When I sell, when should I turn off the utilities?

Never turn off the utilities prior to the close of escrow. During the inspection period, general inspectors will require the gas and electricity be on in order to confirm the condition of the property.

What is the general rule for capital gains when I sell my home?

The general rule is if you lived in the property for 2 or more years within the last 5 years, if you sell the private residence, you can collect up to $250,000 (single) or $500,000 (married couple). Of course, speak to your account and do your homework!

If you are over 55: Sell now, buy later!

Dear William,

I’d like to buy a replacement property using the Proposition 19 rule where I can bring my tax basis with me. The only problem is I don’t have a property to buy yet and I feel like I should sell my house. Can you help?

K.S., Malibu

Dear K.S.,

Buying a replacement property and following the timelines for everything can be very overwhelming. Fortunately, for every single detail, we have the right people to help along the way. One important aspect you should know about Proposition 19 is that you are allowed to sell your property first and still have up to two years to identify your replacement property [if you are over the age of 55].

Call me and lets talk strategy,

William

How much can I lease the home I currently live in for?

Many people get to a point where their personal home isn’t for them anymore. It’s ok. It’s very normal. Some people like change and move around and some people just want to upgrade or downsize. Whatever the reason, renting your property can be valuable as income as well as equity building.

Real estate investor gurus often encourage the idea of never selling. Rather, rent out your property and continue to buy more property by using the equity built into the property you already own. There are also incredible tax advantages for property investors. Lease agreements can create new loan agreements!

If you are considering leasing your property, we would love to help you vet best tenant for the best price. We can offer global marketing across multiple sites and brokerages as well as micro local tenant pools looking for properties like yours.

Call or text us anytime for a complementary valuation to find out how much you can rent your space for 📞

310-388-2448

How can I increase the rental income of my property?

Hi William, 

Harry and I are thinking of leasing out our Palisades home since we are spending more time at our Palm Desert home. What do you suggest we do since you’ve already seen it. We want to make more rental income. Maybe you can share this on your Dear William for others too. We want to list for lease in May btw. 

 MJ 

 Hi MJ! 

 We can talk details over the phone but here’s a quick list of the things I would do to your house to generate the most possible income. Top dollar tenants want ocean views (you have it) and they want a sense of newness, freshness and a pinch of modernity. That can happen with your house with a few improvements once you move out. 

 Here are 5 things you can do to improve your rental income: 

 1) Show the house empty so it feels bigger. Tenants want to feel like the place is spacious and they’re the newest tenants living in fresh new energy. 

 2) Paint every wall white. White walls create the feeling of more space and enhance the feeling of crisp, fresh and clean. 

 3) Refresh the kitchen Let’s talk about painting your cupboards, replacing the countertops and getting brand new appliances. Tenants love a solid remodeled kitchen every time. 

 4) Modernize the bathrooms Replace the toilets with new cooler looking ones and reglaze the bathrooms that have bathtubs. 

 5) Make the curb appeal pop. I would suggest adding some drought friendly plants along the walkway in front of your entrance and add some solar lighting to your garden. I can show you more in person what I mean.

PS I would not change floors ever. They’re original hardwood and they’re absolutely delicious. I think if you do all these things, we could likely find a tenant willing to pay 30-40% more in your area. 

 I’ll call you in the morning, 

William

We decided to lease and wait to buy when rates are lower. What do you think?

Hi William, we decided to stay in Brentwood and wait until next year to buy when rates are lower. What do you think?

Jenny J, Brentwood

Hi Jenny,

Here’s the problem … waiting for mortgage interest rates to come down is like waiting for home prices to go up. The demand feeds the pricing. I would prioritize what a healthy mortgage payment monthly is to you and your family and what you want your lifestyle to be and find a home regardless of the interest rates. Where do you want to live and love? Right now, quality properties are hitting the market and getting way less attention that they would have been getting 6 months ago. You could likely get the property for less than asking price if it’s been on the market for a bit. If rates really do come down and there are more buyers who come back to the market, you will have more competition and it will drive up the price. Right now, buyers have more power in the negotiation because there are less buyers to compete with. Don’t worry too much about the interest rate. We have some negotiation strategies that will overcome that obstacle. Also, refinancing when interest rates are lower is always a smart idea. Keep looking. You never know what is around the corner!

