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It seems impossible to get enough money for a down payment on a house. It is the most common barrier to the Great American Dream of homeownership.

In spite of this, every year we help buyers buy their first home. We have learned a lot about how buyers accumulate a down payment on a house!

How much money do you need for a down payment?

While we are in this strong seller’s market (the sellers have more control) you need to look at things in terms of what the seller wants.  And, besides a high sales price, the seller wants as little risk and inconvenience as possible. That is why 20% is considered “standard” and safe down payment on a house. Anything lower is considered a higher risk and anything higher is considered a lower risk for the seller.

It is possible to get a loan with as little as 3.5% down payment- you just can’t expect to use that sort of loan to buy the home that every other buyer wants to buy.

A Financial Advisor Shares 5 Ways to Get a Down Payment

I asked fellow Bruin, Matt Crisafulli, to help people understand that they CAN get that down payment on a home. Many people think it is so completely out of reach they never even start the process.

Matt is a fee-only financial advisor and his job, literally, is to help people achieve their financial goals.  We love solving the ills of the world over breakfast and good coffee. This post is just the start. Without further ado, take it away Matt!

Matt’s Five Tips

Automate Your Savings.  The saying “out of sight, out of mind” is your best friend when saving for a long-term goal.  The less you have to think about saving to make it happen, the better off you will be. 

Open a separate savings account (not at your primary bank) and set up automatic transfers.  The automation of this process will stop you from coming up with excuses to spend the down payment money month over month. Making sure you choose a bank other than your primary bank, will make it that much harder to transfer the funds back into your primary checking account.

I recommend a high yield, online savings account for the best interest rate. It won’t be a lot of interest, but your money will be safe and you won’t be tempted to spend it.

Defer Excess Income. To help you reach that savings goal a little faster, defer your salary raises and bonuses to your savings account. Receive a $500 bonus? Straight to the down payment fund. Get a 3% raise? Increase your monthly savings by 3% too! If you were comfortable living on your old salary, take your annual raise and/or bonuses and use those to supercharge your savings! The sacrifice is only temporary, and the payoff will be well worth it!

Re-allocate Debt Payments to Savings. Most people have some type of debt they are paying back – an auto loan, a credit card, a personal loan, etc. – that is inhibiting their ability to save.  Once one/some of those debts are paid back, reallocate those monthly payments into the down payment fund.  For example, once the credit card balances are paid off, take that monthly payment, and add that to the monthly savings. The extra savings will really add up over time!

Review Expenses to See Where You Can Cut Back. We don’t like to admit it, but most of us overspend in at least a few areas of our lives, such as dining out, shopping, or entertainment.  Review your current spending to see if there are any areas you can cut back to help you achieve your goal of homeownership sooner.   I guarantee the pain of cutting back for a short period of time will pale in comparison to the joy of buying that first property.

Get a “side hustle”.  When all else fails, increasing your monthly income will help you reach your savings goals.  Pick up extra shifts. Volunteer for overtime. Do work for your friends.  The important thing is that the excess income gets saved month over month.  The side hustle doesn’t have to be a different,

Palm Springs as a best place to retire is almost a cliché. Heck, I almost didn’t include Palm Springs in my series until my pal Paul Kaplan pointed out that I was missing the boat. His Palm Springs ain’t yo Grampa’s Palm Springs.



Show Notes:

Paul Kaplan – from Pasadena and lived in Palm Springs for 20 yrs. His team has 20 agents who collectively cover the entire desert.  The Paul Kaplan Group was #2 in sales and recently merged with #1 in sales, Bennion Deville making them the undisputed Big Bad Mac Daddy in Palm Springs area. AND they are a local independent broker.

Why is Palm Springs A Best Place To Retire?

Palm Springs is the best place to retire for Southern Californians, but it used to be just a second home community. Today more retirees (and others) live in Palm Springs year-round. Baby boomers move out here before retiring, as well as lots of LA buyers who find Palm Springs far more affordable than LA.

More people can work remotely, so more people buy their first home here and rent in LA.

What Does a Middle-Class Retiree Buy In Palm Springs?

There is a huge range of options for a retiree in Plam Springs area. Options range from condos in the low 100k to a “normal single-family home, 3/2 in Palm Springs for about $500k – $600k.

People don’t often realize there are 9 or 10 so different cities in this area. In Cathedral City houses are less – a basic three-bedroom, 2 bathroom home with a pool might sell under $400k; that same home in Palm Desert maybe sells for $500k.

There are lots of options. The bigger question is, “What do you want your lifestyle to be like?”

