Jose Gonzalez

Zoning

Zoning is a legal method for cities to control the use of real estate in certain specified areas. A zone is created and only certain types of property, or certain uses of properties, are allowed in the zone. The main purpose is to outline and segregate uses that are thought to be unable to coexist; in reality, zoning is used as a permitting system to prevent new development from harming existing residents, businesses or any surrounding properties. Zoning can also include regulations of activities which will be suitable on particular sites. The regulations may include open space, agricultural, commercial, industrial, low-density residential, high-density residential or special use. The densities at which those activities can be performed are determined by the height of buildings, the amount of space structures may occupy, even the location of a building on the lot.

In the United States zoning is not very old as it might be believed. According to “No Zoning”, In 1916 the city of New York adopted the first zoning regulations to apply to its entire city as reaction to construction of The Equitable Building. This building outstood neighboring residences and completely covered all available land area within the property boundary, leaving neighboring buildings with their windows blocked and leaving out the availability of sunshine for the people in the affected area. Definitely the need for a zoning regulation is needed in this scenario. Meanwhile there are still some large cities in the United States that reject the idea of zoning. Houston Texas is distinctive, no zoning regulation have been implemented in the state.

Since zoning regulations restrict the rights of owners to use their property as they wish, there are at times controversial. Probably that is why Houston voters have rejected in efforts to implement zoning three different times in 1948, 1962 and 1993. The law has determined that zoning regulations are accepted if it is reasonable and logical, “if it stand a reasonable and substantial relation to the public health, safety, comfort, morals, and general welfare; and if that means employed are reasonably necessary for the accomplishment of its purpose; if it is reasonable and not arbitrary “Land Use and Zoning Basics ", with all this factors in mind there is obvious space for disagreement and questioning the zoning regulations

During research in the internet, typing zoning in youtube, the returning results were all but disapprovals of zoning. A lot of people complain about zoning for deciding about town/cities/counties restrictions in developing. For example a video shows how Buncombe County Citizens complain and protest against the Buncombe County Commissioners for zoning entire county. People in this video ask the county commissioners to let them have a vote on the decision on zoning or not the county. They even ask to raise hand who would not like the county to zone and everybody in the room raised their Video:

Overall, while zoning has its positive side it also has its negative. Zoning could be beneficial in the way that it could control public health, safety and comfort in zoned areas. At the same time, there are a lot of people that disagree with zoning because it limits owner’s ability to do with their land as they wish.

Workscited

"Land Use and Zoning Basics." http://realestate.findlaw.com/land-use-laws/land-use-and-zoning-basics.html. 10 Apr. 2012. .

No Zoning. 2007. YouTube. 10 Apr. 2012 .

Zoning. 10 Apr. 2012. .

Blog Post #2 (Fin 180)

Rights with Real Property

By Jose Cruz

Every single individual has public rights that exceed any private individual right. The rights that an individual has over real property include air, surface, and subsurface rights. Estates are also rights associated with real property. They are categorized as either freehold or leasehold estates. Real property refers to the land and its improvements. It includes all the physical aspects of real estate (Diaz and Hansz 172). This could be the walls, ceiling and anything that is attached to the land. “Land, in its general usage, includes not only the face of the earth but everything of a permanent nature over or under it. This includes structures and minerals” (Real Property). Individuals gain private rights by having ownership over real estate which is term real property.

"Cuius est solum, ejus est usque ad caelum et ad inferos":

"To whomever owns the land, shall own the earth to its center and up to the heavens."

This Latin phrase can be used to explain the air, surface, and subsurface rights related with real property (Duhaime). Air rights are the rights of the ownership and the use of the space above the land. Ideally they extend to outer space but it only extends to a “reasonable height”. This allows for air planes to fly over properties without the need to ask for permission. Subsurface rights are the rights of the ownership and the use of the space below the land. Just like air rights, they extend to center of the earth but really only extend to a “reasonable depth”. Modern technology does not allow us to reach the center of the earth to use that space. Surface rights are the rights of the ownership, use, and occupation of the surface land area in a real estate property (Diaz and Hansz 172-173). These rights are restricted by technology, mining, electricity distribution, sewer systems disposal and air travel. They create limits to the use of space and don’t provide the owner full ownership and usage of that space (Duhaime). According to U.S. Code Title 49 (a) Sovereignty and Public Right of Transit, the “U.S. Government has exclusive sovereignty of airspace of the United States and a citizen of the United States has a public right of transit through the navigable airspace”. According to U.S. Code Title 49 (b) Use of Airspace, the “Administrator of the Federal Aviation Administration shall develop plans and policy for the use of the navigable airspace and assign by regulation or order the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace” (49 USC § 40103). However, the owner can be compensated by selling the right or leasing the right.

