Gonzalo Manriquez

Fin 180

Student Created Objective Questions

CH 11

1. The most important aspect of our society’s development, and global competitiveness is?

     a) roads

     b) utilities

     c) education

     d) law enforcement

2. Assessment offices often use _____ to conduct valuations, which are not necessarily accurate estimates of current market values.

     a) Ad valorem value

     b) Taxable value

     c) Assessment ratio

     d) Mass Valuation

3. The final steps in property tax administration include,

     a) Billing and collection

     b) Special Assessment

     c) Overview of the process

     d) Exemptions

4. In addition to roads and utilities, government responsibility has expanded to education.

     a) T

     b) F

5. Assessors rarely have time or resources to conduct evaluations using all three traditional approaches to value.

     a) T

     b) F

6. The homestead exemption may be available to temporary and permanent residents. 

     a) T

     b) F

7. Property tax due, is equal to Taxable value times Millage rate.

     a) T

     b) F

8. Zoning is one of the most powerful rights a municipality has to implement in the comprehensive plan.

     a) T

     b) F

Answers: 1) c, 2) d, 3) a, 4) T, 5) T, 6) F, 7) T, 8) T

Invest in Downtown Fresno

How the High Speed Rail will Affect Downtown Fresno

               

                For years now, there has been an ongoing battle between the High-Speed Rail (HSR) authority and its opponents, criticizing the business plan. If the project does eventually go through, the first section will be completed by 2022 and there will be a station right in Downtown Fresno. The question is; should you invest into Downtown Fresno now and capitalize from this opportunity?

                The HSR expects a ridership of 88-117 million people by the year 2030. With Fresno being at the center of California and the center of the High Speed Rail track, a lot of that traffic will go through Fresno.  With a possible spike in tourism and increase in foot traffic in the millions a year, the businesses downtown will be thriving. Downtown Fresno is an area mostly forgotten by most Fresnans today, but that may change when a HSR station is at the center of it creating a hub that will draw everyone towards it.

                Developers are already looking into capitalizing on this opportunity. Big name developers like GranVille Homes have already made moves into Downtown Fresno. Granville, along with a few more developers already started building residential housing in the area. Iron Bird Lofts, Vagabond Lofts, Pacific Southwest, Grande, etc. are just some of the residential loft spaces available to rent. All the residential areas being developed now in Downtown Fresno are catered towards the young and single, or couples with no children market.

                Office space is another area that is being heavily developed in Downtown Fresno. An area in the Downtown Revitalization Movement is to bring businesses downtown. There are over half a dozen different venues that offers office space for rent; Pacific Southwest, The Grande, Bizworks, OfficeBay, etc. These businesses maybe locating downtown to capitalize on the HSR or from other reasons, but there is a movement happening already.

                Residential and commercial areas are being heavily developed in Downtown Fresno with the hopes of the HSR creating a huge spike in land value. It’s still all speculative and too early to say, but the movement is gaining momentum. Get on the bandwagon, or should I say “High Speed Rail,” before it’s too late.

               

http://www.huffingtonpost.com/2012/04/12/california-high-speed-rail-authority_n_1422401.html

http://www.cahighspeedrail.ca.gov/assets/0/152/159/41bf717b-675d-4466-9202-4ae90f7c94d3.pdf

http://www.cahighspeedrail.ca.gov/assets/0/152/302/e1018874-5937-4fdb-bf99-5d53d0d21d63.pdf

Real Property Regulations

Building Codes and Subdivision Regulations

Cesar Garcia

 

Building codes and subdivision regulations are crucial to be implemented in our homes, offices, schools, stores, factories, or places of entertainment.  Safety must be assured to protect the public from any disasters due to fire or structural collapse.  These subdivisions regulations and building codes provide minimum construction and subdivision development standards.  Without these building codes being enforced many disasters could occur.  

In early America, George Washington and Thomas Jefferson encouraged the development of building regulations to provide for minimum standard that would ensure health and safety.  Since then regulations and codes have been set throughout the United States each varying from state to state.  Regulations vary from coverage from fire, and structural safety to health, security, and conservation of energy. In order for the codes to be effective the understanding and cooperating relationship between building officials and the groups they serve.

