10 Tips for Buying Your First Rental Property

Real estate has produced many of the world’s wealthy people, so there are plenty of reasons to think that property is a sound investment. But like any investment, it’s better to be well-versed before diving in with your hundreds of thousands of dollars. Arm yourself with the information below before starting a new career as a real estate tycoon. (See also: Tips for the Prospective Landlord.) 1. Make Sure it’s for You Do you know your way around a toolbox? How are you at repairing drywall? Or unclogging a toilet? Sure, you could call somebody to do it for you, but that will eat into your profits. Property owners who have one or two homes often do their own repairs to save money. If you’re not the handy type and you don't have lots of spare cash, being a landlord may not be right for you. (See also: Becoming a Landlord: More Trouble Than It's Worth?) Your first property will consumer lot of your time as you learn the ins and outs of being a landlord. Think of it as another part-time job. Do you have the time? 2. Pay Down Debt First Savvy investors might carry debt as part of their investment portfolio, but the average person should avoid debt. If you have student loans, unpaid medical bills or have children who will soon attend college, purchasing a rental property may not be the right move at this time. 3. Get the Down Payment Investment properties generally require a larger down payment than owner-occupied properties, so they have more stringent approval requirements. The 3 percent you put down on the home you currently live in isn’t going to work for an investment property. You will need at least 20 percent, given that mortgage insurance isn’t available on rental properties. 4. Beware of Higher Interest Rates The cost of borrowing money might be cheap right now, but the interest rate on an investment property will be higher than traditional mortgage interest rates. Remember, you need a mortgage payment that’s low enough so that it won’t eat into your monthly profits too significantly. 5. Calculate Your Margins Wall Street firms that buy distressed properties aim for 5 percent to 7 percent returns because they have to pay a staff. Individuals should set a goal of 10 percent. Estimate maintenance costs at 1 percent of the property value annually. Other costs include insurance, possible HOA fees, property taxes and monthly expenses such as pest control and landscaping. (See also: A Quick Guide To Landlord Insurance) 6. Don’t Buy a Fixer-Upper It’s tempting to look for the house that you can get at a bargain and flip it into a rental property. But if this is your first property, that’s probably a bad idea. Unless you have a contractor who does quality work on the cheap – or you’re skilled at large-scale home improvements – you’re likely to pay too much to renovate. Instead, look to buy a home that is priced below the market and that needs mostly minor repairs. 7. Calculate Operating Expenses Overall, operating expenses on your new property will be between 35 percent and 80 percent of your gross operating income. If you charge $1,500 for rent and your expenses come in at $600 per month, you’re at 40 percent. For an even easier calculation, use the 50 percent rule. If the rent you charge is $2,000 per month, expect to pay $1,000 in total expenses. 8. Determine Your Return For every dollar you invest, what is your return on that dollar? Stocks may offer a 7.5 percent cash-on-cash return while bonds may pay 4.5 percent. A 6 percent return in your first year as a landlord is considered healthy, especially given that number should rise over time. 9. Get a Low-Cost Home The more expensive the home, the higher your ongoing expenses will be. Some experts recommend starting with a $150,000 home. 10. Find the Right Location Look for low property taxes, a decent school district, a neighborhood with low crime rates, an area with a growing job market and plenty of amenities like parks, malls, restaurants and movie theaters. (See also: Top 10 Features of a Profitable Rental Property) The Bottom Line Keep your expectations realistic. Like any investment, a rental property isn’t going to produce a large monthly paycheck for a while and picking the wrong property could be a catastrophic mistake. Consider working with an experienced partner on your first property or rent out your own home to test your landlord abilities.

Tuesday Tour Pick

55 Hilltop Dr, San Carlos, CA 94070 5 beds 4 baths 3,384 sqft For Sale $3,169,000 Est. Mortgage $11,923/mo This stunning newly constructed home offers traditional appeal with chic-contemporary design. You will be impressed by the extraordinary sense of style and the luxurious appointments throughout. The formal entry leads you to the beautiful LR and spacious and separate DR. The gourmet kitchen boasts a large center island with breakfast bar and custom cabinetry which opens to an inviting FR with fireplace. Tucked away on the 1st floor is a private guest suite to welcome visiting family and friends, or to re-purpose as an office/den. As you enter the home through the garage you're in the mudroom which is appointed with custom cabinetry/cubbies & a bench to keep everyone organized. Upstairs is a grand master suite situated to enjoy the views of the hills. The gorgeous MB has a claw footed tub, double sinks and large shower. Rounding out the upstairs you have 3 BR's, 2 additional baths & laundry room. The backyard has a patio and 2 lawn areas, the perfect space for outdoor living.

