Sunday, November 11, 2012

Home Design online

Autodesk puts out an online home design tool here

Friday, November 9, 2012

Property Values in California 2013, 2014, 2015

My property value predictions for CA; Prices will largely stagnate in population centers and drop in suburban and rural areas.
My reasoning:
1. CA just elected a Democrat Super Majority to our state assemby. Prop 13 is now in danger.
2. Several large businesses, most notably Boeing have announce lay-offs and plant closures in this state.
3. Business owners continue to emigrate from Ca.
4. Continuing amounts of real estate shadow inventory that will not be absorbed by the CA economy because of private sector job loss. There are probably two rounds coming with 3-4Million homes, and 5-6M homes and job losses may aggravate these numbers.
5. Failure to develop energy sources faster than we are closing them down and aging power distribution infrastructure.
6. Recent taxes on lumber and passage of proposition 30 allowing increased sales taxes will retard new construction of housing.
7. Also, in the near future septic tanks will no longer be allowed on properties less than 2.5 acres and on older homes, you'll be forced to hook to sewer. Might want to check into that before buying an REO.

If you can buy and reduce your housing outlay, interest rates make sense to do so, especially if you buy a solar-electric (photovoltaic) system at the time of purchase to hedge against rising electricity costs.
After Sandy,  and the gas shortages and rationing, I would seriously recommend buying an electric golf cart in case of a disaster, especially if you have solar panels. Especially if it has the standard plug for electric vehicles.

I can imagine a mini-bubble scenario if more government money is pumped into the economy, but we don't seem to have the population pressure on housing to drive prices up, though a speculative frenzy at these lower prices, or investors hedging against inflation may cause those investors to scoop up housing at today's low interest rates (3% ish)

I would like to read what any of you think on this, and your reasoning why.

Saturday, April 28, 2012

My Response to Christopher Matthews in Time Business

The following link is what I'm responding to. A post in LinkedIn seemed to think this article was optimistic. After reading it, I didn't find it so, but I notice a lot of agents on LinkedIn are talking the market up, maybe because they believe it to be true, but, I suspect, mostly to make a commission. So this is the link:

Here are two of my responses that I posted on LinkedIn:
 In coastal areas this may be true. California's San Diego, Orange County, and San Jose only have about 30 days of inventory. This may well have to do with the employment bases in those areas, though. 
SD County and OC are pro-business conservative strong holds in the CA political landscape. San Jose has made the most of high-tech government subsidies, and is left-leaning. But the three areas have steady jobs and ocean accessibility. 
Outlying areas are still seeing drops in the housing market. We're also seeing a double-dip (or are soon likely to) in the foreclosure rates--or should I say a double-spike? There is going to be another round of foreclosures as investors and homeowners who can't find work after 2 years finally let their houses go back to the banks. 
Why? If you've been watching, CA tax revenue dropped 16%. The job providers in CA are still leaving and Gov. Brown is still trying to get Californians to vote themselves a tax increase this year. So, expect more people to give up on CA. This will probably help some other state, though. 
You can also add in factors such as "self-deportation" of illegal immigrants and also of some of our legal immigrants who've decided to go home. Keeping in mind that many adults are living with extended family, and the country's population growth is driven primarily by immigration, you don't have heavy demand for housing, except for already crowded markets.

