Hi, this is Corey Chambers in Los Angeles Your Home Sold GUARANTEED or I’ll Buy It* Thanks for taking a minute to take a look at the L.A. Loft Blog. I’ll share with you some valuable information about this topic: The three biggest mistakes that home buyers and sellers make in downtown Los Angeles real estate. If you see any properties that are of interest to you, let us know. We will gladly send you a property information packet on any loft condo or house, or a private preview is available upon request. If you have a home you’d like to sell, you should know that I will GUARANTEE the sale of your present home, at a price acceptable to you, or I’ll buy it for cash. This guarantee will allow you to buy your next home without worrying about selling your present home. To find out how much you can sell your home for, call the Corey Chambers Team at 213-880-9910. #mistake #dtla
Avoiding mistakes is usually a good idea to save yourself some time, money and aggravation. And when it comes to real estate, it’s about saving yourself a very heaping helping of time, money and aggravation, because you always want to get as much money as possible for selling the place, or to spend as little money as possible buying a place — to save as much money as possible, and also to save yourself some time. You’re not wasting a lot of time from your work unnecessarily, and to avoid other headaches. So its helpful to know, especially if you’re thinking about downtown Los Angeles or anywhere in LA — or any urban type of place, but some of this can apply to suburbs and farm towns as well. That’s why it’s good to know these three mistakes that people make.
Number one is related to what our situation right now — with the panic and hysteria, crazy virus and the economy. That’s also kind of connecting to that because — people who listen to me know that we are in the Greater Depression of 2020. And I know it’s not going to be exactly the same as the Great Depression of 1929. It’s going to be worse in some ways, and will be better in some way, or I should say worse in some ways, and not as bad. For some people, better in some ways. During the Roaring Twenties, and also during the early thirties, during the Great Depression, there were some businesses that did better than ever. Maybe 20% of businesses grew and did better than ever. Some of these were entertainment industry, which did great during the Great Depression. Not all of them, I’m sure. Maybe more than half of them actually did worse, but some of them did better because their careers happened to be in line with what was going on at the time. We know that some of the top celebrities, top actors just made more and more and more money, started making millions of dollars, as did the big the oil barons and captains of industry — and all of those other people did quite nicely during the Great Depression.
At the end of this article, I’m going to go over of how readers and clients — and my very few fans and viewers of my videos and friends (and especially clients) can do better than ever before during the Greater Depression of 2020.
The first mistake is people who are not really understanding of whats going on with the economy and also with a local economies that start with downtown Los Angeles. I just got off the phone a couple days ago with someone who is trying to sell his place. He’s making a bundle of mistakes. He’s using a super discount real estate company to sell his place; the reason being that he overpaid for the El Dorado loft condo unit in the first place. He bought it about a year ago. Number one is you’ve got to use an agent who’s going to tell you the truth — not someone who’s going to get you hyped up, saying “you got to offer full price because home prices are going up. Haven’t you seen the news? Prices are going up”. While I know prices are not going up in downtown Los Angeles. They were not going up in downtown Los Angeles at that time. And they were not going up in that prices were not going up in downtown Los Angeles. During the year before that, prices have been dropping in downtown Los Angeles (median price) for more than two years now. That’s a couple of mistakes that he made: Using an out-of-area agent, who is giving incorrect market information and who doesn’t know that neighborhood. So, that was a couple of mistakes right there: using his buddy Joe as his real estate agent to find a place, or just using the sellers agent instead of using his own agent who would have known that local market.
Overpaying for the loft: It’s a mistake people have been making for the last couple, two or three years, and people are still making this one mistake. While it might be ok to pay top dollar for a loft if you have plenty of budget, and you want something that is super duper, way better than other properties, this is like the very best unit in the building, it has upgrades, it’s fixed up and there’s nothing else like it. Yeah, for some of those, the prices have not dropped because we’re saying more differentiation, more distance from the bottom to the top between the economical places vs the luxury properties, even if they’re in the same building. The unit with a back alley view is going to be selling for much, much, much, much less than the penthouse with the best view in the front of the building. Thats the only exception — if you want to have that top Penthouse front view with the most glorious view, versus the the little unit in the back facing the alley. In that case, there is a good chance you will need to pay a lot more.