Thinking of buying a house? Here's where to start

Home Trends Thinking of buying a house? Here's where to start by Kathryn Vasel @KathrynVasel June 12, 2017: 12:18 PM ET So you're ready to take the leap from renter to homeowner -- but where exactly do you start? Many first-time homebuyers across the country are facing brutally competitive markets that favor sellers. That means buyers need to bring their A game to snag a pad of their own. Especially if you're a newbie. The road to homeownership can be long and daunting, but here's where experts say you should start. Powered by SmartAsset.com SMARTASSET.COM Check your bank balance How much have you saved for a down payment? Nothing? You might want to start there. Lenders usually like to see a 20% down payment before they'll give you a loan. But it's not a requirement. There are also a bunch of low down payment loans available, including government-backed FHA loans that only require a 3.5% down payment. Either way, you're gonna need some cash. So now's the time to start evaluating your spending habits and finding areas to cut back and sock that savings away. Note that anything less than 20% down means you'll pay more every month -- not only will you be borrowing more money, but you'll also likely be charged private mortgage insurance fees on top of your mortgage payments. Smaller down payments also make it tougher to compete in a hot real estate market filled with all-cash buyers who often win out in bidding wars. Know your number Lenders use a three-digit number called a credit score to decide whether to lend you money, so you need to know what yours is before you start house-hunting. The higher your score, the more likely you are to get to get a loan and a lower interest rate. There are three major credit reporting companies, and federal law mandates they each give one free report, once a year. You can check your reports for free here. You can also order your credit score while you review your report, though there could be fees. Many credit card companies offer free credit scores, so check with your bank first. Related: 3 million first-time homebuyers have been shut out of the market Be sure to review the reports carefully and get any mistakes fixed. If your score isn't where you want it to be, start taking steps to fix it. Along with your credit score, lenders also review your debt-to-income ratio (monthly debts divided by monthly income). Many lenders want to see this number no higher than 43%. home buyers guide Check in with your bank House hunting is fun, but it helps to know how much home you can afford before you start looking. If you're not sure, asking the bank what they're willing to lend you is a good place to start. "Too many first-time clients will fall in love with a home before they are qualified and they try to back into it," said Bob McLaughlin, senior vice president and director of mortgage at Bryn Mawr Trust. "Get the qualification first." To get pre-qualified, lenders will take a quick look at your financial picture and come up with a ballpark figure of how much you can afford to borrow. Related: Homebuying secrets from the real estate battlefield Some buyers choose to go one step further and get pre-approved for a loan to help them better compete against other bidders. This review process is more involved and results in an approved loan amount. Be prepared to hand over a stack of paperwork that will likely include at least one month of pay stubs, two years of tax returns and two months of banks statements from all your accounts. Check in with yourself Just because you got approved for a loan, doesn't mean you should spend that much. "On paper you might be able to afford a $2,500 monthly payment," said McLaughlin. "But it might be better to go with what you feel your budget can hold." When figuring out what you can afford, add up your mandatory expenses like student loan and car payments, health care costs, groceries, cell phone and utility bills. But don't forget to factor in the extra money you need for fun things like entertainment, shopping and travel. Getting saddled with a huge mortgage payment can leave you "house poor" -- or unable to spend money on other things you enjoy because you're struggling to afford housing. Start researching Now comes the fun part: house hunting. First start looking at online listings where you want to live to get an idea of what homes cost and figure out what you can expect to get within your budget. Related: Here's how long it takes to save for a down payment It helps to make a list of which features you definitely want the home to have, and which ones would be nice, but aren't deal breakers. Find a trusted adviser Now it's time to get up close and personal with some actual homes. You don't have to have a real estate agent to visit and make offers on a home, but having a professional in your corner can help make navigating the process easier. And since they're usually paid for by the seller's commissions after a sale, you shouldn't have to pay for their services. Experts recommend asking friends and family members to recommend somebody they've worked with personally, and then interviewing them. Happy house hunting! CNNMoney (New York) First published June 12, 2017: 11:27 AM ET

Telecommuters Tell All

Where should I stash my down payment savings?

