An ADU is a secondary dwelling unit with complete, independent living facilities for one or more persons and generally takes three forms:

•   Detached: The unit is separated from the primary structure

•   Attached: The unit is attached to the primary structure

•   Repurposed Existing Space: Space (e.g., master bedroom) within the primary residence is converted into an independent living unit

•   Junior Accessory Dwelling Units: Similar to repurposed space with various streamlining measures

ADUs offer benefits that address common development barriers such as affordability and environmental quality. ADUs are an affordable type of home to construct in California because they do not require paying for land, major new infrastructure, structured parking, or elevators. ADUs are built with cost-effective one or two story wood frame construction, which is significantly less costly than homes in new multifamily infill buildings. ADUs can provide as much living space as contemporary condos being built in new infill buildings, and serve very well for all types of households.

ADUs are a different form of housing that can help California meet its diverse housing needs. Young professionals and students desire to live in areas close to jobs, amenities, and schools. The problem with high-opportunity areas is that space is limited. There is a shortage of affordable units, and the ones that are available are out of reach for many people. To address the needs of individuals or small families seeking living quarters in high opportunity areas, homeowners can construct an ADU on their lot or convert an underutilized part of their home (like a garage) into a junior ADU. This flexibility benefits not only people renting the space, but the homeowner as well, who can receive an extra monthly rent income. ADUs give homeowners the flexibility to share independent living areas with loved ones; they allow seniors to age peacefully with room for extra care and help bring extended family members together while maintaining privacy.

Relaxed regulations and the cost to build an ADU make it an easy, affordable housing option. A UC Berkeley study noted that one unit of affordable housing in the Bay Area costs about $500,000 to develop, whereas the highest price for an ADU goes up to approximately $200,000.

ADUs are a critical form of infill-development that are affordable and offer important housing choices within existing neighborhoods. ADUs are a powerful type of housing unit because they allow for different uses and serve different populations: ranging from students and young professionals to young families, people with disabilities, and senior citizens. By design, ADUs are more affordable and can provide additional income to homeowners. By encouraging the development of ADUs, local governments can improve access to jobs, education and services for many Californians. 

With the economic uncertainty that arose due to the coronavirus pandemic, it was expected that remodeling projects and housing changes would decline drastically.  However, people who have been working from home and have accessible income may be pondering the idea of renovations to increase home functionality.  To effectively conduct a renovation, one must contact contractors and designers for advice.  Below we’ll discuss 3 tips for executing a home renovation.

Tip #1: Make Sure Everyone Involved Is On The Same Page 

Have a plan for the work you want to get done.  Make sure every contractor/designer knows their duties, and clearly outline the details of the project along with who is leading it.  Miscommunication can have drastic consequences. 

Tip #2: Construct an Agenda 

Prepare for mistakes and construction issues by giving yourself enough time on the schedule to recover from any possible missed deliveries, declined permits, or natural disasters.  Throughout the renovation, schedule multiple meetings with everyone involved in the project (contractors, designers, and service providers) to ask questions and discuss new information.  Joint meetings allow everyone in the party to come together to create an effective, efficient plan. 

Tip #3: Carefully Choose the Contractors, Designers, and Other Workers Involved in Your Renovation

Ensure you know their skills and experience, and discuss the building blocks of your renovation plan to gage their perspectives.  Even though lower prices are appealing, accepting them may entail a sacrifice of product quality and craftsmen experience.  Do not be afraid to question the choices your contractors make; open communication is necessary for a successful home renovation.  Guarantee an outstanding home transformation by choosing the best fit for you, whether it’s contractors or paint colors.  

To read Michael Lerner’s full article, click the link below. 

https://www.washingtonpost.com/business/2020/07/17/tips-handling-major-renovation/

A foreclosure occurs when a borrower does not maintain their mortgage payments, and the lender who gave the loan reclaims the property and sells in an attempt to regain the money that was lost. 

Steps Leading Up to Foreclosure 

1. About 2-3 weeks after you’ve missed your first mortgage payment, a letter from your lender will appear in the mail detailing the past due payment and describing the possible measures that will be taken if the mortgage payments are not made.  Usually, lenders will provide a grace period of about 10-15 days where late payment can be made free of penalties.

2. You will receive multiple methods of notifications (calls, messages, letters, etc.) if you continue to miss payments.  Late-payment penalties may be instituted by the bank.  

3. After 90 days of missed payments (3 mortgage payments), a notice of foreclosure in 30 days may be issued to you by your lender. 

4. The lender is allowed to begin foreclosure after 120 days of missed payments.  Depending on the state, the process may take from one week to one year.

A foreclosure forces the eviction of all the tenants living on the property.  To prepare the property for a resale, the locks will be changed and the premises will be secured.  Timelines and foreclosure policies depend on the town and the lender; the local economic standings may also affect how the foreclosure functions. 

Impacting your credit 

A foreclosure entry will appear on your credit report, and it will stay there for seven years from the date of the first payment you missed.  Foreclosures are seen as damaging entities in your credit history, and influences the judgement of creditors.  It will also affect your credit score, but the weight of that effect depends on the state of your score beforehand.  The action that most negatively impacts credit scores are missed payments, so the odds are your credit score will be significantly lower if you undergo a foreclosure.  

