The Altamuras

2920 The Strand, Manhattan Beach

Gio — Tue, 24 Jan 2012 00:42:58 +0000

North facing corner location on The Strand (beachfront). An over sized lot with 43 feet of beach frontage. 7 beds, 6.5 baths plus a bonus room/office near the pool and spa situated inside of a private atrium. The upper level hall features a barrel ceiling and floor to ceiling windows bringing in lots of light. On the top floor, the large master suite features two sitting areas, fireplace, balcony, and a spacious loft (perfect for an office, yoga studio, additional closet space). A total of five bedrooms sit on the top floor, two bedroom/bathroom suites are on the lower floor perfect for visiting guests, live-in nanny s, or in-laws. The lower floor also features a second spacious entertainers family room with strand access. The corner location offers additional outdoor space for lounging in the sun, or entertaining on your spacious patio. Breathtaking ocean views from Palos Verdes to Malibu and beyond. 4 car garage parking with room for 2 additional cars in front of the garage doors.

Bringing in the New Year

Gio — Wed, 18 Jan 2012 23:41:43 +0000

Happy New Year to everyone out there. I hope it was a safe and eventful time. On the real estate front, there was slow activity, as expected during the holiday times. However, as we ascend into Winter, this time tends to produce new listings, new buyers, and a fresh outlook for the real estate market in 2012. Over the past 10 years, the South Bay generally sees an influx of new listings right after the Super Bowl. No one has the right answer as to why this specific time, but it just has worked out that way.

Having said that, currently there are 89 active listings in Manhattan and 54 in Hermosa (SFR, Townhome/Condo). Very low numbers for Manhattan and Hermosa but this is January, and expect there to be more inventory coming back out. A few reasons why Sellers take their property off the market in the Fall/Winter and bring it back out in the new year include the holidays, getting the Days on the Market (DOM) back to zero, a fresh look with either a new price or improvements that they did not make before they listed it.

Buyers are always around, looking for the right property to pull the trigger. Timing is everything and sometimes it takes a buyer to lose out on a property before they realize when it is the right time to buy.

Which loan program is best for your client?

Gio — Sat, 10 Dec 2011 00:54:43 +0000

Conventional loan is the most popular loan in the South Bay. These loans are underwritten to Fannie/Freddie guidelines and are up to $625,000. A Borrower needs a minimum credit score of 660, a max debt to income ratio (DTI) of 50%, and a down payment of 5% to 417,000 and 10% down to 625,00. Conventional loans currently have the lowest interest rates of any loan.

FHA loan amounts are up to $729,750. These loans offer low interest rates, however mortgage insurance is very expensive (1% upfront costs and an added 1.10% monthly cost for the life of the loan). Need a minimum credit score of 640 and a max DTI of 50-55%. These loans are primarily issued for first time buyers with a low credit score.

Jumbo loan amounts are up to 5,000,000+. This requires at least 20% with a credit score of 700 and above with a max DTI of 45%. There are no government guarantees. These loans are underwritten to individual investor standards and each bank/investor have different guidelines. High end buyers will typically use a jumbo loan.

In the current real estate market, sellers want qualified buyers. A Seller wants a 20-25% DP buyer rather than a FHA buyer because an FHA buyer is considered risky and ultimately, the deal has a higher probability of falling through.

*This helpful information was provided by Grant Norris of RPM Mortgage.

High Demand for Cape Cod

Gio — Wed, 16 Nov 2011 22:56:32 +0000

It’s no surprise around town that the Tree Section is swarming with buyers, from all price ranges, yet the market activity is not showing this trend with sales. Many blame the inventory and how the product is not in correlation with price and quality. However, the pent up demand for Cape Cod is through the roof, and this couldn’t be more true with 800 19th Street. A perfect example of how style of a certain property, along with a competitive price, will yield all those buyers to step up to the plate.

Placing the property on the MLS on a Saturday, having public open houses’ and generating a great response, the listing agent had six offers before the end of the weekend! Being in the know, the property was sold over full price by a local agent, for $1.952 (List Price was $1.899). 800 19th St is on a corner, yet on a busy one (Pacific and 19th) but the orientation of the house minimized the noise from the stop and go traffic. The New-England inspired style homes feature natural colors with simple, subtle exterior elements designed to blend into the landscape. Buyers see Cape Cod and think of warm, inviting, and entertaining lifestyle suitable for family living.

In conclusion, the market inventory is weak with over priced listings and the quality just isn’t what it was in the Spring. This is natural and tends to happen as the holidays are near. However, 800 19th is a great equalizer to this stigma.

