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S P R I NG 2014






Leslie Appleton Young CAR’s Secret Weapon

Elena Johal

Alain Pinel’s 2013 Top Producer

Douglas Duncan

Unique Perspective with Fannie Mae Chief Economist Bay Area MARKET through the eyes of petite power house

Carole Rodoni


Strategy is the name of the game with Investor

Lori Greymont

Leslie Appleton Young

California Association of Realtors (CAR) Chief Economist

Elena Johal

Douglas Duncan

Carole Rodoni

Lori Greymont

Alain Pinel 2013 Top Producer

Fannie Mae Chief Economist

Bay Area Expert








WEDNESDAY, APRIL 9, 2014 9:00 a.m. – 5:30 p.m.


Expo Hall B-D 5001 Great America Parkway Santa Clara, CA 95054


Full Day Conference - $79 (includes access to educational seminars, expo floor, lunch and VIP networking reception) Significant discount for groups of 10 or more


•    170+ exhibitor booths •    9 educational seminars featuring nationally recognized speakers

•    CEO Perspectives on the State of the Industry

•    Networking reception for full day

conference attendees and VIP sponsors

Register online at or call 408.342.3517 to receive $10 off full day conference. Offer expires March 31, 2014.

•    Exciting new sponsorship opportunities •    SCANVenger Hunt™ - QR code scavenger hunt to win prizes!

Register and get more information at: or call 408.342.3517




36-37 In Intimate Detail w/ Kathy Fettke 40-41 49ers Silicon Valley Stadium Deal 42-43 The Great Valuator, Larry Stone 44

5 Cities in Silicon Valley Worth Watching

32 Advice 32

Women & Real Estate Marketing


The Newest Real Estate Technologies to Adopt This Year!


5 Ways the Information Economy Can Work for Your Investments


New Trouble for Series LLCs

14 Features

14-15 Charting the Course with Leslie Appleton Young 18-19 Inspired Investing : Lori Greymont’s World 20-21 A View of the Valley with Petite Powerhouse

Carole Rodoni

24-25 Getting it Right from the Kick-Off :

Alain Pinel Top Producer Elena Johal

26-30 A National & International Economic Perspective

with Doug Duncan

6 Basics 6-7

Money Making Tips for Today’s

Real Estate Investor- Pam Bianco

8-9 To Flip or Not to Flip 10

13 45

Those #&%! Flipping Regulations!

Calendar Investor Resources SPRING 2014 REI VOICE

Publisher’s Note W Geraldine Barry

Publisher/ President of SJREI Association

elcome to the new REI Voice Magazine designed, produced and printed right here in the Silicon Valley. You’ll find we’ve sharpened our niche market magazine to a fine point. In the often cluttered and noisy space of real estate information, REI Voice has become even more focused. To keep you ahead of the curve, we are monitoring the rapidly changing environment so that you don’t have to—new lending laws, evolving Federal policy, changing market conditions, strategies, economic data, affordability, and more. This issue delivers what you’ve told us you love: top-shelf data, choice interviews, and fresh analysis to incorporate into your investment decisions. We are just as excited about the market as we are to bring you the information that makes you rock as a real estate investor. Our strategy is your success.

This issue casts an illuminating focus upon industry thought leaders such as Fannie Mae chief economist, Doug Duncan, who enlightens us with his views on China, Europe, the U.S. and beyond. Doug truly has a gift for simplifying economics and making it accessible for the average person. Carole Rodoni, Bay Area expert, brings us up-to-date on what’s up with the Millennials, and why they are a group to watch right now. She is absolutely charming with fast wit, and sophisticated take on the Silicon Valley through the lens of real estate and technology is not to be missed. Leslie Appleton Young, chief economist with California Association of Realtors, gives us a behind-the-scenes look at her preferred metrics to determine which direction a given market is headed while revealing how inventory tops the list for investors to get a quick pulse on what is happening in any given metro area. Investor Lori Greymont focuses on her strategy for successful investing which began with bootstrapping some cash-flow in college—and, of course, cash-flow is always a good strategy… Strategy matters in every aspect of our lives. For instance, while my navigation app provides me the play-by-play on how to arrive at my destination, I still know how to read a map in the event my mobile device loses connection. So, I keep a map in my car. The importance of strategy is true for real estate investors and professionals alike; we are aimless if we don’t have a plan and an end result in mind. As you read, I encourage you to do two things: explore your strategy and refine it. Focusing on your finances is time well spent. It will help create peace of mind for your life and your retirement. Planning and strategizing from a financial perspective first, yields a greater quality of life by affording you the freedom to pursue those important things that make your heart sing and your spirit fly. Whether it is volunteering, climbing Everest or relaxing with family, isn’t doing what we love the goal for most of us? Focusing on your financial picture and strategizing your endgame is the key to successful investing. If you are reading REI Voice for the first time, please join us as my guest at SJREI Association (San Jose Real Estate Investors Association), where we connect and educate investors (see page ). REI Voice brings you relevant, timely articles while SJREI focuses on hosting speakers and providing the opportunity to forge important connections with other investors. Cheers to focus, strategy and success!


REI VOICE™ Magazine A Publication of SJREI Association™

Reproduction or use of any editorial or graphic is prohibited. To request reprints or reprint rights, contact REI Voice Magazine SJREI Association and REI Voice Magazine make no representations or warranties regarding the content, accuracy, or validity of the advertisements or of the articles contained herein. All persons should exercise due diligence and consult with legal and tax professionals before making any investment decisions. Copyright © 2014 SJREI Association. All rights reserved.




Money Making Tips By Pam Blanco


he modern real estate investor is part James Bond, part economist. You need to sleuth for both property and financial details. Not only should you pick a property that has strong financials or potential for ROI, but you should also select a property based on how it will perform as a rental property. Here’s a guide for the crafty investor who is looking to add some stealthy property sleuthing techniques to the arsenal.

Strong Market Values

Planning on holding on to your property to collect some rental income until you’re ready to sell? Yes? Time to conduct a stakeout of the area! That’s right: rustle up your eavesdropping gear and take a look at what is lurking in the city, town or neighborhood you’re interested in. Are there any upcoming businesses, train stations or corporate downsizings? Select a property in an area with strong values, coupled with a healthy demand to insure that your property will maintain its investment value over time.

Good Schools

All good spies, and investors, know that the value of a fine education is priceless. Never underestimate the power of good schools; think like a tenant. Even though you will likely never use the property, you will need to get in the mind of your renters. If you house is family friendly you’ll want to know what the schools are like in the area. If the schools are top performing schools, your property will have an increased demand amongst families with school aged children. If the property is in an underperforming area you may have a harder time renting the property out and a conservative vacancy rate should go into your calculations for your ROI worksheet.

Local Amenities

A little luxury goes a long way at the end of the day. The modern day tenant works hard and doesn’t want to be far from amenities when it’s time to head home. Convenience is key for rental properties. Look for close proximity to employment, entertainment and shopping. While demand may be high currently for rental properties there are still enough options on the market for tenants to pick a place that is more convenient and better proximity to amenities. If the property is hard to get to or in an out of the way location, you’ll need to make sure you account for this in your marketing plan.



Leave your competition in the dust. Take a long, hard look at the number of rentals in the area. It’s important that there is not an abundance of rentals in the location because you will have to compete with other landlords -- and you don’t want to get in a pricing war because at that point no one wins. Large amounts of rental properties can also affect home values if other rental properties are not maintained to the standards that you maintain your properties.



Don’t judge a book by its cover, but do judge a property by its neighborhood. The overall condition of the neighborhood matters and should reflect pride in ownership. Are the majority of the homes well maintained, in good shape, and accurately valued? If you’re the nicest home in the neighborhood, you may find yourself having a hard time renting or selling the property.

Forecast the Future

Is the property near a major road construction site? Will a local detention center be too close for comfort in the coming years? Stepping back from the property and reviewing the surrounding area with a critical eye will be important to the success of your property. Consider how the surroundings will affect your tenants and their lifestyle. Forecast what the future of the property, neighborhood and city means for your tenants and your ROI. Make your decision based on what you find. The above guide comes in handy if you’re a local investor. For the investor who’s drawn to out-of-state markets that offer better returns, the challenge of real estate investing gets kicked up a few notches. Buying outside your market is a great strategy to diversify your portfolio and increase your investment choices, but you will need an ace team of property managers to help you manage, buy and protect your investments. When reviewing an area to invest in, be sure you’ll have access to

a top-notch property management team. Having a good property management team will make or break your return. Good management teams will keep you updated on all market conditions, including factors that could both positively and negatively affect your investment value. Managers will need to visit your property at least every month and should always include exterior photos of the property so that you are kept abreast of any changes to the condition of your property. Good management teams will closely monitor the property and provide updates on any maintenance items that need to be repaired before they become a major item – from secondary drain line clog to broken windows. Your team will provide current rental information as well as updated market info on the area. Bonus points if your property management team also has licensed agents and or brokers. This will allow you to have seamless transition from purchase to rental, and they will monitor market conditions to allow you to sell the property if the market is right – or help you to scout out additional properties to add to your portfolio. Finally, the management team should provide interior inspections that address items not being taken care of by the residents, catching them early enough to prevent bigger issues that would normally be discovered upon move out and help reduce the make ready cost to get the property ready for the next tenant. When you have a solid property management team in place, you can rest easier and put your talents to use sleuthing around for ways to even further maximize your capital. James Bond had a support team – and so should you.

Pam Blanco is the Founder and President of Professional Asset Management and Sales. Catering to investors, the company has developed into a turn-key solution provider to help investors grow and manage their portfolios of properties, both single and multi-family. SPRING 2014 REI VOICE


By Tom Wilson Wow! Flipping surely seems exciting on “reality” TV, however, the flat screen doesn’t reveal the high risk and the hard work. “Flipping” is a term used primarily in the Unites State that defines a purchase below market with the intent of selling short term, with or without adding value, at a higher price. In 2013, there were over 33,000 flips in the U.S., 2000 of those in the San Francisco Bay Area alone. Flippers provide a great benefit to the marketplace by removing blighted properties from communities, returning them to the homeowner and rental marketplace, and increasing property values and tax revenue to the community. I am proud to be a flipper. Make no mistake; I am first a long term hold investor. Why? These are assets that provide relatively passive income, and have appreciating income and asset values with inflation. Flipping is a business with very active participation with the highest tax bracket. Albeit, it can produce a lot of short term income if done well. Most good cities for flipping have a short supply and high demand, especially at median to lower price ranges, encouraging newcomers (including institutional investors) to this dramatic cottage industry to bid too high in desperation to get a product, and then count on the market being higher when they sell. This is dangerous on both counts. The goal is to make maximum profit per month with minimum risk—you want to keep your money moving. At the close of a successful flipping project, celebrate with your team. Then, take a portion of your profit and buy some long-term hold properties for inflation hedging assets, for passive income, and for future early retirement.

