Presentations text content in CAREERS IN REAL ESTATE
CAREERS IN REAL ESTATE
Types of Real Estate
Many & Varied Product Types & Sub-categories:
Residential (single family residences (“SFR”), 1-4 dwelling units, condominiums, townhomes, vacation ownership, sea-borne residences)
Multi-family (market rate; student housing)
Retail (Regional Malls, Power Centers, Neighborhood Centers, Strip Centers, Triple Net, Public/Private Concessions, On-site Retail, street front)
Industrial (warehouse, manufacturing, distribution, “pick-pack & ship”)
Storage Facilities (household goods, art, wine, vehicles)
Hospitality (hotel, motel, hostel, resort, residences, restaurants, bars, tourism/convention/visitor bureau)
Golf & Resort
Subsidized & Tax Credit HousingSlide3
Public Facilities ConcessionsEntertainment Venues & Theme Parks
Hospital & Urgent Care Facilities
Assisted Living & Convalescent Facilities
Agriculture (crops, vineyards, orchards, live stock)
Water RightsMineral RightsRights of Way & Easements Religious FacilitiesEnergy Generation Facilities
Urban Planning/Land Use
Regional authorities (RWQCB, AQMD, CCC, CEC)
Economic, Demographic & Population Trends
Public / Private Partnerships (Grand Park; LA River Project)United States Green Building Council (USGBC)Green Building Design, Construction & Management LEED - Leadership in Energy & Environmental DesignSlide5
Construction (hazard, defect, wrap, completion and personal guarantees)
Errors & Omissions
Fidelity BondsWorkers’ CompensationOSHA & ADA complianceHuman ResourcesEDD compliancePerformance & Completion BondsPrivate Compliance ProvidersSlide6
Debt/Equity & Finance
Institutional Investment Funds
Institutional Investment Fund Advisors
Investment Banks (debt markets; RMBS/CMBSLenders - A cornucopia of resources: commercial banks; savings & loans; savings banks; corporate debt (e.g., GE Capital); mortgage banks; pension funds; life companies; private equity; credit unionsMortgage BrokerGSE’s: Fannie; Freddie; FHA; Ginnie MaeLoan Servicing
International Right of Way Association (“IRWA”)
Right of Way
Mineral Rights; Rights of way (identification, acquisition, easements); Utility Corridor Planning & AcquisitionConservation EasementsConservancy land acquisition (holding entities)Conservation easementsBureau of Land Management (“BLM”) - Land swapsAgriculture
Agriculture (crops, live stock, vineyards, orchards, etc.)
Water Rights (acquisition, sale, trading)
Brokerage (sales, leasing)Slide8
Land Use, Entitlement & DevelopmentUrban Planning
Zoning & Government Regulation
Demographic Research & Analysis
Use studiesLand SurveyTitle InsuranceEnvironmental Study, Review, & “Impact Reports”Financial Modeling & ProjectionsDesign: Architecture, Exterior, InteriorEngineering: Geologic, Civil, Structural, MechanicalConstruction & Project ManagementSlide9
Uniform Standards of Professional Appraisal Practices (“USPAP”)
Commercial Real Estate Brokerage
Sales; Acquisitions; Like-kind Exchanges; Tenants in Common (“TICs”)
Business Opportunities (“Bulk Sales”)Listing Services (Reis, Loopnet, CoStar, AIR, etc.)Residential Real Estate Brokerage Single Family ResidencesPlanned Unit Developments (“PUD’s”) e.g., condominiums
Time Shares/Fractional Ownership
Listing Services (MLS, Internet,
California Bureau of Real Estate (“BRE”)
“The mission of the California Bureau of Real Estate is to safeguard and promote the public interests in REAL ESTATE MATTERS through licensure, regulation, education and enforcement.”Slide11
BRE Home Page: Essential InformationVerify a Real Estate License
2014 Real Estate Law
FAQsDepartment of Consumer AffairsMultiple Jurisdiction License LookupFormsFile a Complaint
Real Estate Business Resources
Complete List of Publications
Invitation for Public Comment/Hearing Notices
Connect With Us:
Call BRE Public Information Line
Real Estate Licensing
8 Approved Courses
2 Years of full time experience
Pass State ExamComplete ApplicationSalesperson License3 Approved CoursesPass State ExamComplete ApplicationSlide13
Resources & Websites
