CAREERS IN REAL ESTATE

CAREER OPPORTUNITIES &

LICENSE REQUIREMENTS

Types of Real Estate

Many & Varied Product Types & Sub-categories:• Residential (single family residences (“SFR”), 1-4 dwelling

units, condominiums, townhomes, vacation ownership, sea-borne residences)

• Multi-family (market rate; student housing)• Retail (Regional Malls, Power Centers, Neighborhood Centers,

Strip Centers, Triple Net, Public/Private Concessions, On-site Retail, street front)

• Industrial (warehouse, manufacturing, distribution, “pick-pack & ship”)

• Storage Facilities (household goods, art, wine, vehicles)• Hospitality (hotel, motel, hostel, resort, residences,

restaurants, bars, tourism/convention/visitor bureau) • Golf & Resort • Office• Seniors Housing• Subsidized & Tax Credit Housing

• Public Facilities Concessions• Entertainment Venues & Theme Parks• Hospital & Urgent Care Facilities• Assisted Living & Convalescent Facilities• Agriculture (crops, vineyards, orchards, live

stock)• Water Rights• Mineral Rights• Rights of Way & Easements • Religious Facilities• Energy Generation Facilities

(cont’d)

Urban Planning/Land Use• Government agency• Regional authorities (RWQCB, AQMD, CCC, CEC)• Economic, Demographic & Population Trends• Public / Private Partnerships (Grand Park; LA

River Project)

United States Green Building Council (USGBC)

• Green Building Design, Construction & Management

• LEED - Leadership in Energy & Environmental Design

Risk Management/Insurance• Construction (hazard, defect, wrap,

completion and personal guarantees) • Errors & Omissions• Liability• Fidelity Bonds• Workers’ Compensation• OSHA & ADA compliance• Human Resources• EDD compliance• Performance & Completion Bonds• Private Compliance Providers

Debt/Equity & Finance• Institutional Investment Funds• Institutional Investment Fund Advisors• Financial Analyst• Investment Banks (debt markets;

RMBS/CMBS• Lenders - A cornucopia of resources:

commercial banks; savings & loans; savings banks; corporate debt (e.g., GE Capital); mortgage banks; pension funds; life companies; private equity; credit unions

• Mortgage Broker• GSE’s: Fannie; Freddie; FHA; Ginnie Mae• Loan Servicing• Wealth Management

International Right of Way Association (“IRWA”)

• Senior Right of Way Agent (“SRWA”)• Mineral Rights; Rights of way (identification,

acquisition, easements); Utility Corridor Planning & Acquisition

Conservation Easements• Conservancy land acquisition (holding entities)• Conservation easements• Bureau of Land Management (“BLM”) - Land swaps

Agriculture• Agriculture (crops, live stock, vineyards, orchards,

etc.)• Water Rights (acquisition, sale, trading)• Timberland• Brokerage (sales, leasing)

Land Use, Entitlement & Development

• Urban Planning• Zoning & Government Regulation• Site Acquisition• Demographic Research & Analysis• Use studies• Land Survey• Title Insurance• Environmental Study, Review, & “Impact Reports”• Financial Modeling & Projections• Design: Architecture, Exterior, Interior• Engineering: Geologic, Civil, Structural, Mechanical• Construction & Project Management

Appraisal • Uniform Standards of Professional Appraisal Practices

(“USPAP”)

Commercial Real Estate Brokerage• Sales; Acquisitions; Like-kind Exchanges; Tenants in

Common (“TICs”)• Business Opportunities (“Bulk Sales”)• Listing Services (Reis, Loopnet, CoStar, AIR, etc.)

Residential Real Estate Brokerage • Single Family Residences• Planned Unit Developments (“PUD’s”) e.g.,

condominiums• Time Shares/Fractional Ownership• Listing Services (MLS, Internet, Zillow, Redfin, Trulia,

etc.)

California Bureau of Real Estate (“BRE”)

“The mission of the California Bureau of Real Estate is to safeguard and promote the public interests

in REAL ESTATE MATTERS through licensure, regulation, education and enforcement.”

