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CAREERS IN REAL ESTATE CAREER OPPORTUNITIES & LICENSE REQUIREMENTS.

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Presentation on theme: "CAREERS IN REAL ESTATE CAREER OPPORTUNITIES & LICENSE REQUIREMENTS."— Presentation transcript:

1 CAREERS IN REAL ESTATE CAREER OPPORTUNITIES & LICENSE REQUIREMENTS

2 Types of Real Estate Many & Varied Product Types & Sub-categories: Residential (single family residences (“SFR”), 1-4 dwelling units, condominiums, townhomes, vacation ownership, sea-borne residences) Multi-family (market rate; student housing) Retail (Regional Malls, Power Centers, Neighborhood Centers, Strip Centers, Triple Net, Public/Private Concessions, On-site Retail, street front) Industrial (warehouse, manufacturing, distribution, “pick-pack & ship”) Storage Facilities (household goods, art, wine, vehicles) Hospitality (hotel, motel, hostel, resort, residences, restaurants, bars, tourism/convention/visitor bureau) Golf & Resort Office Seniors Housing Subsidized & Tax Credit Housing

3 Public Facilities Concessions Entertainment Venues & Theme Parks Hospital & Urgent Care Facilities Assisted Living & Convalescent Facilities Agriculture (crops, vineyards, orchards, live stock) Water Rights Mineral Rights Rights of Way & Easements Religious Facilities Energy Generation Facilities (cont’d)

4 Urban Planning/Land Use Government agency Regional authorities (RWQCB, AQMD, CCC, CEC) Economic, Demographic & Population Trends Public / Private Partnerships (Grand Park; LA River Project) United States Green Building Council (USGBC) Green Building Design, Construction & Management LEED - Leadership in Energy & Environmental Design

5 Risk Management/Insurance Construction (hazard, defect, wrap, completion and personal guarantees) Errors & Omissions Liability Fidelity Bonds Workers’ Compensation OSHA & ADA compliance Human Resources EDD compliance Performance & Completion Bonds Private Compliance Providers

6 Debt/Equity & Finance Institutional Investment Funds Institutional Investment Fund Advisors Financial Analyst Investment Banks (debt markets; RMBS/CMBS Lenders - A cornucopia of resources: commercial banks; savings & loans; savings banks; corporate debt (e.g., GE Capital); mortgage banks; pension funds; life companies; private equity; credit unions Mortgage Broker GSE’s: Fannie; Freddie; FHA; Ginnie Mae Loan Servicing Wealth Management

7 International Right of Way Association (“IRWA”) Senior Right of Way Agent (“SRWA”) Mineral Rights; Rights of way (identification, acquisition, easements); Utility Corridor Planning & Acquisition Conservation Easements Conservancy land acquisition (holding entities) Conservation easements Bureau of Land Management (“BLM”) - Land swaps Agriculture Agriculture (crops, live stock, vineyards, orchards, etc.) Water Rights (acquisition, sale, trading) Timberland Brokerage (sales, leasing)

8 Land Use, Entitlement & Development Urban Planning Zoning & Government Regulation Site Acquisition Demographic Research & Analysis Use studies Land Survey Title Insurance Environmental Study, Review, & “Impact Reports” Financial Modeling & Projections Design: Architecture, Exterior, Interior Engineering: Geologic, Civil, Structural, Mechanical Construction & Project Management

9 Appraisal Uniform Standards of Professional Appraisal Practices (“USPAP”) Commercial Real Estate Brokerage Sales; Acquisitions; Like-kind Exchanges; Tenants in Common (“TICs”) Business Opportunities (“Bulk Sales”) Listing Services (Reis, Loopnet, CoStar, AIR, etc.) Residential Real Estate Brokerage Single Family Residences Planned Unit Developments (“PUD’s”) e.g., condominiums Time Shares/Fractional Ownership Listing Services (MLS, Internet, Zillow, Redfin, Trulia, etc.)

10 California Bureau of Real Estate (“BRE”) “The mission of the California Bureau of Real Estate is to safeguard and promote the public interests in REAL ESTATE MATTERS through licensure, regulation, education and enforcement.”

