Los Angeles Real Estate Success Stories

Los Angeles is a city of stark contrasts, from the multi-million dollar homes in Pacific Palisades to the slums of South Central. For many of modest means, the accumulation of great wealth through Los Angeles real estate is a chimera, an unrealizable dream. The gap between where they stand and where they would like to be is just too large. Yet there are those who, starting from just such a situation, have parlayed an investment of a few thousand dollars into substantial real estate wealth. The particulars vary, but the key in each instance is formulation of a sound plan and consistency in pursuing that plan over time. Here are the stories of a few outstanding individuals who did just that:

Why Real Estate?

For the patient investor, real estate is substantially more attractive than securities as an investment. Even for the dyed-in-the-wool stocks and bonds investor, real estate is appealing as a means of portfolio diversification. The four main benefits of commercial real estate are:

The benefits of appreciation and equity buildup are available to both real estate investors and homeowners. Tens of thousands of families have created the most significant portion of their family wealth through appreciation in the value of their home over the course of their working careers. In addition, payments made on a mortgage loan are like a monthly savings plan, adding to equity.

Commercial real estate offers additional income benefits. The issue of income is related to supply and demand, which affect the asking price for rents. Because of the myriad employment and self-employment opportunities in the Los Angeles area, rents have marched steadily upward over the decades, and the consequent benefit in terms of income for the real estate investor is a very solid one.

With respect to tax benefits, couples who sell their home can take a capital gain exemption of up to $500,000 tax free on a joint tax return, or up to $250,000 on a single return, provided they have lived in the home for at least two of the five years preceding the sale. The real estate investor also enjoys exceptional tax benefits. The first is the write-off of depreciation as a deduction against income, resulting in a tax break. The second is the IRS Section 1031 tax-deferred exchange, one of the last great investment tax shelters in our country. Section 1031 allows an investment property owner to exchange equity from one property to subsequent larger properties and defer capital gains taxes over the course of his or her life. This tax-deferred exchange is available for all the properties in a real estate investor's portfolio. In a comprehensive estate plan, a lifetime of capital gains passes tax-free into the owner¡¯s estate.

A lifetime plan of investing in real estate is thus one of the nation¡¯s last true means of creating significant wealth and deferring taxes.

The Listing Agent’s Role in Marketing Your Home Advertising to the “Public” Every home seller likes to be assured that their listing agent and or their real estate company will run ads featuring their home. Newspaper ads range from color photo ads to lots of listings reflected on a page with primarily only copy. Classified ads featuring your home are another tool. Ads may also appear in local real estate magazines and on the Internet (ideally on several sites). Of course, Realtors and their brokerages will run ads featuring your house, but not necessarily for the reasons the seller expects. The primary motivation for advertising is to make the telephone ring. Advertising creates phone calls and some of those callers become clients of the agents answering these calls. This builds up a pool of homebuyers looking for property in general. Multiply this by all the agents and companies who also advertise homes, and there is a large pool of homebuyers in the market at any given time – all of whom have contacted a Realtor. The agents representing those homebuyers know about your home once it is listed in the Multiple Listing Service, has been on broker preview, and because your agent is also marketing directly to these agents. Through, the Multiple Listing Service (MLS), the agents match up their clients (computer prospecting), with available homes, one of which may be yours. Realtors then show the selected homes to their clients, who ideally end up buying one. Although, ads do not typically sell your house directly, they create a pool of clients for Realtors; and one of these existing clients typically purchases your home. Behind the “Advertising Scene” When an Agent or their brokerage, advertise homes they have for sale, there is more than one objective. Certainly, the real estate office wants to generate phone calls and sell houses, but the advertising also shows other homeowners how effectively they market their listings. This impresses not only the seller, but also others who may be thinking of selling their home. The advertising brings in more listings, which generate more ad calls, which produces more buyers…. Cross selling is often how your property is sold; someone calls on one home and the agent on the line tells that buyer about yours. About 5% of the time, you and your agent will get “lucky”; and someone calling on your house may actually end up buying it. Neighborhood Announcements When you first list your home many agents send "announcements" to all of the other houses in your neighborhood. This is typically done in the form of postcards, or letters. This too is has a double purpose: your neighbors might have friends who are looking to buy a house (but they probably would notice the for sale sign, anyway) and of course this hopefully impresses other area homeowners that might be contemplating a sale. Open Houses An open house can be also be helpful, but not for the reasons most homeowners think. Just like with advertising, most visitors rarely buy the house they come to look at. They usually do not even know the price of your home when they stop by– they probably just followed an "Open House" sign to your door. Often, the exterior of the home appealed to them, because the home is over their budget. An open house reminds your neighbors that your home is for sale, and offers them an opportunity to "take a look." Hopefully your neighbors will tell friends or family members about your house, creating "word of mouth" advertising. However, there are other reasons for conducting open houses, too. Listing agents who "farm" a particular neighborhood use them as an opportunity to meet with other local homeowners who will someday be selling their home. Most of us, Agents hope to also list your neighbor’s homes in now or in the future. Advertising to Realtors Realtors are typically more comfortable showing clients homes that they are familiar with. The Broker’s Open House is a very effective means to quickly get a large number of Realtors into your front door. These realtors are hopefully working with prequalified buyers that are looking to buy a home similar to yours. To maximize attendance, veteran Listing Agents might provide refreshments or a raffle of some sort. Property Brochure Distribution is another way that your Listing Agent may be marketing your home to other Realtors. These services hand deliver your property brochure to each individual agent in a specific geographic area. Other top Realtors employ an Internet program to email listing cards to the top local selling agents in your community. Because Realtors are the ones with the “buyer pool”, It is much more productive and beneficial when your listing agent directs most of his or her marketing efforts toward other agents. It is an easy mistake to measure your agent’s effectiveness solely by counting the number of newspaper and magazine ads featuring your property. "Behind the scenes" marketing is the most effective and most difficult for the seller to measure. Phyllis Harb, a California native is a Realtor/Marketing Specialist at RE/Max Tri City in La Canada, California. RE/MAX Tri-City offers additional offices in La Crescenta, Glendale, Los Feliz and Pasadena. Harb has been assisting Los Angeles County home sellers and buyers since 1989 and additionally offers over 10 years experience in real estate lending. Harb has an award winning web site @ http://www.RealtorHarb.com & may also be contacted at 818 790-7325.

