Reasons to Refinance

As a homeowner you will choose to refinance for a wide array of reasons. Here are some of the most common reasons to refinance:

• Obtain a lower interest rate.
• Build your equity faster.
• To change your loan type.
• To take advantage of an improved credit rating.
• To draw on any equity that is already built in the home.

--
Thank You!
Ricardo Bueno - Residential Commercial Construction Investment Advisor
Teaching you how to Build Wealth through Real Estate!
You can reach me directly at 323.810.2175

Are you in need of some Estate Planning?

The underlying question here is: What Am I worth?

Estate planning, is the process of accumulating and disposing of an estate to maximize the goals of the estate owner. The various goals of estate planning include making sure the greatest amount of the estate passes to the estate owner's intended beneficiaries, often including paying the least amount of taxes and avoiding or minimizing probate court involvement. Additional goals typically include providing for and designating guardians for minor children and planning for incapacity. (Wikipedia, The Free Encylcopedia: Estate Planning)

Here's what you do...

Add up all of the current worth of all your assets, including:

- any liquid assets: assets such as cerificates of deposit, money market funds, and bank accounts
- any fixed assets including bonds
- both stocks and mutual funds
- retirement plans such as a 401(k), any profit sharing plans, IRAs, etc.
- any personal assets. These include your home, car(s), etc.
- life insurance and the value of your business if you're self-employed. Don't forget rental property and any other real estate.

Then, what I want you to do is subtract your mortgage and other debt from the value you've just derived. If the resulting figure clearly approaches $2,000,000 (two million dollars) then some serious Estate Planning is in order here!

Here's how it works, a given amount of each estate is exempt from taxation by the federal government. The following table references the amount of the exception for the years 2001 through 2011. Any estate with a value above the referenced amount is subject to the estate tax however only for the amount equal to the portion above the exemption amount.

The 2001 tax act will repeal the estate tax for a total of one year in 2010. It will then then readjust it in 2011 to the year 2001 level.

ExclusionAmount
Year Max/Top tax rate

2001 $675,000 55%

2002 $1 million 50%

2003 $1 million 49%

2004 $1.5 million 48%

2005 $1.5 million 47%

2006 $2 million 46%

2007 $2 million 45%

2008 $2 million 45%

2009 $3.5 million 45%

2010 repealed 0%

2011 $1 million 55%

Creating wealth afterall is about maximizing tax benefit and there are several vehicles to help you achieve this.

Here at Wilshire Financial, Inc. we believe that Residential Real Estate Financing is more like a science and Commercial Real Estate Financing is an art. So what we're doing is combining science and art through a collaborative process involving Financial Planners, Accountants and Attorneys in order to help realize the goals of each and every one of our clients.

Real Estate Investing ~ Secrets Revealed!

Ever thought about how to successfully invest in Real Estate?
It's really quite simple!

• Buy a property at a discount from the resell price.


• Use as much of other people's money (OPM) as you can.


• Make sure that your property cash-flows so that it pays for itself.


• Take maximum advantage of the tax laws.

Sounds simple enough right? Well there are a lot of complexities that can arise but I'm here to make the process as transparent as possible so that every decision you make brings you a step closer to building your real estate fortune. I'll teach you how to utilize your mortgage as a financial instrument to build greater wealth! Think about it this way, we're bringing Wall Street to Main Street.

In the meantime, remember these fundamentals:

• Real Estate is a localized market. Consult with a local Realtor as they are the experts in a particular area. If you're investing in California, visit the Realtor's Corner for a selection of the some of the state's top performing experts and Realtors.


• Familiarize yourself with the mortgage industry. You want to finance as much of your transaction as you can without utilizing out-of-pocket expense. Rather than using your reserves as a down payment, keep them liquid to generate cash-flow or invest them in alternative investment vehicles so that your money is working for you. Now your real estate asset will appreciate in value and so will your investment account.


• Understanding the local real estate market is important. Will local rents justify enough cash-flow for your property to pay for itself?


• Interest on your mortgage is Tax Deductible!

Other Articles of Interest:

100% Financing On Jumbo & Super Jumbo Loans with No PMI - Here's how!

--

Thank You!

Ricardo Bueno - Residential Commercial Construction Investment Advisor

Building Wealth through Real Estate!

You can reach me directly at 323.810.2175.

100% Financing On Jumbo & Super Jumbo Loans With No PMI - Here's how!

Introducing our Pledged Asset Loan Program!

Let's say for example that you have an investment porfolio earning a pretty hefty rate-of-return for you. Now a rate-of-return simply put, is the gain or the loss of an investment over a specified period of time and it's usually expressed as a percentage increase on the initial cost of the investment (your cost-basis). So in our example, let's say that your investment portfolio is earning you a modest 12 - 14%. That's a pretty good rate-of-return; well that's more a matter of perspective based on one's wants and needs. But for the sake of argument, let's agree that it's pretty good.

Question: are you going to want to liquidate your investment portfolio to buy that piece of property valued at $3.5 million?