11 BRE Home Page: Essential Information Verify a Real Estate License 2014 Real Estate Law Consumer Alerts Current News FAQs Department of Consumer Affairs Multiple Jurisdiction License Lookup Forms File a Complaint Real Estate Business Resources Complete List of Publications Invitation for Public Comment/Hearing Notices Connect With Us: Call BRE Public Information Line LIC (4542)

12 Real Estate Licensing Broker License 8 Approved Courses 2 Years of full time experience Pass State Exam Complete Application Salesperson License 3 Approved Courses Pass State Exam Complete Application

13 Resources & Websites Bureau of Real Estate California Association of Realtors Apartment Association of Greater Los Angeles Franchise Tax Board Institute of Real Estate Management (IREM) Franchise Tax Board Dept. of Corporations National Association of Realtors Federal Reserve Dept. of Housing & Urban Development IRS

14 RESIDENTIAL REAL ESTATE SALES F. RON SMITH Founder, Partners Trust Real Estate Brokerage

15 F. RON SMITH PARTNERS TRUST 25 years of service As an expert in new construction and advisor to my clients in everything from home staging to color palettes and landscaping, I have successfully represented over U.S. $1,000,000,000. (that’s “billion”) in transactions I collaborated with four talented associates and founded Partners Trust Real Estate Brokerage and Acquisitions in In just five years, Partners Trust has sold over U.S. $5 billion in real estate with 200 associates in seven offices. One of the key elements to the immediate success of Partners Trust is the company's ability to network directly with the best realtors in their markets. A proud co-founder and President of Leverage Global Partners, which aligns the most prestigious independent real estate brokerage firms from around the world.Leverage Global Partners I credit my long-term success to my local expertise and strong community connections. I introduce my clients to both a home that fits their needs, and a neighborhood and community lifestyle that matches their interests. I live in Brentwood on LA's Westside with Tracy, my wife of 26 years. I am enormously proud of our sons, Evan and Brandon. I enjoy travel, fitness, good wine and live music. I am an active supporter of numerous charitable organizations, including LA Family Housing and Concern Foundation for cancer research. I am proud to be a member of the Executive Committee of USC's Lusk Center for Real Estate. Executive Committee

16 PROPERTY MANAGEMENT So you want to manage your own SFR’s, & Condos as rentals?

17 What Are Your GOALS… 1. Safety of Investment 2. Cash Flow – passive income 3. Tax Benefits – depreciation, interest deductions 4. Diversification of Investment Portfolio 5. Appreciation (over time) 6. Pride of Ownership 7. Equity Build-Up for Retirement or Estate

18 LEARN THE BASICS Managing a Home: A “Simple” Outline LEASING – marketing; keeping the property rent ready/clean; receiving inquiries; showing the property; negotiating rent; accepting applications and screening prospects; receiving funds & turning over the keys. MANAGEMENT – move-in inspection; receiving communications from tenant; handling vendors; collecting rent; distributing notices; legal action – eviction, Government or or tenant; insurance claims; and unit turnovers for incoming tenants.

19 MARKETING STRATEGIES Advertising Mediums Internet; apartments.com; postlits, Craig’s List; Zillow Your own website Property signage Flyers Third party agencies – MLS for Member real estate licensees

20 RENT  Establish initial rental rate based on similar product in your market, or “enough to cover your mortgage”?  Rent Increases:  Economic Changes – what the market will bare (excludes qualifying properties in rent control areas)  Nuisance – an increase not high enough to necessitate a move  Rent Control – government regulated increases – exempt: one detached single family dwelling per lot.

21 Federal Fair Housing Act of 1968 I. Race II. Color III. Religion IV. National Origin V. Gender VI. Familial Status (pregnancy, medical condition, gender) VII. Handicap (disability: mental or physical)

22 CALIFORNIA FAIR HOUSING STATE LAWS In addition to the Federal Laws, CA has added: Ancestry Familial & Marital Status Gender, Gender Identity, and Gender Expression Sexual Orientation Children Source of Income Disability or Medical Condition Genetic Information Immigration or Citizen ship Status Religious Creed – dress and grooming practices Prohibits discrimination and harassment in fact or perception in all aspects of housing; Requires housing providers to make reasonable accommodations in rules and practices; Prohibits retaliation against any person who has filed a complaint, participated in an investigation, or opposed any activity prohibited by the act. Exception – Not applicable to an owner-occupied, single-family home/condominium who rents out a room in the home to a roomer or a boarder, and there are no other roomers or boarders living in the household & shares the living room, kitchen or bathroom. CA Dept. of Fair Employment & Housing:

23 REDUCING FAIR HOUSING RISKS 1. Become familiar with Federal, State and local Fair Housing laws. The owner, mgmt. co. and/or building manager can and will be held personally and severally liable. 2. Review practices regularly to ensure that you and your staff understand the laws and company policies. Have written Policies & Procedures and train your staff.