Freehold estates are ownership for an indefinite period of time. Most real estate bought are freehold estates. The freehold estates include fee simple absolute, qualified fee, life estates, and legal life estates. Fee simple absolute are inheritable and lasts as long as the individual and his heirs wants to keep it. Qualified fee is a qualification on the fees simple interest. Life estate is where the individual retains possession of the land for the duration of his or her life. Legal life estate is established by law rather than by owner of the land (Spaulding). Non-freehold estates are property interests with limited duration, also known as leasehold estate. They include tenancy for a stated period, tenancy at will, tenancy from period to period, and tenancy at sufferance (Diaz and Hansz 179). Concurrent estates exist when property is owned or possessed by two or more individuals simultaneously (Real Property).

The rights associated with real property are needed to protect the property and provide the owner with ownership and usage. The rights might have limitation but without them people would struggle to protect and use their land.

"49 USC § 40103 - Sovereignty and Use of Airspace." 49 USC § 40103. 30 Jan. 2012. Web. 12 Apr.      2012. <http://www.law.cornell.edu/uscode/text/49/40103>.

Diaz, Julian, and J. Andrew. Hansz. Real Estate Analysis: Environments and Activities.

Duhaime, Lloyd. "Air, Water and Subsurface Rights." Duhaime.org. Permalink, 04 June 2009. Web. 12 Apr. 2012. <http://www.duhaime.org/LegalResources/RealEstateTenancy/LawArticle-66/Air-Water- and-Subsurface-Rights.aspx>.

"Real Property." LII. 19 Aug. 2010. Web. 12 Apr. 2012. <http://www.law.cornell.edu/wex/real_property>.

Spaulding, WIlliam C. "Estates in Land." : The Fee Simple Estate and the Life Estate. Thismatter.com, 2011. Web. 12 Apr. 2012. <http://thismatter.com/money/real- estate/estates-in-land.htm>.

Tax Lien Investing

Nathan Nycum

California State University, Fresno

Tax Lien Investing

There are quite literally hundreds of ways to invest in real estate. Each method and strategy has its own advantages and disadvantages. In this depressed real estate market a unique type of investing has grown to a level that is not normally seen. Tax lien and tax deed investing can prove to be a very lucrative form of real estate investing with a relatively low level of risk for those who know how to do it. This paper will summarize what tax liens and deeds are and how they work, analyze some of the risks and benefits of investing, and discuss some current techniques and strategies that investors are using.

What are Tax Liens and Deeds?

http://www.youtube.com/watch?v=4yMrRMpNzDY

The use of tax liens and deeds varies widely from state to state and each state sets its own procedures and laws to handle their tax policy. A tax lien is a claim attached to a property that gives the lien holder the right to collect the money owed plus interest by foreclosure if necessary. A tax deed is very similar but differs in that it gives the party holding the tax deed the right to take ownership of the property immediately. Tax liens and deeds occur when a property owner fails to pay all or part of their property taxes. When this happens the county places a lien on the property and holds it until the annual public auction. Most of the liens are sold to investors at these auctions but those that aren’t get placed in the county’s inventory and held until the next year if still unpaid. Once an investor purchases a lien they own the right to collect the delinquent taxes owed plus all the penalties established by the county. If the delinquent taxes remain unpaid until the end of the period allowed (5 years in California) then the lien holder can foreclose and take ownership of the property. The other possibility is that the delinquent taxes are paid including all interest and the investor makes the return stated on the lien they purchased.

Benefits and risks of Investing

Even though there are numerous laws that usually ensure that the investor’s return is guaranteed, this type of investing is not riskless. Since a tax lien is a sign that someone is not paying their bills there is a strong likelihood that other liens exist on the property in question such as judgment liens or IRS liens. In most cases the tax lien takes priority over all other liens or encumbrances but some in states or counties this is not true. It is completely up to the investor to research the property thoroughly and often in order to mitigate their losses and avoid risk. In addition, many states and counties have payback periods that last for several years so most tax lien investments are long term investments. On the other hand there are several benefits to the tax lien investor. The returns are fairly high as most states charge around 18% which all goes to the investor if repaid. It is also a way that some investors build their portfolio through the foreclosure process to earn even higher returns by receiving the properties debt free.