Foreclosure Alternatives 

More often than not, lenders prefer to avoid the time consuming, expensive process of foreclosures whenever they can.  Within their missed payment notices, lenders will list a lender representative for you to speak to for help.  Utilizing that opportunity could lead you to a financial recovery.  It is possible to negotiate a new payment plan with your lender (provided you agree to fees and a higher interest).  Worst case scenario, this gives you time to find a buyer for your home that way you profit off of the sale.  You may also get your lender to agree to a short sale, but that is an unfavorable option for both parties.  A short sale entails you selling the house for the highest price you can get, and the lender will accept the proceeds of the sale as a form of settlement for your mortgage loan.  Though this option is viable, it provides no benefits to the client.

Explaining Foreclosure Sales 

Foreclosures provide some great opportunities for homebuyers with determination and willingness to accept a potentially challenging estate.  Homes that have been foreclosed have the potential to be sold at a cheap price, but it is best to know the risks before you enter the world of auctions or lenders.  

My House Has Been Foreclosed, Now What? 

Foreclosures can have substantial effects on your credit score that will take at least a couple years to recover from.  The best approach you can take in this situation is to start rebuilding your credit.  Stay consistent and patient; your credit score will eventually return to a good standing. 

To read Jim Akin’s full article, click the link below. 

https://www.experian.com/blogs/ask-experian/what-is-a-foreclosure/

Many people are oblivious to the different kinds of trusts and the purposes trusts serve to maintain estates.  Below, the two basic trusts are compared: revocable and irrevocable. However, when firmly deciding which trust to invest in, a discussion with an attorney will provide you with in-depth information and professional guidance. 

The terms of a revocable trust can be changed at any time, whereas an irrevocable trust cannot be modified without the approval of the beneficiaries. If you choose to put property in a revocable trust, you maintain the ownership of the trust and have complete control over it.  The property can always be taken out of the trust, and you control everything that happens to it.  In terms of the IRS, revocable and irrevocable trusts are treated the same.  However, if you choose an irrevocable trust, you essentially lose personal control over it.  The trust claims ownership over the property and controls its future.  The former owner of the trust (you) would not be able to remove the property from the trust or sell the trust itself.  The future of the trust can only be controlled by the beneficiaries. 

Choosing which trust is right for you depends entirely on your individual circumstances.  However, the purposes of each trust can be separated based on their standard uses: usually, irrevocable trusts are used for estate and federal estate tax purposes, and revocable trusts (a.k.a. living trusts) are initiated to evade probate issues but do not affect your federal income or estate income taxes. 

This decision should be made with the consultation of an attorney.  An attorney will be able to guide you and explain each type of trust in more detail.  With the information and purpose of each trust, you will be able to make an informed decision on what will most benefit you and your family. 

To read IIyce Glink and Samuel J. Tamkin’s full article, click the link below. 

https://www.washingtonpost.com/business/2020/06/17/purposes-revocable-vs-irrevocable-trusts/

When applying for credit or loans, your clean report will mean lower interest rates.  So if you have one or more negatives on your credit report, use the following strategies to fix it:

1. Dispute: If the business/company that reported the an item (the “Reporting Business”—this can be a bank or credit card, too) made a mistake, then contact them and dispute it !  Businesses are required by the Fair Credit Reporting Act (FCRA) to investigate and correct errors.  Insist that they correct their error with all three credit-reporting bureaus.  

2. Dispute Again: If the reporting business doesn’t fix it, contact the three Credit Reporting Bureaus yourself (again, this is if there’s an error involved).  The bureau is required by the FCRA to investigate and correct items that are wrong.

3. Pay to Delete It.  If it wasn’t an error, you can offer to pay the debt (with a pay-for-delete letter) if they will delete it from your credit report.  You could try offering a settlement instead of the full amount—no harm in trying!

4. Write a Goodwill Letter.  Ask the creditor for a “Goodwill Deletion.”  This works best if it was a one-time mistake on your part, such as a late or skipped payment.  The company doesn’t have to do it, or even respond…so just persuade them that you realize the error you made and explain that you’ve become more responsible now.  It’s worth a shot.

5. Wait It Out: This can take a long time, and the length of time varies.  However the impact of a negative item on your credit score will diminish with the years, even while it’s still there on your reports.  Meanwhile, try hard to keep new negatives from hopping onto the bus.

6. Hire a Professional Credit Repair Service.  For about $100 per month, a reputable service can help you correct errors, dispute negative items, and negotiate with creditors.  You can do these things on your own, but if your situation is complicated, this might be for you.  

Strategies That Won’t Work:

1. Filing for bankruptcy.  Sure, it can eliminate your debt—but it will ruin your credit score and will be visible on your credit report for seven long years.  Only do it if you are desperate!

2. Closing the account with the negative item.  Just don’t.  Doing so will not remove the debt.  It will lower your amount of available credit, thus damaging your credit-to-debt ratio on your credit score formula.

Regularly reviewing your credit reports is the best way to stay on top of your score.  Be patient and pursue all avenues when addressing problems.  Your credit score affects your ability to obtain credit cards, loans, insurance—and the interest rate for each of these.  For the full article, click here:

https://money.com/get-items-removed-from-credit-report/