Broke no more Where should I stash my down payment savings? by Kathryn Vasel @KathrynVasel June 15, 2017: 9:59 AM ET Me and my husband will start looking into buying a home in March 2018. In the interim is there any investment advice for money that has been saved so far a for down payment? --Name withheld Saving for a down payment can be a big undertaking and a major hurdle to buying a home. That's why you want to be sure to protect your hard-earned savings. Powered by SmartAsset.com SMARTASSET.COM With a plan of homeownership less than a year away, experts recommend keeping the funds in a savings account. The idea is to keep the money easily-accessible and safe. "While other investments may be able to provide a higher return in the long run, because of their short-term time horizon, it's most important that they ensure they have the money they need to buy the house when they want it," said Roger Ma, a certified financial planner and licensed real estate agent in New York City. While savers have been dogged by low interest rates on savings accounts, online savings accounts usually offer higher yield. For instance, Ally Bank is currently offering a 1.05% annual percentage yield (APY) on its online savings accounts, compared to an average .06% savings rate at big banks. Related: Here's how long it takes to save for a down payment Experts also suggested considering putting the money in a money market account or a certificate of deposit (more commonly known as a CD). CDs tend to pay higher interest than savings accounts, but your money is locked in for a certain time period. "A CD might be restrictive," said Eric Roberge, a CFP and founder of the firm Beyond Your Hammock. "Make sure the term is aligned with when you will need the money. Your first priority should be liquidity and the ability to access the money without fees." broke no more Send us your money questions for a chance to be featured in Broke no more! Ask us here. With any of these accounts, it's important to verify the bank is FDIC insured. If your plan is to buy a home in roughly three to five years, you have a little more wiggle room -- but not much. Longer-term CDs can have higher higher yields, and depending on your risk tolerance it could make sense to invest some of the funds. "If you wanted a little risk, you can consider investing 30-40% of the funds in equities and the remaining balance would be 60-70% in bonds," said Patrick Stark, director of financial planning for RS Crum. "But be careful with the bonds, make sure they are high-quality investment bonds." Once the time horizon becomes five years or longer until homeownership, wanna-be buyers have even more savings options. Related: Thinking of buying a house? Here's where to start If buyers had a lump sum of money saved up already, Roberge might advise them to put it in the stock market in a conservative portfolio of either a 50-50 split between stocks and bonds or one that favors bonds. At the same time, buyers would continue to save more money in a savings account. "The idea is that in five years they will probably have enough in the savings account to just use that money for the down payment, and then the money in the stock market they can leave it in there," he said. While lenders like to see a 20% down payment, it's not always a requirement. There are other low-down-payment options, including a government-backed FHA loan that requires as little as 3.5% down. However, putting less than 20% down means you'll pay more every month since you'll be borrowing more money and likely be charged private mortgage insurance fees on top of your mortgage payments. Lastly, experts said signing a down payment check shouldn't clear out your bank account. Stark recommended keeping three to six months of living expenses in an emergency fund to cover any unexpected expenses. "No matter how well you plan things, there are always unexpected expenses when you own a home," he said. Send us your money questions for a chance to be featured in Broke no more! Ask us here. CNNMoney (New York) First published June 15, 2017: 9:59 AM ET

Owners, Appraisers Disagree on Home Values

Owners, Appraisers Disagree on Home Values DAILY REAL ESTATE NEWS | THURSDAY, JUNE 15, 2017 Homeowners feel like their homes are worth more than what appraisers say they are, and the gap between the two estimated values has grown for the sixth consecutive month, according to Quicken Loans’ National Home Price Perception Index. Read more: Owners, Appraisers Aren't Seeing Eye-to-Eye Appraised values were, on average, 1.93 percent lower than what homeowners expected, according to the index. Appraisals are drifting farther from owner estimates, even though their assessments continue to rise higher each month, the index shows. “It’s important for consumers to see the HPPI and not only think about the difference in perceptions, but the different perceptions across the country,” says Bill Banfield, Quicken Loans executive vice president of capital markets. “Home values, and home value changes, vary widely depending on the city you’re in. Homeowners, and those looking to buy a home, should keep a close eye on their local market to better understand home values in their area.” For example, in Denver and Dallas appraisals are nearly 3 percent higher than what homeowners expect. On the other hand, in Philadelphia and Baltimore appraised values are more than 3 percent lower than what owners estimate. Source: Quicken Loans

1031 Exchanges Under Threat?

1031 Exchanges Under Threat? DAILY REAL ESTATE NEWS | THURSDAY, JUNE 15, 2017 A major tax advantage for the commercial real estate industry may be one of the casualties in a sweeping federal tax reform expected this year, The Wall Street Journal reports. Read more: Lawmakers Need REALTORS® on Tax Reform We Could Lose 1031s. Here’s Why That Matters Some lawmakers are eyeing the 1031 exchange provision to get the tax-rate cut they seek. The provision allows sellers of real estate and other assets to defer capital gains taxes by reinvesting any profit in “like-kind” properties. The 1031 exchange applies to a range of assets, but real estate accounts for the largest portion of exchanges at 36 percent, according to Ernst & Young LLP data. The Joint Committee on Taxation estimated in 2014 that repealing like-kind exchanges could raise $40.6 billion in extra tax revenue over one decade. Several lawmakers consider the provision to be loophole that has limited economic benefit and, therefore, some are looking to put it on the chopping block in order to pay for lower tax rates. For example, Mark Mazur, the director of the Tax Policy Center, says 1031 exchanges “really have become just a way to defer tax liability.” However, real estate executives believe that any move to get rid of 1031 exchanges would be devastating to the economy and the industry. A recent report by Green Street Advisors says that like-kind exchanges are used in 10 percent to 20 percent of commercial real estate transactions. Any threat to 1031 exchanges “would cause a lot of transactions not to occur,” says Jeffrey DeBoer, chief executive of the Real Estate Roundtable. He adds that investors who purchase real estate through 1031 exchanges are more likely to invest in those properties than those who pay cash. “Therefore, you have capital you can now put into the newly acquired property.” The House Ways and Means Committee has yet to release a bill on the matter, although The Wall Street Journal reports that the chatter among lawmakers on such legislation is growing. Maintaining 1031 exchanges is a top priority for the National Association of REALTORS®. Earlier this year, NAR President William E. Brown said the association will meet any proposals to curb 1031 exchanges with strong resistance because the provision is a vital vehicle in driving commercial real estate development. “If that goes away, commercial real estate will be decimated,” Brown said earlier this year. “That’s something we’re being very clear about with Congress. This provision is to commercial real estate what [the mortgage interest deduction] is for residential real estate. We will fall on our sword for this.” Source: “1031 Exchanges, a Cherished Real Estate Tax Break, Faces Extinction,” The Wall Street Journal (June 14, 2017) [Log-in required.]

