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Jim Klinge
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Carlsbad, CA 92011

Category Archive: ‘Real Estate Investing’

“Bizarro Desert Wonderland”

Were you thinking you could always move to the desert? H/T daytrip:

Link to Full Article

Mark Grden was looking for peace and quiet when he bought his house a half-mile from the main entrance to Joshua Tree National Monument in 1998. And for years, he found it.

“I used to sit out on the porch and watch bobcats creep past under skies filled with stars, bats and owls,” he said. “Neighbors knew each other and kept an eye on each other’s property.”

But over the past two decades, this otherworldly landscape has gone from a destination for hikers and rock climbers to an international attraction luring 3 million visitors per year — overwhelming the area’s craggy campsites, low-slung motels and Grden’s once-sleepy community.

“Now, I’m surrounded by Airbnbs filled with vacationing strangers who seem to think anything goes out here,” he said, shaking his head.

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Posted by on Jun 5, 2018 in Jim's Take on the Market, Market Buzz, Real Estate Investing, Thinking of Buying?, Thinking of Selling?, This Is America | 6 comments

Flippers and The Bubble

Excerpted from this NPR article:

Link to article

New research and data suggest that the practices of house flippers fed the bubble of the early 2000s. Much of the blame for the housing crash has fallen on subprime borrowers and people who bought and lived in homes they couldn’t afford.

But researchers are now coming to understand that a big part of the problem was people with better-than-average credit scores who owned multiple homes — not subprime buyers, but real estate investors, landlords and flippers.

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Posted by on Apr 18, 2018 in Flips, Jim's Take on the Market, Real Estate Investing | 1 comment

Regulating SFR Investors?

Now that the big investors have virtually stopped buying homes, a legislator wants to find a way to regulate them.

Typically the term “institutional investor” refers to private investment firms that buy dozens of residential properties with the explicit aim of generating a steady income stream through rentals. Often they invest the money of wealthy individuals and public pension funds, like those established for California state workers and teachers.

The best example is Blackstone, a publicly traded Wall Street firm that barrelled into the country’s single-family home market in the depths of the Great Recession in the late 2000s. Through its residential investment-focused subsidiary, Invitation Homes, Blackstone is now the largest owner of single-family homes nationwide. In California, they own about 13,000 homes.

But firms such as Blackstone have stopped buying wide swaths of California homes. According to the real estate data firm ATTOM Data Solutions, which defines institutional investors as entities that buy 10 or more homes in a given year, institutional investors accounted for less than 2 percent of the state’s single-family home and condo sales in 2017.

That’s a pretty steep drop from as recently as 2012, when institutional investors accounted for about 7 percent of sales.

Why the decline? California no longer has a glut of cheap houses that can be easily gobbled up in foreclosure auctions. A sustained economic recovery and a lack of construction of new housing has sent housing prices skyrocketing. It’s now too expensive for institutional investors to buy lots of California homes. Blackstone’s Invitation Homes bought only 82 California houses last year.

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Posted by on Apr 10, 2018 in Foreclosures, Foreclosures/REOs, Jim's Take on the Market, Local Government, Real Estate Investing | 3 comments

‘Total Loss to Investors’

Watch out for those investment groups – hat tip Richard!

A federal complaint accuses an Irvine real estate firm and its executives of siphoning off proceeds from a house-flipping venture financed largely from investors’ retirement savings funds.

Hoplon Financial Group and its two top executives — Hoplon founder and Chief Executive Daniel Benjamin Vazquez Sr., 56, of Orange County and Hoplon Chief Operating Officer Gilbert Fluetsch, 52, of Escondido — are accused of numerous securities violations in a U.S. Securities & Exchange Commission complaint filed Friday, Jan. 12.

Vazquez and Fluetsch couldn’t be reached for comment. Nor could Hoplon Financial Group be reached at the phone number posted on its website.

“Our goal is to protect our clients’ assets and safeguard what they have worked hard to build,” Hoplon’s LinkedIn page says.

According to the SEC complaint, filed in federal court in Santa Ana, Vazquez and his companies pitched their services to investors found through cold-calling and asking them to roll over their 401(k) retirement accounts into individual retirement accounts handled by brokers he was associated with.

Twenty-seven investors put up $2.18 million from 2011 to 2014 after Vazquez and Fluetsch promised their money would be used to purchase and renovate homes in a venture called the New Economic Opportunities Fund LLC, or NEON.

“In reality, they were draining most of the money from NEON’s accounts for their own purposes,” the complaint contends.

NEON purchased eight Southern California properties in 2012 and 2013, spending more than $767,000 on repairs. Subsequent sales generated $917,322 in profits, all of which were diverted to Hoplon.

“As of today, NEON has no known assets. All funds in its bank accounts have been depleted, and it holds no properties in its name,” the complaint said.

Under terms of the offering, Hoplon, Vazquez and Fluetsch were entitled to $188,197 in compensation for managing NEON, but diverted $968,436 to Hoplon and themselves.

In addition, the complaint said, NEON funds were used to pay Hoplon expenses, to cover payments for luxury cars Hoplon purchased or leased for Vazquez’ and Fluetsch’s use, and to cover such personal expenses as sports club memberships.

The complaint said $59,000 in NEON funds were diverted to pay for property improvements on Vazquez’ home and $6,500 more was spent on work performed on Fluetsch’s house.

Hoplon, Vazquez and Fluetsch “misused substantial amounts of NEON funds, resulting in a total loss to investors,” the complaint said.

Link to Article

Posted by on Jan 18, 2018 in Jim's Take on the Market, Real Estate Investing | 2 comments

Buying A Flipped Home

With the lack of new homes available, the flipped homes have become a substitute for buyers who don’t want to do any repairs or improvements.

Here are four good questions:

Question #1: Have the Renovations Been Permitted?

Question #2: Were the Sub Contractors Licensed, Bonded ,and Insured?

Question #3: Can I See the Before Photos?

Question #4: Do the Windows Have a Double-Lifetime Warranty?

A good article on the details:

Click to article

Posted by on Jan 12, 2018 in Jim's Take on the Market, Real Estate Investing, Thinking of Buying?, Tips, Advice & Links | 8 comments

Vacancy Rates

Buy rental properties! San Diego’s vacancy rate is also 2.9%, same as L.A.

Posted by on Nov 16, 2017 in Jim's Take on the Market, Real Estate Investing | 0 comments