 When the market got overheated in 2005, I decided to go work as a building inspector in 2006 until 2008. I couldn't justify selling homes I felt were overpriced, but thought I'd see a 30% correction. Little did I know that in the Inland Empire it would be 50-70% or I would have gotten out of the rental market entirely. 
After being an inspector for the first half of 2008 I watched panicked contractors unloading their inventory, and Frontier Homes declare bankruptcy. I am currently VP of the local chapter of the International Code Council, and 90% of the contractors I knew have left not only the area, but California. I listened to Mexican-Americans and guys that I suspected were here illegally talk about leaving CA to go back to family farms in Mexico. (FWIW I speak pretty good Spanish, and was the only Spanish speaking inspector at the city for over a year). 
There are bright spots in the economy, but this has more to do with government favoritism of certain industries. Low income housing (or affordable housing) requires local governments to provide a certain amount of housing. This helps developers at the cost of small-time investors. Also FHA rules allowing only 4 loans has hurt small investors. I know several that would like to invest but can't, unless they spend money incorporating and jumping through other hoops. 
Many of these investors, maxed their credit cards to keep things afloat or took hard-money loans because they couldn't get any other financing. Their hopes of the economy recovering has been dashed, and they are realizing that it's time to short sale, deed-in-lieu, or BK this year. Next year you will see more bargain homes outside of the coastal areas. 
Additional areas for profit include rentals, if you are just getting into them. The FHA 4 loan rule benefits corporations and the IRS (is that a surprise to anyone?) There is a lot of rental buying in the High Desert, mostly with section 8 renters. But, I can't deny there is money to be made in this arena. I think it's a big crap shoot myself, but know people that swear by Section 8. File this under making money through affordable housing and government subsidies, in my book, however. 
There was a recent article about new home owners finding themselves underwater shortly after purchase on Reuters on April 26, 2012 (date preserved for future searches: If the agents for these new owners did the right thing for them, they may have bought for construction cost or less. In which case their is still an upside. If we get inflation, the houses may be worth more and the low mortgage rates are beneficial, as long as their is employment to pay the mortgage. 
I'm not saying don't buy. But, inasmuch as we disclose to our clients, we have a fiduciary responsibility to let them know what we can. I try to work with investors that understand the risks 
One other area to look at that comes to mind is having your buyer buy solar during the purchase process. It adds to value of the home, and costs around the same on a monthly basis as the electricity it generates. This helps keep housing from going underwater and is justifiable with FHA energy efficiency mortgages. This also prepares your client for CEC building code changes coming in 2016 and 2020. 
My company PFAES consulting can help with this process.

Please email me at or reply to this blog if you have any questions. 

Sunday, April 22, 2012

Swamp Cooler Maintenance and Performance Tips

It's getting warm again. I live in the desert where it's much cheaper to run a swamp cooler or evaporative cooler (if you don't have laminate floors). So here's some advice.

***1. Panels: Clean the top tray. Check for rust. Take a steel brush or sand blast them and repaint. In fact, this should be the first thing you do, so you can let them dry while doing the other stuff. This is a good time to also vacuum out the rest of the machine--you don't want all sorts of dirt blowing in when you start it.

2. Check you pads. If they have to much calcification you can replace them or run some vinegar or commercially available cleaner through them. Pads should have NO AIR GAPS. I once went to my mom's place and a cheap handyman put 3 strips of the blue man-made pads in to save money. Most of the air got sucked through the gaps. If you have to do something like that because $6 is out of your budget, at least overlap the pieces. FWIW I prefer straw pads, they hold water better.

3. Maintain your pan. Clean the dirt out of your pan. If there is rust in the bottom--or even if there's not--even if you're just installing a cooler, go get some wet application roofing tar and coat the bottom of your pan. It will make the pan last 10 years or more. Cool water helps it set more quickly.

4. Lube your bearings. Check for damage to the bearings. If none, lube them a couple times. I usually lube one side, spin it, lube it again, then go to the other and lube twice in the same manner, then lube the 1st side again, then the second side again.
DO NOT used WD-40. You need a thicker oil like 30W or the stuff in the swamp cooler section with the extendable tube. I haven't had bearings go out before the cooler itself was toast, using this method.
Lube your bearings once a month.

5. Check your motor. If it doesn't grind and isn't frozen, use some electric motor/alternator/starter cleaning spray from any automotive store to clean out dust and such from your motor. In fact, if your motor turns and grinds a little, this may restore the motor for usefulness. Dirt destroys the brushes in your motor and causes it to fail prematurely.
You might want to do this again when you lube your bearings again. Considering the cost of electric motors these days, that cleaner is a good investment.