24 Reducing Risks (cont’d) 3.Establish a documentation program. Whenever you or a staff member deviates from the normal routine or practice, document what you did, when you did it, and why. 4.Service & Support Animals – Allowed into all residential units. Animals of all types that work, provide assistance, or perform tasks for a benefit of a person with a disability, or animals that provide emotional support that alleviates one or more identified symptoms or effects of a person’s disability.

25 The Rental Application Recommended Information Residential : Name of all adults (18 yrs or older*) who will be occupying the apartment Current address and date of birth for all adults party to the Lease Social Security number for all adults, however, cannot be required per AB976, Picture ID - Drivers License; State ID card; check birth date & address, copy them for the file References – name, address, telephone bank acct. #, friends, previous & current landlord; obtain emergency contacts (get at least two, one being a close family member) Verifiable Income – sources: paycheck stub, Social Security voucher, income tax return, etc. Signature of all adults on the application to allow you to obtain a credit report and other reference check reports * Emancipated Minor – State Court approved

26 THE LEASE Obtain a “current” Agreement with Addenda. An Agreement with a term of one (1) year or more must be in writing. However, even a month to month tenancy should be in writing. An Agreement with a term of one (1) year or more must be in writing. However, even a month to month tenancy should be in writing. California Civil Code requires a termination notice of at least 30 days if < 1yr., 60 days if ≥ 1 yr.; daily or weekly notices if those are the terms of the stay. Be aware of Gov’t Rent Control/ Tenancy laws that may supersede your notices.

27 Tenant Screening Follow these steps when considering a tenant’s application to rent a dwelling unit: 1.The applicant’s credit history is the best way to determine credit worthiness. 2.Review the application with the prospective tenant when it is first turned in. This will help confirm information and give them an opportunity to explain any issues you may encounter with their report. NOTE: First in first reviewed in accordance with the Tenant Selection Criteria/Policy. 3.Order a credit report and if policy requires, a criminal report and eviction report. Can charge up to $45.99 (Dec.2014), but cannot exceed actual cost for report plus reasonable value of time spent to obtain information. 4.In reviewing a credit report, check for: applicant’s rental history, collections, late payments, and debt to income ratios. Consider how medical service collection issues might have effected their payment record if applicable. 5.Obtain at least three year’s residency and employment history.

28 Tenant Screening (cont’d) 6.Call at least one prior Landlord for referral. Please note that the applicants current Landlord may not give an accurate recommendation if: A. that Landlord wants that tenant out, or B. that Landlord does not want to lose that tenant. Ask these questions: A. Is the rent current? B. Is the rent paid on time? C. Is the tenant being asked to leave? D. Is the tenant leaving before the expiration of the Lease? E. Would the Landlord rent to this tenant again? 7. Call the employer and ask the following questions: A. What is the applicant’s annual income? B. How long has the applicant been employed? C. Is the position temporary or permanent? D. If the applicant has been employed for only a short time, call the previous employer.

29 Tenant Screening (cont’d) Bankruptcy is not necessarily a bad risk. Recent filers for Chapter 7 Bankruptcy are less likely to have debts and more likely to have cash for living expenses. Usually only can file Ch.7 but once every 8 years (consult with attorney for exceptions). It is important to determine why they filed. For example: medical bills vs. credit card (consumer) spending; Business/Investment vs. personal loans. Your Tenant Selection Criteria can state that the Bankruptcy “has been discharged” and a 12 to 24 month period of no late payments of rent and/or credit is required thereafter. Of course, current rent payment status is very important. If the applicant has previously skipped or failed to pay rent, it will probably happen to you, sooner or later!