BRE Home Page: Essential Information Verify a Real Estate License 2014 Real Estate Law Consumer Alerts Current News FAQs Department of Consumer Affairs Multiple Jurisdiction License Lookup Forms File a Complaint Real Estate Business Resources Complete List of Publications Invitation for Public Comment/Hearing Notices  Connect With Us:  Call BRE Public Information

Line 1-877-373-4LIC (4542)

Real Estate Licensing

Broker License 8 Approved Courses 2 Years of full time experience Pass State Exam Complete Application

Salesperson License 3 Approved Courses Pass State Exam Complete Application

Resources & Websites

Bureau of Real Estate http://www.bre.ca.gov California Association of Realtors www.car.org Apartment Association of Greater Los Angeles

http://www.aagla.org Franchise Tax Board www.ftb.ca.gov Institute of Real Estate Management (IREM) http://

www.iremla.org Franchise Tax Board www.ftb.ca.gov Dept. of Corporations http://www.dbo.ca.gov National Association of Realtors www.realtor.org Federal Reserve www.federalreserve.gov Dept. of Housing & Urban Development www.hud.gov IRS www.irs.ustreas.gov

RESIDENTIAL REAL ESTATE SALES

F. RON SMITH

Founder, Partners Trust Real Estate Brokerage

F. RON SMITHPARTNERS TRUST

25 years of service As an expert in new construction and advisor to my clients in everything from

home staging to color palettes and landscaping, I have successfully represented over U.S. $1,000,000,000. (that’s “billion”) in transactions

I collaborated with four talented associates and founded Partners Trust Real Estate Brokerage and Acquisitions in 2009. In just five years, Partners Trust has sold over U.S. $5 billion in real estate with 200 associates in seven offices. One of the key elements to the immediate success of Partners Trust is the company's ability to network directly with the best realtors in their markets.

A proud co-founder and President of Leverage Global Partners, which aligns the most prestigious independent real estate brokerage firms from around the world.

I credit my long-term success to my local expertise and strong community connections. I introduce my clients to both a home that fits their needs, and a neighborhood and community lifestyle that matches their interests.

I live in Brentwood on LA's Westside with Tracy, my wife of 26 years. I am enormously proud of our sons, Evan and Brandon. I enjoy travel, fitness, good wine and live music.

I am an active supporter of numerous charitable organizations, including LA Family Housing and Concern Foundation for cancer research. I am proud to be a member of the Executive Committee of USC's Lusk Center for Real Estate.

PROPERTY MANAGEMENT

So you want to manage your own SFR’s, & Condos as

rentals?

What Are Your GOALS… 1. Safety of Investment2. Cash Flow – passive income3. Tax Benefits – depreciation,

interest deductions4. Diversification of Investment

Portfolio5. Appreciation (over time)6. Pride of Ownership7. Equity Build-Up for Retirement or

Estate

LEARN THE BASICSManaging a Home:A “Simple” Outline

LEASING – marketing; keeping the property rent ready/clean; receiving inquiries; showing the property; negotiating rent; accepting applications and screening prospects; receiving funds & turning over the keys.

MANAGEMENT – move-in inspection; receiving communications from tenant; handling vendors; collecting rent; distributing notices; legal action – eviction, Government or or tenant; insurance claims; and unit turnovers for incoming tenants.

MARKETING STRATEGIES

Advertising MediumsInternet; apartments.com; postlits, Craig’s List; Zillow

Your own websiteProperty signageFlyersThird party agencies – MLS for Member real estate licensees

RENT Establish initial rental rate based on similar

product in your market, or “enough to cover your mortgage”?

Rent Increases:Economic Changes – what the market will

bare (excludes qualifying properties in rent control areas)

Nuisance – an increase not high enough to necessitate a move

Rent Control – government regulated increases – exempt: one detached single family dwelling per lot.

Federal Fair Housing Act of 1968

I. RaceII. ColorIII. ReligionIV. National OriginV. GenderVI. Familial Status (pregnancy,

medical condition, gender)VII. Handicap (disability: mental

or physical)

CALIFORNIA FAIR HOUSINGSTATE LAWS

In addition to the Federal Laws, CA has added: Ancestry Familial & Marital Status Gender, Gender Identity, and Gender Expression Sexual Orientation Children Source of Income Disability or Medical Condition Genetic Information Immigration or Citizen ship Status Religious Creed – dress and grooming practices

Prohibits discrimination and harassment in fact or perception in all aspects of housing;

Requires housing providers to make reasonable accommodations in rules and practices;

Prohibits retaliation against any person who has filed a complaint, participated in an investigation, or opposed any activity prohibited by the act.