Bureau of Real Estate
www.bre.ca.gov California Association of Realtors www.car.orgApartment Association of Greater Los Angeles http://www.aagla.org Franchise Tax Board www.ftb.ca.govInstitute of Real Estate Management (IREM) http://www.iremla.org Franchise Tax Board www.ftb.ca.govDept. of Corporations http://www.dbo.ca.gov
National Association of Realtors
. of Housing & Urban Development
RESIDENTIAL REAL ESTATE SALESF. RON SMITH
Founder, Partners Trust Real Estate BrokerageSlide15
F. RON SMITHPARTNERS TRUST
25 years of service
an expert in new construction and advisor to my clients in everything from home staging to color palettes and landscaping, I have successfully represented over U.S. $
1,000,000,000. (that’s “billion”) in transactionsI collaborated with four talented associates and founded Partners Trust Real Estate Brokerage and Acquisitions in 2009. In just five years, Partners Trust has sold over U.S. $5 billion in real estate with 200 associates in seven offices. One of the key elements to the immediate success of Partners Trust is the company's ability to network directly with the best realtors in their markets.A proud co-founder and President of Leverage Global Partners, which aligns the most prestigious independent real estate brokerage firms from around the world.I credit my long-term success to my local expertise and strong community connections. I introduce my clients to both a home that fits their needs, and a neighborhood and community lifestyle that matches their interests. I live in Brentwood on LA's Westside with Tracy, my wife of 26 years. I am enormously proud of our sons, Evan and Brandon. I enjoy travel, fitness, good wine and live music. I am an active supporter of numerous charitable organizations, including LA Family Housing and Concern Foundation for cancer research. I am proud to be a member of the
of USC's Lusk Center for Real Estate.Slide16
So you want to manage your own SFR’s, & Condos as rentals?Slide17
What Are Your GOALS…
Safety of Investment
Cash Flow – passive income
Tax Benefits – depreciation, interest deductions
Diversification of Investment PortfolioAppreciation (over time)Pride of OwnershipEquity Build-Up for Retirement or EstateSlide18
LEARN THE BASICSManaging a Home:
A “Simple” Outline
keeping the property rent ready/clean; receiving inquiries; showing the property; negotiating rent; accepting applications and screening prospects; receiving funds & turning over the keys.MANAGEMENT – move-in inspection; receiving communications from tenant; handling vendors; collecting rent; distributing notices; legal action – eviction, Government or or tenant; insurance claims; and unit turnovers for incoming tenants.Slide19
, Craig’s List; ZillowYour own websiteProperty signageFlyers
Third party agencies –
MLS for Member real estate licenseesSlide20
Establish initial rental rate based on similar product in your market, or “enough to cover your mortgage”?
Economic Changes – what the market will bare (excludes qualifying properties in rent control areas)
Nuisance – an increase not high enough to necessitate a moveRent Control – government regulated increases – exempt: one detached single family dwelling per lot.Slide21
Federal Fair Housing Act of 1968
ReligionNational OriginGenderFamilial Status (pregnancy, medical condition, gender)Handicap (disability: mental or physical)Slide22
CALIFORNIA FAIR HOUSINGSTATE LAWS
In addition to the Federal Laws, CA has added:
Familial & Marital Status
Gender, Gender Identity, and Gender ExpressionSexual OrientationChildrenSource of IncomeDisability or Medical ConditionGenetic Information
Immigration or Citizen ship Status
Religious Creed – dress and grooming practices
Prohibits discrimination and harassment in fact or perception in all aspects of housing;
Requires housing providers to make reasonable accommodations in rules and practices;
Prohibits retaliation against any person who has filed a complaint, participated in an investigation, or opposed any activity prohibited by the act.
