frank ponce real estate investments

Frank Ponce Real Estate Investments

There is a song I sing to my children that goes like this: �This crooked little man and his crooked little smile took his crooked sixpence and he walked a crooked mile. Bought some crooked nails and a crooked little bat. Tried to fix his roof with a rat-tat-tat-tat-tat� He worries constantly: �Oh, no, don't let the rain come down. My roof's got a hole in it and I might drown.� A hole in your tenant�s roof is no laughing matter and defi-nitely nothing to sing about. It is a litigious nightmare waiting to happen if you don�t take care of it right away. The roof on your apartment complex is the first line of defense against the elements of nature, such as rain, wind, sleet and the hot sun. Con-ducting an inspection inside and out each year can help you avoid a lot of headaches

in the future. There are a few months before the rainy sea-son, so these are my signals to look for that spell trouble:

• Check for peeling paint or wallpaper or stains on the ceiling and walls. A sagging ceiling may indi-cate that it was once saturated with moisture and it may come down on your tenant�s head during the next driving rain if you don�t address the issue.

• Check to see if your rain gutters are attached properly and that water isn�t just pooling there and then soaking into the adjacent wood. Make sure these gutters are free from debris as well. Inspect the flashing around chimneys and vents to be certain they are not worn. The tar can sometimes have cracking where water can begin seeping in and cause expensive water damage to your property.

• Look for missing shin-gles, cracked and curled shingles. If these are present, then it may be time for you to call the local roofer for an esti-mate on a new roof. If your rain gutters have a lot of granules from your shingles in them, it means your roof is on its last leg, and it�s time to replace it.

Remember: If the rain is pouring into one of your ten-ant�s unit, then it is uninhabit-able. If it is uninhabitable then it is not rentable. The tenant may do a constructive eviction because the landlord (you) failed to do something that he has a legal duty to provide (e.g. provide a roof over the tenant�s head). The landlord's action (or failure to act) renders the property un-inhabitable and the tenant may terminate the lease and seek damages.

Fal l Issue 2006

MY R O O F �S G O T A H O L E I N IT A N D I M I G H T DROWN !

I N S I D E T H I S I S S U E :

Getting a Good Appraisal

2

Marketing Apartments 2

1031 Exchanges 3

What�s in Store? 3

3912 W. Sunset Blvd. 3

South Bay Trends 4

SOUTH BAY COMMERCIAL & INVESTMENT NEWS

D O N � T G E T R I P P E D - O F F O N R E PA I R S ! Those of us who own rental property are usually handy with a hammer. We own tool-boxes, and we know what to do with what's in them! How-ever, most of us are not Jacks (and Jills) of all trades, so we occasionally have to hire pro-fessionals to do repairs we can't (or don't want to) do.

Most service professionals are paid on a "time and mate-rials" basis, or in other words, they are paid according to the length of time the repair takes plus the cost of materials to do the job. It's easy to discern what the cost of materials is for a particular job (check the local hardware store or lum-

ber yard), but how much time should it take? That's more difficult to estimate, and ven-dors know that. Therefore, vendors who overestimate the time a job will take, might rip-off some property owners. Do a little homework before en-tering into a costly repair.

http://www.frankponce.com

Will your tenants be singing in the rain?

Don�t get ripped-off

Please disregard this solicitation if your property is listed with another agent.

South Bay Commercial & Investment News

Are you refinancing or selling your apartment building? Then you will need to get an appraisal. To get the best appraisal you will need to follow these simple steps: Have your entire financial info ready including the rent roll, and income & expense statements for the last two years. Don�t miss the scheduled inspection otherwise you will have to wait longer. Apprais-ers are busy people. Missing your appraisal means your lender will be held back in his process.

Make your apartments look beautiful. A clean and main-tained property is easier to market and to lend on. Know the competition in your area as a reference to deter-mine value. Have there been any recent sales in the area that can substantiate your value? Is there new apart-ment construction in the area? Be available should the ap-praiser have any questions. Give your cell and office num-bers to make his/her job eas-ier in reaching you.

Getting your apartment build-ing appraised shouldn�t be difficult. Just be organized. Most appraisers know their business and will conduct a thorough appraisal on the property, but if you think your valuation should come in higher, you need to make your case with facts and documen-tation. To avoid having a low ap-praisal, a seller should pre-pare the apartments for the appraiser as if the appraiser were a hot buyer prospect. The appraiser isn't going to consider the price and make an offer, he or she is going to set the real price of the build-ing. Make it show its best.

G E T T I N G T H E B E S T A P P R A I S A L F O R Y O U R B U I L D I N G

them information about your building. Mailers - “Just Listed” will be mailed out to over 1,500 Southland income property owners, as they are the most likely to buy. We send out marketing newsletters to these same owners. An e-mail update goes out to a long list of buyers and other interested parties. MLS - Since there are a small number of agents that sell apartment build-ings, many buyers are represented by a variety of residential agents. These agents first and foremost obtain their in-formation through the Multiple Listing Service. Your property will be pre-sented on the MLS to attract agents and their clients. Loopnet - Your property

will be displayed on Loopnet where all in-come property agents and investors go to view inventory, and thousands of buyers are matched with sellers daily. Detailed brochure - We will produce a detailed brochure that provides information on the prop-erty’s description, loca-tion, financials (current and projected), compara-ble sales, photo tour and parcel, street and satel-lite maps. This brochure will be given to every principal or agent inquir-ing about the property. This will also be available on all of our websites. Advertising - Your property will be adver-tised regularly in the local papers until sold. Call me at (310) 503-4158 or (310) 791-6086.