High-End, High Added Value Silicon Valley Flip Example 1429 Bent Drive, Campbell, CA BEFORE · 4 bed, 3 bath, 3000 ft2 · Purchase Price: $550,000 · Purchase Date: 12/7/2011 · Purchase Closing: $1,177 Front

Family Room



· Resale Price: $1,625,000 · Resale Date: 4/19/2013 · Resale Closing: $87,893 · Total Rehab: $546,101 · Debt Service: $94,113 · Soft Costs: $19,272 · Operating Costs: $10,986 · Net Profit: $312, 046




Family Room / Kitchen





• Wholesale with assignment contract

• Get experienced partners & consultants

• Wholesale with purchase & resale

• Buy only in high demand areas

• Cosmetic added value

• Narrow down geographical area and type of flip; focus

• Structural added value

• Line up lenders before looking for your deal

• Added value with addition

FINANCING METHODS • Subject-to assumptions • Cash • Hard money loans • Private loans • Equity share

HIGH-END FLIP REQ’s • Design as important as sq. ft. & neighborhood

• Set deadlines, rewards, and penalties for performance • Focus on non-listed properties with less buyer competition • After a win, do your prep & demo on day 1 after Close Of Escrow • Get fixed bids for major work • Put more money in the front than the back • Minimize risk: permit structural work, 1099s, insure • Pay your General Contractor directly; let him pay the workers


• Exceptional curb appeal

• Follow the herd; instead find a niche

• Dramatic architecture but not eccentric; hire an architect

• Buy the most expensive house on the block • Over Improve for the neighborhood

• Open floor plan and great room

• Analyze your sales comps without expert help

• Volume (cathedral and/or high ceilings)

• Underestimate rehab costs

• Totally updated; use a designer & proappliances

• Keep non-performing subs & associates

• High quality consistent finish throughout

• Buy “killer deals” in weak resale areas • Over estimate resale price • Fall in love with a prospective deal; be prepared to walk • Make many changes after starting: they are costly

Tom Wilson 408-867-1867

• Count on market appreciation • Have a failure & not learn from it • Feel invincible because you have a success

Tom Wilson is a 37 year real estate veteran who has executed over $100M and 1800 units of real estate investments. After thirty years of managing some of the Silicon Valley’s pioneering technology companies, Mr. Wilson put his business and management experience toward full time investing. One of his companies, Wilson Investment Properties, Inc., offers high-quality, high-cash flow, fully rehabbed, and leased properties to other investors. Mr. Wilson is also a weekly host of Real Estate 360 Radio on KDOW 1220 am every Wednesday at 3 pm PST. His radio podcasts can be downloaded on iTunes and viewed on YouTube. For more information, visit his website: SPRING 2014 REI VOICE 9



By Jeffrey B. Hare, Attorney at Law

Flipping is back! Rising home prices and low inventory equals opportunity for investors with the right resources and skills to profit. But whether you’re an experienced flipper or a beginner, new regulations will force you to change your game plan. Failure to comply can be extremely risky – and costly! “Flipping” refers to the process of turning an existing property into an attractive home for purchase. A typical flip involves acquiring the property at a discounted price, making essential repairs and upgrades, and selling for a profit in the shortest time possible. Two critical factors are the cost of financing and timing, so the faster the work can be completed and on the market, the better. Therefore, any factor that causes delay will increase expenses and reduce profit. In response to the housing crisis, both Congress and the California Legislature have been busy enacting legislation intended to protect consumers and ensure stability in the mortgage markets. These regulations will have a direct impact on how a flip-type project is typically funded and sold. Regulations imposed by the DoddFrank Act and enforced by the Consumer Finance Protection Bureau (CFPB) just went into effect in January, 2014. With certain exceptions, seller financed loans must be fully amortized (no balloon payments allowed), and all lenders must establish the borrower’s ability to repay the loan. Flippers intending to sell to entry-level homebuyers will need to familiarize themselves with these regulations, since they will directly impact the ability of buyers to qualify for mortgages. It is especially important to note that failure to comply with DoddFrank regulations could be raised as an affirmative defense to a foreclosure action, which could cause significant delays for both private and institutional lenders. Since the regulations are new and extremely complex, it will take time to get legal clarification of some of the specific requirements.

California State Legislature has enacted several regulations and amended others that have a direct impact on the typical flip project. Virtually every type of repair and remodel work involved in a typical flip project requires building permits. If the owner/ investor hires a licensed contractor to pull the permits and do the work, there should be no problem. However, when an owner/ investor tries to do the work themselves, or tries to save money by hiring unlicensed contractors, things can go wrong – terribly and expensively wrong! A state law in effect since January, 2010, requires that an owner who wants to do the work themselves must sign a “Builder-Owner Affidavit” under penalty of perjury in order to get the required permits, and they must agree not to sell the property within 12 months! This alone poses a major problem for most flippers! At the same time, licensed contractors must comply with new regulations governing terms and conditions of contracts and mechanics liens. A property owner who hires an unlicensed contractor (or laborer) becomes an employer, and must register with the Employment Development Department, the Franchise Tax Board, and the IRS, and must obtain and carry Workers Compensation nsurance. Failure to do so can result in heavy fines and penalties, not to mention the risk of serious liability exposure if the worker is injured on the job. A licensed contractor whose license expires for any reason during the course of a project becomes an unlicensed contractor, and subjects the owner/investor to liability as an employer not only of the contractor, but any helpers hired by the contractor on the job. Be sure to confirm that the contractor’s license and Workers Compensation insurance are current throughout the course of the project! This can be done online at Flipping can be profitable if done properly, but there are risks. Even experienced flippers could get trapped by the new regulations, and the penalties for noncompliance have never been greater. Consult with a qualified professional before you make a potentially costly decision. © 2014 Jeffrey B. Hare, Attorney at Law Jeffrey Hare 408-279-3555

Jeffrey B. Hare, Attorney at Law, provides outcome-oriented legal services to real estate investors, commercial and residential property owners, and real estate developers. As a real estate attorney with over 25 years’ experience in real estate and business transactions, Mr. Hare provides his clients with a practical, cost-effective approach to solving complex legal issues, including due diligence, contract review, and negotiations. He also has extensive experience with entity formation (LLCs, etc.), and is very familiar with the use of self-directed IRAs for alternative investments such as real estate. 10 REIVOICE.COM

Events Calendar August

March March 6 : Peers + Pros: Three Investors Share Their Strategies Domain Hotel, Sunnyvale @ 7PM March 8 : JumpStart Real Estate Investing Basics Courtyard Marriott San Jose Airport @ 9AM

August 7 :

SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM



September 4 : SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM

Apr 3 : SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM



May 1 : SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM

October 2 :



June 5 :

SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM June 14 : JumpStart Real Estate Investing Basics Courtyard Marriott San Jose Airport @ 9am

November 6 :

July July 10 : SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM

SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM

SJREI Monthly Meeting Domain Hotel Sunnyvale @ 7PM


Member Only Holiday Event TBD


With Leslie Appleton-Young By Geraldine Barry

For the purpose of this journal, Leslie Appleton Young can be summarized in three words: human think tank. She serves as the vice president and chief economist of the California Association of Realtors (a trade organization boasting over 165,000 members). Her work with CAR revolves around the analysis of housing markets, broker industry trends and strategic planning efforts for CAR; when it comes to real estate in California, Leslie Appleton Young is all but a household name. Her roots in our state run deep: she is a mother with grown children and just celebrated her 33rd anniversary with CAR. The bottom line? If you want to know what the weather will be tomorrow, read the Farmer’s Almanac. If you want to know which new car to buy, check out Consumer Reports. If you want to know which way the markets are going in California, find Leslie Appleton Young. I was lucky enough to catch up with her this month and catch a glimpse of her outlook on what, exactly, our local markets have in store for us.


I start off by asking Leslie to take a look at the past, then the present. Tell me why, I ask, that last year we had a great year for appreciation throughout the state of California - as high as 30% in some Bay Area markets - when this had taken three years to accomplish last cycle. What changed so dramatically? Over the past few years starting in 2009, Leslie says, investors have picked up distressed properties to either rehab and flip, or hold longterm. Things have changed. “Once the distressed market started drying up, the traditional market took off.” Leslie concludes. Furthermore, she says, first time buyers matter. “Last year 28% of buyers were first time buyers, that number should be closer to 50 percent in a normal market, but affordability and financing are locking them out. First time buyers are a very important component of a healthy real estate market as they can eventually become the move-up buyer, and drive markets in their wake.” Last year those of us in the Bay Area and Valley noticed inventory shortages. Eager to hear Appleton’s take on the shortages I ask: what happened, Leslie? “More people who were under water gained equity in this appreciating market helping them come into a positive equity position. In 2009 in CA, 25 per cent of homeowners were underwater; currently we still have  13.3% under water and still moving through the system. That the CA economy is doing very well helps all the other metrics.” Leslie proclaims. The bottom line for 2014, I ask? “My 2014 forecast: an increase 3.2% in sales which is a substantial increase from the -5.9 per cent last year” Leslie informs. I listen and write. This is valuable information.


Leslie is the head of the largest member organization in the country and as such, I’m eager to get her take on the current mood of real estate agents out there. Are they frustrated? I ask her to discuss what’s going on. “The average age of a realtor is 51 years old,” she starts. Indicating that it’s not just technology driving sales, she says, “Just as with any business – relationships reign supreme. It’s all personal.” Despite the emphasis upon a more old-fashioned connection with the customer, it’s important to remember, she explains, that realtors are retailers and technology in retail is important right now: “Amazon has raised the bar for all retailers, gaining momentum and delivering results on our doorstep – making the process effortless for the user.” The Internet moves fast – and as we live in an increasing digital world, realtors are expected to move fast too. The pressure is on for realtors to find ways to increase their momentum and deliver results more quickly. Realtors today are feeling the push to forge meaningful connections with their clients – all the while finding innovative ways to deliver faster results. From smart phone apps to encouraging word-of-mouth praise, it’s clear that today’s realtors must get creative with marketing, fine tune their people skills and keep up with current technology. Changes are happening for realtors and investors alike. The median price for homes increased by 27.5 % in 2013. A key reason for this change is that lower priced homes, such as ones from the distressed market, have been scooped up by investors and are now gone. In 2014, Leslie indicates, the increase in home prices will continue: “This year we anticipate a more moderate 6% increase in medium home prices for CA.”