Even for the superior properties, today’s buyers still need to take into consideration that prices are falling, as there’s pressure for even high-end-property prices to fall — even for the penthouse. The reason: We are in The Greater Depression of 2020. We know this based on the most important data. We’ve had the worst stock market crash, actually a set of three three major crashes, in less than a year. We’ve also seen the biggest drop in employment, the biggest surge in unemployment, bigger than the great depression. The third signal of worse depression is the biggest drop in GDP gross domestic product, which is also bigger than the GDP drop of the Great Depression. Those three numbers are already worse than the Great Depression. Anyone who says it’s not worse than the Great Depression must be looking at inferior numbers inaccurate or irrelevant statistics. These three numbers are the key numbers for the economy. As for GDP, you could say that’s number one.
Other supporting depressionary economic numbers include: the worst drop in retail, and the worst drop in commercial real estate. Many of these smaller numbers are also worse than the Great Depression. The stock market its another smaller number, but still an important number — the huge drops in the in the stock market.
Prospective home buyers must take all of those into consideration when putting in a purchase offer. We can’t just ignore the economy. We cannot believe people who say that that things are going to just have a “super V,” and that everything is wonderful. When buying a home, we can’t just throw caution to the wind and ignore the biggest economic shock factors in American history. Many industries are 80% gone. Restaurants, travel, hospitality just to name a few. Commercial real estate and many others. These are not little factors. This is huge. This is much worse than the Great Depression as far as a number of impacted industries and the severity of the wiping out of commerce.
Several things must get worse before they can get better. One of those is the stock market. The other is real estate. Most of the economy must get worse. About 80% of the economy has to get worse before it can get better. We’ve got to have capitulation in the stock market. True capitulation is when people say, “Things are much worse than I thought, and they can only get worse from here.” We’ve got to have mainstream media saying that, and the average person believing that the stock market is screwed up and can and will only get worse. We’ve got to have that attitude of capitulation temporarily, but we’ve got to reach that point of capitulation before we can have a real strong stock market recovery.
People may say it’s all Trumps fault, or it’s all the liberal Democrats fault. It’s all whoever’s fault, it’s all China’s fault. People blame other people. Some people may say it’s the Jews fault, it’s the homosexuals, it’s those greedy rich people, or it’s the minorities. Whomever they’re going to blame it on, most people are not going to blame it on themselves. But if you want to blame anyone for one’s finances, we must all look into the mirror and then blame or congratulate the person in the mirror for our own personal financial situation.
As we heard in the story about the man who paid way too much for his property, now he’s trying to sell it, using one of the cheapest real estate broker services than he can find. In this case, they’re not going to be able to sell if they’re not even able to market it. Cheapest discount broker means close to zero marketing. Anyone who believes they are going to get above market price, which he thinks that he needs to get, he does not understand the market. He is making one mistake after another for that particular home.
He’d be better off if he simply acts on the fact that he actually plans to stay there for a while. He communicated that he actually has a new job there in the neighborhood where he bought his place. Now he’s selling his property out of panic and fear that it’s going to go down a lot in value. That’s another mistake. He just got a job in the neighborhood. That’s usually going to be a mistake to sell a home just out of fear that the values going to go down. Theres an 80% chance of the values going to go down. But if the owner is living there, rent rents are not going to go down that much. Rent’s usually go up. Rent’s rarely go down much. The property values are going to start going up when the property owner least expects it. Then, he’s going to miss out on all of the future equity gain. If he tries to sell now, he will probably get it sold in about a year or two from now, or at the very bottom of the market. And then the property value will start going back up. That’s what one should expect from him and the way that he operates.