How can I plan for retirement in my 40s?

Dear William,

I’m 40 and I have a mortgage already and I’m thinking about ways to plan for my retirement years. What are you seeing your clients do?

Carmen G, Mt Washington, Los Angeles

Dear Carmen,

You’re asking this question at the best time in your life to make decisions that will benefit your future financially and comfortably. Have you considered buying a vacation home? Buying a vacation home now might be a solid home for your retirement years! Lots of our clients have vacation homes in Palm Springs, La Quinta, Palm Desert and Desert Hot Springs. So many options! You can also pay the mortgage by renting it out either as a short term rental or long term. The point is think about buying property you’d like to appreciate in your platinum years now and buy it so that when the time comes, you’ll own it mortgage free! Check out our current lease in Silverlake and our Airbnb for sale - maybe you’ll be inspired to buy your own rental or lease out your own property!

Your Agent Truly,

William

Should I sell my house now or next year?

Dear William,

We are definitely selling our house. My husband Jimmy wants to move to Palm Springs area for retirement. Should we sell this fall or next year? I read an article that said Zillow predicts home prices to jump 6.5% next year!

Josie B, West Hollywood

Dear Josie,

The same news was also reporting a recession a year ago. Do you remember? I find you can score great deals in the desert in the summer!

Rates are expected to drop too! What happens when rates drop? Prices increase! More buyers are buying! If I were you, I’d sell now this fall season before the big pool of inventory comes next year and you have more selling competition. Every property we sell right now sells for way over asking. I can’t guarantee that next year regardless of what the news says.

William

Should I sell my condo or lease it?

Hi William,

My son is moving out of his condo we bought for him for university and now that he is graduating we are considering selling the condo. We were also considering leasing the property since it is a university student area and rents are almost double what we owe in mortgage. What do you think we should do?

Darryl H, Santa Monica 

Hi Darryl,

How smart that you purchased a property for your child to live in while they attend university! As much as I would love to sell everything, I also want your referral business for life so here’s the real deal.

Are you familiar with the tax benefits of owning a rental property? I suggest you dive a little deeper into my blog articles. There’s an entire blog dedicated to this topic and we include the advice from our expert CPA Dennis Duban.

If you can pay the mortgage and collect passive income, I would not sell the property. With limited inventory, prices are continuing to climb. University towns are a great place to continue to collect healthy revenue streams through rental income.

Instead of selling, maybe your son would be interested in trading the condo for a multi unit property where he can live in his own and collect income from the tenants! In this case, you would be able to sell the condo for a multi unit property - but you would need to rent out the existing condo first in order to complete a 1031 exchange and avoid paying capital gains at the close of sale.

For most people, the hardest part in real estate is coming up with a down payment. So long as you continue to grow the equity of your property, son will continue to benefit from the growing portfolio in the years to come.

William

Are home prices coming down?

Dear William,

I’m a medical student and I’m thinking of buying but it seems like prices are slowly coming down. My gut is telling me wait. What do you think?

Dan S, Beverlywood, Los Angeles

Dear Dan,

Your belief that prices are coming down is a popular belief! In a recent Rubel+Ashman poll, we discovered that 52% of people believe that prices are coming down. The reality is that is not the case. Prices have actually increased nationally almost 1% in the last 30 days. We are seeing multiple offers still come in. Properties are still selling for over asking. If you’re waiting to buy and can, get in it to win it. Success is not a spectator sport.

Buyers are competing over less inventory and even though mortgage interest rates have increased, the competition is still there. Don’t let interest rates scare you. The only thing that should scare you is an empty real estate portfolio. You don’t even necessarily have to live in your investments either but you should definitely be buying property as often as you can.

William

Can I buy a home with my friend?

Dear William,

My friend and I were thinking of buying a property together because it’s too expensive in Weho and we are so over living in Hollywood and we want to be near the weho bar scene. Can two people not in a relationship buy a property together?

Carlos, Hollywood, Los Angeles

Hi Carlos!

I think it’s COOL BEANS you’re thinking beyond just your wallet and income when it comes to real estate investing. That faster you’re in, the quicker you get to trade chits at the table.

Can you get a home loan with a friend? 100% yes. Lenders do not care about your relationship status but rather how you’re going to pay the mortgage bill. The more people to pay the bill the better for them.