Boat captains come armed with maps and tide reports. Financial masterminds like Appleton Young use metrics to chart courses and navigate choppy economic terrains. I’m curious as to what metrics Leslie uses for her monthly tracking to decipher the market’s direction, so I go ahead and ask. “Inventory.” It’s a way of quickly taking a market’s vital signs. Appleton says. “Inventory will tell you where the market is headed. This is the #1 metric addressing supply & demand. Simply put, inventory levels tell us a lot about the activity in a given market and whether it is healthy or not.” What’s next on her list of metrics? Population. Job creation. Unemployment. These numbers are huge in the long-term, she explains, “The continued strength of the housing market is dependent on jobs being created, particularly for the young college grads...Housing has been the strongest part of the economy for the last few years - and attractive prices and interest rates drove that aspect of the market.” Before I’m willing to part with Appleton Young, I want some predictions from her. If population is a significant part of the market, I press Appleton for her thoughts on where the population trends in CA will go and how they will impact the real estate market in CA over the next few decades. Without skipping a beat, Appleton Young answers, “People want to live, work and play in the same place simplifying their lives...creating the rebirth of downtowns. You can see that across the board in the revitalization of downtown areas from Los Angeles to Manhattan to San Francisco. It’s the demographics that are going to define the future of real estate -- who they are and what they want to they want to live.”

Leslie Appleton-Young - C.A.R. Vice President & Chief Economist Leslie Appleton-Young is Vice President and Chief Economist for the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), a statewide trade organization with more than 165,000 members dedicated to the advancement of professionalism in real estate. Leslie directs the activities of the Association’s Member Information Group.  She oversees the analysis of housing market and brokerage industry trends, broker relations, and membership development activities.  She is also closely involved in the Association’s strategic planning efforts and is a well-known speaker in California’s real estate community. Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island.  She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania. She  earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania


home lending, locally grown

Bryan VanHuystee

Mortgage Sales Manager NMLS # 669364


Helping you find the right home loan —right here in San Jose— To learn more, visit Member FDIC Equal Housing Lender

Loan products subject to credit approval.

Lori Greymont’s World By Susan Hare “Milking time is seven at night,” Lori Greymont tells me as we consider her two brown cows, “They each produce 3 gallons a day.” We are standing outside of the dairy pen, located at the rear of Lori’s property in Morgan Hill, California. A couple of chickens scratch in the dirt. One of her dogs runs up for a pat on the head. I’m fascinated that this business owner, wife, mother of four, and mentor to other real estate investors finds time to milk her own cows. I ask what she does with 42 gallons of milk a week. “Well,” she says, “since we own the cows, we’re allowed to use their milk, but it’s illegal to sell because it’s not pasteurized.” Lori goes on to calmly explain how to handle excess milk assets with same level of detail, competence, and inspired application of regulatory requirements as she does with her real estate holdings. I should not be surprised. Business transactions are part of her DNA. Lori Greymont was born into the business of old-school house flipping. Her mother would buy a broken house and move in with the kids. Renovation was a family chore. As soon as the house was fixed up, it was sold and the family moved into another eyesore. At nineteen, Lori made her first real estate transaction. Fivehundred dollars and a HUD loan bought Lori a for-sale-by-owner near college. She renovated the basement over the summer and rented it out to another student. It became a cash flow property and taught her to appreciate the value of sweat-equity coupled with steady income over the gamble of appreciation. It was value she’d retain after college and a move to California. We are at an SJREI meeting and Lori is approached by an eager new investor. Lori’s eyes sparkle and she greets the man like an old friend. Lori truly enjoys sharing her wisdom, some of which is contrary to popular opinion. I watch Lori tell the newbie to take it slow in real estate. The man seems surprised, as though he expected a pitch for a five-house deal. After all, hundreds of websites encourage investors to build their portfolio as quickly as possible. Not Lori. She goes on to share the story of the Texas cattleman who became rich starting with one cow. The man learned to make money on that one cow, and then he added a zero—that is he bought 10 cows. Once he learned to make money on 10 cows, he bought 100, and then 1,000 cows. He said he got rich by never skipping a “zero.” If the man had jumped from 10 cows to a herd of 1,000, he would never have learned the lessons he needed to when he only owned 100 cows.

Author’s Note: Lori is participating in a 100-mile bike ride to raise money for the Leukemia & Lymphoma Society. Donations are welcome through a link on her website,



Lori believes in being as methodical with building a real estate portfolio as the Texan was in building his herd. She learned to make money on one house before she purchased ten. Now, after having bought and sold thousands of houses, Lori is glad she didn’t miss a step along the way. When she tells the new investor to go slow, it is the voice of vast experience. Even so, Lori claims, “I’m not a real estate pioneer. I flipped houses in the early 2000’s, I purchased and developed land in 2004, I did bulk REOs from 2008 to 2010. My current focus is finding solid cash flow investments for myself and other investors looking for turnkey passive investments.” What Lori does, and does well, is watch the market and adjust her business model to suit the times and regulations. She says, “Now that the lending provisions of the Dodd-Frank Act are in effect, some people say that seller-financing is dead. But that’s only if you write multiple contracts for deeds the way you used to. There are ways to comply with the new regulations and still sell real estate to people that banks avoid.” So how does Lori legally put to good use 42 gallons of unpasteurized milk a week? She created a cooperative and sell shares in the cows. As a part owner, each shareholder helps pay for the upkeep of the cows and receives an allotment of milk a week. The solution is inspired and effective. But what about the neighbor who couldn’t afford a cow share? Lori is a great believer in the value of time. With so much to juggle, she has little problem delegating. It’s one reason her staff is so loyal. The other reason is trust. “I surround myself with people who are more talented than I in a given area,” Lori says. “To be happy, people need autonomy and passion. They don’t just need money. I give them control. When they feel they are contributing, they don’t want to go elsewhere.” Back to the neighbor who can’t afford a cow share. The person paid with time spent milking. To someone with as many business interests as Lori, this was indeed a fair exchange. Recently I asked Lori about her micro-dairy. An ill parent had joined the Greymont household and something had to give. The cows were sold. Pragmatic as ever, when circumstances changed, Lori made adjustments.

Lori Greymont is the CEO and Founder of Summit Assets Group, the premier purveyor of Turnkey properties with passive cash flow in Atlanta and Birmingham. Since 2009, Summit has transacted over 1,600 houses, helping investors achieve their personal financial goals. For a free no-obligation consultation on creating your own investment plan, please call 408-782-9162.


A View of the Silicon Valley with

Powerhouse Carole Rodoni

By Geraldine Barry The ingredients for success in business is the subject of many books, courses and much conversation. Carole Rodoni doesn’t have time for such things; she’s made certain her name is synonymous with success. When Ms. Rodoni talks, we stop and listen. It’s an honor to spend some time with Carole Rodoni and take notes while her keen eye sets its sight on our bay area market and the future. Rodoni is a petite and spectacularly bright powerhouse whose business acumen has reigned supreme over the Bay Area real estate community for many years; with perfect recall she fires off a dazzling array of data, perceptive insights, and humorous commentary on the real estate market -- and the Silicon Valley economy in general. Who is buying? What are their demographics? Where is the market headed? Government shenanigans? Interest rates? Twitter, Tumbler anyone? Yes, Carole has an opinion on all of the above, and she’s generally right on the money.  Carole had already been a successful businesswoman with considerable success back in the 80’s when, Carole reminisces, “I was hired by an Italian Industrialist who purchased Fox and Carskadon Real Estate, a company that was bleeding cash. He gave me sixty days to turn things around.” 60 days? While many of us would have run for the hills to focus on more sure things, Rodoni took the project on the way she always does: driven, goal oriented, focused…and true to form, she got the job done on time. She assumed the role of chief operating officer at Cornish and Carey Real Estate, following the Fox & Carskadon turnaround, and ultimately became president and chief operating officer of Alain Pinal Realtors. Not one to leave well enough alone, Rodoni and her team revamped and grew Alain Pinal Realtors at her trademark fast clip. It was from these executive positions that Rodoni developed her boundless enthusiasm for real estate and an impressive understanding of the market. “I was in the trenches every day talking to customers, title companies, agents, and economists giving me the edge with real time data and knowledge that could not be found elsewhere.” Carole Rodoni single minded, result-oriented, hard-working and yields results wherever she hones her focus. In talking shop with such a sharp mind, it’s hard to know where to dive in first. Nationally, Rodoni indicates, things are on the upswing. Last year 11 million homeowners were under water; today that number has dropped to 7 million. 800,000 returned to break even position in the past twelve months alone. With appreciation, the market is positively impacted as homeowners now have more choices when it comes to selling. Loan modifications provide an alternative solution where the banks modify the loan so that homeowners have an affordable  payment and can keep the house. These options have helped the market recover locally and nationally. Rodoni discusses the market here in her native Bay Area. She declares that real estate markets get cold, but never freeze here. She goes on, “Last year there was pent up demand, a frenetic kind of market, especially in trendy areas. In today’s market, buyers are more thoughtful about their purchases.  Interest rates edging up caused a breather in the market place. This year inventory will become more balanced.” Rodoni shares, “The Bay Area is a solid real estate market”. Rodoni indicates that though fragmented here and there, even the lowest ends of the market will build momentum and steadily rise. “Overall the market is recovering rapidly,” Rodoni states.



When it comes to the Silicon Valley markets, some speculators are concerned that the middle class is being squeezed out and generally declining across the board. Rodoni’s take? Population trends and demographics are changing the face of real estate in the Bay Area. She lays it out, “You have the worker bees, and we will always had to make accommodations so they can live here in this expensive locale, and support the service industries, and growing economy. The middle class is constricting naturally, the jobs they have historically held are disappearing because of the technological advancements.” The market is changing, then, because the population is. Rodoni says the Internet Revolution is to thank for these changing demographics. Whereas the Industrial Revolution took place over the course of 50 years, the valley has seen the Internet Revolution take hold in a mere 14 years. Just as the young, single girls who were powering the mills of Lowell became the face of the Industrial Revolution, the Internet Revolution has a face, too: the Millennials. Rodoni shared that these young affluents’ are becoming a dominant buying force, particularly in tech savvy areas. Specifically, the Millennials in the 25-35 age group; with education & technical skills are securing jobs in companies with large salaries and stock options that make them wealthy much faster than their parents. This group was the second largest buyers of real estate in the last year - they will become the number one buyer in next five years. It’s an important market change, Rodoni believes, and speculators would be wise to take note. So, how is the Internet Revolution impacting the economy? Rodoni is unflappable, “There are miniSilicon Valley’s popping up all over the country. It depends on how concentrated the Millennials are in a given location. The Millennials are highly educated, and are drawn to the Silicon Valley culture, and the opportunities here. They are also willing to go out and spend money on what they want, and pay to live in a high priced tech rich location for access to the brains, networking, and entrepreneurial environment here.” Rodoni says we need only look at the activity of the Apple or Googles of the world, who are buying up companies, startups and software at a fast clip. Money, and lots of it, is trading hands here. Rodoni declares, “No revenue, no problem. They are willing to pay a premium to get that application.” To really bring her point home, Rodoni switches things up, “Look at Twitter; it has never been profitable,” she says, “- but the 200 million eyeballs is where the huge potential lies. Users are addicted to it; the assumption is that advertisers will follow.” The Bay Area’s home sales, then, will follow suit. Rodoni fires off statistics, and speaks at breakneck speed. Her agile mind, and sharp wit, are both stimulating and intriguing to behold. As a successful business woman for many years, Rodoni stumbled into real estate when a challenge was thrown her way; it’s no wonder, then, that when others may see challenges in looking at the local real estate market, Rodoni sees nothing but promise, potential, and profit when looking at today’s market. It’s what she does best. Needless to say, spending time with this Silicon Valley icon keeps you on your toes -- do be sure to wear something comfortable should you ever have the pleasure of her company.