Transitioning Renters to Homeowners

When a HUD-approved housing counselor at ACTS Housing first met Esperanza, she was on her hands and knees scraping old tile off the floor of her new home, debris flying everywhere. In that moment, her housing counselor knew she was a woman on a mission. Esperanza went to ACTS Housing, a HUD-approved housing agency, because she was tired of paying high rental costs. “Half of my check goes to the rent,” said Esperanza. “With three kids, I was ready. I’ve been saving so long and my kids deserve more.” The first step in Esperanza’s homeownership journey was a meeting with Maria Santos, Director of Homebuyer Counseling for ACTS Housing. Maria Santos, pulled Experanza’s credit report, walked her through various housing options, and supported her every step of the way. Maria explained, “Esperanza was a joy to work with. She was passionate and focused on homeownership from day one.” With Maria’s help, Esperanza purchased a property that had been in foreclosure on the South Side of Milwaukee, and renovated it into the home of her dreams. Having worked in the construction trade for five years, Esperanza had the perfect skillset to take on such a big project. She explained, “Once I got the house, the kids were excited because everyone has their own room now. And, I have more money in my pocket.” Esperanza, her three children, their dog and cat are now happy and cozy in their newly renovated South Side home. Maria explains that watching homeowners like Esperanza achieve their home buying dreams makes her job worthwhile. “The most rewarding part of my work is watching families overcome obstacles and move closer to homeownership,” said Maria. “I work with a lot of incredibly strong individuals who work hard to become homeowners. Once the keys are in hand, it makes all the hard work worth it.” ACTS Housing is thankful for Esperanza’s commitment to her family and her home. She has joined a cohort of more than 2,200 ACTS families since 1995 who have done the hard work necessary to become homeowners throughout Milwaukee. Read the latest issue of The Bridge from HUD’s Office of Housing Counseling or subscribe at TheBridge@hud.gov.

Transitioning Renters to Homeowners

June 16, 2017 Transitioning Renters to Homeowners Written by: Office of Housing Counseling Photo: Esperanza sits in the living room of her home. When a HUD-approved housing counselor at ACTS Housing first met Esperanza, she was on her hands and knees scraping old tile off the floor of her new home, debris flying everywhere. In that moment, her housing counselor knew she was a woman on a mission. Esperanza went to ACTS Housing, a HUD-approved housing agency, because she was tired of paying high rental costs. “Half of my check goes to the rent,” said Esperanza. “With three kids, I was ready. I’ve been saving so long and my kids deserve more.” The first step in Esperanza’s homeownership journey was a meeting with Maria Santos, Director of Homebuyer Counseling for ACTS Housing. Maria Santos, pulled Experanza’s credit report, walked her through various housing options, and supported her every step of the way. Maria explained, “Esperanza was a joy to work with. She was passionate and focused on homeownership from day one.” With Maria’s help, Esperanza purchased a property that had been in foreclosure on the South Side of Milwaukee, and renovated it into the home of her dreams. Having worked in the construction trade for five years, Esperanza had the perfect skillset to take on such a big project. She explained, “Once I got the house, the kids were excited because everyone has their own room now. And, I have more money in my pocket.” Esperanza, her three children, their dog and cat are now happy and cozy in their newly renovated South Side home. Maria explains that watching homeowners like Esperanza achieve their home buying dreams makes her job worthwhile. “The most rewarding part of my work is watching families overcome obstacles and move closer to homeownership,” said Maria. “I work with a lot of incredibly strong individuals who work hard to become homeowners. Once the keys are in hand, it makes all the hard work worth it.” ACTS Housing is thankful for Esperanza’s commitment to her family and her home. She has joined a cohort of more than 2,200 ACTS families since 1995 who have done the hard work necessary to become homeowners throughout Milwaukee. Read the latest issue of The Bridge from HUD’s Office of Housing Counseling or subscribe at TheBridge@hud.gov. TwitterFacebookLinkedInEmail