Building codes must be responsive to the government’s need to protect the public.

A subdivision is the division of a parcel of land into number of lots, blocks or sites as specified in local ordinances, law, rule of regulation, with or without streets or highways, for the purpose of sale, transfer of ownership, or development. A subdivision occurs whenever any parcel of land is made into two or more parcels. This could include a tract of land that is 200 acres split into two 100 acres, or four 50 acre parcels, or one 200 acre parcel. One historical purpose of creating subdivision regulations was to maintain better records of land ownership and property boundaries. By using subdivision units of land were easier to define.

Nowadays subdivision regulations are still used for the same purpose; they are also used to help insure that newly developed land is properly developed with adequate access to public utilities and facilities. Once the land is developed and constructed, the government becomes responsible for maintain the public infrastructure. Local government can influence the overall character of the subdivided land. For example, if a community doesn’t want to sprawl, they may set maximum lot sizes or regulations regarding building character within their subdivision control ordinance. Building codes are implemented in every state and are enforced differently depending on the conditions that take place in the area. For example building in Los Angeles, buildings are to withstand earthquakes because this is an area where these natural disasters occur. In New Orleans building codes will focus more on withstanding hurricanes and flooding occurrences, rather than for withstanding earthquakes.  Every area has their building code standards which are enforced to ensure the safety of the public.

In conclusion building codes and subdivision regulations are important to assure the construction of buildings is safe for people to inhabit.  These building codes ensure the minimum construction standards or requirements. Building codes require construction techniques and materials to prevent fire and building collapses. Subdivision regulations require minimum standards in subdivision design and construction.  These are important real property regulations that affect every living person because without these disasters could occur.  

Works Cited

Diaz, Julian, and J. Andrew. Hansz. Real Estate Analysis: Environments and Activities. Dubuque, IA: Kendall Hunt Pub., 2010. Print.

International Code Council

http://www.iccsafe.org/safety/Documents/BSW-BldgCodes-How.pdf

Subdivision Basics

http://www.co.ontario.ny.us/planning/acrobat/training/Subdivision.pdf

Subdivision Regulations 

 http://www.in.gov/indot/div/projects/i69planningtoolbox/_pdf/Subdivision%20Regulations.pdf

Natural Hazard Disclosure Statments

Anmmar Alsaggaf
Finance 180
Blog Post 2

Would you want to know if your house was on a fault line? How about an area that has potential flooding? Or an area subject to a wild fire? The US government is pushing off liability of events like the flooding that happen in Katrina to State agencies, in response, state agencies now have responsibility to create maps that zone areas that are potentially dangerous to people living in residential homes or any type of real property.

Let’s get into some of the history and hypothesis how this all came to be. Building a home, or developing construction on a piece of land that is subject to danger does not make any sense, yet humans do this because there has always been and always will be an opportunity cost. The opportunity cost is that the value of having shelter outweighs the conditions of the habitat, even if it means danger poses. In current times people live in naturally hazardous places like SF, Hawaii, New Orleans and many others in terms of similar geographic region and weather condition exist. These lands are at risk to earthquakes, wild fires, or floods. Some of these areas are susceptible to multiple risks proven through history of natural hazards in a certain area. Some of these risks are even caused by man, for example dams. So what can humans do to become aware of Natural Hazards and why has this not been a major issue in the past? Maybe it is that some people used to be less aware of the natural hazards, and that humans are creatures of habit that believe mother nature’s dangers are inevitable wherever you trot the globe. Humans have taken one step in minimizing the devastation of natural hazards to people by letting them know when danger is lying under their feet, or surrounding their homes.