Exception – Not applicable to an owner-occupied, single-family home/condominium who rents out a room in the home to a roomer or a boarder, and there are no other roomers or boarders living in the household & shares the living room, kitchen or bathroom.

CA Dept. of Fair Employment & Housing: www.dfeh.ca.gov

REDUCING FAIR HOUSING RISKS

1. Become familiar with Federal, State and local Fair Housing laws. The owner, mgmt. co. and/or building manager can and will be held personally and severally liable.

2. Review practices regularly to ensure that you and your staff understand the laws and company policies. Have written Policies & Procedures and train your staff.

Reducing Risks (cont’d)

3. Establish a documentation program. Whenever you or a staff member deviates from the normal routine or practice, document what you did, when you did it, and why.

4. Service & Support Animals – Allowed into all residential units. Animals of all types that work, provide assistance, or perform tasks for a benefit of a person with a disability, or animals that provide emotional support that alleviates one or more identified symptoms or effects of a person’s disability.

The Rental ApplicationRecommended Information

Residential: Name of all adults (18 yrs or older*) who will be occupying

the apartment Current address and date of birth for all adults party to the

Lease Social Security number for all adults, however, cannot be

required per AB976, 2007. Picture ID - Drivers License; State ID card; check birth date &

address, copy them for the file References – name, address, telephone bank acct. #, friends,

previous & current landlord; obtain emergency contacts (get at least two, one being a close family member)

Verifiable Income – sources: paycheck stub, Social Security voucher, income tax return, etc.

Signature of all adults on the application to allow you to obtain a credit report and other reference check reports

* Emancipated Minor – State Court approved

THE LEASEObtain a “current” Agreement with

Addenda.

An Agreement with a term of one (1) year or more must be in writing. However, even a month to month tenancy should be in writing.

California Civil Code requires a termination notice of at least 30 days if < 1yr., 60 days if ≥ 1 yr.; daily or weekly notices if those are the terms of the stay. Be aware of Gov’t Rent Control/ Tenancy laws that may supersede your notices.

Tenant ScreeningFollow these steps when considering a tenant’s application to

rent a

dwelling unit:

1. The applicant’s credit history is the best way to determine credit worthiness.

2. Review the application with the prospective tenant when it is first turned in. This will help confirm information and give them an opportunity to explain any issues you may encounter with their report. NOTE: First in first reviewed in accordance with the Tenant Selection Criteria/Policy.

3. Order a credit report and if policy requires, a criminal report and eviction report. Can charge up to $45.99 (Dec.2014), but cannot exceed actual cost for report plus reasonable value of time spent to obtain information.

4. In reviewing a credit report, check for: applicant’s rental history, collections, late payments, and debt to income ratios. Consider how medical service collection issues might have effected their payment record if applicable.

5. Obtain at least three year’s residency and employment history.

Tenant Screening (cont’d)6. Call at least one prior Landlord for referral. Please note that

the applicants current Landlord may not give an accurate recommendation if:

A. that Landlord wants that tenant out , orB. that Landlord does not want to lose that tenant.

Ask these questions:A. Is the rent current?B. Is the rent paid on time?C. Is the tenant being asked to leave?D. Is the tenant leaving before the expiration of the

Lease?E. Would the Landlord rent to this tenant again?

7. Call the employer and ask the following questions:A. What is the applicant’s annual income?B. How long has the applicant been employed?C. Is the position temporary or permanent?D. If the applicant has been employed for only a

short time, call the previous employer.

Tenant Screening (cont’d)

Bankruptcy is not necessarily a bad risk. Recent filers for Chapter 7 Bankruptcy are less likely to have debts and more likely to have cash for living expenses. Usually only can file Ch.7 but once every 8 years (consult with attorney for exceptions). It is important to determine why they filed. For example: medical bills vs. credit card (consumer) spending; Business/Investment vs. personal loans.

Your Tenant Selection Criteria can state that the Bankruptcy “has been discharged” and a 12 to 24 month period of no late payments of rent and/or credit is required thereafter.

Of course, current rent payment status is very important. If the applicant has previously skipped or failed to pay rent, it will probably happen to you, sooner or later!

Security Deposit LawsMaximum of 2 months unless the premises is furnished, then landlord can collect 3 months as a deposit. Accounting within 21 days of lease termination.

