cupertino multiple offer situation and not overpay?
The answer is not simple, and sometimes it is
 not a question of price, but terms, like contingencies, length of escrow, length of rent back, etc.
But for right now, let's just discuss price. Here are some things to keep in mind when you make an offer on a Cupertino home in a multiple offer situation,
1. In my opinion the most important thing is, how much is this home worth to you? In other words, what price would you offer so that if it sold for $1000 more you would not be sorry because you do not want to pay that much. It may be that you would pay more than your offer if you could, but you can't so you are just doing your best. But if that is not the case you need to decide how much the house is worth to you so that if you do not get it you will not have regrets.
2. How is the asking price of this home compared to market value? If the house is listed low it will get multiple offers and sell for much more. If it is listed at or above market value it will not. This is not rocket science. Figuring out market value can be a little tricky since there are many variables, and the market is a moving target, but a good Menlo Park real estate agent should be able to help you analyze comps. Once you know the market value you will have to offer more in an appreciating market like we are in now. Sorry, but that is the truth.
3. What is the style of the listing agent? Does he or she like to list homes very low to get as many multiple offers as possible on their Cupertino listings? Does the agent over value a home to try to get more money for their client, or just try to win out on a competitive listing? Does the agent like to work with multiple counter offers, or accept the the first best offer?  Your agent should be able to give you insight into what other Cupertino real estate agents like to do.
In the end, the final offer price and terms will be your decision, but if you have a great Cupertino real estate agent he or she can help guide you through the murky waters of Cupertino multiple offers.
If you have any questions about buying or selling a home in Cupertino please feel free to contact me.

If you want to search for Menlo Park homes for sale click here.

Marcy Moyer
marcy@marcymoyer.com
D.R.E. 01191194
650-619-9285

When Selling A Home In Palo Alto to Bee Or Not To Bee

selling a home in palo alto
I was recently asked to go to a home in the Barron Park neighborhood of Palo Alto to speak to the owners about possibly selling their Palo Alto home. We did the typical tour of both inside and outside of this lovely farm home style home from the early 20's. It had been in the family since it was built and the 3 siblings who inherited it are getting ready to sell this beautiful Palo Alto home.
There were many things that stand out about this beautiful old home, but to me the most interesting thing I saw was the largest bee hive I had personally seen in my 20 years in business.
It is not uncommon to see a termite report with a mention of a bee or wasp nest attached to the Palo Alto home for sale. When this happens as a Palo Alto real estate agent I generally tell my client that it is best to remove the wasp nest. Getting stung by a wasp is not going to give a potential buyer a warm fuzzy feeling about buying a Palo Alto home where the sting occurred. Get an exterminator!
Removing a bees nest is a little different. Bees are having some problems with survival, and we need them. They pollinate and make honey. There are a number of local companies that will remove the hives and not kill them. It is more expensive than an exterminator, but better for our environment.
I firmly believe that relocating bees when you are selling a Palo Alto home is the best idea. Not only can being stung by a bee be uncomfortable for potential Palo Alto home buyers, but it can also be a real health hazard for those with bee sting allergies.
If you have any questions about buying or selling a home in Palo Alto please feel free to contact me.
If you would like to search for homes for sale in Palo Alto click here.
Marcy Moyer
Keller Williams Realty Palo Alto
www.marcymoyer.com
marcy@marcymoyer.com
Cal BRE 01191194
650-619-9285

Thursday, September 25, 2014

How Much To Offer For A Palo Alto Ca Condo With Multiple Offers

Palo Alto condo multiple offers
Anyone trying to buy a condo in Palo Alto right now knows that it is tough out there. There are many more buyers than sellers and many Palo Alto condos sell with multiple offers way over list price. Some homes go as much as 30% over asking, but some do not. How does a buyer make the decision about how much to offer to have the winning bid in a Palo Alto condo multiple offer situation and not overpay?
The answer is not simple, and sometimes it is not a question of price, but terms, like contingencies, length of escrow, length of rent back, etc.
 
But for right now, let's just discuss price. Here are some things to keep in mind when you make an offer on a Palo Alto hcondo in a multiple offer situation,
1. In my opinion the most important thing is, how much is this home worth to you? In other words, what price would you offer so that if it sold for $1000 more you would not be sorry because you do not want to pay that much. It may be that you would pay more than your offer if you could, but you can't so you are just doing your best. But if that is not the case you need to decide how much the house is worth to you so that if you do not get it you will not have regrets.
2. How is the asking price of this condo compared to market value? If the condo is listed low it will get multiple offers and sell for much more. If it is listed at or above market value it will not. This is not rocket science. Figuring out market value can be a little tricky since there are many variables, and the market is a moving target, but a good Palo Alto real estate agent should be able to help you analyze comps. Once you know the market value you will have to offer more in an appreciating market like we are in now. Sorry, but that is the truth.
3. What is the style of the listing agent? Does he or she like to list condos very low to get as many multiple offers as possible on their Palo Alto listings? Does the agent over value a home to try to get more money for their client, or just try to win out on a competitive listing? Does the agent like to work with multiple counter offers, or accept the the first best offer?  Your agent should be able to give you insight into what other Palo Alto real estate agents like to do.
 
In the end, the final offer price and terms will be your decision, but if you have a great Palo Alto real estate agent he or she can help guide you through the murky waters of Palo Alto condo multiple offers.
If you have any questions about buying or selling a home in Palo Alto please feel free to contact me.
If you would like to search for homes for sale in Palo Alto click here.
 
Marcy Moyer
marcy@marcymoyer.com
Ca B.R.E. 01191194
650-619-9285