30 Security Deposit Laws Maximum of 2 months unless the premises is furnished, then landlord can collect 3 months as a deposit. Accounting within 21 days of lease termination.  When notice of move out received:  Inspection w/ tenant 2 weeks prior to move out  48 hour minimum notice of inspection  Tenant is not required to attend, but it is recommended that they are there.  Damages to Owner for a bad faith security deposit refund could be up to 2 times the deposit amount plus the deposit,  What can you deduct – delinquent rent, cleaning and damages (with a receipt for costs/services rendered) – nothing can be collected for normal “wear and tear”.

31 MOVE IN/OUT INSPECTIONS  Move-In Inspection:  Manager to complete form at the time of move-in  Give tenant a copy of the signed inspection report  Take pictures before they move in  Move-Out Notice by Tenant/Landlord:  Send letter confirming their notice and let them know of the “pre” move-out inspection date  Conduct inspection >14 before move out. Leave copy of inspection in unit if unattended by tenant  Post Move-Out Inspection:  Meet with tenant (if possible) just after they move out  Give/send copy of report (signed by tenant if possible)  Include inspection in Security Deposit reconciliation  Take pictures after they move out

32 PERMISSION TO ENTER PERMISSION TO ENTER  Emergencies – i.e., fire, water issues  Verbal or written authorization from tenant for service requests  Owner’s request for entry (24 hour Notice) to show to prospects for sale/rent, lender, appraiser, gov’t officials, etc.  Abandonment – recommend 2 people present, take pictures  Court Order – at any time, no notice required

33 LICENSED & UNLICENSED CONTRACTORS Licensed Contractors: ◦P◦P ass and exam for their license type – B, C-10, C-27 ◦B◦B onded, Insured, Can pull permits ◦C◦C an lien property for non-payment ◦C◦C heck for licensing with the California State Licensing Board (“CSLB”) at or (800) 321-CSLB Un-Licensed “Handyman”: ◦N◦N ot required to have insurance ◦C◦C annot pull permits or lien for non-payment ◦W◦W ork limited to $500 (labor & materials) or misdemeanor charges can be brought against them. ◦L◦L abor charge lower than contractors – less recourse options to get the work completed or uphold warranties.

34 CONTRACT TIPS Develop a “scope of work” Get several bids and check references. Require a written contract, and don’t sign it until you understand the terms. Maximum ten percent (10%) or $1,000 as a down payment whichever is smaller (for single family homes). Don’t pay cash and don’t let the payments get ahead of the work. Put together a progress payment schedule if the job warrants it. Common to have ten (10%) retention of the total contract amount until 10 days after the work is completed: 1) to make sure the job is done right; and 2) all subcontractors are paid, no liens. Owner should record a “Notice of Completion” for large jobs.

35 SMOKE / CO DETECTORS I. Carbon Monoxide (“CO”) detectors required in each dwelling unit intended for human occupancy with fossil fuel burning heater or appliance, fireplace or an attached garage. II. Smoke Detectors – 1/1/14: owners of SFR required to test and maintain smoke detectors. III. New battery operated smoke alarms being manufactured for 1/1/14 deadline. 10 yr. life battery that makes the unit disposable.

36 Landlord’s Responsibility - Habitability - 1. Nine points from Civil Code , Green v. Superior Court (1974), “every residential lease had an implied warranty of habitability which the tenant cannot waive”. 2. Breaches of habitability can allow tenant to withhold rent until repairs are made. a) must give written or verbal notice; b.) allow a reasonable time to repair. 3. After a reasonable time, tenant may personally do or contract for the repair and withhold amount from rent used to repair (CC 1942). Tenant can withhold up to one full month’s rent, twice per yr.

37 CA HABITABILITY REQUIREMENTS FOR A DWELLING UNIT 1. Effective waterproofing and weatherproofing of roofs & walls. 2. Unbroken/secure doors and windows 3. Plumbing in good working order – hot & cold running water; connected to sewage line. 4. Heating & gas facilities in good working order. 5. Unit’s electrical (lighting, wiring & equipment) system in good/safe working condition. 6. Clean and sanitary buildings, grounds & appurtenances which are free from debris, filth, rubbish, rodents & vermin. 7. Adequate trash receptacles in good repair. 8. Floors, stairs and railings in good repair. 9. Compliance with building and housing code standards.

38 Addt’l Habitability Standards 10. Working toilet, wash basin, and bathtub or shower. 11. Kitchen with a sink, not made of absorbent material. 12. Natural lighting in every room. 13. Operable deadbolt locks on main entry doors and locking or security devices on windows.