When notice of move out received: Inspection w/ tenant 2 weeks prior to move

out 48 hour minimum notice of inspection Tenant is not required to attend, but it is

recommended that they are there.

Damages to Owner for a bad faith security deposit refund could be up to 2 times the deposit amount plus the deposit,

What can you deduct – delinquent rent, cleaning and damages (with a receipt for costs/services rendered) – nothing can be collected for normal “wear and tear”.

MOVE IN/OUT INSPECTIONS

Move-In Inspection:Manager to complete form at the time of move-inGive tenant a copy of the signed inspection reportTake pictures before they move in

Move-Out Notice by Tenant/Landlord:Send letter confirming their notice and let them

know of the “pre” move-out inspection dateConduct inspection >14 before move out. Leave

copy of inspection in unit if unattended by tenant Post Move-Out Inspection:

Meet with tenant (if possible) just after they move out

Give/send copy of report (signed by tenant if possible)

Include inspection in Security Deposit reconciliationTake pictures after they move out

PERMISSION TO ENTER

Emergencies – i.e., fire, water issues Verbal or written authorization from

tenant for service requests Owner’s request for entry (24 hour

Notice) to show to prospects for sale/rent, lender, appraiser, gov’t officials, etc.

Abandonment – recommend 2 people present, take pictures

Court Order – at any time, no notice required

LICENSED & UNLICENSED CONTRACTORS

Licensed Contractors:◦ Pass and exam for their license type – B, C-10, C-27 ◦ Bonded, Insured, Can pull permits◦ Can lien property for non-payment◦ Check for licensing with the California State Licensing

Board (“CSLB”) at www.cslb.ca.gov or (800) 321-CSLB

Un-Licensed “Handyman”:◦ Not required to have insurance◦ Cannot pull permits or lien for non-payment◦ Work limited to $500 (labor & materials) or

misdemeanor charges can be brought against them.◦ Labor charge lower than contractors – less recourse

options to get the work completed or uphold warranties.

CONTRACT TIPS Develop a “scope of work” Get several bids and check references. Require a written contract, and don’t sign it until

you understand the terms. Maximum ten percent (10%) or $1,000 as a down

payment whichever is smaller (for single family homes).

Don’t pay cash and don’t let the payments get ahead of the work. Put together a progress payment schedule if the job warrants it.

Common to have ten (10%) retention of the total contract amount until 10 days after the work is completed: 1) to make sure the job is done right; and 2) all subcontractors are paid, no liens.

Owner should record a “Notice of Completion” for large jobs.

SMOKE / CO DETECTORS

I. Carbon Monoxide (“CO”) detectors required in each dwelling unit intended for human occupancy with fossil fuel burning heater or appliance, fireplace or an attached garage.

II. Smoke Detectors – 1/1/14: owners of SFR required to test and maintain smoke detectors.

III. New battery operated smoke alarms being manufactured for 1/1/14 deadline. 10 yr. life battery that makes the unit disposable.

Landlord’s Responsibility- Habitability -

1. Nine points from Civil Code 1941.1, Green v. Superior Court (1974), “every residential lease had an implied warranty of habitability which the tenant cannot waive”.

2. Breaches of habitability can allow tenant to withhold rent until repairs are made.

a) must give written or verbal notice;b.) allow a reasonable time to repair.

3. After a reasonable time, tenant may personally do or contract for the repair and withhold amount from rent used to repair (CC 1942). Tenant can withhold up to one full month’s rent, twice per yr.

CA HABITABILITY REQUIREMENTS FOR A DWELLING UNIT

1. Effective waterproofing and weatherproofing of roofs & walls.

2. Unbroken/secure doors and windows3. Plumbing in good working order – hot & cold

running water; connected to sewage line.4. Heating & gas facilities in good working order.5. Unit’s electrical (lighting, wiring & equipment)

system in good/safe working condition.6. Clean and sanitary buildings, grounds &

appurtenances which are free from debris, filth, rubbish, rodents & vermin.

7. Adequate trash receptacles in good repair.8. Floors, stairs and railings in good repair.9. Compliance with building and housing code

standards.

Addt’l Habitability Standards

10. Working toilet, wash basin, and bathtub or shower.11. Kitchen with a sink, not made of absorbent

material.12. Natural lighting in every room.13. Operable deadbolt locks on main entry doors

and locking or security devices on windows.