Research through technology using Geographic Information Systems (GIS), computer software; arc map, and satellite imaging now allows for the real estate industry to have the tools to show prospective buyers of homes if 6 main natural hazards exist through a form called a natural hazard disclosure statement (NHD or NHDS). Why create such a law? “Mitigation: avoiding development in hazardous areas Preparation: organizing contingency plans and supplies.  Response: mobilizing emergency services and equipment.  Recovery: rebuilding public works and private property.” (Detwiler, 1998)

In 1998, the Natural Hazard Law was passed creating an added responsibility to real estate agents, brokers, title companies, and interested parties. This document is required by the State of California in every single residential real estate transaction in order to close escrow. There are many natural hazards in California with high severity. If a home buyer, land developer, engineer, or investor want to be aware of potential hazards they might be able to find information if research was available. Now in many large cities pieces and bits of information could be found but it is time consuming and inconsistent. Areas of smaller population and underdeveloped often do not have any available information. This creates a danger and greater risk for real properties and might create a false sense of security, because most people assume if someone built something somewhere they obviously know what they are doing and there is no doubt that something could be wrong. Well people who make such assumptions could be surprised from the reality of their geographical state whether it is natural or man-made, natural hazards do occur even in the most populated cities. This is why the Natural Hazard Statement market was created. It allows for state and local maps to be researched properly. It also assigned a job to the State in answering a problem that the US government has wanted states to take care of. The State geologist, other state and local agencies, including the Federal Emergency Management Agency (FEMA), have now taken a critical role in making sure that areas of potential hazard are zoned and outlined and disclosed to those prospective buyers who live and will reside in California residential properties.

Natural Hazard Disclosure Statement: There are 6 elements that are potentially hazardous to a real property that a buyer must know about and a seller is strongly advised to supply. The responsibility falls on the seller or sellers agent. Depending on the zone and preference of the client, a property may be subject to other disclosures in addition to the ones mentioned here: Including; Mello Roos, Military Ordinance, Tax Report, Airport Noise Ordinance, Toxic Mold information, and Megan’s Law. Additional disclosure require an additional cost due to the extra research time.

A special flood hazard area designated by the Federal Emergency Management Agency.

An area of potential flooding in the event of a dam failure, designated by the state Office of Emergency Services.

A very high fire hazard severity zone designated by the California Department of Forestry and Fire Protection.

A wildland fire area that may contain substantial forest fire risks and hazards, designated by the State Board of Forestry.

An earthquake fault zone designated by the State Geologist.

A seismic hazard zone designated by the State Geologist.

(Torlakson, 1997)

When a flood zone for example is marked “yes” as in potentially hazardous, there is a 1/100 year chance that it will occur. This is the reality of the industry, and it is the responsibility of a business to provide accurate information with no room for mistakes. In depth preparation is required to ensure the best possible outcome for each NHDS produced by experts. We will also provide interested parties with the ability to transparently see what is important regarding the Natural Hazards required to be disclosed in a residential real estate transaction by the state of CA, in an effort to allow person(s) involved in the transaction to make smart decisions in buying their real property.

Although the Natural Hazard Disclosure Statement (NHDS or NHD) is such a minute part of a real estate transaction often looked over buy agents, buyers and sellers, it is required to close escrow and in the rare times that disasters occur, it is the responsibility of a NHD expert to report real facts to protect the buyer/seller of a property and their agents. By providing full disclosure, transparency is created and confidence is built in a real estate investment. Awareness is increasing and buyers are now increasingly becoming fearful of areas of potential flooding, areas of potential seismic activity, and wild fires in respective order of most feared to least. This information was derived from a research report that surveyed a population of California residence and recent home buyers. The report mentions that buyers who were not aware of the NHD would now take it into consideration for their next home purchase and they ranked their fears from highest to lowest on the survey based on the hazards disclosed in there NHD report. What most home buyers do not realize that some are now, is that with increased risk to the property comes increased insurance costs. Some areas mandate them if one of the potential natural hazards is marked “yes”.  (Austin and Romn, 2006).

This industry of natural hazard disclosures is growing because of the inevitable fact that humans are increasing in population, with an increase in the percentage of natural disasters in every continent, and an increased need for awareness to be built. These trends set up a world where caution is eminent. In this economy people are careful about buying a home, because it’s a big investment and a long term commitment. Home owners aren’t going to get out of their homes fast like before and buy numerous times in their life. And those who are buying multiple times are investors, or they are wealthy. In any case, proper preparation is required and every step of precaution must be taken to help make better decisions.

Work Cited

       Assembly Member Torlakson, Assembly Member Strom-Martin, and Senator Kopp. "BILL NUMBER: AB 1195." CERES. California Enviornmental Resource Evaluation System, 1997. Web. 13 Apr. 2012. <http://ceres.ca.gov/planning/nhd/ab1195.html>.