39 million households are paying more for housing than they can afford

39 million households are paying more for housing than they can afford by Kathryn Vasel @KathrynVasel June 16, 2017: 1:28 PM ET Rising housing costs are putting a major squeeze on Americans. Nearly 39 million households can't afford their housing, according to the annual State of the Nation's Housing Report from Harvard's Joint Center for Housing Studies. Experts generally advise budgeting about 30% of monthly income for rent or mortgage costs. Powered by SmartAsset.com SMARTASSET.COM But millions of Americans are far exceeding that guideline. One-third of households in 2015 were "cost burdened," meaning they spend 30% or more of their incomes to cover housing costs. Of that group, nearly 19 million are paying more than 50% of their income to cover their housing needs. Related: Best cities for first-time homebuyers When so much of your paycheck is going toward keeping a roof over your head, it forces sacrifices in other budget areas, including food, health care and transportation. "It depends on household type: Families with kids ... they cut back pretty severely on food," said Jennifer Molinsky, a senior research associate at the center. "Older adults cut back a lot on health care." In 2015, there were almost 25 million children living in cost-burdened households. Low-income families with children that are paying more than half their incomes to cover housing cut back the most on food, according to the report. They spend less than $300 a month, compared to households with no cost burdens, which spend about $500. Related: Thinking of buying a house? Here's where to start "To make ends meet, these families often do not buy enough food for their households or they substitute cheaper but less nutritious foods, either of which can jeopardize their children's health and development," the report stated. Low-income households are also more likely to compromise on the quality of housing, including living in places with structural issues. Low housing inventory levels have helped push up home prices as many markets struggle with a supply and demand imbalance. Bidding wars are common in some places. Home prices fell off a cliff after the 2007 housing crash, but they have been rising and last year surpassed their pre-recession peak. That price appreciation has scared away many wanna-be buyers, who have been forced to rent. Demand for rental units has increased and pushed up prices. As a result, the report found, more than 11 million renter households pay more than half their income on housing -- a 3.7 million increase from 2001. Miami has the highest percentage of cost-burdened renters, at nearly 62%, followed by Los Angeles and Deltona-Daytona Beach, Florida at 57%. CNNMoney (New York) First published June 16, 2017: 1:28 PM ET

Golden Moon Gallery: Downtown San Mateo’s Wonderland of Art & Expression

Golden Moon Gallery: Downtown San Mateo’s Wonderland of Art & Expression By Dave Newlands Advertising Feature Writer Jul 26, 2017 Updated Jul 27, 2017 0 × 6 remaining of 7 Welcome! We hope that you enjoy our free content. +2 Golden Moon Gallery storefront Golden Moon Gallery is a bit like Narnia, or Wonderland. You’ll find it when you’ve wandered farther than you think you should, and looked into just the right nook, or cranny. It’s a Parisian inspired black storefront with the logo in gold leaf on a window full of fascinating bits of art. When you do peek into that window you’re pulled into an amazing place full of wonders at which to marvel – items to ponder, and stories to hear. When you leave, you are undoubtedly changed. At the very least, inspired. “We are here for the 74-year-old man who came in the other day and he found something therapeutic in [the art] and he had never found that before,” owner and founder Nick Chaboya said. “Or the kids who come in and are in awe asking a hundred questions about each thing to their parent. I remember those moments.” +2 golden moon logo Chaboya grew up in the Bay Area and has been an artist pretty much since birth. High school was art school for him, then it was California College of Arts and Crafts, and after that he established himself internationally on the strength of his tattoo work and his painting. With that reputation and career built, he had a chance to return home and share the world and the people he discovered along the way. Golden Moon Gallery is the blossoming fruit of Chaboya’s life as an artist so far. +2 Nick Chaboya, Golden Moon Gallery Nick Chaboya, artist and owner of Golden Moon Gallery. Photo by Michael Davis “At the core, what we strive to be is a community. A community of people who appreciate the handmade, and people who believe in art,” Chaboya said. When you do find your way through the doors of Golden Moon Gallery, and you do meet Nick, you quickly realize that this is a place where imagination and personality can truly run free. This is a place where an artist can come from anywhere, and anything can be art – a chemist can make ceramics, a hunter can make jewelry. You look at a roll of duct tape on a shelf and you think it is a mundane thing, included to compliment a display, and you would be wrong. The tape is also art, designed and crafted by a person as a form of expression, not by a corporation as a unit of commerce. If you are starting to get the impression that Golden Moon Gallery is a place where anyone is welcome, where all ideas are appreciated, where all stories and expressions have value, then you are starting to get the point. Chaboya appreciated the culture that was growing in downtown San Mateo, but what he didn’t see amongst the restaurants and stores was a place that you could stumble upon, that you could wander into for no other reason than what you saw in the window piqued your curiosity. When you walk out you should have a new story to tell, or a new hobby to explore. Downtown needed a place that dealt in inspiration. The gallery itself takes an unusually low commission of its sales so more of the local community can afford beautiful and unique items in their homes. Golden Moon Gallery is truly about inspiring the community and supporting the arts. “A high percentage of the artwork displayed here comes from people I meet and interact with while traveling,” Chaboya said. “There’s also a lot of local artists that walk in, introduce themselves, their artwork, and bring their art and community with them. We’re always having a call for artists, every day. I would love to support you.” Like any world built on imagination, one has to indulge in the curiosities while you are there. Be that kid that asks a hundred questions. Chaboya, his wife, his mother, or any of the staff at the gallery are happy to indulge you because the pieces you see at Golden Moon Gallery are not cottages at sunset or happy little trees painted simply to sell, or to pass the time. These are passionate expressions of lives and emotions that needed to be turned into creative output. That bowl in the corner is a chemist who is so devoted to his science that he simply must figure out how to make the elements of clay and glaze swirl in a precise way. That painting on the wall is the healing of an emotional wound put to canvas. The assemblage of each terrarium you see helped a homeless man eat well for a day. There are pieces of traditional art that will leave you in awe, but there are also pieces of non-traditional art that will leave you wondering how it was even made. That wonder and curiosity is forming the next step for Golden Moon Gallery. The gallery begs to be a social space. Chaboya is eager to begin welcoming people to events that will allow the community to be a part of the artistic process, to learn and experience new things with the artists of the gallery, to expand the reach of their inspiration and count the patrons as active members of the Golden Moon Gallery family. Ideas are swirling all the time and beginning to gel for classes and exhibitions that will offer something unexpected and exciting to downtown. Golden Moon Gallery may not reach out and grab you with a neon sign or a pitch man on the corner. It is in it’s own way, a wonderland that requires a certain degree of curiosity to discover. It is a place that, once discovered, will have you returning time and time again, and each time it will be different. You will find new things to explore, and new things to experience. It is a place that must be seen to be believed, and a place that will no doubt pay dividends on your curiosity.