UNLAWFUL ACTS BY A LANDLORD

Tenant Lockout (key change) without Court Approval

Seizure of Tenant Property

Removal of Doors and Windows

Shutting off of Utilities (fine of $100 per day, plus damages)

Trespassing – jail time if prosecuted by D.A.

EVICTIONWhat a Landlord cannot do:

A. Retaliatory Eviction – If tenant legitimately complains about property issues: habitability, exercising legal rights (suing Landlord) or joining a tenant union, Landlord cannot evict or increase rent for 180 days if complaint is habitability. Complaint can be oral or in writing.

B. Constructive – Landlord turns off utilities, changes locks, etc. CC 789.3, $100 per day for each violation.

C. If in Rent Control – can only evict for “just cause” (see City housing department for definition.

Actual Eviction (court ordered) – hire an attorney, proper Notice to tenant, Unlawful Detainer case filed, proceedings through Superior Court for the State of CA.

Eviction after Foreclosure (5/10) – If new owner want to move in.1. Tenant on a M-T-M, 90 day notice2. Tenant on a Lease, 90 day notice after lease term

expires unless tenant is related to the former owner.3. Affirm City statutes for current regulations.

SERVING AN EVICTION NOTICE(GENERAL STEPS)

◦ Serve the resident with a Notice to Pay Rent of Quit Do not include amounts other then base rent

for that month Personal Service to the named person on the

lease or a responsible adult. If resident or adult not home, post notice and

mail a copy. Complete a Declaration of Service.

◦ Wait the appropriate # days and then have an attorney file an Unlawful Detainer action Do not count the day Notice was served Last day must fall on a business day.

Pacific National Property Services, Inc.

Services Include: Maintenance and Remodeling Apartment unit and grounds cleaning Temporary Personnel Consulting and Training

Don Brenon, CPM®

President310-926-8823

dbrenon@pacific-companies.com

Serving the greater Los Angeles & Orange Counties.

© Copywritten material, cannot reproduce without written consent of presenter

QUIZ

1. The California Bureau of Real Estate (“BRE”) issues how many different types of real estate licenses?

a. one

b. two

c. three

d. four

2. California real estate law requires all Sellers of single family residences (“SFR”) to pay a real estate commission equal to __% of the gross sale price.

e. 2%

f. 5%

g. 6%

h. There is no California law that requires any payment of any real estate brokerage commissions to any real estate licensee, upon sale of any SFR

3. In California’s residential real estate market, the customary gross commission Seller should pay is:

a. 2%

b. 5%

c. 6%

d. there is no customary commission amount

4. Which of the following is a legally valid form of commission payment to a real estate licensee?

e. money and/or promissory notes

f. an equity interest in the acquired property

g. personal property

h. any of the above

5. Which home renovations and/or remodeling projects most often return at least the original capital investment upon resale of the home?

a. kitchen or bathroom remodel

b. adding one bedroom

c. installing a swimming pool/spa feature

d. installing a new energy efficient/fire resistant roof

e. adding a 2-car garage

f. installing an outdoor cooking/dining area

  6.The market value of single family residences always appreciates.

g. true

h. false

7. To obtain a real estate salesperson license in California, an applicant is required to successfully complete more credit hours than a:

i. doctor, electrician, psychologist, or chiropractor

j. veterinarian, architect, lawyer, or commercial airline pilot

k. cosmetologist, police officer, chef, or CPA

l. personal trainer, plumber, or dental assistant

m. none of the above

8. Freda, a 39 year old single woman, owns, as her sole and separate property, a 10 acre, 180° view bluff-top, single family residence appraised at $25 million, on the edge of Toyopa Drive in Pacific Palisades overlooking the Pacific Ocean. The property is free and clear of all liens and loans. Freda fell in love with her new bf, 23 year old Jay-Sea-Vu, who has just arrived from Texas and moved in with her as he begins his singing career in Hollywood, and has convinced Freda to marry him. Upon marrying and immersed in wedded bliss, Freda’s Toyopa house:

a. automatically becomes Community Property, ½ owned by her husband, Jay-Sea-Vu

b. can never become Community Property

c. may gradually become Community Property during the duration of the marriage

d. remains her Separate Property until she decides to allow it to become Community Property

THANK YOU

WE LOOK FORWARD TOSEEING YOU

&TEACHING YOU

IN OUR CLASSES !

UCLA EXTENSION