Southern California Realtor, Phyllis Harb is ranked among the top 5% of Realtors nationally. You may contact her directly @ 818 790-7325

Phyllis Harb may be contacted at http://www.RealtorHarb.com or Phyllis@realtorharb.com

Known as the Peach State, Georgia is the state of southern hospitality. If you prefer the traditional southern culture, Georgia real estate is certainly worth a look.

Georgia

The largest state east of the Mississippi, Georgia has a long and glorious history. Civil war monuments are rife throughout the state as are small towns with turn of the century homes. Notwithstanding this culture, Georgia is also a very modern state with growing cities such as Atlanta.

Atlanta

The most populous city in Georgia, Atlanta is a growing metropolis. From a sports perspective, the city has Michael Vick and the Atlanta Falcons, the Braves, basketball, hockey and has even hosted the Olympics. Raised in 1865 by General Sherman, the city has a newish feel and has grown to a population of over 3.5 million people. The city can be classified more as a modern city than a traditional southern one.

Savannah

If you’re looking for a true southern city in Georgia, Savannah is the place. Located on the border with South Carolina, Savannah is a step back into the past. With tree-lined streets, the city hosts a variety of architecture from the 18th and 19th century including Victorian homes and old manor. Streets are dwarfed by huge, ancient Oak Trees. To see Savannah, rent of buy “Midnight in the Garden of Good and Evil,” which was filmed in the city.

Athens

Roughly an hour north of Atlanta, Athens is a mix of southern culture and college town. Home to the University of Georgia, the town has a population of 30,000 plus students. This influx of students gives the city a liberal feel, which is unique for the south.

Georgia Real Estate

Georgia real estate prices vary by location with the metropolis of Atlanta dwarfing smaller town real estate. A single family home in Atlanta will set you back $300,000 on average, while $250,000 will do the trick in Savannah and $230,000 in Athens. The appreciation rate for Oregon real estate depends entirely on the location, but averages a moderate six percent for 2005.

If southern hospitality is your ideal, Georgia may be your destination. With reasonable real estate prices, you can pick up a good deal.

Raynor James is with FSBOAmerica.org - a FSBO homes for sale by owner site. Visit our "Sell My Home" page to list your FSBO Home or visit our home buying page to see homes for sale.

Raynor James may be contacted at http://www.fsboamerica.org