Doing a Good Deed Today

Gio — Fri, 04 Nov 2011 21:52:19 +0000

This edition of our blog will have nothing to do with real estate. Instead, we are here to promote the most common and most respectable thing you, me or anyone could do; a good deed for someone. I know it’s the classic cliche, “Do unto others as they would to you.” But if you think about it, isn’t that what it’s all about? People can say they don’t have time, or in this economy…, or whatever, but if you just take a few minutes out of your day to do something, anything, that you can think of as a good deed or favor for someone, go ahead and post it at karmaky.com. It only takes a second and trust me, you will feel good about yourself when you are done.

New Building Code Change in the Sand

Gio — Fri, 28 Oct 2011 19:35:10 +0000

Ever wonder why Hermosa Beach allows for rooftop decks and Manhattan Beach doesn’t? Me too! It seems ridiculous that two cities, merely the same in every way, including building regulations, has this huge flaw. Actually, this is arguably the biggest advantage Hermosa has over Manhattan. Well not anymore! Recently, the MB building code has changed the way builders can construct Townhomes in the Sand Section. Before the change, builders would construct “two on a lot” Townhomes on East-West lots, which run 33′ by 105′. The front unit ranges between 2,200 sq ft to 2,500 sq ft and the back unit between 2,800 sq ft up to 3,300 sq ft. The back unit is more valuable because of the bigger sq. footage. As a result, this would account for either an extra bedroom or a media/den room and views over the front unit. The front unit would have more parking and not be in the back (Ex: Properties on Highland Ave. and Manhattan Ave). Years past, MB wouldn’t allow a roof top deck on the front unit, which would only be accessible to the back unit, because they considered the deck the 4th floor of the front unit. Now, they changed that and I’m sure you can guess how that greatly affects the back unit even more, in a positive way… VIEWS!!!

The hot topic amongst builders is finding these highly sought after “East-West” lots to build. The demand is strong and a perfect example is the project Kim Komick is doing at 2207 Bayview Dr. in Manhattan Beach. Her plan is to build two Townhomes, the front being 2,400 sq. ft and the back 2,800 sq. ft. I believe they will be offered at $2.4 and $2.8 million respectfully. These two town homes will feature the new plan where the front unit has a roof top deck, but the deck is only accessible to the back unit. Imagine the views!!! I have heard they already have offers on the front unit and a lot of activity on the back. Completion in 2012.

1031 Exchange Continued…

Gio — Mon, 17 Oct 2011 21:40:33 +0000

Continuing with the 1031 Exchange topic, today we will discuss how to calculate one’s gain from the exchange. Here is the calculation:

Sale Price – Adjusted Basis = Gain

Here is the formula for Adjusted Basis:

Purchase Price + Depreciation + Capital Improvements = Adjusted Basis

Unfortunately, you have to pay 3 different taxes on the gain: 1) 25% Depreciation Recapture Tax. 2) 15% Federal Capital Gains Tax, and 3) 9.3% CA Capital Gains Tax. A general rule of thumb is to take away 1/3 of your gain as taxes.

There are tax deductions for individuals and married couples to help lessen the tax burden. The best deduction is the Section 121 Homeowner Exemption. To qualify, the property you are exchanging has to be your primary residence, meaning you must have lived in the property for 2 out of the last 5 years. An individual will receive a $250,000 tax exempt gain and a married couple will receive a $500,000 tax exempt gain for the exchange. Thank you IRS!

Reminder: flipping a property will NOT grant you the homeowners exemption because you are not the primary resident of the property and the government will treat the property as personal inventory

A savvy 1031 exchange investor would tell you the best way to delay paying taxes on an exchange is to “Defer, Defer, Die” by continuing to defer taxes by rolling the gain into new property after new property until your death! This is the best way to avoid paying taxes, and to leave your heirs with no tax burden.

For example: You sold a property for $10 million and the adjusted basis was $2.5 million, leaving you with a $7.5 million gain and a $2.5 million tax. Now if you passed away and left the property with your heirs, the adjusted basis can be increased to match the sale price of the property. As a result, your heirs will pay zero taxes!

If you decide to stop rolling each gain into a new property and pull out the money for other purposes, then you must pay taxes on all of the gains combined!

For further information regarding 1031 exchanges and other tax benefits, please visit Leonard Spoto’s Asset Exchange Company

1031 Exchange and How YOU Can Benefit!

Gio — Fri, 14 Oct 2011 00:34:43 +0000

Have you ever read an article, overheard a conversation or just plain curious about what a 1031 exchange is all about? Well today’s blog, which is in two parts, will give you a simple explanation of what it means and how you can benefit from it. Essentially, a 1031 is the name of the tax code for tax deferral relating to property. There are 4 basic requirements:

1.Property Qualifications

2.Tax Deferral Requirements

3.Timeline

4.Identification Rules.