– Not applicable to an owner-occupied, single-family home/condominium who rents out a room in the home to a roomer or a boarder, and there are no other roomers or boarders living in the household & shares the living room, kitchen or bathroom.
CA Dept. of Fair Employment & Housing: www.dfeh.ca.govSlide23
REDUCING FAIR HOUSING RISKS
Federal, State and local Fair Housing laws. The owner, mgmt. co. and/or building manager can and will be held personally and severally liable
.Review practices regularly to ensure that you and your staff understand the laws and company policies. Have written Policies & Procedures and train your staff.Slide24
Reducing Risks (cont’d)
Establish a documentation program. Whenever you or a staff member deviates from the normal routine or practice, document what you did, when you did it, and why.
4. Service & Support Animals – Allowed into all residential units. Animals of all types that work, provide assistance, or perform tasks for a benefit of a person with a disability, or animals that provide emotional support that alleviates one or more identified symptoms or effects of a person’s disability.Slide25
The Rental Application
Name of all adults (18 yrs or older*) who will be occupying the apartmentCurrent address and date of birth for all adults party to the LeaseSocial Security number for all adults, however, cannot be required per AB976, 2007.Picture ID - Drivers License; State ID card; check birth date & address, copy them for the file
References – name, address, telephone bank acct. #, friends, previous & current landlord; obtain emergency contacts (get at least two, one being a close family member)
Verifiable Income – sources: paycheck stub, Social Security voucher, income tax return, etc.
adults on the application to allow you to obtain a credit report and other reference check reports
Emancipated Minor – State Court approvedSlide26
Obtain a “current” Agreement with
An Agreement with a term of one (1) year or more must be in writing. However, even a month to month tenancy should be in writing.
California Civil Code requires a termination notice of at least 30 days if < 1yr., 60 days if ≥ 1 yr.; daily or weekly notices if those are the terms of the stay. Be aware of Gov’t Rent Control/ Tenancy laws that may supersede your notices.Slide27
Follow these steps when considering a tenant’s application to rent a
1. The applicant’s credit history is the best way to determine credit worthiness.
2. Review the application with the prospective tenant when it is first turned in. This will help confirm information and give them an opportunity to explain any issues you may encounter with their report. NOTE: First in first reviewed in accordance with the Tenant Selection Criteria/Policy.3. Order a credit report and if policy requires, a criminal report and eviction report. Can charge up to $45.99 (Dec.2014), but cannot exceed actual cost for report plus reasonable value of time spent to obtain information.4. In reviewing a credit report, check for: applicant’s rental history, collections, late payments, and debt to income ratios. Consider how medical service collection issues might have effected their payment record if applicable.
5. Obtain at least three year’s residency and employment history.Slide28
Tenant Screening (cont’d)
Call at least one prior Landlord for referral. Please note that the applicants current Landlord may not give an accurate recommendation if:
A. that Landlord wants that tenant out , or
B. that Landlord does not want to lose that tenant. Ask these questions: A. Is the rent current? B. Is the rent paid on time?
C. Is the tenant being asked to leave?
D. Is the tenant leaving before the expiration of the Lease?
E. Would the Landlord rent to this tenant again
7. Call the employer and ask the following questions:
A. What is the applicant’s annual income?
B. How long has the applicant been employed?
C. Is the position temporary or permanent?
D. If the applicant has been employed for only a short time, call
Tenant Screening (cont’d)
Bankruptcy is not necessarily a bad risk. Recent filers for Chapter 7 Bankruptcy are less likely to have debts and more likely to have cash for living expenses. Usually only can file Ch.7 but once every 8 years (consult with attorney for exceptions). It is important to determine why they filed. For example: medical bills vs. credit card (consumer) spending; Business/Investment vs. personal loans.
Your Tenant Selection Criteria can state that the Bankruptcy “has been
discharged” and a 12 to 24 month period of no late payments of rent and/or credit is required thereafter. Of course, current rent payment status is very important. If the applicant has previously skipped or failed to pay rent, it will probably happen to you, sooner or later!Slide30
Security Deposit Laws
Maximum of 2 months unless the premises is furnished, then landlord can collect 3 months as a deposit. Accounting within 21 days of lease termination.