Techniques and strategies

Within the area of tax lien investing there are many different techniques and strategies and since each state and county have different rules it works well for many different types of investors. The most common way to buy a lien is to physically go to an annual auction and purchase the liens available. This can be very difficult for a lot of people since there is a lot of competition at the auctions which means that the returns usually go down depending on the bidding system used. Additionally, it can be difficult for some people to travel to each of the counties they want to invest in. In order to avoid so much competition some investors choose to target specific properties that they have researched to be great investments. Others have found ways around the auction process entirely by going after over the counter (OTC) liens. An OTC lien is one that has been placed into the county’s inventory after the auction. Some counties allow investors to simply purchase the liens directly without having to wait for the annual auction. Some investors simply want the stated return and don’t want to bother with the foreclosure process and others invest strictly for that purpose. In order to increase the likelihood of a foreclosure and shorten the payback period these investors will target mature liens which are liens that are close to the end of their redemption period.

To the new investor; the concept of what a tax lien is and how it works can be quite complicated. But to the seasoned and knowledgeable investor tax liens provide a very unique type of investing that can produce high returns with fairly low risk. 

Apartment Property Management

Apartment Property Management 

By Olivia Thomas

With rampant foreclosures and high unemployment rates it has become difficult for people to make ends meet. The stress of a high mortgage payment each month has caused many people to go from owning a home to renting. This is property managers come in. Now is the perfect time to become an apartment property manager.

According to occupation outlook handbook (OOH) property managers ensure rents are paid on time, handle payroll, advertise properties, handle property staffing, and make sure bills are paid on time (Bureau). Clearly, property management is a dynamic field. Property management involves in-depth knowledge of state and local housing laws. In their webpage on property management the OOH states that, “Know and comply with relevant laws such as the Americans with Disabilities Act, the Federal Fair Housing Amendment Act, and local fair housing laws; not discriminate when renting or advertising” (Bureau). Managers can own the properties they manage or they may manage the other’s property. There are no formal educational requirements to be a property manager, but there are various certifications that make managers more competitive.

It is recommended that property managers obtain certification through a recognized professional institution and in some cases have a bachelor’s degree in real estate. Managers should get certified as a property manager. There are also other certifications that managers can pursue. The Institute of Real Estate Management offers certification in residential and commercial management as well. According to the OOH, “Many employers prefer to hire college graduates for property management positions, particularly for offsite positions dealing with a property’s finances or contract management” (Bureau). Managers need as much education as they can so that they can capitalize on the current market conditions.

Multifamily real estate is currently booming. The Economic Development Corporation Serving Fresno County wrote in their 2012 Real Estate Forecast that, “Apartments are the hottest CRE [commercial real estate] sector today” (Real 27).  They also state that, in Fresno, Apartment sales have increased 50% yr/yr (Real 27). The RCK Organization of Fresno wrote in their First Quarter 2012 RCK Insight that due to a unique mix of market conditions it is, “[…] a great time to own and/or acquire apartments” (3). For these reasons, now is the time to get into the apartment property management industry in Fresno.

The apartment property management industry in Fresno, CA is ideal for anyone looking to break into the property management field. There is opportunity for growth and acquisition of new properties. Various sources have stated the promise that Fresno market holds. In order to be successful in the field one must possess the skills to do a multitude of tasks and wherewithal to get things done.

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2012-13 Edition, Property, Real Estate, and Community Association Managers. 2012. Web.

Economic Development Corporation Serving Fresno County, Real Estate Forecast 2012, 2012. Print.

“RCK Insights: First Quarter 2012.” RCK Organization. 2012: 2. Print.

FIN 180 Real Estate Principles: Updates

Exam 2 is on Wednesday, April 11th.  Exam 2 will cover chapters 8, 9, and 10 (as much as we cover in Monday, April 9th class).  Also, don't forget that Exam 2 will have a full blown investment problem.  You may use a hand held calculator, pencils, Scan-tron, and a 3" x 5" index card for notes, only, on Exam 2.

Blog post 2 is due April 9th, but I will give until April 11th because the syllabus reads "Wednesday, April 9th" which is a typo (April 9th is Monday).  Information on blog post 2 can be found on our website: https://sites.google.com/site/diazhansz/home/blog-post-assignments?pli=1.  Basically, you can choose any topic that is brought up in chapters 6 through 14, do additional research on the topic (yes, you must have citations), write a paper in our 5-paragraph format, and post it to our class blog (http://diazhansz.blogspot.com).

Also, don't forget the class assignment (see the blog post below) for Wednesday, March 28th.  We have a fix for the video problem which is explained in the blog post below.