The Property qualifications states the exchange property must be used for productive use in trade or business or for investment purposes. The other qualification is the property must be “like kind”. For example, a “like kind” property for a SFR can be exchanged for a commercial/office building or even an empty land lot. Foreign property is NOT like kind, meaning you cannot exchange a property in Arizona to one in California.

Tax deferral requirements include reinvesting all of your cash and the purchase price of your property is of equal to or greater than the replacement property sale value. If you buy a house for $500k and sell it 5 years later for $1,000,000, you would be paying taxes on $5ook profit. If you do not touch that profit and reinvest it, you will not be subject to pay taxes on it at the time of sale. The same goes for selling your house and then finding your upleg for the same price or greater value.

The third requirement is the timeline. You have 180 days from the time you close escrow on your property to defer your money or until your taxes are due for that year. An important fact you need to be aware of is that if you plan on doing a 1031 exchange, you must initiate this before your escrow closes. Within that 180 days after you close escrow, you have 45 days to locate a property. If you close escrow after October 17th, you must file for an extension.

The last requirement is the 3 property rule and 200%. Within the 45 days, you need to locate three properties to exchange into. Once you locate three, you cannot change it. If all of them sell and you aren’t one of the buyers, then the exchange cannot take place. The other option is that you can exchange into more than one property, but it cannot be more than 200% value of your property that was just sold. An example would be selling your home for $1 million and then exchanging into 4 properties of $500,000 each.

Knowing these qualifications in advance can help you make more efficient decisions when considering buying and selling property. As you know, time is money! Our next blog will discuss how to calculate a gain from a 1031 exchange and possible methods to avoid paying any taxes!

Inventory at a Low Point in Manhattan

Gio — Mon, 03 Oct 2011 23:32:32 +0000

As we come into the Fall here in Manhattan Beach, the mentality among the public is that the market is starting to slow down as inventory is not coming on the market as frequently as it does in the beginning of the spring. This theory does hold some weight but there is an underlying factor that might not be popping out to potential Buyers and Sellers. As of today, there are a total of 129 properties that are active and 45 in pending or in backup position in all of Manhattan Beach. That is roughly a 2.8 month of inventory. Not a high number, right? A big reason for this is because properties that have come out and have been on the market for over 3 weeks become stale in the eye of the public. Many factors can contribute to this including price, location, floor plan, not enough bedrooms, telephone poles distracting from the view, etc. If buyers don’t see past these issues, the only realistic way for a Seller to make up for that is by lowering the price. This brings me to my next point.

Within the last two weeks, going back to September 25th, there have been 7 properties that have gone into back up or pending position, and 5 out of those 7 had been listed for under 3 weeks. Two reasons for the quick sale: 1. PRICE!! Buyer(s) see the value in the property at a competitive price and have made a strong offer. 2. QUALITY!! Buyer(s) see the correlation between the price and the value of the property. Bottom line, quality properties, priced at market or just below, are seeing a lot of action with multiple offers within the first few weeks. Take 1312 Pine Ave. for example. This 4 bedroom, 4 bath, 2800 sq. ft. corner listing in the Tree Section was offered at $1.445. Just 6 days later, there were multiple offers and it went into escrow over list price. A perfect example of a property having the right combination of competitive pricing and a quality property.

Consistent Market Trends for Manhattan Beach

Gio — Wed, 28 Sep 2011 22:29:38 +0000

Today we are going to take a look at the market activity of September 2011, and compare it to the five previous Septembers from 2006-2010. To preface, September is generally a time where children head back to school, vacations are wrapping up, and the market sees it’s “Summer activity” slow down as the Fall approaches (Our data includes SFR, Townhomes and Condos). Going back to 2006, the height of our market, we saw a whopping 21 homes sell in the month of September. Those were the days when you could buy a house with 0% down!!

The next year saw that number shrink to 11, ten houses less than a year ago but we still considered 2007 to be in the “bubble era” in the South Bay. In ’08, we saw a total of 13 sales close. Strange to see the number jump up 3 considering the Global Real Estate market started it’s decline. However, the downturn did not affect our area until the middle to end of October of 2008. In ’09, 12 homes sold, last year nine and this year nine.

One conclusion to take away from this data is that over the last five Septembers, we have been pretty consistent with our activity, excluding the bubble year of 2006, which happened to be the peak of our market. Currently, 21 homes are active on the market, while three are in Pending position and nine are in Backup.

In addition, these stats do not include deals done off market. Lately, there has been an increase in deals done off market as well as a boom on the rental side of things. Needless to say, our market has been fairly consistent over the last half decade and that’s a good thing for homeowners.