When someone is getting a great new job, a permanent job in the area, that’s a reason it could even make sense to buy at the top of the market with high prices, if you’re thinking of staying there for 10 or 20 years. Your equity is going to eventually go up dramatically. He believed that downtown Los Angeles going to get worse and worse. It probably will get worse more than it gets better. It has been progressing that way, as the extreme liberals are totally in charge. There are no adults in the room to keep people from doing stupid things. Allowing homeless to just completely take over the city, or to take over many of the neighborhoods, is just a very bad idea, and California’s major cities are doing that. They tried allowing crime and homeless to dominate in the 70s and 80s, and it didn’t work out too well, especially in New York. It didn’t work. People moved out. The money moved away. When you let homeless people take over, the money moves out. Thats why socialism doesn’t work: because you eventually run out of other people’s money. That’s the number one reason why socialism doesnt work — because you eventually run out of other people’s money. They say, “We will just stick it to the wealthy people. They need to be fair and they need to share.” Well, theyre not going to share more than about 17% of their income at the most. After that, the wealthy move out and leave. We can’t get 18% from most wealthy people. Many like to think that we can make wealthy people pay 18% or 38% or 58 or 88%. You can’t. When higher taxes are passed into law, then we have to give them loopholes where they can escape most of it. These are economic principles that most people don’t know, don’t care about because economics is the dismal science. Thats the number one problem, the #1 mistake.
The number two mistake is a litigation lawsuits, and problems with the building. Over the last 10 years, more than 25% of all of the loft buildings in downtown Los Angeles have had some kind of lawsuit or litigation — more than a quarter of them! So, it’s important to know what are the lawsuits and litigation about, and what are the other problems in the building? What are all of the problems and all of the issues of the building — because they have more than their share and they’re harder to understand because these are different buildings. They’re industrial and commercial buildings that have been converted under the City of Los Angeles Adaptive Reuse Ordinance. Prospective home buyers need to know what are those lawsuits in litigation. These buildings were converted from industrial buildings, commercial office buildings and warehouses, turned into residences residential when they are converted. They were not built for people to live in. People are living in something that was not built for people to live in. They’re built with a lot of concrete. Concrete has a lot of cracking and water intrusion. That’s inherent in old concrete buildings. And then there are many other issues that people need to know about. Is there a homeless person who’s defecating by the front door of the building every night? Is it a dangerous place? How much violent crime, and how many cars are being broken into? A million other things people could be aware of. What are the other defects in the building? That’s the second mistake that people make.
The third mistake is about loft financing. More than half of buyers (usually more like 60% to 80% of buyers) use financing, a home loan mortgage. Getting a home loan for an industrial commercial conversion, doesn’t work most of the time. What people often do is: they use their buddy Joe the lender, or Aunt Sally, who’s a real estate agent from Pasadena or from the valley or Orange County or wherever? They dont know what a loft is. Most people do not know what a loft is. Most real estate professionals do not know what a loft is because it’s rare. Most professionals have never not done one single transaction with an industrial or commercial loft conversion. Then what happens is: they dont know what to do with the financing, thus the financing usually fails. It fails because they’ll also use their friend or relative agent who does not know lofts. The buyer will use their friend or relative agent who does not know lofts, or the buyer will find a property on Zillow or Trulia or whatever and they’ll use the the seller’s agent. The buyer will use the seller’s agent who does not know lofts. So, then the buyer has several problems. And then they get into escrow. And then the toward the end of escrow, the underwriter for Joe’s home loan has a problem. Joe said initially, “I will hook you up. Of course we can get the financing for you.” Then, they get towards the end of escrow, when the mortgage company underwriter finally says, “This is an industrial building. Of course, we cannot do the home loan for an industrial building. Its not a home. Its not a resident is a business.” And theres a whole bunch of other issues a lot of other roadblocks, such as: the building has too much commercial inside of it; too many stores and offices on the bottom floor; too many renters; the homeowners association is not responding to the questionnaires of the lenders; lofts have concrete floors; the lender says that is having no floor, so they think the the loft has no floor, that is an unfinished construction and a host of other issues. The loan does not work, and the property falls out of escrow or has delays. The seller ask for $100 a day or more in per diem fees. And then it doesn’t work and so they dont get their dream loft. There you have it. That was the third issue. Those are big mistakes, and how to avoid them. Now, go steal yourself a loft by getting a steal.