When notice of move out received:Inspection w/ tenant 2 weeks prior to move out48 hour minimum notice of inspectionTenant is not required to attend, but it is recommended that they are there.
Damages to Owner for a bad faith security deposit refund could be up to 2 times the deposit amount plus the deposit,
What can you deduct – delinquent rent, cleaning and damages (with a receipt for costs/services rendered) – nothing can be collected for normal “wear and tear”.Slide31
MOVE IN/OUT INSPECTIONS
Manager to complete form at the time of move-in
Give tenant a copy of the signed inspection report
Take pictures before they move inMove-Out Notice by Tenant/Landlord:Send letter confirming their notice and let them know of the “pre” move-out inspection dateConduct inspection >14 before move out. Leave copy of inspection in unit if unattended by tenantPost Move-Out Inspection:Meet with tenant (if possible) just after they move out
Give/send copy of report (signed by tenant if possible)
Include inspection in Security Deposit reconciliation
Take pictures after they move outSlide32
PERMISSION TO ENTER
Emergencies – i.e., fire, water issues
Verbal or written authorization from tenant for service requests
Owner’s request for entry (24 hour Notice) to show to prospects for sale/rent, lender, appraiser,
gov’t officials, etc.Abandonment – recommend 2 people present, take picturesCourt Order – at any time, no notice requiredSlide33
LICENSED & UNLICENSED CONTRACTORS
Pass and exam for their license type – B, C-10, C-27
Bonded, Insured, Can pull permitsCan lien property for non-paymentCheck for licensing with the California State Licensing Board (“CSLB”) at www.cslb.ca.gov or (800) 321-CSLB
Not required to have insurance
Cannot pull permits or lien for non-payment
Work limited to $500 (labor & materials) or misdemeanor charges can be brought against them.
Labor charge lower than
contractors – less recourse options to get the work completed or uphold warranties.Slide34
scope of work
”Get several bids and check references. Require a written contract, and don’t sign it until you understand the terms. Maximum ten percent (10%) or $1,000 as a down payment whichever is smaller (for single family homes).Don’t pay cash and don’t let the payments get ahead of the work. Put together a progress payment schedule if the job warrants it.Common to have ten (10%) retention of the total contract amount until 10 days after the work is completed: 1) to make sure the job is done right; and 2) all subcontractors are paid, no liens.
Owner should record a “Notice of Completion” for large jobs.Slide35
SMOKE / CO DETECTORS
Monoxide (“CO”) detectors required in each dwelling unit intended for human occupancy with fossil fuel burning heater or appliance, fireplace or an attached garage.
Smoke Detectors – 1/1/14: owners of SFR required to test and maintain smoke detectors.
New battery operated smoke alarms being manufactured for 1/1/14 deadline. 10 yr. life battery that makes the unit disposable.Slide36
Landlord’s Responsibility- Habitability -
Nine points from Civil Code 1941.1, Green v. Superior Court (1974), “every residential lease had an implied warranty of habitability which the tenant cannot waive
Breaches of habitability can allow tenant to withhold rent until repairs are made.
a) must give written or verbal notice; b.) allow a reasonable time to repair.
After a reasonable time, tenant may personally do or contract for the repair and withhold amount from rent used to repair (CC 1942). Tenant can withhold up to one full
twice per yr.Slide37
CA HABITABILITY REQUIREMENTS FOR A DWELLING
waterproofing and weatherproofing of roofs & walls.
Unbroken/secure doors and windowsPlumbing in good working order – hot & cold running water; connected to sewage line.Heating & gas facilities in good working order.Unit’s electrical (lighting, wiring & equipment) system in good/safe working condition.
Clean and sanitary buildings, grounds & appurtenances which are free from debris, filth, rubbish, rodents & vermin.
Adequate trash receptacles in good repair.
Floors, stairs and railings in good repair.