What Does Each Area (or City) in Palm Springs Feel Like?

The High Desert

The area near Joshua Tree is not really the Coachella Valley, but I visited the Integatron (click the link- this one of a kind attraction was designed to talk to aliens) and that area is super hippy-dippy! The culture there is so different from the Palm Springs area.



The High Desert is spread out and much more rustic. You get people who want quiet, peace and alone time. Great hiking and the stars are amazing. It’s not for everybody.

Palm Springs

Palm Springs has international notoriety, but it isn’t just that. There are lots of new hotels, new resorts, a new arena – for music and their own ice hockey! The downtown has a village vibe to it. There is a lot of local boutiques, a big art scene. Some of the most well-known art museums in the country – the Desert Art Museum.

Down Valley

Rancho Mirage and Palm Desert are considered Down Valley- gated golf communities in a different price range from country club condo for mid 200’s to million-dollar dwellings. Down Valley is more like the orange county of the valley- more Big Box retailers and the Paseo.

What Is It Like For A Retiree To Live In The Desert?

So- it’s a desert it gets hot here. Travel away from Palm Springs in August and September. People learn to adapt. You run around and exercise in the morning. Once the sun goes down it is still hot, but it is a lovely sort of heat. It’s really nice.

Everybody has air conditioning and misters. Going from car to home is miserable, but Pasadena is miserable too during those months. You adapt.

What Are Utility Costs Like For A Retiree In Palm Springs?

For a 2000 SF Mid-Century home, you can spend as much as $1000/mo during the hottest part of the year. These homes weren’t insulated or designed for summer living.

But a basic newer home is probably less than half of that.

Solar is becoming quite common which can really bring down the cost of air conditioning.

Retirees Are Not The Only People Who Buy In Palm Springs

Have you ever dreamed of living on Nantucket Island or Martha’s Vineyard? Island life always seemed so dreamy and idealistic. One of the best places to retire in the Pacific Northwest is Whidbey Island

Whidbey Island has all of the romance and natural beauty without going all the way to the other side of the country! Located on the Pacific Northwest’s Puget Sound, Whidbey Island is just a couple of hours from Seattle International Airport, but an entire world from the crowded urban life.

Listen as I ask Kristen about important things you need to know – housing costs, weather, lifestyle and more!



Show Notes

Kendyl: Hello. Hello out there digs live channel subscribers. I am here today with Kristen Stavros, a relatively new friend for me. Hi Kristin. So I met Kristen at a gig that I did up in Tacoma, Washington. I totally fell in love with that area, not least amongst the reasons because it has a reasonable temperature in the summer as opposed to the cooker that we live in during the six weeks of LA hell. Um, and so for a long time I thought that the Pacific Northwest consisted of Seattle, cause you know, I’m your basic ignorance Southern California and who never went East of the I five. And what I found out when I went to Tacoma is there’s all these amazing places that someone could live and I’m kind of working through my new friends lists, exploring all these super, super cool areas that a Californian can go and our equity in our homes will go so far.

Kendyl: So Kristen, hi there. How are you? Thank you for having me. This is, this is a treat. Oh good. Well, it’s a treat for me too because like I know nothing about the area of the PAC Northwest that you’re in. So I kept getting it wrong and getting it wrong. And they get you live and work in an area called Whidbey Island. Correct. Whidbey Island. In fact, I’m going to, I’m going to write that on the screen because nobody is gonna know this. Um, so would it be Island? That’s, that’s where it is on the screen would be Island. Um, and so tell us where that is in relationship to the only any of us know down here, which is Seattle. Yeah.

Kristen: Okay. Great question. So, um, Seattle is about a two, two and a half hour drive from where I live.

Kendyl: And then it is about a two, two and a half hour drive to the other international airport, which is up in Vancouver, BC. So we’re kind of.

Kristen: mid point between Vancouver, BC, and Seattle. Correct. Okay. So it was a two hour drive no matter what you do for an international airport, correct? Correct.

Kendyl: But there’s a local airport?

Kristen: No, not really. So we used to have little planes come through here that would take you to the international airport. It didn’t make enough money. But the rumor on the street is that might be coming back.

Kendyl: Okay. All right. So then the people who live in Whidbey Island pretty much are there for the lifestyle. They’re not commuters to somewhere else.

Kristen: Not entirely true. So we have a lot of people who either do, most of their work is travel. And then working from home or from home, I worked from a, uh, agency that was in Seattle and Tacoma for six years the Island. So there are still some commuters, but they do it in like chunks.