Did you know 3-7% of all home purchases are made with friends? In today’s market it is more than ever smart to think larger than what you can afford if you’re able to go in with an investor friend.

Just remember to set your financial and personal boundaries with them before you move in. I had a roommate once who decided to leave her hair in the shower after every use and I learned very early on that what you don’t communicate will ruin your life AND don’t share bathrooms! Will you have a housekeeper? Who is paying the utilities? What about groceries? What about if your door is closed to your bedroom? Communication is key in any relationship especially when it involves your financial future. It’s also really important to assess your friend and ask yourself if you would go into business with them. Just because you’re friends, doesn’t mean you would do well with them in business or paying bills.

Try out our cool mortgage calculator together to see what you can afford - be realistic and allow room for bar hopping in your budget.

http://www.rubelashmangroup.com/mortgagecalculator

Cheers!

William

What is a probate sale?

Dear William,

How do I buy a property that says it is a probate sale? No one seems to know when I talk to them about it.

Tanner L, Culver City, CA

Hi Tanner,

We deal with probate on a regular basis and it’s always a sensitive matter. From belongings going to estate sales to being sensitive to privacy, our job is to create some emotional stability, provide solutions all while living in the emotional roller coaster of losing someone you love.

If the property still has an existing living owner and the other person on title has deceased, you will need to provide escrow with a original copy of the Certificate of Death in order to sell the property. There are more details in this scenario that we can talk about more on the phone.

If the property has only one owner and the owner is now deceased, here’s the reality: the probate sale is going to go one way or another. The first way is whether or not the property require a court confirmation (still call me!), then a legal counsel will make a final decision on what that price will be so write an offer and see what happens. Most importantly, work with an agent that understands both scenarios so that if you really want the property, it will definitely be yours!

William

Have a question you would like to ask? Email william.ashman@avenue8.comOr DM @williamrealtor Instagram/threads

I’m getting a divorce. Now what?

Dear William, Lisa and Kim,

I’m getting a divorce. I want to buy a property and move on. I am ready for the next chapter. My ex is fine financially and I think it’s going to be fine, no drama. Where should I buy in LA if I want to really work on my equity? I have about 1m to work with and I would prefer to spend about $6000/mo. What do you think?

Patti R, West LA, Los Angeles

Hi Patti,

If there is a silver lining in all this, it is that you are about to experience a whole new chapter in your life - and you’re already asking smart questions that will drive your future.

Be prepared for the unexpected scenarios. Ask your lawyer about the time period you can not purchase property. All these details are specific. Just because your ex is fine with you now doesn’t mean they will be next week. It’s very important to pay attention to the timing your lawyer advises you.

With 1 million in LA, and you want to spend 6000/mo, I’d buy a house in the 2m or less range in the Del Rey neighborhood of West LA and I would renovate it and live in it for two years minimum and sell or lease it and move on. We recently sold a property in 90230 Del Rey area for almost 1 million over what the clients paid for the property originally because they took care of the high end vibes and details of the house and made it worth the price tag.

We would also be looking for a property in the Eagle Rock/Highland Park area of North East LA (the area is coined “NELA”) where the topography is gorgeous and the neighborhood restaurant brunch scene is on fire. We recently sold several properties on the east side and you can find affordable options where your equity will grow quickly.

View Park/Baldwin Hills area is also a hot topic for investment because of epic views of the city and the mid-city location. This is an area that will likely double in value over the next 5-10 years.

Right now, rents are skyrocketing for high end leases. Make your new property stand out by refreshing it, modernizing it and don’t cheap out on finishes. Buyers and tenants know finishes often better than sellers. The best advice I can provide you is make this the best chapter ever in your life and live in your reinvented lifestyle for a minute and soak in the new you.

When I was single for the time after a heavy breakup, I remember changing the linens, getting new things and most importantly a new property. I sold everything on Craigslist in 2 days!

Treat yourself to the best remodel and then let it go when you’re ready - so save some of your cash for lavish finishes. Make sure you sell after 2 years so that you can collect $250,000 without paying capital gains. If you decide to remarry (it happens when you least expect it), you’ll be able to claim $500,000 - but I highly doubt you’re even thinking that would ever happen at this point.

Hope all this helps:)

William, Lisa and Kim

What are the tax benefits to owning rental property?