Wealthy Buyers Turn to Bank-Owned Homes

Wealthy Buyers Turn to Bank-Owned Homes DAILY REAL ESTATE NEWS | FRIDAY, JUNE 16, 2017 Wealthy home buyers are getting around the pervasive inventory crunch by snapping up bank-owned properties and making high-end renovations. Homes listed as REOs “used to be a huge anchor on the property, but now it propels it,” Danny Hertzberg, an agent with the Jills Group at Coldwell Banker in Miami Beach, Fla., told The Wall Street Journal. Hertzberg says luxury bank-owned properties in his market are discounted about 10 percent, much less than the 20 percent to 30 percent discount that was typical a few years ago. Hertzberg recently sold a 10,383-square-foot waterfront REO property with six bedrooms for $8.7 million, which was 6 percent below the list price. The home had been appraised for about $13 million. But the market for bank-owned homes is also getting tighter. In April, the number of properties nationwide in some stage of foreclosure was 734,996—down 66 percent from a peak of 2.2 million in 2010, according to data from ATTOM Data Solutions. In 2016, million-dollar homes made up 2.06 percent of all REO sales, the largest share in three years, says Daren Blomquist, senior vice president at ATTOM Data Solutions. Research firm Clear Capital analyzed 20 metro areas with the highest number of distressed properties listed for more than $750,000 and found the median sales price to be $932,500. That is 3.4 percent lower than the sales price of non-distressed homes in those markets. The largest discounts for luxury distressed properties were in Dallas, where they sold for a median of 13 percent below asking price. On the flip side, in San Jose, Calif., such properties sold for just 0.5 percent below the list price. Source: “Bank-Owned Homes Get a Fresh Look From Wealthy Buyers,” The Wall Street Journal (June 14, 2017)

We are back!

We are back! We have spent the summer working out of the Woodside office while ours was being remodeled. It's finally finished and looks fabulous! We moved back in yesterday. Please stop by and say "hi" if you are downtown.