Kendyl: Okay. All right. Right. So they don’t do it like, you know, three days on, four days off, they might take off for a couple of weeks to wherever the mothership is and then come back. And they’re working remotely is that,

Kristen: there is a major commuting community for Boeing, so Boeing employees and it’s, um, Boeing is right off the Island, off the South end of the Island. So the big Island is this long, weird looking Island. It takes about an hour to drive from the tippity top North to the [tippity] South, um, on the main highway,

How To Invest In Real Estate Without Huge Wads Of Cash

Are you a First Time Investor? Do you have lots of dreams but not a lot of cash?

We published a Real Estate Investment Strategy Guide, but it isn’t very helpful for the First Time Investor.

We found an excellent expert and teacher to help you understand exactly how and why you can start investing and building your real estate investment empire.

Find out how this bright young man turned a modest investment into a portfolio of 100+ rental units in just ten short years!



VIDEO TRANSCRIPT

Kendyl: Hello everybody. My name is Kendyl and I am the owner broker of DIGGS. And as we like to say, we connect cool people with cool homes in Glendale, La Canada and LA Crescenta. But many of you have already achieved your first home and you’re thinking, wow, wouldn’t it be great to start my real estate empire? But you remembered how hard it was to actually save up enough money for your first house and now you’re paying a mortgage and you’re wondering, Oh, will I ever be able to get a piece of investment property? I know how you feel. And I was actually at a Provisors meeting that’s a networking group of really high level, uh, practitioners in all kinds of professions. And I met, uh, Anthony and Cody at the Buckingham investments seminar where they were talking about how they teach first time investors how to start their real estate empire and trade their way up to having real wealth and income and passive income that will take them well into their retirement years and beyond. So I asked Anthony to do this presentation for my agents to teach them how to help people. And it was so good we decided to make this webinar to get this information out to the entire DIGGS tribe. So Anthony, thank you so much for coming on to our little webinars series.

Anthony: Absolutely. Happy to be here.

Kendyl: We were so impressed with the information that you had. Um, I’m just gonna pretty much let you dive into it. Please drop some wisdom and knowledge on our people and let’s get those empires started.

Anthony: Absolutely. Thanks Kendyl. Okay, so, uh, my name’s Anthony Walker. I am the CEO and managing broker of Buckingham investments. We are a local Southern California multifamily brokerage firm in our little niches and helping people learn all about how to invest in real estate, specifically multifamily property, right investment plan that can deliver on your future goals. And then when our clients are ready, we help them get out there and invest and buy their first property or scale up if that’s what they’re trying to do. So today I’ll just purely to go over an initial presentation that covers a lot of our strategy and our philosophy and sort of the numbers behind this at a really high level. And if that’s something that speaks to you, then have tons more information for you as well. So first of all,

Kendyl: interrupt you real, real quick. Just in case you’re thinking, Oh my God, I don’t have $500,000 to drop on an apartment building. I’m just a first time investor, Just stay tuned. Anthony has some great news for you guys. Okay, keep going. Sorry.

Anthony: Ultimately you don’t have to already be rich to do this. However, there’s this quote attributed to Andrew Carnegie that goes something like 90 of all millionaires became so through owning real estate. And that absolutely remains true today. Uh, we were just talking at lunch here at my office about an article in the LA business journal that came out in a recent edition of it had the top 50 wealthiest Angelenos. And I think if you went through the list of 50, probably easy,

It’s time for Spring Cleaning Tips for your Glendale Ca home. Last month we talked to Organizer Vivien Mayhue about organizing your DIGGS. On this month’s episode of Love Your DIGGS we talk to the cleaning experts Janssen’s Cleaning in Montrose.

DIGGS Market Moment

Before we dive in, however, let’ pause for the DIGGS Market Moment.

Today is April 23, 2019. The rest of the country is talking about a slowing real estate market, but is that true in Glendale? If you compare quarter to quarter, there are fewer homes for sale and the number of homes entering the purchase contract is up. This means conditions are slightly BETTER for home sellers than this time, last year.

Average price per square foot is also up a modest 3.7%.

However, it sure seems like there are more signs in the yard and we are starting to see “price reduced” advertisements. This means that while many homes are selling right away with multiple offers, many others are lingering on the market. 33% of the listings currently on the market have had a price reduction.

These are uncertain times…

In other news, DIGGS is just full up with great listings! Step right up and get one for your very own! Sign up for our weekly newsletter to be the first to find out what’s coming on the market.



Check out ALL of DIGGS favorite contractors and vendors at the DIGGS Home Services Resource List

SHOW NOTES:

Things You Should not DIY!