Marketing the South-land’s income properties is an art at which the Coldwell Banker Com-mercial Team is adept. Below is an outline of what we will do to ensure your property sells for the highest and best possible price. Please contact me if you wish to have sam-ples emailed to you. Exposure is the key to selling your investment property for the top price. It must be a harmonized effort combining high quality and accurate ma-terials that “sell” the prop-erty. Agent networking - With 50 years combined ex-perience and a reputation as top notch apartment agents, other agents of-ten call us with their buyer’s needs. We will also contact all income property agents and give


My building is worth 2 million!

MARKETING YOUR APARTMENT BUILDING TO SELL

South Bay Commercial & Investment News

A 1031 exchange is one of the few methods available to defer or potentially get rid of taxes due on the sale of qualifying properties.

By deferring the tax, you have more cash available to invest in another property. In effect, you receive an interest free loan from the federal government, in the amount you would have paid in taxes. Any gain from depre-ciation recapture is post-poned. You can acquire and dispose of properties to real-locate your investment portfo-lio without paying tax on any gain.

There are many ways to benefit from a §1031 ex-change. The following are just a few of the advantages

to this powerful investment strategy:

Tax Savings: Federal and State taxes combined can be as high as 28% of the gain on an investment property.

Leverage: Every dollar you save in taxes allows you to increase your investment portfolio through acquisition of real estate worth many times your initial purchase.

Income: Increase your cash flow by exchanging out of

bare lands and into an in-come-producing property.

Consolidation: Exchange from several management-intensive properties into a larger property with on/off-site management.

Estate Planning: Continue to avoid recognizing gain until death, at which time the gain may escape income taxation because of the stepped-up basis that the taxpayer's heirs may obtain in the prop-erty.

seating, and is one of the busiest breakfast and lunch spots in the Silver Lake area. The duplex units are very spa-cious with loads of charm - one is a 2 bedroom / 1.5 bath paying $1,850 and the other is a one bedroom unit paying $1,200 less a $200 on-site manager fee. The tenants have 2 entrances to the prop-erty - one at street level off Sanborn Avenue and one walk-up entrance off of Sun-

Perfect upleg for your 1031 Buyer! Eat Well, a well estab-lished local restaurant for over a decade is on a NNN long-term 10 year lease with three (3) five (5) year options paying $6,750. This invest-ment property also includes a 2,000 square foot duplex with its own private patio, laundry, and separate storage build-ing, used as an office for the restaurant. The restaurant has new awnings for sidewalk

set Blvd. Both entrances are gated and secure. Great mixed-use investment property! Con-tact Laurie Inadomi-Halvorsen at (310) 791-6075

the market place, and per-haps, there is no need to. Even though apartment build-ings are staying on the market longer, multiple offers are common for apartment invest-ments offering an adequate yield. Is now the right time to buy? The right time to buy an apartment building is when you find the right deal. The right deal is the one that of-

fers capitalization rates that obtain reasonable cash-on-cash returns. Is now the right time to sell? It depends on your exit strategy or what your intentions are. As a seller you do have options which in-clude taking the profit and paying the taxes, investing in another state, do a 1031 exchange, a TIC or PAT.

As we buckle our seat belts and prepare for the ride in 2007, what can we expect in the apartment business? In spite of anemic trends in the L.A. job market the multifam-ily market remains tight. This probably has to do with the low vacancy rate which is about 4%. At this point sellers are still hesitant to lower their expectations to accommodate


The Benefits of 1031 Exchanges

1031 exchanges can be like an interest free

loan from the Federal Government

W H A T I S I N S T O R E F O R 2 0 0 7 ?

4062 W. 142nd Street Purchased in 2005 for $1,425,000 and sold in 2006 for $1,510,000

3912 W. Sunset Blvd. $1,625,000 Mixed-Use Property

P E R F E C T U P L E G F O R Y O U R 1 0 3 1

Coldwell Banker Commercial NRT 68 Malaga Cove Plaza Palos Verdes Estates, CA 90274

Frank Ponce Real Estate Investments

S O U T H BAY T R E N D S

(310) 791-6086 Office (310) 503-4158 Cellular

http://WWW.FRANKPONCE.COM/

Mail To:


The winds will blow their own freshness into you, and the storms their energy, while cares will drop away from you like the leaves of

Autumn. Fall poem by John Muir

Allow me to show you the way up in the apartment business

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

1Q 2Q 3Q

Hawt horne 2006

Avg GRM

$150.00

$155.00

$160.00

$165.00

$170.00

$175.00

$180.00

1Q 2Q 3Q

Ha wt hor ne 20 06

Avg Pri ce Per Sq Ft

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

1Q 2Q 3Q

Hawthor ne 2006

Volume

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

1Q 2Q 3Q

Ha wt hor ne 20 06

Avg Unit

PRSRT STD U.S. POSTAGE

PAID

PALOS VERDES CA 90274 PERMIT NO. 140

frank ponce real estate investments

Documents