Carol Rodini was formerly Chief Operating Officer of Cornish and Carey Real Estate, and President of Alain Pinel Realtors. She is a renowned speaker on the economy and real estate and is currently the President of her own consulting company -- Bamboo Consulting. SPRING 2014 REI VOICE 21



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Getting It Right from the Kick-Off: Alain Pinel Top Producer Elena Johal Elena Johal

By Geraldine Barry

Hailing from the Ukraine, Johal moved to the states in 1989 with her family and a drive to succeed. Her success is powered by her commitment to results, and her commitment to her three children. She wants to set the pace for their lives by setting the bar high in her own: “You create your definition of success which is different for everyone...but at least they can see that hard work, drive, focus and tenacity do pay off.” Her eldest daughter works as a corporate attorney, her younger daughter is away at college and her 13 year old son is, not surprisingly, an avid soccer player. It’s no surprise that Elena Johal loves soccer; great soccer players make big plays. They don’t wait to make a difference in the game—they find an opportunity and go for it. Through skill and repetition, they develop a pace that outfoxes other players. When it comes to technical skills, great soccer players have a honed finesse; they juggle, dribble, pass and shoot with precision. Finally, and most importantly, the greatest soccer players understand how to play the game: they see the whole field and strategically know how—and when—to react to a given situation. Great realtors like Elena Johal do too. When she’s not playing and winning on the soccer field, she’s focused on real estate. In 2013, Johal was named Alain Pinel Top Producer for the San Jose/Almaden office. Needless to say, it’s not her first award and probably not her last.





Elena provide her listings with FREE upscale staging Johal was drawn to real estate after purchasing her first home. “We bought a home and it was complicated. It made me think the process could be simplified for the buyer and seller, depending on their needs”, Johal reflects. Like a great player of any sport, she saw a need for improvement and found ways to win. After leaving her high tech corporate job, she sold 12 houses in her rookie year. So, how does Johal play the real estate game so well? The setup is important. She takes a broad view of the field, recognizes her play options and makes her move on the play she knows will allow her to get to the goal and make the perfect strike—this is how Johal yields such positive results. As if her prowess on the soccer field were not enough, Johal is a mechanical engineer by training, another major influence in her approach to real estate. Being able to see many moving parts working together at once, she is keen on the most finite details and takes a careful and considered approach to ensure that each component of a deal is resolved with simplicity and excellence. Buyers and sellers, especially busy high-tech professionals, don’t have time to argue about mending fences or wade through reviews of various contractors on Yelp. By functioning as something of a one-stop shop, Johal makes her deals happen quickly and smoothly. When one works with Elena Johal, the details are covered. To get homes market-ready, Johal works with trusted contractors and landscapers to take care of any hurdles they face. She goes above and beyond for her clients: she owns a staging company and a landscaping company, both separate businesses from her real estate one, and she provides free landscaping and staging for every listing.

Johal gets it right from the kick-off. Her confidence from years of success is evident, and her clients feel safe with her in charge of the ball: “I assume the sale, and know that they will never find anyone who can do the job as well as I can.” Johal recounts a recent meeting as a potential listing agent with an older couple from China. Their daughter was getting married and they were overwhelmed with planning, selling their house, and moving. Their house needed some work before it was market-ready. Johal told them to relax, close their eyes and envision how teamwork would make it all happen. Like a coach, she simplified the game plan and provided a play-by-play with clear X’s and O’s. She introduced them to the painter, contractor and landscaper and the ball was in motion. By providing peace of mind, trust and an understanding of their needs, in addition to her results-oriented approach, Johal proved she was the right agent for the job and they hired her. Is Johal’s goal money? No. There are three things that drive her in real estate endeavors: bringing value to her properties and her clients; fulfilling a creative drive as each project is unique; providing a healthy and challenging outlet for her competitive drive. There’s an old adage that goes, “Provide value and the money will follow.” For Johal, this rings true. She approaches each property for the win—not the price tag. By focusing on the value she can provide, Elena Johal scores her goals time and time again, “I’ve never had a down year. Even through the recent recession, my sales did not suffer. I consistently strive for superior customer service, and when I do that the sales follow.”

Elena Johal, One of Alain Pinel’s Top Producer 2013 - San Jose - Almaden Office Elena Johal’s talent and skill in handling all kinds of real estate transactions is evident in the results she yields: she was recently honored as Alain Pinel’s Top Producer of 2013. Her years of experience, attention to detail and the value she provides her clients have made her one of the Bay Area’s most esteemed agents. Hurdles are just that for Johal; when she finds an obstacle she finds a way to tackle it. Elena Johal approaches each new project with the goal of creating a winning experience for all of her clients - and it shows ~


A National & International Economic Perspective With Doug Duncan

By Geraldine Barry

Q: In 2008, when the global financial crisis occurred, it exposed vulnerabilities in the U.S. economy and Fannie Mae began to

experience real challenges. The Federal government stepped in to support Fannie Mae and the U.S. housing market. Describe that time in the company.

A: The economic and financial market recession of 2008 was a global event as you note. I joined Fannie Mae at the end of April 2008 and the company was taken into conservatorship in September of that year. Without going into a long list of details, suffice it to say that housing was a considerable part of the downturn as the bubble was a lot bigger than anyone thought, and was, in fact, global in nature. As the full extent of overbuilding and the credit bubble was revealed and prices began to reset, losses mounted across the entire financial sector. It was not until late 2011 that we could confidently state that housing was back on a path toward normal.

Q: What specific strategies were implemented to strengthen Fannie Mae that yielded such an amazing turnaround? A: There have been a lot of decisions made by Fannie Mae leadership working with FHFA in conservatorship, as well as decisions made by other policymakers that had an impact on the market. The Federal Reserve undertook a set of policy decisions designed to put a floor under house prices and to lower financing costs for homeowners with mortgages. The Treasury Department created the Making Home Affordable (MHA) program administered by Fannie Mae, which included the Home Affordable Mortgage Program (HAMP) and Home Affordable Refinance Program (HARP). Fannie Mae implemented new loss mitigation strategies and improved metrics for ensuring that loan servicers were improving the way they worked with troubled borrowers. The company also strengthened its underwriting standards, applying the lessons of the downturn to the criteria to help ensure that borrowers have access to sustainable mortgages and the capability to meet their obligations.

Q: Give us an overview of how far you have come since then as a company and the results that were achieved. What is the outlook now?

A: The company has turned from a period of financial losses to 8 consecutive quarters of profit. Our profits go back to taxpayers in the form of dividends to the U.S. Treasury; however our dividend payments do not offset prior Treasury draws. While the company remains in conservatorship, we have undergone significant changes over the past several years resulting in improved financial performance and a stronger book of business – so it appears that the company has turned the corner from the worst effects of the crisis. We give formal comments on these issues in our 2013 10-K. Our economic forecast is for continued growth in the housing market, although somewhat slower than 2013 since the rise in interest rates has slowed activity as we expected.

Q: It would be an economic catastrophe if, given the quantifiable progress that Fannie Mae has made, the company were simply reorganized or phased out. It’s really counter intuitive given the positive results that have been accomplished recently and the company’s 75-year history. How do you think things will play out?

A: The Congress and Administration will ultimately decide what happens with Fannie and Freddie. While there has been some movement on this front in the way of proposed legislation, the media and others seem to think that things will be pushed past the next presidential election. Forecasting interest rates is hard enough; forecasting legislative activity is another level up from that.



Q: Why would the capital markets provide a 30-year mortgage? Capital markets are driven by profits and it appears that only GSEs (Government Sponsored Enterprises) would be willing to get behind a 30-year fixed-rate mortgage. Surveys indicate that 70 percent or more of homeowners prefer this predictable option in terms of mortgages. Your thoughts?

A: One of the decisions policy makers will have to make is whether they care about the existence of a pre-payable, 30year, fixed-rate mortgage. If they do, then there are certain structural requirements that will need to be met. Today we call this the TBA or To Be Announced market, which is what allows lenders to issue commitments to deliver loans with specific criteria to investors at a point in time in the future while guaranteeing (locking) rates for borrowers today. Our surveys of borrowers show that while they want to have choice of mortgage products, the overwhelming choice is the 30-year fixed-rate loan.

Q: Let’s look at the global economy. What are your thoughts on China, and how is their economy doing? A: China has made a decision that they must alter the balance of investment and consumption in their economy by lowering investment and increasing consumption. That has a number of implications for the U.S. First, China has been a significant source of funding for U.S. markets due to its high savings rate. That is likely to change and put upward pressure on rates in the U.S. over time. Additionally, to increase consumption China will have to raise wage rates, which would benefit U.S. workers on a relative basis.

Q: Are we vulnerable to China as they hold so much U.S. debt, or is it a case of China having a vested interest in our survival because of this?

A: Some people worry that China could sell U.S. debt, which could push down prices, raise interest rates, and do harm to the U.S. economy. They could, but in the process they would sustain significant losses themselves and they are less able to sustain those losses than the U.S. is. Thus, change in their holdings will likely take place over a longer time frame.

Q: Does our debt situation give you pause? How do you think it will impact the US long term?

A: I do worry about U.S. debt, particularly the unfunded liabilities we have for social security, Medicare, and Medicaid. None of these are currently being dealt with. There is a perception among the public that there is some reserve fund in the government for the long-term funding of these obligations. That is not true. Benefits are funded by the current taxes paid and all of these programs will be paying out more than they are taking in in the not too distant future. The difference will have to be paid from general revenue. This is an irresponsible approach fiscally in my opinion.