DIY Gone Bad – spot cleaning with the wrong solution. You can damage colors or leave a residue – that’s like washing your hair without rinsing out the soap, it ATTRACTS more dirt. A lot of the cleaners from the market are like that and can create a bigger problem than you had before

Rug cleaners from the supermarket – there is not enough power to extract enough water and that can create a lot of damage to the underlying floor.

Most Overlooked Items to Clean

Least thought of thing they can clean- natural stone restoration. Return the shine, fill the pits. Any sort of hard surface is often overlooked.

They also clean mattresses. Helps remove dust mites and allergens.

Things you should clean every year :

all your floors and fabrics every 12 – 24 months. If it is just the two of you, every 24 months.

Change air filter in your HVAC system.

How To Deal With Disasters

When disaster strikes you need to call ASAP. Any dark or red color are the most difficult to remove.

Pet urine is also very difficult.

Get paper towels or towels to sop up the liquid. Go to dirtisgone.com for a DIY chart for disaster handling.

The difference between a cleaning company and a maid service?

Maid service is the daily/weekly chores needed while Janssen’s is more deep cleaning

What are the best questions to ask to know if a company is trust-worthy?

Make sure they are insured, workman comp and liability insurance

Reputation – how long in business

Ask for referrals, friends, neighbors or Nextdoor

Ask about their systems – best is “hot water extraction” or steam cleaning. Avoid “dry cleaning” unless you have a delicate upholstery piece.

Ask about environmentally safe products. “Are your cleaning products green”

Neighborhood chatter on Facebook seems more accurate than reviews on Yelp.

Top Tips

The best policy is to apply a fabric protectant before disaster strikes!

Don’t wait until there is visible soil – at that point the damage has already happened.

Contact:

Janssen’s Cleaning

a href="http://dirtisgone.

Tidying Up your Glendale CA home this spring?  Vivien Lee-Mayhue, founder of Tidying Up Los Angeles is a KonMari certified professional organizer that specializes in the organizing method created by Marie Kondo. If you have seen the Netflix show Tidying Up with Marie Kondo, or read the Life-Changing Magic of Tidying Up you are familiar with the KonMari method.

 



Check out ALL of DIGGS favorite contractors and vendors at the DIGGS Home Services Resource List

SHOW NOTES:

DIGGS Market Moment

La Crescenta Valley Garage Sale

Deadline to sign up has passed, but you can still participate! We can’t get you onto the map, but let us know and we’ll get a sign pointing in your sale’s direction! Fill out this Garage Sale Sign Up Form before March 28th, 2019.

Market is Shifting

2019 had a rocky start. Inventory shot up by 20%, but the number of sales stayed steady. This meant that our Months Supply of Inventory (MSI) was 3.4 months supply. For most of the last two years we have been well under 2 months supply!

To put all of that in some perspective, a normal or balanced MSI is 6 months worth of inventory. More than 6 months is considered a buyer’s market with more than enough homes to supply demand. Under 6 months is considered a seller’s market with not enough homes to supply demand.

List Price to Sales Price Ratio is Changing

There is also a growing gap between the seller’s list price and final sales price. For the last two years or so we saw list price to sales price ratio hover around 100% as an average. This means sellers mostly sold at their asking price. That ratio has declined to 94% for Glendale Ca home sales! This means that home seller’s with ambitious asking prices are not successful. The buyers are willing to wait for a better priced home to come on the market.

Side Note: the DIGGS list price to sales price ratio is currently 104%

Things improved in February – MSI came back to 1.7 months. The wise seller is going to make sure their home is the best value on the market in order to attract offers from qualified buyers on the market. Oh, and the wise seller will work with a top Glendale Ca broker.

Tidy Transforms Your Life

If you do the #KonMari method you don’t ever have to tidy up again. When complete, it is easy to maintain!

Tidy UP by category, not by room

The KonMari method has you tidying up by category, instead of room by room. This enables you to get a clear picture of the items that you own, and the redundancies. You will probably be shocked at the number of pens in your house.

Tidy Up By Elimination

It’s just like shopping for a home! Consider ALL the items and consider only the ones that spark joy, the ones you love. Eliminate everything else!

Start Here: What does your ideal life look like?

Vivien begins her consultation by asking you how you want to live in your space. Visualize how you want to wake up, what do you see? How do you begin getting ready for the day?

Your Clothes

The first action is to gather all your clothes from every corner of your home and pile them all on the bed. This is a shocking and useful first step.

Spark Joy

Clothes are the easiest way to start understanding sparking joy....