Dear William,

What are the tax benefits of owning a rental property? I have some cash I’d like to invest in real estate potentially. Let me know what you think!

Jeremy K

Venice, Los Angeles, CA

Hi Jeremy,

There are several tax benefits to owning rental properties. Since we are not certified public accountants in California but do understand what you’re asking, we made sure we asked my go-to licensed accountant Dennis Duban for his expertise.

Here’s what Dennis has to say:

“The primary tax benefit of owning rental property is that cash flow is typically tax free. That is because even though the rents exceed the operating expenses and interest expense (when there is positive cash flow) there is depreciation expenses which will usually result in a loss for income tax purposes. Depreciation is a part of the IRS code that allows you to write off the portion of a property that represents the value of the structure when isolated from that land over a period of years (27.5 for residential and 39 for commercial) and shorter periods for certain improvements. When and how the losses are deductible is another story and can result in other significant tax benefits. But even using the cash flow to pay down mortgages and build up equity is a tax free way to build wealth. There are also tax benefits to short term rentals which can be even greater than long term leasing tax benefits.”

- Dennis L. Duban

dduban@dldcpas.com

Now let’s find you a rental property!

William

How does a buyer’s agent get paid?

Dear William and Kim,

I met you at your open house. I’m looking for a house and I have been looking at some properties and I think I found a property! I called the number on Redfin app but the agent that answered isn’t the listing agent. I’m so confused. They said they will be my buyer agent but I just wanted to see the house. Should I hire a buyer agent? They said I don’t pay for their services, the seller does. Can you explain this? Now that we are in escrow, the seller wants me to do the repairs before the close of escrow and it’s been almost a month and my loan is not approved yet. I’m concerned about the condition of the house and the permits. What should I do?

Thank you,

Brenda R., Hollywood Hills

Dear Brenda,

When you go on apps to search for property, remember the app you’re on has its own business objective and that is to convert you into a transaction. The buyer agent people often reach out to are buyer agents that work for the brokerage and app you’re using. Sometimes agents pay the app for your business through sharing their commission and giving the brokerage app a referral fee which is generally 25-35% of gross commission income.

While there is generally no standard commission of it there, buyer agent commission generally comes out of the seller’s listing agreement where they agree to a total percentage of the sale proceeds that will go to the seller as a commission for procuring the sale. Sites like Redfin actually publish the buyer’s commission - often 2.5% of the purchase price.

Make sure you hire the right person for the job. If you’re wanting to reach out directly to the listing agent, look more closely in the app you’re using and it’s often hidden in the listing description where you can find the listing agent’s phone number. We think you reaching out directly is not a smart move either.

In an ideal situation, you should have contacted us instead of the link because you know that we sell in the area, the agents who work in the area know us, we understand the process and have a network of referrals for any hiccup that comes along in the transaction. We don’t want you to make what we call the $100,000 mistake. We are here to protect you from the vulgarities of the marketplace. Sometimes agents can be a problem too if they don’t have the knowledge to help you get what you want. Sometimes hiring the wrong person can cost you more than the commission from the sale. Missed repairs, permits, understanding contingency timelines and negotiations can impact the bottom line hundreds of thousands of dollars - sometimes millions. As much as the seller is paying for the buyer agent commission, the reality is you’re paying the total bill so be prepared to buy a house with an agent you want instead of clicking on an app!

In regards to permits and inspections and repairs, we never encourage sellers to do any repairs prior to the close of escrow because it puts them in a place of liability should the repair not remedy the problem short term. Credits are better in this scenario because the buyer can hire the people you want to get the job done to your expectations. This is another small example of a big missed opportunity.

Hire us next time:)

William & Kim

310-388-2448

Why is a preapproval letter from my lender so important?

Dear William,

I don’t have a lender yet and I want to buy a house. I go to all the open houses so I understand the market. My goal is to buy a house in the Elysian Park area. The agent I was talking to kept asking me about being preapproval letter from a lender but I don’t feel very comfortable sharing my information. I don’t have that much debt and my job is pretty secure. What should I do next so I’m ready?

Tara R, Echo Park

Dear Tara,

Buying real estate is the smartest move you could make in your life. You will thank yourself in the future. Have you ever met someone who has invested in real estate for 30 years and they regret it? No.