6. Replace your belt. You should be able to loosen the nut that holds it on with a 7/16" or 1/2" wrench or socket. Once you've removed the belt, check the pulleys for rust, or grit on the inside that can damage the new belt. Use a wire brush to clean them if needed. When you install the new belt, leave about 1/2" play in it. That is, the belt should not be overly tight, and the belt should move 1/2" in either direction. This extends the life of your expensive electric motor.

7. Check your pump and spider (the little tubes your water comes out of above the pads) to see if they are delivering the water evenly. If not, it's probably a small amount of straw that's gotten lodged in them. You can often blow this out using your lungs or a compressor. If that doesn't work, there's a spider cleaning tool. New spiders are cheap, and if you replace them, I don't use the MEK glue, I just push them together.

8. Assuming everything is working and clean, put it all back together and give it a test run.

Bonus tip: Increasing the pump to a larger model helps during really hot summers. Increasing the size of the pulley on the motor increases the amount of air flow, as does reducing the size of the pulley on the fan/squirrel cage. If you put a larger motor in your cooler, that will also help. Increasing all three might allow you to cool an extra 300-500 sq. ft per cooler.

Tuesday, August 2, 2011

Horribly Erratic Updates

On the gardening front--rodents got my meager plantings. The dogs were no help.
I have traded around for an old rototiller and a chipper shredder. I am also still composting.

On the real estate front, I keep seeing lots of businesses close and think we're going to see more.
This the day after the "budget deal" I can only think that our country is going the way of Zimbabwe and the Weimar Republic. There is only one way for the US to "borrow" money. We are going to have to get it from the Federal Reserve, which will print up money--money that has no basis in wealth--just an IOU backed by the labor of the American people. So, the politicians have sold our children and grandchildren into indentured servitude for a bit of comfort in the here and now that is bound to be short-lived.
All the more reason for me to get my fall crops planted.

If I could give any real estate advice to you right now it would be:
0. Have a plan. Almost any plan is better than no plan.
1. Plant a garden. We had "victory gardens" during WWII, and farmers did well during the days of the Weimar Republic. Hand tools are really cheap at garage sales these days.
2. Be utility self-sufficient. If you can afford to move to a place with your own well, septic, electric, heating (wood stove and trees), and propane, do it. Otherwise, make your own home as self sufficient as possible.
2A. Learn to reuse as much as possible--Using dishpans and dumping the water on trees, or finding creative reuse ideas for things you might normally throw away.
3. Start storing food and seeds. You may want to store in a few different places as these will become valuable commodities worth killing for and stealing.
4. Prepare you friends and relatives. If your place has enough room, it would be better to have extra people to lighten the load of labor and defense. You'll have to choose whether or not you'll help those that you know are lazy.  If you are lazy yourself, you'll have to push yourself. (see frequency of my blogs)
5. Lighten your load.
If you are in the city, you are in the most danger, sell extraneous items in your life and have a car, truck, or van ready to go to your friends in the country. Have this vehicle's fuel tank full every night. Garage it if you can. If you have too much garbage in your garage, sell it or give it away, so that you can park this car inside. It may save your life and the lives of your loved ones.
You car should have some camping gear or other "survival" equipment, and I would suggest over the counter drugs, organic seeds, ammunition in 9mm, .40 S&W, .45 ACP, 12 guage (or whatever it is you need for your personal firearm) and tobacco as trade goods. Don't forget a package of toilet paper. Things that are light and valuable if you can't get them at the store.
Even if I'm wrong, you'll be (more) prepared for the next Katrina, Fukushima, Northridge, LA Riot situation than the next person.

