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David Dardashti – Real Estate Investing and Lessons From UC Berkeley

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David Dardashti - Real Estate Investing and Lessons From UC Berkeley

David Dardashti

A man who has been all around the media lately is David Dardashti. Born in Iran, David moved to the U.S at the age of 12, fleeing racist persecution in his home country.  Residing in Chicago, he and his family had a difficult time in their first few years in America.  Not knowing much English and coming to the U.S with barely any possessions forced David’s family to start fresh, as they left their home and almost all their personal belongings back in Iran.  Fast forward around 6 years and David was accepted to the prestigious University of California Berkeley, a school he dreamt of attending.  Still struggling with English and adapting to his life in America, he pushed through and graduated from UC Berkeley with the class of 1998, moving back to Chicago right after.  Ever since then, he has been working at precious firms in Chicago’s famed financial district, learning market trends and making his clients wealthier along the way.

While David enjoys his day job and has worked in the financial industry for 2 decades, he tells us real estate investing has been one of his passions in generating more income and building wealth.  It gives him a lot of control over his investment versus stocks, allowing him to customize his properties and decide specifically what he wants to own. When talking to David, he tells us that real estate is misunderstood by the general public.  It is seen as a time-consuming task and not the “passive income” we all dream of.  Additionally, people don’t see how amplified returns in real estate can get using different tools such as tax write-offs and leverage.  In this article, we are going to outline the different ways David tells us he amplifies his real estate returns and how it’s completely possible to make a 30% or more return per year on a good deal.

First, David recommends getting preapproved for a loan with hopefully good credit.  It isn’t very difficult to build good credit nowadays, all it takes is monthly on-time credit card payments for about a year and you’ll get the best loan possible.  The reason you need a loan is to leverage your money.  With 20% down and the rest as a loan, a $100,000 investment can buy $500,000 in real estate vs only buying $100,000 without leverage.  Once you found a property and have the loan set, it is time to find a deal.

David tells us that a lot of the money in real estate is made in the deal itself.  Compared to stocks where the price between buyers and sellers agrees for the most part and is easily determined, real estate has inefficiencies in the market.  Properties aren’t like stocks with thousands of buyers and selling giving it a perfect price, allowing investors like David to take advantage of these inefficiencies.  David likes to find off-market properties and the so-called worst house on the block in a great area that is increasing in population.  A “fixer-upper” he says.  This allows him to buy it below market value, but some work into easy renovations, and immediately increase the value of the property over what you paid for it plus what is owed on it.  Even better, this is simply equity in the property that increases your net worth and is not gained as ordinary income is.

The next way you are making money is in property appreciation.  Real estate on average returns around 3% per year historically, but properties in well-picked areas tend to increase more.  While many people may think this is a mediocre return compared to the average of 7-10% of stocks, this is where our leverage comes into play.  A $100,000 investment in stocks that makes an average return of 7% will increase your net worth by $7,000.  However, we leveraged our $100,000 to buy a $500,000 property with a loan paying for the rest.  Therefore, a 3% return on our property, while less than the 7% in stocks, works out to a $15,000 return, more than double in the stock market!  Appreciation works heavily in our favor because we have a set loan amount that doesn’t increase as the property value increases so over time, the property value increases and we only put $100,000 of our own money into the investment.  This might raise the question of what happens to the loan, and this brings us to our next point.

David puts tenants in all his properties who pay rent and consequently pay down the mortgage out of their pocket.  In all good investments, the rent charged to the tenant should cover all expenses, including the mortgage, property taxes, insurance, and repairs, with a little additional money left over known as cash flow.  This money is cash in your pocket and should be saved for any surprise expenses or just spent as regular income.  Every month, the tenant will pay down the loan for you and after 30 years, the mortgage will be paid off, leaving you with a fully paid-off house.  In this specific example, let’s use our $100,000 down payment and assume the tenant pays down the whole mortgage over 30 years and the property increases 3% per year.  By the time the mortgage is paid off, our initial investment will turn into a fully paid off property worth $1.2 million, 12x our initial investment.  This does not include the cash flow and all the tax advantages that come with real estate.

David tells us this is why real estate is his investment of choice.  He says a lot of this learning has come with experience investing but the foundation of what was taught at his classes at UC Berkeley.  He is very grateful for his education and says the tips he got from professors and classmates have stayed with him to this day.

Follow David on twitter@DavidDardashti_:

Also Check:

David Dardashti UC Berkeley- Chicago Businessman With A Passion For Finance

David Dardashti- Buying Cash Flow Positive Rental Properties

Home improvement

Choosing Kitchen Cabinets

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Choosing Kitchen Cabinets

Whether you are building your home or simply redesigning your kitchen, you are going to need to look at kitchen cabinets. There are so many cabinet options that it can feel overbearing. Luckily, we have put together a quick guide on how to choose kitchen cabinets that will work best for you.