Answer: NOT if your mortgage payment is going to be 7 - 8%. You're better off maintaining your investment portfolio and letting it generate that 12 - 14% cash flow. If you liquidate it to tie it into the property, you're sitting on a bank and the rich know that creating wealth is more about making your money work for you. Let's remember, money makes money!

In short, this program is excellent for clients who wish to defer capital gains or losses while maintaining their current investment strategy!

How The Program Works:
Certain eligible investment assets may be used/pledged in lieu of a down payment.

For Example: You have a purchase price of $3.5 Million
You'll have to pledge cash and other cash-equivalents equal to the top 45% of the purchase loan amount; that's $1,575,000. However, if you're pledging against stocks and bonds, you'll have to gross this figure up 143% to $2,252,250.

Once these accounts are verified, you'll qualify for 100% financing but will be required to maintain your investment position; in other words your investment assets will remain in their current position and the investing instution will monitor that you have not liquidated such assets until your pledge is removed. (For further information on this program and how a pledge is removed, you can reach me directly at 323.810.2175.)

Again, this program is excellent for those high net worth clients interested in defering capital gains while maintaining their investment strategy.

Features:
• There is no rate increase or points charged for 100% financing
• No down payment is required
• Avoid Private Mortgage Insurance (PMI)
• Maintain your long-term investment strategy
• Maximize tax deductible interest
• No need to move your investment accounts
• You can assist a friend or family member in purchasing their home by pledging eligible assets on their behalf

Wilshire Financial, Inc. and I (Ricardo Bueno) believe that Residential Real Estate Financing is more like a science and Commercial Real Estate Financing is more of an art. So we're combining science and art through a collaborative process involving Financial Planners, Accountants and Attorneys to help realize the goals of every one of our clients.

Going Commercial

William Shakespeare said,
When we mean to build,
We first survey the plot, then draw the model,
And when we see the figure of the house,
Then must we rate the cost of erection,
Which if we find outweighs ability,
What do we then but draw anew the model
In fewer offices, or at least desist
To build at all? -- William Shakespeare

Moving from investing in small residential complexes to investing in complex multi-unit or mixed-use commercial complexes is the equivalent of moving from Junior High straight into College. Though today's market place allows the investor the same types of financing for their commercial properties as they normally would for residential properties, commercial investments require a whole new level of professional management. And if you're a full-time employee, do you really have the time to manage a 20-unit commercial complex?

I'm not advising against your investment in that 20-unit commercial but I am asking you to take a plan of action into consideration; a Business Plan so-to-speak. How will you finance it? How will you manage it? If your investment goes sour, what's your exit strategy? How Will You Own It?

If you work with your own Financial Advisor & CPA, I'm sure that you've discussed ownership of your investment properties through some form of corporate or partnership structure.

WHY?

Because as a high net-worth individual, you want to insulate your personal wealth from any lawsuits or any other personal liability issues that may arise against you.

Here are some common types of ownership that you might consider:
Sole Proprietorship
Partnership
Limited Partnership
Corporation
Limited Liability Company

Follow the Money:
You always want to finance as much as possible on your property purchase. If of course you have enough for a down payment that means a lower interest rate. But don't place more of a down payment than is necessary. Keeping liquid cash-flow and having it available is always important. In this case your purchase should cash-flow itself but having additional reserves for improvements/repairs never hurts.

Unlike Residential Financing, you'll find that Commercial Financing requires larger down payments, loan products carry shorter terms, and interest rates are generally higher. But don't fret, commercial financing is generally speaking a little more lenient than residential financing. There are still very competitive loan programs available in the market place. It's simply a matter of determining what your immediate needs are and locating appropriate financing terms.

Remember: Provide your lender/loan officer with as much information as you can! Give them a "mini business plan." The more information we have, the better we can structure your deal and locate an appropriate financing package.

--

Thank You!

Ricardo Bueno - Residential Commercial Construction Investment Advisor

Teaching you how to Build Wealth through Real Estate!

You can reach me directly at 323.810.2175

(6) Six Reasons Property Values Increase

Six Factors that Cause Property Values to Increase In Value:

1. Inflation:

As we all know inflation is the decline of the buying power of money. We can also refer to it as the effect of the increase in the cost of living. As society becomes more modern and sophisticated, we generally develop a desire for things that cost more. So when you have a buyer purchase a high-end piece of real estate, you can count on that driving property values up. (Note: the same applies in the opposite direction. When a buyer purchases at a low end price, it's going to drive property values down. This is the case in the current market in certain geographic areas.)

Income property has some excellent potential for offsetting the effects of inflation. So even if you're not seeing an immediate return on your investment through the monthly cash-flow generated, hold your position for the long-term and you'll definitely make your investment worth-while.

Think of it this way, cash-flow may be tight at first but your tenants are paying the mortgage for you and your property is appreciating over the years. Let's not forget the fact that you can increase your rents yearly to stay in-line with the market rents. The longer you hold, the more cash-flow you'll begin to generate. Not to mention the fact that you might stumble upon a buyer willing to pay you $1.5 million for that $600,000 investment you made.

