Burt M. Polson | Napa Valley and Vallejo's Commercial Real Estate Broker

Guiding you through the real estate part of your life™

Commercial Sales, Leasing, and Consulting

Private Equity Real Estate Funds

Napa Valley and Vallejo, California

Qualifying tenants - part 2

You are familiar with qualifying tenants and administering leases if you own investment real estate.  Whether your rental property is a house or a big box STNL (single-tenant net leased) property occupied by an Office Depot or Whole Foods you have qualified a tenant and executed a lease.

In part 1 of our focus of discussion was for a residential tenant, which is usually an individual or several individuals. Qualifying a tenant of this type is a simple process where you have the applicant complete an application, and as the landlord, you obtain credit, eviction, and criminal reports as well as contact their employer, past landlords and references.

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Qualifying tenants - part 1

Investment property owners must evaluate prospective tenants’ creditworthiness as an essential part of creating a solid return on their investment while mitigating any future potential issues.

It is essential to be thorough in evaluating and qualifying a prospective tenant for single-family rental homes. Many issues can develop from a tenant who may lack integrity in paying rent on time or even worse damage the property.

In commercial real estate investments, the value of the real estate is directly tied to the income derived, and therefore the tenant’s creditworthiness is essential. However, as in residential real estate much can go awry with the tenant’s use of the property.

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"On the hook" with a listing agreement - part 2

In part one we discussed the three basic types of listing agreements.

I left you with the following question regarding the broker getting paid a commission for their efforts: “What if a potential buyer and seller talk and agree that when the broker’s listing agreement period expires they come together, execute a purchase agreement and consummate a transaction effectively cutting the broker out of the transaction and a commission.”

The listing agreement protects the broker for a set period of time against this provided a broker registers all the potential buyers who toured the property or made an offer that failed. If the seller and buyer consummate a sale during the period of time after the expiration of the listing the broker will still receive a commission.

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"On the hook" with a listing agreement - part 1

If you sold or leased real estate with an agent or broker, you probably signed a listing agreement, or what is formally called an “exclusive authorization and right to sell,” or “exclusive right to represent owner for sale or lease of real property,” depending on the form used.

Just as the title implies, the property owner is giving the real estate broker the exclusive right to represent them and their property in marketing and eventual transaction. There are also less exclusive representations called an “agency authorization” and an “open listing.”

A broker representing a seller has a fiduciary duty of care, integrity, honesty, and loyalty to their client. Did you know the seller has specific responsibilities as well in their representation to the broker?

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Understanding the ADA - part 3

Part one of Understanding the ADA (Americans with Disabilities Act of 1990) highlighted the difficulty many commercial property and business owners have in understanding and implementing the ADA.

Part two highlighted how to determine if your property complies, the benefit of hiring a Certified Access Specialist (CASp), and checking your lease to determine ADA responsibility of the tenant premises.

In this article, we will answer some specific questions.

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Understanding the ADA - part 2

Part one of Understanding the ADA (Americans with Disabilities Act of 1990) highlighted the difficulty many commercial property and business owners have in understanding and implementing the ADA.

One may ask: “How do I determine if my property is in compliance and how do I get my property into compliance before delivery of a notice from an attorney informing me to do so?” Continue reading for more information and also look for part three where we answer your specific questions.

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Understanding the ADA - part 1

The Americans with Disabilities Act (ADA) law from 1990 in part works to ensure access to offices, stores, restaurants and other businesses by all people including those with disabilities and makes it unlawful to discriminate against people with disabilities.

California’s Title 24 of the Building Standards Code outlines regulations more stringent than the federal ADA guidelines and were actually in place before the federal ADA guidelines.

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How to predict the real estate cycle and profit - part 2

I have not lost my mind. I am not offering a “get rich scheme” or a secret way of “timing the market.” The truth is these teachings usually found at high-energy seminars are full of hot air.

Profiting in investment real estate takes time. There may be a few outliers who tell you how they doubled their money in three months flipping a property, but these are not all that common.

Knowing the real estate cycle can give you a strategy of when to buy, hold and sell as well as what to look for in a potential investment property.

In part one, I provided you an overview of the first two phases of the real estate cycle, recovery, and expansion. Phase 1, recovery, is when the market starts looking better after a recession. You may find vacancy rates decreasing, the Federal Reserve potentially lowering interest rates, and people begin to find jobs.

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How to predict the real estate cycle and profit - part 1

Is it possible to know what the real estate market is going to do in the future? Sorry, to get your hopes up, but there is not a way to foretell what the market will do tomorrow.