Q: What are your thoughts on the Euro Zone?

A: The Euro Zone still has a long way to go to get back to health. While the U.S. has been making progress getting its banking system back to health, the same cannot be said about the Euro Zone.

Q: How do you think the overall economy in the U.S. is looking today?

A: The economy is improving gradually. We think it will grow about 3 percent in real terms this year. Our theme for 2014 is Private Forces Move to the Fore, meaning that the private economy will start to move out from under the weight of government policy.

Q: It appears in retrospect that the U.S. government handled the financial crisis very well, with intervention measures

A: That is a subject that will be debated for a long time, I would guess. The difficulty in determining success is that we don’t run repeat experiments in economics, so we can’t really determine the “what if” scenarios.

Q: Do you have an opinion on the San Francisco Bay Area and its spectacular rebound in terms of the housing market

A: The Bay Area has been supported by geography and the amount of land left to develop (it’s hard to develop in the ocean); by productivity growth (technology), which is a key determinant for growth; and by import/export and other more diverse economic advantages to employment in the area, much of which extends to housing.

not allowing housing inventory to flood the market, which eventually allowed the markets to burn through the excess inventory.

and economy? It appears that its growth does not have the footprint of a bubble.


Doug Duncan

A National & International Economic Perspective (Continued)


Q: How do you think financing will play out for investors around

A: I think that institutional investor market participation has

Q: I know our readers who are real estate investors will want your thoughts on the hottest real estate markets in the country now. What markets are hot right now from your perspective?

In my opinion, it’s themarkets where prices fell the most. However, the bottom segment of those markets has recovered and activity is shifting to geographies where job growth is strengthening. We recently did a paper on the state level dispersion of job growth. It’s worth reading because the data show that this recovery has the most disparate regional recovery pattern of any since the 1960s.

A: Any predictions or interesting insights to share that I have not

Housing is still a long way from normal and we are predicting that 2016 will be the year key indicators are back to some semblance of normal.

Q: Are there ‘target’ numbers within Fannie Mae being used to consider dropping the hi-balance lending limits?

A: FHFA sets the loan limits. They have access to our data and

Q: With the new loan limits and the fact that CA real estate is expensive, how will this impact the market?

A: I can’t speak to that specifically, but it’s my belief that all home

the country? A lot of cash has been deployed in the purchase of real estate by hedge funds, private investors, investment backs like Goldman Sachs, and others. But the average investor tends to have a difficult time getting traditional financing despite a good record of payment and a good credit score. Any loosening up of funds that you can see on the horizon?

peaked and is now going to find ways to lay off risk and ultimately develop an exit strategy – largely because the discount to longterm price has declined for them. Some institutional investors have turned to providing financing for others as opposed to buying properties for their own investment portfolios. Credit seems to be easing slightly overall, but I think that the individual investor will still face some hurdles.

mentioned above?

make those decisions independently from us.

prices are local – meaning that anytime loan limits are changed the effects will differ by geography. When local prices exceed the loan limits, credit tends to be more expensive and terms tend to be more variable.


Q: Where are interest rates headed in 2014 as the Fed starts to pull back on quantitative easing?

A: We expect a modest increase in rates, which should end the year at around 5 percent for a 30-year fixed-rate mortgage. However, there is an argument to be made that with the Fed changing its policy posture, it is possible that rates could fall if ending securities purchases slows growth beyond current forecast expectations. Rates have fallen somewhat recently.

Q: What are your thoughts on the new Qualified Mortgage guidelines?

A: Given the GSE exemption in place, the new rules shouldn’t have a large effect. Without that exemption, there likely would be an appreciable effect. Also, it’s likely there will be an interest rate experiment that takes place over the current housing cycle as some elements of the rule do not flex with market conditions.

Q: It appears that interest-only loans will no longer be available... probably a good thing? If people get 5-year arms, etc.,

A: Interest-only loans were developed to facilitate financial planning by sophisticated households who actively manage their portfolio. This was a very small segment of the population, and they will lose that tool. However, the interest-only loan was abused and policymakers chose to eliminate it. The move was intended to prevent some less financially sophisticated households from getting in trouble and to stop speculators from using a highly leveraged approach to extract capital gains from real estate.

they have to qualify for a fully amortized loan. How will that impact the market?

Q: Have we gone too far in the other direction in terms of protecting the consumer?

A: I think there is merit to that argument. In my opinion, consumers need to be held accountable for their decisions or a market-oriented economy does not function well, just as businesses need to be held accountable for the decisions they make.

Q: Are you concerned that fewer first-time buyers will be able to qualify given the more stringent underwriting standards

A: Not necessarily. The difficult question is what the “appropriate underwriting standards” are. If standards are too tight, then what is just right? One thing that became a consensus in the aftermath of the crisis is that lending should be sustainable so that borrowers are able to stay in their homes.

Q: What book are you reading right now? What magazines, blogs, and resources do you read on a daily basis to stay

A: I am reading Colossus by Niall Ferguson, The Glory of Their Times by Lawrence Ritter, and The Pacific by Mark Helprin. I read the Wall Street Journal and Sunday New York Times, Forbes and Architectural Digest magazines, Barry Ritholtz’s blog, and a significant number of analyst and economist newsletters and reports.

Q: Are you using your iPad more? You just got it when we spoke last and were reluctant to give up your books. I feel the

A: I do use the iPad, but not for reading. More for searching for things. I order certain things online, choose options for services, read reviews—things like that.

across the industry?



Doug Duncan is Fannie Mae’s senior vice President and chief economist. He is responsible for managing Fannie Mae’s Economics & Strategic Research Group. In this leadership role, Duncan provides all economic, housing, and mortgage market forecasts and analyses and serves as the company’s thought leader internally and with external constituent groups.  Named one of Bloomberg’s / BusinessWeek’s 50 Most Powerful People in Real Estate and one of Inman News’ 100 Most Influential Real Estate Leaders for 2011, Duncan is Fannie Mae’s source for information and analyses on the external business and economic environment, the implications of changes in economic environment to the company’s strategy and execution, and forecasting for housing activity, demographics, overall economic activity, and mortgage market activity. SPRING 2014 REI VOICE 29

Thinking of Selling?


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& Real Estate Marketing By Aaron Norris

Just in time for Valentine’s Day, the National Association of REALTORS® released an interesting report discussing property crushes and what features get men and women hot and bothered about houses. First, some stats to set the conversation. Did you know that women control 51% of U.S. private wealth, account for 85% of all consumer purchases, and influence over 95% of total goods and services? Did you know that women make or direct 91% of home buying decisions and initiate some 80% of all home improvement projects? Did you know single women are one of the fastest growing segment of home buyers? If you’re thinking women are a powerful and special market, you are correct? However, not in the sense that you should be creating separate marketing campaigns. Most small companies won’t have the time or resources to create female-centric ad campaigns. It’s easier to know what women want and respond to up front to better address the market.

Women and Real Estate

According to the NAR study, there are a few key factors women focus on when it comes to real estate: 1. Amenities. According to the NAR survey, women are more likely to fall in love with houses over their budget. Amenities that are likely to send them over the edge include open floor plans, outdoor living spaces, upgraded fixtures, walk-in closets, and upgraded fixtures.

2. Neighborhood. Women are more likely to stay away from rough neighborhoods and neighbors. Women will also be more likely to research school score performance as well as accessibility to things like shopping and entertainment. No real big surprise, right? In a seller’s market, you may even be thinking this doesn’t apply because the lack of inventory means buyers are more willing to overlook flaws. They just want a house! However, it’s important to know the features that matter and sell the benefits in your marketing. Also, consider the tremendous value and a potential bidding war that might ensue with the correct feature. What about adding a central air conditioning unit in an older beach home? Or building a new pool on a Palm Springs property? What about adding a modern master bedroom and bath to an older home in an upscale, established neighborhood? Compare the cost to potential sales difference and you might be surprised.

Women and Marketing

While you may not have the budget to target mommy blogs and pay for targeted ads on the Hallmark Channel for your latest listing, there are some general marketing tips anyone in real estate can use that can help be more effective with an eye towards your female customers. 1. Great visuals and writing with benefits in mind. Consumers start their home shopping and research online. While men are more fact driven when it comes to real estate, women tend to be more visual. Be sure to take lots of great pictures and add copy to your listings that sell the benefits of the space. A little staging to dress up kitchens and bathrooms can go a long way in allowing a potential buyer to see themselves in the space. Don’t forget to write good copy when describing your property. Who doesn’t love a little detail on what makes a house special?

2. Quality service. Women tend to be much more loyal to brands than men. If you provide a quality service and are responsive to their needs, they are your customer to lose.

3. Share. Women are far more likely to share and refer their service experience off and online! If you’ve done a great job with all we’ve discussed, the final piece of the puzzle is making certain you make it easy for the customer to share that awesome experience. Find special touches that make the moment that much sweeter. A picture of the family in front of the “For Sale + SOLD” sign. Perhaps a little house warming gift that’s unique to the family. Create a lasting memory by capturing a moment, and capture a client for life.

Men and women may differ in features they focus on when buying properties. However, everyone likes great customer service and we as marketers always want to make it easy to share our great experiences. A little creativity and attention to detail in this business can go a long way in creating a steady referral stream and lifelong customers. Aaron Norris is Vice President of the Norris Group where he is responsible for business development and production of TNG’s award-winning radio show, events, and educational seminars. Mr. Norris is also principal at Palisoul, Norris + Conroy, a marketing and strategy team based in Southern California and hosts the marketing and business podcast, The Cocktail Party Statement.


Contact Aaron Norris at 951-780-5856


The Newest Real Estate Technologies to Adopt this year! By Mark Thomas As a real estate professional or investor, if you’re not evolving and adopting the latest technologies to streamline and improve your business, you’re sending out an open invitation to your more tech savvy competitors that you want them to have your lunch. While it may seem harsh, that’s the reality for today’s tech-driven real estate world. Let’s take a look at some new tech tools for real estate pros that will help you build your profits.

The above tech innovations are just a few of the many powerful tools available to real estate professionals and investors today... there are countless other great ones as well. Whichever tools you ultimately decide to use, the most important thing to keep in mind is that adopting the latest technologies is critical in staying ahead of the curve - and your competition.