       Detwiler, Peter M. "Show and Tell: The New "Natural Hazard Disclosure Statement“." Www.ceres.ca.gov. 1998. Web. 2012. <http://ceres.ca.gov/planning/nhd/showtell.html>.

       Troy, Austin, and Jeff Romn. An Assessment of the 1998 California Natural Hazard Disclosure Law (AB 1195). Detailed Research Findings. California Policy Research Center, University of California, 2006. Web. 2012. <http://www.uvm.edu/~atroy/cprctroy.pdf>.

The Advantages of Multi-Unit Investing

Elizondo Mendoza
Finance-180
Blog-2

Flipping single family units has received more exposure than multi-unit housing over the years. This is due to the media attention it has been receiving with reality TV shows such as Flip This House and home improvement shows. However, investing in multi-family units might be a better option to consider for people who have money saved, and are looking to earn more money on their investments in a market that is currently booming. Usually the investors believe that buying single-home units will get them a good foothold in this particular market and they don’t have to invest a huge amount. This is outright a misconception. In a multi-unit investment, you can find more tenants and better cash flow compared to single units or homes (Kim and Charles). The extra money coming in from different tenants can be used to quickly payoff the mortgage and also to cover any maintenance expenses.

            Economies of scale are in favor of multi-unit apartments because all the tenants are consolidated in one place as opposed to somebody that has a couple of houses spread out throughout the city. This makes it easier on the investor not only to collect rent, but also provides other advantages. Some of these advantages are seen when performing repairs or performing maintenance on the units. One only has to worry about fixing one roof, and taking care of one lawn, as opposed to 3 roofs and 3 lawns for somebody that owns 3 houses. It also tends to cut down on the amount of risk because if a tenant moves out of the apartment then one can still rely on the cash flow from the other tenants. But when the owner that is renting a house has a tenant who moves out, then there is no money coming in until he or she can find a new tenant. Although multi-units cost more than single family units, one can always look around for triplex and duplex houses that go for just about the same price as a single family house, except there will be more tenants which results in more cash flow.

             Since multi-units cost more than single units, the profit that is earned at the time of the sale is also greater because of the appreciation accumulated from the acquisition price. If a $120,000 single unit house appreciates at 10% it will be worth $132,000 as opposed to a multi-unit apartment with a price of $320,000 that appreciates at 10% will be worth $352,000, which ends up being $20,000 more. Another thing to take into consideration when looking to invest in multi-units is that there is less competition when comparing it to the market for single units. There is a lot less competition than there is in single family houses. Why? Because no one is out there teaching how to do it and all the single family guru’s make flipping single family houses sound as easy as chewing gum in the dark (Lindahl 2011).  obviously, investing in a market where there is less competition increases the opportunities to make a profit.

             Investing in a multi-unit place might be easier said than done, as there are a couple important things one has to take into consideration in order to minimize risk and maximize profits. It is not just about securing a loan, purchasing a building, housing a few tenants, and watching the money pour in. In order to minimize risk as much as possible one has to due diligence and perform a thorough rental market survey. It is imperative for investors to incur about rental market trends for apartment vacancies, cap rates and future developments that might have a positive or negative effect on the property. When scouting for a potential place to invest, it is important to look out for rental signs and ads. These may be clues that rental units are down. However, if it is the opposite then it can be a good place to invest. If an investor is going to take the plunge into investing, then it is important to learn the fundamentals.

             Overall, there are many advantages when it comes to investing in multi-unit apartments. Savvy real estate investors have multi-units as part of their portfolios along with single-family units (Koonar 2009). For young investors who are skeptical about investing in a large project, they can always start off with small single units until they gain the experience and knowledge necessary in order to succeed in real estate investing. Once they have the confidence and are looking to make serious money, then including multi-units to their portfolio will be a smart choice.