Think About Your Budget

Cabinets can get expensive quickly. That is why you should have a budget in mind before you begin picking them out.

Here are a few money-saving tips to consider when buying kitchen cabinets.

  • Avoid customizing
  • Use open-shelves
  • Opt for cheaper materials than wood

Cabinets will usually cost you around 30-50% of your overall kitchen remodeling budget. Keep this in mind when thinking about how much you are going to allocate to them in your budget.

Choose Your Style

There are a few different style options you can choose from for your cabinets.

  • Stock cabinets – Come unassembled in a box
  • Semi-custom – Built to order with limitations on customizability
  • Custom – Designed By You

Stock cabinets are your cheapest option and custom are the most expensive.

Choose Your Box Materials

There is a boatload of different wood species for you to choose from for your cabinets. Along with whether you want them to be solid wood, particleboard, or plywood.

Choose Your Type Of Cabinet

There are three different types of cabinets.

  • Base cabinets
  • Wall cabinets
  • Pantry cabinets

Depending on the size of your kitchen, you may want all three types of cabinets, or just one. You may even want different styles for different cabinets.

Frames And Overlay

Once you decide the type, you need to determine if you want the cabinet with or without a frame. As well as what type of overlay you want the door to have. In other words, do you want to have a handle or not.

Choosing Your Colors And Finish

Your last step is to pick out the colors and finish of your cabinets. Your options are to:

  • Leave the doors unfinished
  • Do a simple paint
  • Stain
  • Glaze and highlight

Once you decide on all of this, you are ready to install your cabinets!

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Home improvement

What is an Accessory Dwelling Unit?

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What is an Accessory Dwelling Unit?

An Accessory Dwelling Unit is an extra dwelling found on the same lot as a single-family or multi-family construction. An Accessory Dwelling Unit may be connected to the primary residence, detached from the primary residence, or included within an existing residence or accessory structure. A Junior Accessory Dwelling Unit is a unit that is no more than 500 square feet and contained totally within the single-family structure

What is a Jr ADU?

According to ADU builders, A Junior Accessory Dwelling Unit or Jr ADU is contained totally within the Primary Unit except for adding an entrance hallway. A Jr ADU must have a separate entry and an efficient kitchen but may share a bathroom with the Primary Unit. The minimum size is 70 square feet and the maximum size is 500 square feet.

Can I construct an ADU and Jr ADU on my property?

If your lot is a legal lot of record that has an existing single-family residence as the Primary Unit (or a single-family residency is proposed through a separate permit request) in a residential or mixed-use place, California State Law permits you to build one ADU and/or one Jr ADU if there are sufficient water and wastewater services, smallest setback requirements are maintained, and fire and life security standards are met. ADUs are subject to building code standards and require building permits.For more information about ADUs visit ADU statistics.

Do I have to give parking for an ADU?

Parking requirements for accessory dwelling units shall not exceed one parking space per unit, whichever is less. These areas may be provided as tandem parking. The accessory dwelling unit parking space(s) may not be located in the required front yard setback.

Parking is not required in any of the following situations when the applicant demonstrates that:

  • The accessory dwelling unit is found within one-half mile of public transit, including transition stations and bus stations. Distance is measured by walking distance.
  • The accessory dwelling unit is found within an architecturally and historically significant historic area.
  • The accessory dwelling unit is built completely within the proposed or existing primary dwelling unit or an accessory structure.
  • When on-street parking permissions are required by the city but not allowed to the occupant of the accessory dwelling unit.
  • When there is a car share vehicle found within one block of the accessory dwelling unit.
  • If a required garage, carport, or covered parking structure for the primary unit is demolished or turned in conjunction with the construction of an accessory dwelling unit, required parking for the primary unit shall be granted on the property, outside of the front yard setback, and on a city-approved structure.

What if I have an existing ADU that violates building codes?

A buyer may request a five-year delay in enforcement of the building codes, which will be given unless the violation impacts health and security requirements.

ADU in a Multi-family Structure?

State law permits conversion of non-livable space with multi-family structures (two or more units in the same structure) to one or more ADU’s. In addition, a multifamily property may add 1 or 2 newly constructed ADU’s on the property, space permitting. The whole number of ADU’s may not exceed 25 per cent of the whole of existing units. One off-street parking area is required for each ADU. Garages may be turned to ADU’s provided replacement off-street parking spaces are designated for the homeowners who previously used the garage spaces. Jr ADU’s are not permitted in multifamily properties. If you are looking for reliable ADU construction company then you should consider SOTO BAY construction!