High-end hotel contemplated at Event Center

High-end hotel contemplated at Event Center San Mateo County looks to developers for proposals to upgrade key event facility By Samantha Weigel Daily Journal staff Aug 2, 2017 Updated 3 hrs ago 2 As the Peninsula’s economy thrives alongside bustling business growth, San Mateo County officials are looking to upgrade a key event facility that attracts people of all ages and backgrounds. The San Mateo County Event Center, best known for hosting the annual county fair, is being considered for new uses including a high-end hotel. Earlier this year, the Board of Supervisors issued a request for qualifications to encourage the development community to offer ideas for the San Mateo site located between San Francisco and Silicon Valley. A portion of the site’s 48 acres could be offered to a hotel developer as officials look to generate revenue and improve the event center facilities. Located next to the massive Bay Meadows mixed-use development and large office buildings popping up nearby, officials hope to attract more events to the county-owned site. Top employers in the area include Visa, SurveyMonkey, GoPro, Coupa Software, PlayStation Network, Gilead, Oracle and others that attract thousands to the region. One goal is to attract more use of the Event Center through improved conference facilities, said Supervisor Carole Groom, who represents San Mateo and is a former city mayor. While still on a “fact-finding mission,” the goal of the hotel would be to help finance improvements, which may be laid out during a separate update of the site’s Master Plan, she said. “There’s a lot of business trade shows and we wouldn’t have shows the size of Moscone Center, but there’s a middle ground and it would be great to have more weekday shows,” Groom said. “It’s a facility that’s of great use, a variety of events fit into it, though it’s older and, like a lot of older things, refurbishing could be helpful.” Last month, supervisors met in closed session to discuss two responses from real estate investment firm Broadreach Capital Partners, and local hotelier Solomon Tsai. Officials are expected to solicit more specific plans from the two developers by crafting a request for proposals. The county notes a sufficient market demand for additional hotels with nearby upscale hotels averaging around 86 percent occupancy last year with rooms going for nearly $194 a night. To create a hotel at the event center, about 3 to 5 acres could be offered under a long-term ground lease on a portion of the surface parking lot, according to the county. County Chief Communications Officer Michelle Durand said officials are undertaking a thoughtful process to consider a variety of options for improving the Event Center. “They’re doing their due diligence,” Durand said. “I think everyone agrees the Event Center could be a little more modern in its facilities and the goal has always been [to have] a place that can attract different events and shows.” Aside from the possible hotel, Durand said Event Center officials are looking toward an economic analysis and master plan update to improve the facilities. While the idea for a hotel has floated around for years, Durand and Groom cited the improved economy and new Event Center leadership as an encouragement for moving forward now. Immediately adjacent to the Saratoga Drive Event Center is the 160-acre mixed-use Bay Meadows Development. More than half way done, the former race track is being transformed into office, commercial and residential space. It hosts the Franklin Templeton Investments and SurveyMonkey headquarters, the private Nueva School, Kaiser Permanente Medical Offices, and will be home to thousands of residents and nearly 780,000 square feet of office space. “That area just seems ripe for having a hotel. There’s a lot of businesses that are bringing a lot of people, and a lot of people living there with residents having people visit,” Durand said. To the north, real estate developer Hines is nearing completion of nearly 380,000 square feet of office space at Concar Drive, and 599 housing units are slated at Station Park Green near the Hayward Park Caltrain station. “We put all that together and said you know, if we’re going to try to renovate the Event Center, a hotel would be a nice addition,” Groom said. “The hotel would do well with the Bay Meadows development, with the Concar development, as well as with additional kinds of shows at the Event Center.” Revenue generated from an agreement with a hotel developer could help the county afford improvements to the Event Center’s facilities. The site attracts a variety of events year-round from trade shows and expos to concerts and the Bay Area Maker Faire. The site also holds the rights to the former Bay Meadows horse race betting with five days of satellite wagering through the San Mateo Jockey Club. Hundreds of annual events are held at the grounds that include seven buildings comprised of 195,000 square feet of space, according to the center. The Event Center parking lot is also frequently rented out to large employers who shuttle employees to office headquarters in other parts of the region, and the city of San Mateo is also looking to underground a storage tank to temporarily hold sewage during extreme storms on a portion of the lot. While located in the city of San Mateo, the Event Center is a county-owned facility. Durand said it’s not yet clear whether a proposal would go through the city’s or county’s planning process. But she emphasized there would be a public planning process and stakeholder engagement. Groom and Durand agreed it’s important to be sensitive to neighborhood concerns and said they’re working closely with city staff as well as the Event Center board. Moving forward, there will be opportunities for public input should officials commit to proceeding with a hotel. Ultimately, they said the project could provide benefits to the city, county and those frequenting an improved Event Center. “That area is growing so much it would benefit the businesses, the residents and certainly the city of San Mateo and the county, to have a facility there that’s world class and in part draws a different caliber of shows,” Durand said. samantha@smdailyjournal.com (650) 344-5200 ext. 106 Twitter: @samantha_weigel