Tuesday, March 29, 2011

More Gardening and Herding Cats

This was originally written last summer. I even have a picture of that poppy...on my friends computer.
So, despite going to bed around midnight, I woke up around five, watered the garden and checked my email. I think my cat, Ripley woke me up, wanting to go out.
We normally leave the window open for her to come and go as she pleases, but lately another cat has been coming in and eating her food. We thought that perhaps the cat was fighting with ours. This morning after letting Ripley out, I tried to go to bed, then heard mewing outside the bedroom window. I opened it up to let her in and there she is with the orange and white cat I chased off the other night. I called Ripley in--hoping to save her from a catfight--and she jumped to the window sill. Then the other cat just looked at me pitifully, hoping that I'd let it in too. Poor thing looked skinny and gave me the big eyes treatment (imagine Puss & Boots from Shrek), but I was unmoved by the kibble poacher (I hadn't had my coffee yet).
As I was up, I decided to get some more gardening done. I got dressed and drove out to the site that I've written about before. I started coffee at that location and placed some more screening on the ground, put more dirt in the tire wall, placed some railroad ties, and built a double compost bin. I moved some weeds, dirt, and organic (organically fed, no hormone/antibiotics for the horses on a holistic rescue shelter) manure into the bin. Then I moistened it up with the hose and moved it around with the hay fork.
All that took from about 6:45am to around 10:00am. That's when it started getting a bit too warm and bright to be out in the sun any longer. I chose to use that time to do some running around.
I paid some bills, posted a notice, picked up some items from storage, made some phone calls, and fueled the old 4runner.
I took siesta when I got home, then went to do some work in that vacant rental. It's mostly clean now. I need to vacuum again, then steam clean. I also like to wipe the kitchen and bathroom down with bleach, before showing a unit. Some people like pine scented cleaners, but the oils leave a film. Bleach just smells cleaner too me. I also need to wash the windows. I use soap and water. It doesn't harm any of the plexi-glass windows like an ammonia based cleaner would.
Even with the evaporative cooler it's just too hot. So I'm using time to write and do some reading rather than maintenance. So I'm cooling down with hefeweizen beer that I picked up at Big Lots (also a good place for cleaning and some gardening supplies). The beer is Carmel Wheat Beer, and is pretty good. It's better than Widmere (sp?)
Oh! And I was thinking of planting California poppies on the tire wall because they are so hardy and used to the soil up here. When I was out there I discovered a poppy had come up behind the wall. I'm taking this as a good sign.

Wednesday, March 23, 2011

Gardening Update

No pictures today.
I find myself apologizing for my lack of diligence to this blog.
Anyway. I drilled some holes in the bottom of the spa for drainage. I intend to put some block, brick and stone in the bottom to improve drainage, and then put in some soil and compost. I was motivated by a neighbor to one of my rentals. I've been over working on a vacant unit and he's been rototilling his front yard for a garden. He's made me feel like a slacker, as he is on disability.
So I went back to my place and started some small projects. I leveled out the spa using a demo bar and a railroad tie as a lever and fulcrum while I shoveled some dirt under one of the corners. Then I drilled some holes into the bottom or the spa and the low spots on the seats. I had to find my bit extension due to water being in the spa from the recent rain.
Once my battery ran out, I removed the wheel from my wheel barrow and then took the wire wheel to the axle.
I'm kind of glad there's no pictures. All the rain has sprouted tons of weeds. They'll go into the compost (and probably the spa) but I don't want anyone seeing how remiss I've been.
The long and short of things was that I had all my rentals full, then 3 vacancies happened abruptly. And I've been looking for something other than real estate.
Hope you're having a good day.

Friday, July 2, 2010

Ok. Actually I'm waiting for some non-paying renters to remove the last of their belongings and give me back the keys. But, If they show up, that will save me (and them in the long run) the legal fees.
Today, I've been working on updating rental agreements to include fees for serving notices on tenants. This is because I had to serve the above mentioned people in a city 50 miles away. I had to make 3 trips. So I'm not going to take that one in the shorts again.
I've also been working on a new "Disposition of Security Deposit" form, so that I can comply with the law. Remember, you have 21 days in CA to mail one of these out.
Happy 4th of July to you all. Remember all of the Patriots who have sacrificed fortune, wellness, and life in order to give us this great country.
If you wish to read my political ramblings, check out
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