                                               Works Cited

Kris Koonar (2009). Begin With Single-Family or Multi-Unit Rentals? Retrieved from http://eemazier.suite101.com/begin-with-singlefamily-or-multiunit-rentals-a112563

Kim&Charles Petty. Advantages Of Investing In Multi-Units. Retrieved from http://www.reidepot.com/articles/Petty-Charles/Advantages.html

David Lindahl. (2011)The 5 Money Making Advantages Of Multi-Unit Investing. Retrieved from http://www.reiclub.com/articles/multi-unit-investing

psantacruz blog2

Pedro Santacruz

Construction

4/11/12

Dr. Hansz

What is construction and how is it developed?  There are so many questions regarding construction, zoning, and building codes.  These are the main questions and regulations when one tries to build any type of building in the United States.  Construction has different types of construction that depend on what type of occupants it will have after it is completed and what its use will be.  That is a major question because depending on the type of use will determine the type of fire rating it will have.  Another factor to consider is the number of stories that will determine the type of classifications of the building.  The building plans and the building permit are generally the first steps to take for any construction.  One major constrain that government has over constructions is the accessibility standards also known as the American with disabilities Act (ADA).  Every building has to pass the state and federal regulations.

What are the types of construction and how are these determine?  There are five different types of constructions.  These are determined based on its hazards towards the occupants.  The higher the fire resistivity of the building the smaller the hazards to the occupants.  The International Building Code is who classifies the type of the building.  In order to classify a building the floors, roofs, columns, beams, exterior walls and the exterior partitions will be checked.  These will be checked to determine the degree of fire resistance. 

Type І is the most fire resistant construction and type V is the least fire resistant.  Type І and type П are composed of noncombustible elements using materials such as steel, concrete and masonry.  These elements are used on the structural frame of the building including the exterior walls and the roof.   

Type Ш and type ІV constructions are made using noncombustible and combustible materials.  The exteriors walls of the building are made out of noncombustible materials and the interior of the building is composed out of combustible materials such as wood or wood based materials.  The frame is mostly constructed out of wood. 

From type one to type four there is a subdivision that further explain the compositions to the structural framing of the building whether is wood combustible or wood non combustible.  The main difference of type V is that the envelope and the structural framing of the building do not need to be fire rated. 

Zoning is another major element to consider when seeking constructing a building.  Zoning ordinance also known as zoning code is a document required by the planning laws of the city or county.  The primary use is to regulate the use of the land according to the laws of the city.  Cities have created different district groups that determine the use of the land.  The district groups are the Residential groups, Commercial district group, Industrial district group and the Special district group.  All of these groups are subdivided in to several other groups that further explain the use of the building.  For example the commercial group is divided in to professional, office, retail and business. 

Zoning map and Zoning text are two other restrictions that talk about the use of the land for the present and future.  Zoning map for example explains how much land can be used for residential use.  The city will limit the use of residential housing because later on in the future the expansion of the city might require fire stations, shopping centers, schools and hospitals. Zoning text on the other hand means that city has a limit on the ground coverage and the floor area that can be used.  The ground area that can be used depends on where is located.  These two areas are powerful restrictions that limit ground coverage and volume of a building. 

Building codes are enforceable by using the police powers vested in government as it is mention in the book by Julian Diaz and Andrew Hansz ( Real State Analysis Environments and Activities).  The local government enforces a series of inspections during construction and after construction to ensure the building is being built following the local codes.  The local codes will inspect the plumbing and the slabs very carefully to insure that the building will pass.  After the building passed all inspections the developer will apply for a certificate of occupancy.

This is a brief description of the main components that take place when trying to construct a building.  These are the rules and regulations that have to be followed in order to obtain a building permit and use it the building after its completion for its intended purpose.  Zoning and building codes are enforced by the city, the county, state and federal laws.  These rules and regulations are to ensure the welfare of the citizens and occupants of the building.    

Works Cited

Diaz, Julian, and J. Andrew. Hansz. Real Estate Analysis: Environments and Activities. Dubuque, IA: Kendall Hunt Pub., 2010. Print.

Mehta Madan,Walter Scarborough, Diane Armpriest. Building Construction: Principals, Materials, and Systems. New Jersey: Upper Saddle River, 2008.

Mulligan E. Donald and Kraig Knutson.  Construction and Culture: A built Environment. 2^nd Ed. Illinois: Champaign, 1999,2000,2004.