However, there are methods to predict what may happen based on trends that occurred in the past. Analyzing the trends in the financial and real estate markets over many years gives economists the ability to recognize a cycle.

Want to know how to profit during each phase? Review “your strategy” in each section below to find what you can do as a savvy investor.

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How to spot a scam in ten steps or less

No one wants to be taken advantage of, but there are plenty of unscrupulous people who want your money and are devising ways to get it.

Scam artists, unfortunately, have always been around us. In the past, they may have been easier to spot, but they are getting craftier and to me in more abundance.

Here is my list of how to spot a scam in ten steps or less:

Step 1 - the unconventional transaction

An unconventional method of executing the transaction could be the first sign of a scam. If the first question you ask yourself is, “That’s a strange way of doing that?” you should probably stop there.

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A snapshot into my private resources

Several of the resources real estate brokers use can cost upwards of $1,000 dollars or more per month. Brokers use several resources with many more thankfully in the range of less than $100 per month, with many being free.

Many of these are not all that private.

Here are a few of my private and free resources you might find helpful. The first website you should go to is burtpolson.com for my current articles and archive of every article I have written.

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Do your due-diligence diligently

If you are purchasing real estate, you probably want to know what you are getting yourself into and perform due-diligence.

I purchased a used truck and was able to negotiate what I thought was a good deal--only if I knew then what I know now I would have passed.

I soon discovered after closing the deal that my truck was driven hard during the first few years of its life in the Canadian wilderness by a contractor for the oil business. You can imagine the hidden wear and tear about every inch of the truck experienced. Well, I do not have to imagine--I have become good friends with my mechanic.

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Retail trends and predictions

The news media tells us Amazon is disrupting the retail industry causing stores to close. Retail is evolving, and it is not all negative.

Below are five trends and predictions in the retail industry.

Who wants to shop at the mall?

Our regional mall that opened over thirty years ago at the time consisted of 150 stores including Emporium-Capwells, JCPenney, Sears, and Mervyns. A cinema and video arcade were the entertainment.

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5 avoidable risks for commercial property owners - part 1

“I thought the only risk you had was making sure the rent check cleared the bank,” exclaimed Paula, a friend of mine who is considering investing in commercial real estate.

Jokingly, I had to explain that investors do not just sit back collecting rent checks each month. There are ongoing responsibilities an owner should perform during her ownership to not only ensure a happy tenant but also mitigate risk.

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Shaking up real estate values with the new fault maps - part 2

The Napa earthquake of 2014 likely affected the value of several homes close to the fault with several owners finding it may be difficult to sell at some time in the future.

In part one, we reviewed the new Alquist-Priolo earthquake fault zone map which now confirms the location of the fault running from north Vallejo, through American Canyon up through north-west Napa.

When examining a map, you will find a yellow-shaded area following the actual fault and averages a quarter of a mile in width.  This area is where development could be restricted.

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Real Estate Applications of the Tax Cut and Jobs Act

Mortgage Interest Deductions (For taxpayers who itemize)

  • The mortgage interest deduction for existing mortgages of up to $1 million (for principal residence and second homes, combined) taken out before December 15, 2017, will not be affected. Homeowners may also refinance mortgage debts existing on December 14, 2017, up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
  • For any new loans as of January 1, 2018, (for principal residence and second homes, combined) the deduction will be limited to interest on $750,000 of principal.
  • The interest on home equity loans will only be deductible if the proceeds are used to substantially improve the residence.
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Shaking up real estate values with the new fault maps - part 1

I recall going on a run at Alston Park in Napa after the earthquake to find a six-inch crevice that opened up across several trails. Previously living in Browns Valley in Napa I pinpointed the location of my former home on the new Alquist-Priolo earthquake fault zone map to find the house is now within the yellow block signifying it lies within the earthquake fault zone. I am thankful I sold when I did.

When I purchased the home, I suspected the fault was in the area of Century Oaks Park based on previous maps, so I always had bought earthquake insurance. I sold the home back in 2011 and had never experienced an earthquake in that house.

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Salvation Army provides housing for culinary students

Substance abuse and homelessness are part of our community in the Napa Valley, and The Salvation Army of Napa Valley’s Culinary Training Academy was established to make a difference in the lives of those needing a second chance.

Lack of affordable housing in Napa is a dilemma not easily solved. Losing a job or experiencing tough times that takes away your earnings potential is a reality that touches us all.

The academy is a program that gives someone who has struggled with homelessness and substance abuse the independence, self-sufficiency, confidence, and dignity to pursue a professional job in local hospitality industries.

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