39 UNLAWFUL ACTS BY A LANDLORD Tenant Lockout (key change) without Court Approval Seizure of Tenant Property Removal of Doors and Windows Shutting off of Utilities (fine of $100 per day, plus damages) Trespassing – jail time if prosecuted by D.A.

40 EVICTION What a Landlord cannot do: A.Retaliatory Eviction – If tenant legitimately complains about property issues: habitability, exercising legal rights (suing Landlord) or joining a tenant union, Landlord cannot evict or increase rent for 180 days if complaint is habitability. Complaint can be oral or in writing. B.Constructive – Landlord turns off utilities, changes locks, etc. CC 789.3, $100 per day for each violation. C.If in Rent Control – can only evict for “just cause” (see City housing department for definition. Actual Eviction (court ordered) – hire an attorney, proper Notice to tenant, Unlawful Detainer case filed, proceedings through Superior Court for the State of CA. Eviction after Foreclosure (5/10) – If new owner want to move in. 1.Tenant on a M-T-M, 90 day notice 2.Tenant on a Lease, 90 day notice after lease term expires unless tenant is related to the former owner. 3.Affirm City statutes for current regulations.

41 SERVING AN EVICTION NOTICE (GENERAL STEPS) ◦ Serve the resident with a Notice to Pay Rent of Quit  Do not include amounts other then base rent for that month  Personal Service to the named person on the lease or a responsible adult.  If resident or adult not home, post notice and mail a copy.  Complete a Declaration of Service. ◦ Wait the appropriate # days and then have an attorney file an Unlawful Detainer action  Do not count the day Notice was served  Last day must fall on a business day.

42 Pacific National Property Services, Inc. Services Include:  Maintenance and Remodeling  Apartment unit and grounds cleaning  Temporary Personnel  Consulting and Training Don Brenon, CPM ® President Serving the greater Los Angeles & Orange Counties. © Copywritten material, cannot reproduce without written consent of presenter

43 QUIZ 1. The California Bureau of Real Estate (“BRE”) issues how many different types of real estate licenses? a. one b. two c. three d. four 2.California real estate law requires all Sellers of single family residences (“SFR”) to pay a real estate commission equal to __% of the gross sale price. a. 2% b. 5% c. 6% d. There is no California law that requires any payment of any real estate brokerage commissions to any real estate licensee, upon sale of any SFR

44 3.In California’s residential real estate market, the customary gross commission Seller should pay is: a. 2% b. 5% c. 6% d. there is no customary commission amount 4.Which of the following is a legally valid form of commission payment to a real estate licensee? a. money and/or promissory notes b. an equity interest in the acquired property c. personal property d. any of the above

45 5.Which home renovations and/or remodeling projects most often return at least the original capital investment upon resale of the home? a. kitchen or bathroom remodel b. adding one bedroom c. installing a swimming pool/spa feature d. installing a new energy efficient/fire resistant roof e. adding a 2-car garage f. installing an outdoor cooking/dining area 6.The market value of single family residences always appreciates. a. true b. false 7. To obtain a real estate salesperson license in California, an applicant is required to successfully complete more credit hours than a: a. doctor, electrician, psychologist, or chiropractor b. veterinarian, architect, lawyer, or commercial airline pilot c. cosmetologist, police officer, chef, or CPA d. personal trainer, plumber, or dental assistant e. none of the above

46 8. Freda, a 39 year old single woman, owns, as her sole and separate property, a 10 acre, 180° view bluff-top, single family residence appraised at $25 million, on the edge of Toyopa Drive in Pacific Palisades overlooking the Pacific Ocean. The property is free and clear of all liens and loans. Freda fell in love with her new bf, 23 year old Jay-Sea-Vu, who has just arrived from Texas and moved in with her as he begins his singing career in Hollywood, and has convinced Freda to marry him. Upon marrying and immersed in wedded bliss, Freda’s Toyopa house: a. automatically becomes Community Property, ½ owned by her husband, Jay-Sea-Vu b. can never become Community Property c. may gradually become Community Property during the duration of the marriage d. remains her Separate Property until she decides to allow it to become Community Property

47 THANK YOU THANK YOU WE LOOK FORWARD TO SEEING YOU & TEACHING YOU IN OUR CLASSES ! UCLA EXTENSION


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