A large number of real estate professionals and investors have given up ink for esignatures over the past 4 years. According to Veterans United Realty, in 2010, approximately 20,000 real estate professionals reported using DocuSign for business documents - and that number has since jumped to over 130,000 real estate professionals. DocuSign reports that as of October 2012, more than 4 million real estate transactions have been completed on DocuSign. These numbers will increase exponentially: the benefits of being paperless far outweigh the negatives and the tech-friendly millennial generation will continue to demand these products for real estate transactions. My company’s product, Reesio, takes paperless to a whole new level. Not only have we fully integrated DocuSign into our product but we also go way beyond just esignatures. Reesio has the ability to transform your work life as it allows you to easily establish workflows, timelines, activity logs, the marketing of properties, and offer making/accepting/rejecting. Simply stated, Reesio functions as a virtual, paperless assistant that allows real estate professionals and investors to be more efficient, reduce liabilities and to do more deals. Going paperless is just the beginning. Once you’ve begun streamlining your transactions effortlessly in the “cloud” of cyberspace, you should consider adding some tools to help you find investors for potential deals, and to find the actual deals themselves. Crowdfunding in real estate is all the rage right now and new crowdfunding real estate apps are sprouting up all over the place. My two favorites are RealtyShares and RealtyMogul: both platforms have successfully helped match those with deals to potential investors, and both companies are venture-backed. After securing the funds to purchase potential investment properties, it’s time to find the actual best deals on the market. A new product called Flipt uses big data and recommendation scores to let you know the potential likelihood of a successful investment in a particular property. Flipt rates properties based on their potential for fixing and flipping, renting out, and buying and holding. You can search for any property in the United States to find out what Flipt’s recommendation is and they also provide investors with insider picks of specific properties they recommend. Mark Thomas is an accomplished serial entrepreneur, and Reesio is his third tech startup and the fifth overall startup that he’s founded/co-founded.



How the Information Economy Can Make You $$$ We’re now into 2014 and the digital revolution is meeting the energy revolution here in the US. Way back when the Industrial Revolution radically shifted the way and the speed at which we worked, today’s Digital Revolution has changed everything about the way we work and experience life – in just a few short years. Now, the energy revolution is upon us and, new ways to create energy are popping up everywhere. With technology advancements moving at the speed of light, this is an exciting time to create income streams and tax shelters that will both build and protect your wealth. Planning for your financial future means making strong financial choices based on current financials and trends. Here are our top 5 trends to watch as you develop your strategies to be successful: 1.

Get in front of trends. The digital revolution is expanding and changing our world: embrace it, earn from it.

2. The early bird gets the worm. Volatility is increasing and economic climates are shifting. There are calm spots in the world today. Find them and be the first one there. 3. Keep your eyes on Mexico. Mexico is poised to become our prime trading and manufacturing partner. For the past 20+ years, the Mexican government has been making numerous improvements to the infrastructure, transportation, energy and telecommunications and has placed its economy among the 13th largest in the world with plenty of purchasing power and expanding middle class. 4. Participate in the Energy Revolution -- with safety and security. Learn what the energy revolution is all about, why Texas is a great place to invest and how to start leveraging this exciting time to increase your ROI’s. 5. Be open to new ways of doing things. The nature of work is going to change as the digital revolution expands. Not only is Amazon changing shopping, it is changing labor and jobs. The world is going to transition from the Flintstones to the Jetsons in a short period of time. Be prepared. Compare now to the latter half of the Industrial Revolution; the similarities, economically, are endless. The Internet is at the very early stages of driving an exponential economic growth curve similar to the wealth creation that occurred during the Industrial Revolution. In just a few short years (believe it or not, mass access to the Internet is only about ten years old), we’ve shifted to a digital economy and a global workplace. The possibilities are endless.

Jeb Henley Equity Transition 831-419-4200


It’s an exciting time to be alive. We have exponentially increased our ability to access knowledge. Search engines we take for granted deliver access to knowledge that would have been unimaginable two decades ago. Social networks have increased our ability to reach out to millions of people to request information and advice. Everything from real-time stock prices to reviews of consumer electronics to food safety violations for restaurants is now available to anyone with a mobile device. As Peter Diamandis writes, “A Masai warrior on a cell phone in the middle of Kenya has better access to knowledge than President Reagan did 25 years ago.” Diamandis is right – and that means now is a great time for investors to put the power of our information economy to work for them. It’s an exciting time to invest. You can invest and invest wisely for income and retirement. Find out how to maximize your assets and passive income from an expert who has experience and an eye on the future.

Jeb Henley is a Real Estate Broker and investor with over 35 years’ experience with both residential and commercial properties. Mr. Henley has been investing, selling and exchanging real estate since 1975 in both California and across the United States. As a Broker, Mr. Henley works with strategic partners and affiliates to locate solid real estate values that will provide his investor clients with opportunities for both cash flow and appreciation. Using his extensive experience in handling real estate transactions ranging from single family homes to large commercial properties, Mr. Henley focuses on helping his clients to develop and build a successful real estate investment portfolio, from initial acquisition to eventual sale or exchange of the property.



for Series LLCs

By Garrett Sutton


A Series LLC is a new type of LLC that supposedly can be used to segregate liabilities and risks into separate cells, or series. It is often promoted to real estate investors as a way to internally segregate each holding into a different cell. Graphically, it can be explained as follows:

ABC Series LLC

Cell #1 Owns Duplex

Cell #2 Owns Fourplex

Theoretically, the idea is that if you were sued over the duplex in cell #1, a claimant couldn’t get at the fourplex in Cell #2. Even though both properties are owned by ABC Series, LLC, by segregating them into separate cells, the two properties are protected from each other. An internal shield of liability is supposed to protect one from the other, just as if you had two separate LLCs. Eleven states have approved the Series LLC: Delaware, Illinois, Iowa, Kansas, Montana, Nevada, Oklahoma, Tennessee, Texas, Missouri, and Utah. Which means 39 states have not.

The Case The big issue arises when you take a Series LLC into a state that hasn’t approved them. Does the home state rule apply, whereby no internal shield protection is granted? Or does, for example, Delaware law apply wherein one cell would be protected against a claim brought against the second cell? To date, we haven’t had a case answering this question. But that all changed with the Alphonse case. The Fifth Circuit US Court of Appeals decided Alphonse v. Arch Bay Holdings, LLC, No. 13-30154, 2013 WL 6490229 (5th Cir. Dec. 11, 2013) in a way that challenges Series LLC protections. At issue is whether the internal affairs of Delaware’s LLC law (extending internal shield protection) applies in a Louisiana case or if Louisiana’s own, less protective law applies as to Louisiana parties. The court found that the internal affairs doctrine “does not apply to disputes that include people or entities that are not part of the LLC.” Meaning that one cannot argue with certainty that Delaware’s protections apply in a case involving outside Louisiana parties.

Caution I have warned against the use of Series LLCs from the start. The whole ‘internal shield of liability’ protection gambit, until approved numerous times in all 50 states, seems structurally weak and susceptible to attack. They are fragile. A deposit intended for one cell when placed in the second cell’s bank account creates problems. When a bookkeeping error can bring down an entire series structure, you have to think twice. Promoters selling Series LLCs often ignore the risks of innocent missteps which can compromise one’s entire protection plan. These promoters sold the Series LLC in California as a way to avoid paying the annual Franchise Tax Board (FTB) fee of $800 per entity. The argument was: “Pay the $800 once for the parent series and avoid the $800 for each cell.” Of course the FTB saw right through that ‘strategy.’ They now charge $800 per cell, negating any benefit. Now we have a case questioning the use of Series LLCs in states outside those that have authorized them. If the internal shield of liability doesn’t apply, as the Alphonse case suggests, the Series LLC and each cell are wholly responsible for every claim, whether in one cell or the other. Given the risks, you are much better off using separate LLCs. Garrett Sutton is an attorney and author of several best-selling books on asset protection, including Loopholes of Real Estate and Start Your Own Corporation. He can be reached at or by calling (800) 600-1760. Garrett Sutton has over 25 years experience assisting and advising entrepreneurs and businesses in selecting the appropriate corporate structures to limit their liability, protect their assets and advance their personal and financial goals through real estate investments and other means of wealth creation. An author, speaker and member of an elite group of “Rich Dad’s Advisors” hand selected by Robert Kiyosaki, Garrett speaks to investors and entrepreneurs on a variety of issues. Garrett has authored numerous titles included in the “Rich Dad, Poor Dad” wealth-building book series. His books provide an accessible source of information for building your own success. 35

Kathy Fettke

In Intimate Detail:

It’s been a big year for California real estate. The market has appreciated dramatically over the last year and as the economy recovers, secondary markets are becoming more and more appealing. By Geraldine Barry

Q: What is attractive about Cincinnati, Ohio now? A: Prices are high again in California and it difficult to achieve positive cash flow; negative cash flow is no fun, which is why secondary markets are looking good. Ohio is a state where you can buy a home for the same amount as a down payment on a property in California. Big difference. The best deals usually come in some form of distress and the “bounce-back in prices hasn’t happened yet in Ohio. Here’s a real life example of a one of our recent purchases. I just bought a Cleveland property for 65,000 that’s now renting for 1,100 per month. Q: Tell me, what 3 metrics you look at to determine if you will enter a given market? A: Great question, simple answer: Job growth first, then population growth and, finally, affordability. Q: What are the particular economic drivers that appeal to you about Ohio? A: One word: jobs. We want tenants who can afford to pay the rent! It’s important for an area to have diversified tenants - we look for jobs to be in varied fields such as health care, high tech, higher education, and energy. That’s why we’re not so excited about North Dakota, where there are jobs, but they are mostly in energy – not enough job diversity. For us, Ohio just makes sense. Q: What Return Of Investment are you typically looking for? A: We look for rents to come in at 1% of purchase price or better. For example, if we purchase a house for $100,000.00, we want to bring in $1,000.00 in monthly rent to meet that 1% ratio. Beyond rents, I want to see the potential for capital growth. We want that $100,000 purchase to be in a neighborhood where new homes would cost $150,000 or more to build. We look for middle class homes that appeal to middle class renters. We typically stay under the $150,000 price point because cash flow tends to decrease over that number.


Q: What size cities do you focus on & how does employment figure into the equation? A: We recommend that our members invest in or near cities that have a minimum of 1 million residents. In that size city, one part of

town may have high unemployment while another neighborhood is booming. You’ve got to know where the growth is headed. I like unemployment numbers to be better than the national data.

Q: Is eviction a difficult process in Ohio unfortunately this is a part of investing game? A: It takes about 45 days to evict in Ohio. It’s a landlord friendly state. We like these states where judges believe it’s the renter’s obligation to pay or leave.