Compliance with building and housing code standards.Slide38
Addt’l Habitability Standards
toilet, wash basin, and bathtub or
shower.Kitchen with a sink, not made of absorbent material.Natural lighting in every room.Operable deadbolt locks on main entry doors and locking or security devices on windows.Slide39
UNLAWFUL ACTS BY A LANDLORD
Tenant Lockout (key change) without Court Approval
Seizure of Tenant Property
Removal of Doors and Windows
Shutting off of Utilities (fine of $100 per day, plus damages)Trespassing – jail time if prosecuted by D.A.Slide40
What a Landlord cannot do:
– If tenant legitimately complains about property issues: habitability, exercising legal rights (suing Landlord) or joining a tenant union, Landlord cannot evict or increase rent for 180 days if complaint is habitability. Complaint can be oral or in writing.
Constructive – Landlord turns off utilities, changes locks, etc. CC 789.3, $100 per day for each violation.If in Rent Control – can only evict for “just cause” (see City housing department for definition. Actual Eviction (court ordered) – hire an attorney, proper Notice to tenant, Unlawful Detainer case filed, proceedings through Superior Court for the State of CA.
Eviction after Foreclosure (5/10)
– If new owner want to move in.
1. Tenant on a M-T-M, 90 day notice
2. Tenant on a Lease, 90 day notice after lease term
expires unless tenant is related to the former owner.
3. Affirm City statutes for current regulations.Slide41
SERVING AN EVICTION NOTICE(GENERAL STEPS)
the resident with a Notice to Pay Rent of Quit
include amounts other then base rent for that monthPersonal Service to the named person on the lease or a responsible adult.If resident or adult not home, post notice and mail a copy. Complete a Declaration of Service. Wait the appropriate # days and then have an attorney file an Unlawful Detainer actionDo not count the day Notice was servedLast day must fall on a business day.Slide42
Maintenance and RemodelingApartment unit and grounds cleaningTemporary Personnel Consulting and TrainingDon Brenon, CPM
Serving the greater Los Angeles & Orange Counties.
material, cannot reproduce without written consent of presenterSlide43
1. The California Bureau of Real Estate (“BRE”) issues how many different types of real estate licenses?
threefour2. California real estate law requires all Sellers of single family residences (“SFR”) to pay a real estate commission equal to __% of the gross sale price.2%5%6%
There is no California law that requires any payment of any real estate brokerage commissions to any real estate licensee, upon sale of any SFRSlide44
3. In California’s residential real estate market, the customary gross commission Seller should pay is:
there is no customary commission amount4. Which of the following is a legally valid form of commission payment to a real estate licensee?money and/or promissory notesan equity interest in the acquired propertypersonal property
any of the aboveSlide45
5. Which home renovations and/or remodeling projects most often return at least the original capital investment upon resale of the home?
kitchen or bathroom remodel
adding one bedroom
installing a swimming pool/spa feature
installing a new energy efficient/fire resistant roofadding a 2-car garageinstalling an outdoor cooking/dining area 6. The market value of single family residences always
To obtain a real estate salesperson license in California, an applicant is required to successfully complete more credit hours than a:
doctor, electrician, psychologist, or chiropractor
veterinarian, architect, lawyer, or commercial airline pilot
cosmetologist, police officer, chef, or CPA
personal trainer, plumber, or dental assistant
none of the aboveSlide46
Freda, a 39 year old single woman, owns, as her sole and separate property, a 10 acre, 180° view bluff-top, single family residence appraised at $25 million, on the edge of
Drive in Pacific Palisades overlooking the Pacific Ocean. The property is free and clear of all liens and loans. Freda fell in love with her new bf, 23 year old Jay-Sea-Vu, who has just arrived from Texas and moved in with her as he begins his singing career in Hollywood, and has convinced Freda to marry him. Upon marrying and immersed in wedded bliss, Freda’s
Toyopa house:automatically becomes Community Property, ½ owned by her husband, Jay-Sea-Vucan never become Community Propertymay gradually become Community Property during the duration of the marriageremains her Separate Property until she decides to allow it to become Community PropertySlide47
SEEING YOU &TEACHING YOUIN OUR CLASSES !UCLA EXTENSION