San Mateo City Council promotes workforce housing and parking

San Mateo City Council promotes workforce housing and parking City to reissue request to developers for downtown lots By Samantha Weigel Daily Journal staff 7 hrs ago 3 With affordable housing and parking in high demand for downtown San Mateo, city officials will leverage two valuable lots as they urge the development community to compete for the right to build. The City Council discussed the financials of ideas received by 10 developers in a closed session meeting this week, before instructing staff to outline a formal request for proposals with tall orders. The preliminary parameters include requiring any development on the city-owned sites to include 164 housing units — a minimum of 35 percent of which must be offered at below-market rates — and 535 publicly accessible parking spaces — which includes replacing the 235 currently available spaces. But the mix of nonprofit and private developers will be encouraged to offer various creative proposals balancing the city’s budget and its goals, said Deputy City Manager Kathy Kleinbaum. “We fully expect we’ll get a range of [proposals], 35 percent up to 100 percent affordable, and we welcome that,” Kleinbaum said. “What we’re really looking for is [a developer] that can be really creative, really help us look at alternate financing models and limit the amount of money the city has to put in while maximizing our goals.” Any project will go through a public hearing process, and Kleinbaum stressed these initial steps are about choosing a developer with which to work. Buildings will be subject to the city’s voter-approved 55-foot height limit and density restrictions. The city wants to retain ownership of the land but offer it through a long-term ground lease, likely resulting in a rental project, Kleinbaum said. The sites straddling Fifth Avenue just east of the train tracks are a short jaunt to the downtown Caltrain station and in an area slated for transformation. The properties were purchased for $5 million in the 1990s with redevelopment agency funds before the governor dissolved the affordable housing funding mechanism. It’s now a unique opportunity for San Mateo to leverage land now valued at nearly $16 million. “We want proposals that dramatically increase the available off-street parking downtown, and provide the maximum amount of housing,” Goethals said. “The location and its proximity to the downtown Caltrain station make it ideal to increase the available parking for downtown and build another transit-oriented development.” Satisfying community priorities will entail the city making significant financial contributions, aside from the land. Paying for parking and housing One major council goal is promoting workforce housing, or below-market rate opportunities for people making between 80 percent and 120 percent of the area median income. But traditional funding mechanisms such as federal tax credits, or even San Mateo County’s sales-tax generated Measure K revenue, is only available to units for those making low incomes, or up to 60 percent of the average for the region, Kleinbaum said. The city will consider projects with a mix of affordability from low income to market rate, but is hoping to prioritize workforce housing that’s often the most difficult to finance. The goal is to understand a spectrum of options and the financial implications, she said. “We’re really going to try to make a push for [workforce] units,” Kleinbaum said, adding “there’s no other available funding sources other than city funds to help finance those units.” The city currently has about $2 million in its affordable housing fund and is in the process of collecting more commercial linkage fees — money collected from developers to help offset the impact of new construction on the housing crisis. The city also has about $5 million dedicated to creating new downtown parking spaces, but it’ll need much more to help finance the construction of a 535-space structure, Kleinbaum said. Construction costs typically run about $25,000 to $60,000 per parking space depending on whether it’s above or below ground. Known as the Worker Resource Center and former Kinko’s lots, the initial requirement was for developers to at a minimum replace the 235 publicly accessible spaces. But after discussing options, the council agreed to leverage the sites to help meet projections that downtown needs hundreds of new spaces to accommodate future growth, Kleinbaum said. Councilwoman Diane Papan said this is a unique opportunity to build something that will meet long-term goals. “This is our one shot to do something,” Papan said. “We took a look at what our biggest needs are — obviously housing and then parking to service the downtown businesses. So we’re really trying to get the most bang for our buck within those two goals.” An interested bunch Following a broader request for qualifications, 10 developers submitted ideas to the city and officials are hopeful a little competition will enhance options. Interested developers include Eden Housing and Pacific Companies; Sares Regis; Windflower Properties; Bridge Housing and Bay Meadows master developer Wilson Meany; Raintree Partners and Anton Development Company; the Core Companies; MidPen Housing; Civic Partners; Urban Housing Communities; and Domicile 1 — EAH Housing and EBL&S Development, according to the city. Several proposals came from partnerships between nonprofit and private developers, and the city is anticipated to chose one to build both sites. Proposals were initially graded based in part on financial feasibility, but some used questionable or differing assumptions. Kleinbaum said the council decided to give all 10 developers another opportunity while including more precise parameters. “We want to leave the door open,” Kleinbaum said, but “we don’t expect all the developers that submitted to resubmit.” When it comes time to weigh options, Papan said her considerations would include financial soundness, how much subsidy is needed from the city, and how requirements are met. Kleinbaum said staff anticipates issuing the request in September, with the goal of choosing a developer by January. But, she noted, there will be plenty of room for negotiations and picking a developer doesn’t necessarily mean the proposal won’t change. The public will also be engaged in the planning that will go through the normal city entitlement process, she said. Nearby neighborhoods have expressed concerns about the lots slated to house new residents, and the impacts to traffic. Some have suggested other types of amenities be included, such as public meeting spaces for neighborhood groups. Some also raised concerns about the recent meetings being held in closed session. Kleinbaum said providing the council time to digest the complications of real estate financing was important to tailoring expectations. She noted while some preliminary project designs or renderings may have been appealing, the city must first contemplate the fiscal implications and feasibility. “We’re trying to select, more than anything, a developer to partner with,” Kleinbaum said. “We’re not giving this project any special preferences, it’s not going to bypass any step of the planning process, it’s going to have that full public scrutiny. But we’re just trying to avoid picking a project based on window dressing.” samantha@smdailyjournal.com (650) 344-5200 ext. 106 Twitter: @samantha_weigel