Q: What is the most important thing that investors need to be aware of as they explore investing out-of-state? A: Whew! Great question. Don’t buy online just looking at the fundamentals. Online dating demonstrates that you do not always get

what you think you getting! I could tell a million horror stories I’ve seen or heard – but, the bottom line is this: VISIT your property before purchasing! Require that any purchase goes through a title company and that all funds are wired to escrow. Fraud happens. Avoid it. Get 3rd party inspections. Have property management in place before you close. I was in Cleveland showing investment properties to some of our members when I got a call from someone in our network who found an apartment and wanted us to look at it while we were there. The broker said it was nearly 100% occupied, near a college and in great condition. So, we decided to take a look. As we approached the area, we got scared. There were rows of apartments, most with windows boarded up, overgrown grass, and vacancy signs in every window. We got out of there fast, but still had time to get the phone number on the For Rent sign. We called to inquire about vacancies, asking if there were enough apartments for all 20 of us. The answer was “yes!” So much for fully-occupied in a college town…VISIT your property before purchasing! Trust but verify. Always get a 3rd party inspection before closing. And never pay for a renovation before it’s been done. You can pay a deposit, but make sure to hold back final payment until an independent inspector can verify that work was indeed done.

Q: What are your top recommendations to get results? A: · Work with a team you trust

· Being part of a large network helps. A good one can act like Yelp for the real estate investment business. · Always get inspections · Always use title and escrow for your purchases · Visit your property and talk to the neighbors · Make sure you have great property management in place before buying

Q: What are your top three criteria for selecting competent property management? A: Look for experience, great systems and integrity. Your property manager should have at least 2 years of experience, an organized working system for their business, and references. Q: Who is buying right now in your market? A: Smart investors looking for cash-flow. Folks looking to self-direct their IRA’s and buy investment property that cash-flows. People

who want bargain prices and solid cash flow in working class neighborhoods that have the potential for price appreciation. Cash buyers looking for steady income stream. People who want access to distressed prices before they bounce back.

Q: This a cash flow proposition - not necessarily an appreciation play. If we learned anything the last cycle it is that appreciation is never a given and can get investors in a lot of trouble if they bank on it. Your thoughts?

A: When you buy for cash flow, you are not focused on price increases or decreases. You really don’t care about that because you’re

not selling. Appreciation is super fun when it happens, but depreciation is painful, especially if you have a mortgage and are feeding the property every month due to negative cash flow. Buying for cash flow is much easier to plan for and predict than appreciation. It also helps you sleep better at night!

Kathy Fettke is the CEO of Real Wealth Network, and is frequently featured on CNN, NPR and CBS MarketWatch. She is also an active real estate investor, licensed Realtor, certified coach, and former mortgage broker. She founded Real Wealth Network in 2003 to help investors avoid “the scammers” and get the right price on the best income properties in the strongest markets. Kathy and the team at Real Wealth Network focus on helping investors grow their real estate portfolios through creative finance and planning.



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Inside the 49ers Stadium Deal. How the little city of Santa Clara wrestled the 49ers away from namesake San Francisco and landed a world class stadium without bankrupting city coffers! Publisher Geraldine Barry dissects this really big deal. By Geraldine Barry Santa Clara, a small city located between San Jose, the 10th largest city in the country, and Sunnyvale a dominant force in the Silicon Valley tech community, fought to claim its space as something more than a bit player in the very competitive environment of major league sports. A home stadium for the San Francisco 49ers was hanging in the balance. When an opportunity presented itself Santa Clara city leaders quietly, strategically pulled together a plan to outsmart the bigger, better, richer, infinitely more prestigious City of San Francisco. This is the story of how the little guy prevailed, and was completely underestimated in the process, pulling off a coup! One clear fall day in 2006, Patricia Mahan, former mayor of Santa Clara, Councilmember Kevin Moore and a group of civic leaders met with decision makers from the San Francisco 49er’s for a trip on the Sky Tower Ride at the Great America Theme Park. At stake was the perspective home of the championship team. In 2006, the future of the San Francisco 49er’s remained uncertain. The only certainty was that the team needed out of the cold, old, and ill-equipped Candlestick park. The 49er’s organization had struggled for 10 years with the City of San Francisco to locate a site for a new stadium. The city’s only suggestion was the “historically blighted” Hunters Point, which the 49ers never considered a viable option. The site required significant toxic cleanup, and was surrounded by incompatible development. The 49ers were looking for alternatives when the Santa Clara City Council, said, “Come check us out.” An amusement park might not be the first place that comes to mind as a location for hammering out a multi-million dollar deal. However, the City believed that once the 49ers bought into their vision, clearly visible from that perspective, everything else would fall into place. Up on the nearly 200 foot high Sky Tower Ride they went. The heart of Silicon Valley spread out before them. To the east was a vacant parcel large enough to accommodate a new stadium and the auxiliary businesses it would require. To the south and west, over two million people, many already 49er fans, hungered for a local team. From their bird’s-eye-view, they saw major freeways and a light rail system ready to accommodate lots of traffic. They could visualize parking for the potential 70,000 vehicles required to host a Super Bowl, easily assessable to the proposed stadium site. Most important, they discovered that they shared Santa Clara’s results-oriented attitude. The willingness to do whatever it took to bring the 49ers to Santa Clara enticed all concerned. So began the journey to the 49ers new home, an endeavor that is jaw-dropping in magnitude.



The vision established on the Sky Ride was put before the voters, Measure J, a measure once passed allowed the City of Santa Clara to lease land to a newly established entity the Stadium Authority. This entity was tasked with constructing a new football stadium where the 49ers would be the primary tenant. This private/public entity was formed to ensure that in a worst-case scenario, the entity would take the financial hit, not the city or taxpayers. The City of Santa Clara enjoys a high level of public trust that city leaders have diligently cultivated over the years - a relationship that ensured

How is the project coming along? It is 20% complete on track and on budget to hit its original schedule - opening season 2014. Another bright spot is that the stadium, even as it is underconstruction, is a contender to host the Super Bowl 2016. The collaborative nature that permeated the relationships in securing the stadium deal is again evident in the partnership Santa Clara forged with the city of San Francisco. A Super Bowl would benefit a region, not just a city, so in order to maximize the opportunity and work toward another successful outcome both cities are working together to make that a reality.

that Santa Clara voters approved Measure J easily. This successful outcome was strategically accomplished through hundreds of meetings from living rooms to town hall settings with all key players participating - John & Jeff York from the 49ers, city leaders and council members including current Santa Clara Mayor Jamie Matthews. The message they shared was how this project benefited, not only one city, but the region as a whole, and the community embraced that vision; thereby was approved through Measure J the 49ers plan to build a $937 million stadium in their city.

“The economic activity generated by a single Super Bowl game exceeds other major professional sport championships, including a 7 game world series. In most years, both Super Bowl teams come from somewhere else so virtually everyone attending the game is a visitor. This is much better for hotels and restaurants.” County Assessor, Larry Stone said. “Since the game is played in Santa Clara, that city will receive major economic activity and benefit. My guess is every hotel room from San Francisco to San Jose will be booked solid. The Super Bowl may be just one game, but the events and festivities go on for almost a week. While we would all love to see the 49ers play in the Super Bowl here in 2016 or 2017, the chances are not that great. The NFL and local businesses particularly hotels, restaurants and tourist attractions don’t want that to happen either.”

Let the work begin. The stadium site, which had long been vacant - its primary use a shooting range for local law enforcement is now a bee hive of activity. A deal was hammered out, between both parties, agreeing that local labor be used exclusively for the project. Thus ensuring the highest quality labor force ahead of all the other large, local projects on the horizon such as the Apple Spaceship and Bart. “By entering into labor contracts with the Stadium Authority we locked up high quality labor, and ensured no work stoppages providing both sides (labor & 49ers) the security that helps garner high performance and commitment.” Mayor Matthews said. Builders Turner/Devon were given an incentive by the Stadium Authority of $5 million dollar for meeting the opening deadline, and fines reaching as high as $ 20 million for missing the mark. The stadium when completed is set to be the greenest, most sustainable stadium ever built in the U.S, featuring solar panels, green roofs, and sustainable renewable materials. One hundred per cent American steel is being used on the project. “We re-opened several steel mills so the steel could be milled on U.S. soil, and we hit our goal of one hundred per cent U.S. manufacturing,” Matthews said. “Five of the largest cranes in the world outside of Dubai were brought in simplify the process of handling the steel, ensuring that it was not double handled, and could be set in place directly upon delivery to the site.”

This is a win for the whole region - no metropolitan area is complete without a major league team, so why not the worldrenowned Silicon Valley? What an outcome from a Sky ride at Great America to a new stadium, and potentially hosting a Super Bowl. “We believed from the beginning this could become a reality despite several roadblocks. Securing the 49er stadium in Santa Clara, took teamwork, coordination, and focus. It is a great story in terms of collaboration between multiple parties, and a clear vision of how that empty parking lot could become a site for a stadium that beautifully, and naturally fit into this community. No one person, or group, can claim responsibility for this OUTCOME. It truly required a sustained effort and courage of an entire community and its leadership – it was the greatest of team efforts.” Matthews said. No one could have predicted this triumphant outcome when the talks began - in 2014, this stadium will be a reality. The City of Santa Clara and its council members did indeed pull off a coup!


By Geraldine Barry Larry Stone, Santa Clara County Assessor, sits perched comfortably in a spacious office overlooking a sea of rooftops. Each one represents a source of income for Santa Clara County, but that’s of no import to one of Silicon Valley’s 100 most powerful leaders. “In this role,” he said, “I am not concerned with funding constitutional responsibilities, (despite what I may feel strongly about personally) but to provide accurate assessment values on real property.” It is Mr. Stone’s laser-like focus on providing accurate assessments, along with a keen mind for efficiencies and customer service that has kept him in office for sixteen years. The County Assessor oversees a $300 billion assessment roll and a staff of 243 – a number that has remained consistent during this recent downturn.   Prior to becoming County Assessor, Larry was a City Council member and Mayor of Sunnyvale. He also worked on Wall Street, and later was a co-founder of a successful real estate development firm. He currently has an interest in two affordable housing projects totaling 500 units in San Jose. A good indication of his focus is in the composition of his staff. Of the  over two-hundred employees of the assessor’s office, there is exactly one administrative assistant .Everyone else has a job description that directly relates to assessing and getting the mission of the office completed.   Mr. Stone said, “My job is to ensure that we do our job as efficiently as possible. As assessor I am independent of the politicians that spend the money that this office generates, and I covet that independence”. This distinction is important because during the recent downturn, 124,000 properties were reassessed to reflect the decline in values-- a whopping $26 billion dollars in value reduction.  Mr. Stone laughingly said, “You have to be strong politically, and in yourself to pull that off. My loyalty in this job is to the tax payer and giving them a fair property valuation.”   Longtime San Jose Mercury columnist Scott Herhold called Mr. Stone “the third most powerful elected official (in San Jose).”   Mr. Stone’s power position was clearly earned. When he took office in 1996, Mr. Stone was struck by the inefficiencies in the organization and immediately started to review and develop processes to make the office more efficient, something he had very successfully accomplished as Mayor of Sunnyvale. He noted, in his new position that staff members waited in line to use fax machines, waited further to print documents, and that computers were few and far between. He immediately set about remedying this situation.  