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Home improvement

The Ultimate Fireplace Insert Buyer’s Guide

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The Ultimate Fireplace Insert Buyer's Guide

Nothing beats spending the long, harsh winters in Billings with your family, huddled around your home’s fireplace. Memories are created while sipping hot beverages, playing board games, and watching movies in front of your existing fireplace. A best fireplace electric adds value, warmth, and ambiance to any room, but did you know that it may also raise the value of your home?

Your family is entitled to warmth and comfort during the winter. If you discover that your fireplace isn’t heating your home as effectively as you’d like, or if you want to change the design of your current fireplace, there is a simple method to address the problem without spending money on costly upgrades.

  • Heat production with high efficiency
  • Heating expenditures are reduced.
  • a lower carbon footprint
  • Customizable, fashionable design options
  • There are several faceplate choices.
  • Selecting a Heat Source/Fuel
  • Reduced repair costs

Do you ever wonder, with so much to consider, what you need to know before adding a fireplace insert to your existing fireplace? Are you unsure whether to go with a catalytic or non-catalytic stove insert?

This buyer’s guide will address all of your fireplace insert-related inquiries. We hope this article helps you understand all of the advantages and teaches you all you need to know about buying, installing, and using a fireplace insert!

What Is the Difference Between a Fireplace Insert and a Traditional Fireplace?

It’s critical to grasp the distinction between “fireplace insert” and “fireplace.” The term “fireplace” refers to a pre-existing structure that is constructed directly into your home. Because they are constructed directly into your house or new construction and are not constrained by existing fireplace specifications, fireplaces will generally burn wood as fuel and have wide viewing areas and firebox proportions.

What Is A Fireplace Insert?

A fireplace insert is exactly what it sounds like: a firebox that is installed directly into your existing fireplace to improve heat output.

They are frequently installed inside older, existing brick fireplaces because they provide high-efficiency heat, as opposed to a traditional fireplace, which loses up to 90% of the heat produced via the chimney while preserving the aesthetics of your existing stone fireplace.

Fireplace inserts with a blower that draws air from the room to heating chambers before blowing it back into the living space, increasing the effectiveness of your other heating sources. Electric fans are used within a vent that wraps around the outside of the firebox to power these blowers.

Fireplace inserts make it simple for homeowners to upgrade their current fireplace to make it more efficient and visually appealing. Natural wood and gas fireplace inserts are two common fuel choices for homeowners.

What Is the Distinction Between a Fireplace Insert and a Regular Fireplace?

It is essential to understand the difference between “fireplace insert” and “fireplace.”

The term “fireplace” refers to a pre-existing structure built directly into your home.

Fireplaces will typically burn wood as fuel and have broad viewing areas and firebox sizes since they are built directly into your home or new building and are not restricted by current fireplace requirements.

Installing a fireplace insert into your existing firebox takes little time and is a low-cost, non-invasive method to alter the look of your fireplace and living room.

When planning for a fireplace insert, you may become aware of present fireplace concerns. Do you wonder if your current fireplace should be replaced with a safer, custom-designed fireplace? R & T Services also specializes in the design and installation of bespoke fireplaces. We provide long-lasting luxury classic fireplaces.

How To Choose The Best Fireplace Insert For Your Home

Now that you’ve determined that a fireplace insert is the best method to upgrade your current fireplace, you’ll need to gather crucial information about your house and existing fireplace to narrow down the finest fireplace insert choice for your needs.

1. Dimensions/Sizing

The size and dimensions of your new fireplace insert are determined by the dimensions of your current fireplace.

To select the ideal fireplace insert, you must first obtain the following measurements:

  • Height of the opening.
  • Width of the opening
  • Top-to-bottom opening depth
  • Read the Width and Depth of the Area in Front of the Fireplace.

Because fireplace inserts come in a variety of sizes ranging from little to extremely big, the measurements you collect will decide which model is the best fit. The number of square feet you need to heat will also influence your fireplace insert choices.

Consulting an expert is the best method to obtain precise measurements and the greatest fit for your fireplace insert—even a minor measurement error might result in your insert not fitting properly!

Once you have the dimensions, it’s time to have some fun! You’ll need to determine which fireplace insert best complements your decor and complements the look of your present fireplace.

2. Appearance And Aesthetics

Depending on the fuel type, the style of a fireplace insert varies. Whatever fuel type you select, there are several colors, finishes, and design options to suit all preferences and styles.

Most options, from modern to classic, cast iron to steel, have self-cleaning glass doors and your choice of log set types to optimize aesthetics. Some fireplace inserts even include a remote control for simple operation and thermostat adjustment.

If you’re not sure what look you want, do a quick internet search on sites like HGTV and Pinterest to see what aesthetic best suits your taste.

3. Venting Options For Fireplace Inserts

Depending on the fuel, fireplace inserts are either vented through your working chimney, use a direct vent, or are vent-free.

A wood-burning insert is vented through your existing chimney, but a gas-burning insert is more adaptable.

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