2. Improved Infrastructure:

Changes within the community can produce some very profitable results for the value of properties within the area. However, not every improvement can lead to a positive effect for the value of your property. Some projects might be publicly built and financed, like a local park. Others might be privately owned and financed. And each of these can lead to a different effect on the value of the properties in the immediate vicinity of the project. Some buyers may be signaled towards a great purchase, and others might be enticed to sell because of the new developments.

My suggestion: attend your local Neighborhood Council meetings and your Land Use Committee meetings. Be aware of any new developments in the community and alert yourself to the effects those developments might have. It's always best to be aware especially if you're considering buying or selling.

Examples:

- Long-term construction: the messy appearance of the neighborhood (road work, detours, dust, etc.) might weaken the market in your area. Values may or may not go down. If they don't stagger, you'll definitely see a slow appreciation rate during the development phase.

- New Roads: one street was once readily accessible but now because of the new roads it's not. You can count on property values deteriorating there.

- New Park: like the new Rio de Los Angeles State Park in Los Angeles, CA; or more specifically Cypress Park. A development like this adds value to the local community. The park leads to increased activity in the neighborhood and it attracts much attention from surrounding neighbors making the location enticing to prospective homeowners even if the price is slightly high.

3. Economic Conversion:

Voluntary Economic Conversion: this occurs when there is a change in the current use of a property. And in this case, you have caused the change. For example, let's say that you purchased a Single-Family Residence and converted it into a professional office space. Either the area had zoning permits allowing it or you had the zoning changed. In this case you have engaged in a voluntary economic conversion.

Unlike buying a lot of land to hold for future use and development, economic conversion is the best immediate real estate investment. When an investor purchases a property for the purposes of engaging in a voluntary economic conversion, they are ready to act immediately on their new development. It being something new, it often brings added value to the community!

4. Increased Cash Flow:

Cash flow sets the cash on cash yield...meaning, the return on the actual cash that you have invested in the deal. And anything that will increase the cash flow of a property will also increase the property's value! (Note: we'll have a more in depth discussion on this topic later.)

5. Capital Improvements:

Capital improvements don't necessarily increase the value of a property overnight. (Just ask a reputable appraiser and he/she will tell you the same thing.) This is especially the case if the capital improvements are simply for the purposes of making up for poor maintenance.

So what kind of improvements will add to your property's value? Decorative landscaping is one such improvement.

A quick note for the avid investor: I always say "everything that you do should contribute to a strategy!" So when you buy a property, plan to make any capital improvements earlier on rather than waiting and doing it later. If you have to create a schedule of capital improvements to be made and create a budget, do it! You'll only benefit yourself in the short-term as well as in the long-run.

6. Supply and Demand:

We're currently in a Buyer's Market! There's a tremendous amount of inventory out in the market place due to foreclosures, high expense of ownership, etc. As an investor, this is where knowledge of the current market and an solid game plan come into effect.

You ask, "how do I benefit from the current market?" Well, let's take a look.

What is there a large supply of? Single family residence homes.

What is there a short supply of? Maybe nice office space.

Well, remember what we talked about earlier? Voluntary economic conversion! It's simple economics and yes ladies and gentlemen, it really does work. You CAN invest in a single family residence and convert it into nice, professional office space. But do you homework! You have to make sure that the local zoning regulations permit it.

Don't let the vast inventory trick you into thinking that anything you pick up is a great buy because it's undervalued and will appreciate quickly! Do your homework, create an investment strategy, and leverage your position as a buyer/investor. The foreclosure market is saturated. Some are good picks while others are not. Read my article on Foreclosures before you move forward in that direction.

--

Ricardo Bueno - Your Residential & Commercial Investment Advisor

Ricardo Bueno is a Mortgage Advisor & Team Leader with Wilshire Financial, Inc. A diversified mortgage brokerage located in Pasadena, CA.

Hello and Welcome!

For a lot of people Real Estate is an Investment. But in order for it to be a successful investment, you have to do what the brilliant minds of Wall Street do; practice your "Due Diligence."

I always say, "everything that you do should contribute to a strategy!" -- RB

So I welcome you to my blog! I'll be giving you the tools in the form of knowledge and resources so that you plan your investments accordingly and see your equity grow! I'll teach you how to maximize your cash-flow and increase your rate-of-return.

We're going to cover everything from:

1. Residential - Conforming & Super Jumbo

2. Commercial - Multi-Unit Properties, Strip Malls, etc.

and, 3. Construction - Lot Acquisitions, Developments, New Construction, Conversions, etc.

For any additional resources, please visit my website at www.RicardoBueno.com. Or if you're ready to move forward on an investment, please contact me directly at 323.810.2175. And for those of you who are beginners in the world of investing in real estate, please visit my other blog at www.mortgagecafe.blogspot.com where I'll be teaching you the fundamentals and giving you market updates.