“One can’t ask people to work more productively and not give them the tools to do so,” he said. With a backlog of 16,400 items, which represented $3 billion in delayed assessments, he got the county board of supervisors to allocate funds to purchase the new equipment and furnishings for all county assessor offices. The only mandate involved was to clear the backlog in return. Mr. Stone set a goal to use technology to streamline processes. He ordered new computers and training for every staff member, and standardized the offices with new cubicles laid out more efficiently to maximize the space. These changes ultimately resulted in the creation of one of the more technologically advanced assessor’s offices in the country.  The Santa Clara county assessor’s office is now almost paperless. An online system allows tax payers to essentially perform most tasks without having to leave the comfort of their homes or offices.  The assessor’s office mails out 465,000 post cards to property owners every year giving them advance notice of their property assessments before they are finalized.   This provides an efficient way to communicate any changes, and more importantly the opportunity to dispute the assessment. Additionally, the assessor’s office now provides a pin number to each property owner that provides access to the comparable sales used online. With an insight into the logic behind the assessment property owners are more accepting of their assessment. This transparency has eliminated a lot of work for the assessor’s office and provided the consumer with tool that the Santa Clara technologically savvy residents love.  Mr. Stone spent a lot of money and resources to drive people online and it is working. Complaints are down and more property owners are satisfied. Interestingly, the majority of the 4,000,000 hits the assessor’s website receives each year are after work hours.   One of the lessons Mr. Stone has learned from his lengthy tenure as County Assessor is that “many real estate investors made money, gave it back, made it again, and gave it back”.  The biggest problem with this recent downturn in his opinion is that it impacted all real estate classes, and was more widespread than anyone could have anticipated. He frankly shared, that financial fraud was perpetrated. “Developers have a tendency to over-develop and banks used very little judgment or discretion in why and who they gave financing to.”   One thing he suggested that developers could benefit from was truthful and straight information from the Planning Commission, City officials and Mayor’s office in terms of their projects.  As a developer himself for many years he learned this lesson, “If I can’t support a developer I tell them that and why. At least with a truthful conversation the developer knows what he has to do.  I don’t want anyone to spend time spinning their wheels -- that does not serve any of us well in government or the private sector.” What is his viewpoint of the state of real estate in Silicon Valley? The apartment market is particularly strong right now, as are rents.   Commercial occupancy are at all-time highs as a result of the bustling Silicon Valley economy. This has a trickle-down theory that will impact Santa Clara positively as commercial properties fill up in the peninsula – San Jose will become more attractive as space options become limited for potential companies. The Google effect, the Apple phenomenon, LinkedIn, Facebook, and Microsoft to mention a few are causing an economic uptick in Silicon Valley and the assessor’s tax role is upward bound judging from the most recent tax rolls, at least that’s the view from the assessor’s seat.



Real Estate:

in Silicon Valley Worth Watching this year!

By Flora Qu | February 1, 2014 The year 2013 was an exciting one for the Silicon Valley. With the rebounding real estate market and increased employment alongside the tech boom, the Silicon Valley is on its way to economic recovery. However, in the shadow of rapid growth, the undercurrent of instability in the Bay Area, such as affordability, wealth disparity between the tech industry and the rest of the workforce, and insufficient funds for city budgets all cast uncertainty on the future of the Bay Area. Along with tech-affluent cities, here are five cities that have potential and are worth watching in 2014.

San Jose Pension costs still plague the city of San Jose, and criminal activity remains at a record high. Retaining police is difficult. Yet developers are returning to San Jose—about 1,400 residential units will be offered during the next four years, and commercial building transactions have been taking place downtown. The tech hub on the city’s north side is also attracting big office buildings for fortune 100 companies, as well as Samsung’s new campus, still under construction. However, developers estimate that job growth will outpace housing growth. The city’s general plan is still to restrict housing development in the area, which sets the stage for a future shortage.

Fremont Clean technology may be the next trend for the Silicon Valley. Fremont is where the electric car Tesla set up its headquarters. After Tesla’s stocks experienced a little dip a few months ago, they have been maintaining positive growth. Fremont is also home to at least 35 cleantech companies. The city strives to attract and retain these companies by giving tax exemptions and other incentives. Fremont’s Warm Springs BART station is expected to be open for service by fall of 2015. The city of Fremont is also planning to transform a large vacant area into a clean-tech center. However, the city’s exact plan is not yet set, leaving developers guessing.

Milpitas This is another city that will be affected by BART development. From 2018, Milpitas is expected to be connected directly to San Francisco by BART. Santa Clara’s VTA light rail currently connects the area directly to San Jose’s high-tech center, the North First Street corridor. So once the BART station is finished, the two tech centers in the Bay Area will be connected by public transportation. The city of Milpitas began the transit area plan back in 2005, and since then, more than 10 large developments have been approved, with four under construction. However, the area still has only a few restaurants and small stores within walking distance, except for the Great Mall, which is right next to the transit area.

Redwood City While neighboring city Menlo Park is seeing younger venture capitalists moving to San Francisco, Redwood City’s developing transitoriented downtown project is attracting a mix of commercial and residential development in the area. It may help to retain younger venture capitalists in the city.

Santa Clara The San Francisco 49ers’s new stadium is expected to open in 2014. In 2013, hotels began booming in the area in preparation. And not long ago, two major developers proposed large mixed-use development projects that would compete with Santana Row.



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By Geraldine Barry It’s a new day for real estate. As the sun comes out, we can see one thing clearly: cycles happen. When we are in the midst of a real estate downturn, such as the one we recently experienced, we think it will never end. We imagine that real estate is not a commodity that will recover - and then it does! Likewise, when peaks happen we believe - or hope - that the rally won’t end: it’s fever inducing when it is in full swing as an air of “irrational exuberance” abounds.

and continued education. This type of strength like this is not brewed overnight: it takes time and experience to build up one’s base of knowledge.

Things come and go - it’s part of the life cycle. Summer fades into winter; alpinists climb mountains and then descend so they can conquer new peaks. As investors, it is best to observe but not participate in this pattern: look to your own emotional reaction. Observe your impulses for instruction on avoiding these highs and lows. How could you have avoided the lows? Were the highs a bit too high? I encourage you to develop a protective approach that will carry you through the sometimes choppy waters of our economy.

Leaders observe and wait while others follow. Self-discipline is more important than the instant gratification that is honored by our fast paced tech driven society today. We are living in a “right now” society. You want something? You can have it now. Amazon provides quick turnaround for products without ever leaving your home; Google shopping locally provides same day delivery service often within a four-hour window. It’s no wonder, then, that we expect and almost feel entitled to yield results instantaneously when it comes to our investing strategies. Real estate, however, should not and does not work in the same way as does Amazon: in many cases it is time that adds the most value to a portfolio. Consider how the strategy of buying in and out of the stock market is rife with risk - even for the experienced professional. It is often patience that yields the highest return.

Periods of wealth ebb and flow historically and today. From the Great Depression to the Great recession, economic boom and bust cycles are now as natural as changes in the weather. Look to the oil embargo of the 1970’s. Instead of diversifying, we became reliant upon oil and so we heated our homes and drove our cars with it. When something then changed about our supply of this important fuel, the price shot up and our economy was left spinning. Eventually this downturn led toward another boom - and this cycle repeats.

Who do you listen to in terms of what to do, and when to do it, with your investment and market timing strategy? Unfortunately, the media is generally behind the curve when it comes to predictions: they are simply following the trends and addressing the outcomes as they occur. First, you need someone immersed in real estate space to decipher the noise, and then you must decide who to believe; finally, you must decide how to use the knowledge you gain. Doing this does require work and effort but, from personal experience, it pays off.

Why do cycles keep happening? What drives them? Simply put, human behavior is predictable and just how a given cycle will play out is all but a foregone conclusion. How can we, as logical investors, protect ourselves from participating in the illogical/ emotion driven part of cycles? Can we sidestep these storms? Yes. We can do so by being aware of this ebb and flow and by being contrarian in our strategy. It is vital that we take equal opposite action in order to attain results. Doing so takes courage, strength, and a certain confidence that is attained through study

I’m proud of our history at SJREI: we stay ahead of the curve and share vital information that can make or break a strategy. In hosting top speakers and sharing different voices, we keep you in the loop and make you think critically. Our aim is to empower you to make good solid investment decisions. You can count on REI Voice to take what we do to the next level as our reach increases - giving you the opportunity to read interviews with the best speakers and help you stay on top of market trends and your investment strategy.

An expert at the crafts of real estate investment and business development, Geraldine Barry guides others to hone their skills and perfect their strategies. She founded and currently serves as president of SJREI Association, the Bay Area’s premier educational and networking platform for real estate investors. When she’s not busy with SJREI, Geraldine is publishing the award-winning REI Voice Magazine; she is also an active and skilled investor. Under Geraldine’s leadership, SJREI has advanced from an original half-dozen members to an active community that now boasts over 200 investors attending monthly meetings. A valuable resource for Bay Area investors, SJREI has been the recipient of the National Real Estate Investors Association Award for Excellence in numerous categories throughout its history. Geraldine regularly interviews the industry’s top players, many of whom have appeared as speakers at SJREI over the 12 years since the organization was first founded. In addition to her work at SJREI, Geraldine publishes the nationally recognized REI Voice Magazine. This multi-faceted print magazine – which has featured real estate giants such as Garry Keller of Keller Williams - keeps investors focused and ahead of the curve with fresh insights, powerful interviews and focused data. An accomplished entrepreneur and investor, Geraldine is a sought-after business strategist and real estate investing coach: she advocates a careful and strategic approach to building and sustaining success. Originally from the small town of Cashel in southern Ireland, Geraldine is a long-time resident of Silicon Valley and proud mother to her two children, Colin and Claire. Geraldine attributes some of her successes to a willingness to learn along with others, a steady supply of green tea and the skill she learned from her father of beginning each day in the early hours of the morning. As an entrepreneur, strategist, coach and publisher, Geraldine Barry serves as the Silicon Valley’s hub for investment inspiration, forging connections and 46 building success.



REI Voice Magazine


New Interactive Curriculum! · New Comprehensive Workbook! Engage with fellow participants! · How to Evaluate a Deal · Cash Flow Analysis · Traditional & Creative Financing Strategies · Pros & Cons of LLCs, Corporations, & Partnerships (with attorney Jeffrey Hare) · Effective Property Management · Exit Strategies


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