New York Times Take on Changing Interest Rates
While this article is a bit old (January 9, 2007), the information offered by the New York Times on the effect of changing interest rates is still quite relevant.
Landlord Tenant Links
San Francisco properties are subject to a wide variety of ordinances and regulations concerning tenant’s rights, rent controls and evictions, as well as zoning and use issues. Fortunately, we have landlord tenant attorneys and land use attorneys and advisors to help guide us though the ever-changing maze. Over the years, I have had dealings with many of the issues that come up on development of TIC units, unlawful detainer evictions and Owner-Move-In Evictions (OMI), the Ellis Act, and tenant buy outs.
The rental market in San Francisco is very strong and while offerings for investment properties and developmental opportunities can be lucrative, there are many pitfalls. Investors need local, reputable expertise in these areas to define the problems and provide for cost effective solutions. The following are some useful websites that may be helpful to you to navigate through this maze. This list is for informational purposes ONLY and not intended to be used as recommendations. Please call me direct for more specific details.
Landlord – Tenant Attorneys
Evictions – OMI- Ellis Act- Tennant Buy Outs – Land Use Issues
Wasserman – Stern (David Wasserman)
Goldstein, Gellman, Melbostad, Gibson & Harris, LLP (David Gellman , Boyd Mc Sparran)
Bornstein and Bornstein (Daniel Bornstein)
TIC and Condo Conversions
IRC 1031 Tax Deferred Exchanges
It is amazing how many sellers have told me to sell their rental and income properties and have NOT considered tax planning. When I ask about the tax consequences, they tell me they will worry about this after the property sells.
Some of these sellers have owned the property for years, with a VERY low tax basis, so the Capital Gain Tax is going to be substantial.
Fortunately, the IRS has created tax deferred exchanges to help investors keep more your hard earned dollars. However, if the trade is not structured correctly, the seller has no option other than to pay the IRS on the taxable gain.
Tax deferred exchanges allow sellers to defer the taxable gain from the sale of their properties subject to IRS rules and regulations. The 1031 Exchange and Reverse Exchange serve to postpone all or part of the gain from the sale of qualified properties. The rules are fairly simple but VERY unforgiving if not followed exactly as allowed. Therefore, a qualified and experienced intermediary is a MUST if you are considering an exchange. The Title companies and many independent qualified intermediaries offer their clients services and ADVICE for IRC 1031 Exchanges. Here are a few links to explore: Please call for specific details:
1031 Exchange Services
Asset Preservation Incorporated
First American Title and another good First American Title resource
Lower your property taxes??
With declining real estate market values in many areas, it may be time to review your property tax basis. So far, in 2008, there have been 810 property owners who have had their taxes lowered by the City Assessor-Recorder’s office. If you believe the property values in your neighborhood have declined since you purchased your home, you might want to appeal the tax assessor’s valuation of your property with the County Tax Assessor.
This map shows the actual areas with the percentages where these tax reductions for the 810 property owners in San Francisco took place. Notice that the majority of the assessment adjustments were in Area 9 (South of Market and the Inner Mission District). These adjustments would be mostly attributed to the devaluations on the lofts and newer construction condos more than single family homes. In Area 10 (Bay View, Silver Terrace, Outer Mission, Excelsior, Portola) the values have dropped as a higher percentage of homeowners purchased homes with subprime loans and the resulting foreclosures have had a negative impact on the market.
The Appeals Process
There is a formal and informal property tax appeal process in California. The informal process involves filing with the County Assessor while the formal process involving filing an appeal with the Assessment Appeals Board where you can choose to have a Hearing for an independent review of your property’s assessed value. An appeal will need to include recent comparable sales in your area and other pertinent data.
For details of the appeals process, please see SFGate.com and CaliforniaPropTaxAppeal.com.
Please note: There are many web sites that will assist you with this process for about a $30 fee. However, be careful. Computer generated comparables from Zillow.com and other sales data bases do not always accurately reflect positive and negative individual property value adjustments and the resulting property valuations can vary greatly. Median property values on single family homes have declined approximately 6% overall in San Francisco from October 2006 to October 2008. However, the individual districts and neighborhoods adjustments require personalized market expertise to accurately assess the comparables.
Prime rate drops and Mortgage rates go higher…Buy Why?
At the end of October, the Fed cut its overnight rate on loans between banks by 0.5% to 1%.
so… why do the Mortgage rates go up? This article explains why.
Is the Government Bail Out Helping or Hurting the mortgage Industry?
Government bailout uses tax payer money to help stabilize the banks but where does all the money really go?
Is the government bailout money being used by the banks to purchase other banks and monopolize the industry or to stabilize the industry? The Washington Post offers more information.
Trickledown Effect
Some of the banks have now started a “trickledown” effect to pass on this saving to their best customers. But will JOHN Q PUBLIC and the new home buyer ever see the benefits of this easy money?
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