It’s a big red flag when buyers do not have their preapproval ready to go. Sellers with solid agents selling their home for them would never encourage their seller to accept an offer that does not have preapproval or fully underwritten approval in the offer and/or verification of funds.

The most important thing you should do to get yourself ready is to get your preapproval lined up and do it as fast as you can because rates are likely going to be going higher. Everyone is talking about it and you don’t want to be sitting around waiting because then you’ll just be paying more interest in the future. If you get a preapproval now you can lock down the rate today for an agreed period of time. I can refer some great lenders to reach out to!

In regards to not feeling comfortable speaking about your financial situation, I encourage you to find a real estate agent and professionals where you would feel comfortable talking about that unless of course you have things in your financial history you are embarrassed about or need to address and that’s what’s holding you back. Either way, it’s best to work with people you feel comfortable with and that it almost feels like a normal conversation to be speaking about your income and expenses.

Here’s a tip: Lean into your discomfort. Whatever makes you feel uncomfortable is probably something you should pay attention to and dive in a little deeper because buying a home should be exciting.

Yours truly,

William

Can Canadians get a loan for a home in California?

Dear William,

I live in Vancouver and love Palm Springs. I dream of having a vacation home and visit often. I’m open to also renting it out when I’m not there but I would need help. I’d like to buy something there but I’m Canadian. I’d like to get a loan. Is that possible?

Sheryl K, Kitsilano Beach, Vancouver Canada 

Hi Sheryl,

How exciting that you are thinking of buying a home in Palm Springs as your vacation home! Lots of Canadians like yourself enjoy the warm weather in the fall and winter seasons in the Coachella Valley. Generally speaking, lenders have options where you can obtain a loan if you have a great credit among other essentials and 30% down roughly. You can also hire a local property management company to take care of your property and rent it when you’re not there. Remember, once you start earning income in California you will need to also hire an accountant! 

The great news is that most rentals are able to pay for their total mortgage for the entire year. The most productive part of the year for tourism is generally at the end of the year and beginning of the year. If you would like me to refer you to a lender, we’re always here to help! Let’s get you into vacation mode!

William

What’s the best way to help my child buy a house?

Dear William,

My child works so hard he is 33 years old works in the banking industry and is finding it very difficult to purchase a home. He just got married and I want to help them but I don’t know the right way to do it. Can you help?

Carl J - Westchester, Los Angeles

Hi Carl,

First of all, how cool is it that you’re a proud parent and you feel like your son is working really hard! 

Times have definitely changed since the time you were buying your first home. Homes are becoming commodities and 1 in 5 single family residences are being purchased by investors. I remember as a child my mother telling me how important it was to buy a home because it is your biggest asset. It’s more challenging than ever to get into the housing market with a paycheque and we’re noticing lots of really solid buyers just not making the financial cut. Does that ring a bell? Did you feel that way too when you purchased your home?

First time homebuyers are more than ever relying on help from friends and family financially. I’ve been in scenarios with clients where parents will use their IRA, cash in their accounts or equity in their property portfolio. In fact, 64% are using financial resources from their families and friends to get into their first home. Some parents are even calling it an “early inheritance”. Instead of waiting until after they’re no longer physically here, they give them money now for the house and feel that they can enjoy seeing their children prosper while they’re around to see it. Some parents decide to claw back the original loan to their children from the equity growth in the future years to come. I have experienced other scenarios where the children pay back the loan in multiple payments. I’ve also seen monetary gifts. Some parents go on title. 

I think the most important thing is how does it make you feel to help your child?  It appears that the growth of your child and his future is important to you and you love seeing how successful he is so maybe this is a perfect time to have a conversation with him about planning to help support them if you can in their residential purchase?  You may also want to entertain the idea of creating rental properties for your children to enjoy income so they are able to increase their income and afford the mortgage payments for the property they want to move into. The possibilities are endless. The great news is that you are an awesome parent. Here’s a link to our mortgage calculator if you feel like playing with numbers!

http://www.rubelashmangroup.com/mortgagecalculator

Dear William / Be smart, buy now!

We received questions from a buyer and a seller separately and decided to respond to them both together. William offers serious advice that is practical for all kinds of scenarios in real estate. Check it out! If you have a question you’d like us to respond to, email william.ashman@avenue8.com.

Dear William @ Rubel Ashman Group,

I am renting until the market comes down. Plus, there is no inventory. I’ve got the cash but I think I’m going to wait. What do you think I should do?”

-Mark J  - West Hollywood

“Dear William

Sure it’s a great time to sell my house but I have nowhere to go. Everything is expensive. So now what?”

-Julie A. - Del Rey

_____

“Dear Mark and Julie,

We decided to write back to both of you together since you’re experiencing the market in very different ways and this will give you a bigger perspective. The best advice is to buy something now and don’t try and time the market. Live your life now for you and make some smart money moves.

Why in the world are would-be buyers paying rent in LA? Why are sellers who would rather move holding on to their property so much and say they can’t find somewhere else to live? 

Here’s the deal from a larger picture beyond just you. Lots of would be first time homebuyers are sticking it out in Los Angeles in their rentals instead of buying with millions in their accounts. We see it all the time. This is driving up rent too because tenants are offering more to beat out competition. They’re all hoping that the markets going to crash,  interest rates will drop and that finally they will be able to buy their property. Big mistake. Money doesn’t grow unless you do something with it.

We’re here to tell you a “crash” is likely not going to happen and if rates eventually drop, you can expect home prices to increase 20% or more in value over the next few years. Crazy right? Buy something. You don’t have to buy a house for yourself but you should buy something and get tenants to pay for the bills. 

The only people that actually win in the long run in real estate are people who buy because you always make money when you buy because the idea is to hold onto the property unless you’re trading or have to. Buy anything. Who says you have to live in it? Buy a rental.

The same rule applies to homeowners. Gone are the days where your home is your biggest asset. In most cases, properties are carrying tremendous equity and if you’re scared of interest rates, you should be more scared of losing your equity in the short term.

Buy more property with the equity that’s sitting in your property and if the market does shrink in any form, that will also mean your equity will shrink but your portfolio will have grown and in the long run, you will have built more equity. 

By leveraging your equity now and purchasing property that makes rental sense, this would be the perfect time to be reinvesting in your portfolio and make smart financial decisions for your future health.

It’s also a great time to just sell off property you simply don’t want anymore. Home prices are selling for top dollar because there is limited inventory and a lot of trust fund money is out there ready to scoop up property for way over asking if it’s dolled up properly. We are seeing double digit increase % over asking price when we market the property the way we need to. 

If you don't need to be in LA, you should consider selling and moving for several reasons. But if you’re renting here maybe you can find a more affordable place in a better area in California to buy if you’re working from home. There’s all kinds of ways to buy - but please make some money moves in real estate instead of just letting your money just sit there.”

- William Ashman, Rubel Ashman Group

Smooth Sale-ing: 3 tips for a smoother sale

Buyers tend to think property sitting on the market more than 30 days means there is a problem with the property.

Sellers tend to think property sitting on the market longer than 14 days without an offer is a problem.

Did you know that most property that sits on the market is because there was a buyer that backed out of escrow previously? Currently about 1 in 3 sales fall out of escrow. Loan funding and inspection contingencies are often the culprits. 

Here are 3 tips to smoother sale:

1) Buyers can be liars - just because buyers claim they can afford or want the property “as is” doesn’t mean it’s fact - and beware of the buyer letters!!Deals really are like dating. Make sure you figure out who your buyer is before you go into escrow with them. Buyers can sometimes drag out escrows for what feels like a million years - and when a property sits on the market, especially after the strong seller’s market we had last year, buyers and sellers are conditioned to think property should be selling in 5 minutes when really that is not the case. 

2) Depersonalize your home - whether it’s you move out or you completely refresh and depersonalize, more than ever, buyers want move in, fresh paint ready because affordability is an issue and buyers tend not to have have time or bandwidth to do the work. As much as you love your stuff, buyers want to see themselves in the home and not you.

3) Contingency killers - A residential homebuyer can pull out of escrow during an inspection period in California for literally almost any reason. Funding for loans is becoming harder than ever for many buyers. Loan and inspection contingencies are there to protect the buyer. Buyers can rightfully pull out of the deal within the agreed upon contingency periods. Buyers strengthen their deals by removing contingencies. It’s always best to consider offers with less contingencies - but remember that even when an offer is clear of contingencies, buyers still have room to pull out of the deal in a few scenarios.