NKS Monthly

Cut Clutter & Make Money 

Yard sale, garage sale or rummage sale, no matter what you call it, it’s a great way to get rid of extra things and earn some additional cash. The amount of money you bring in depends on a few valuable secrets. Make sure your sale is a success by following some these suggestions.

Summer is the season for selling. Statistically, summer is the best season to sell because people have more flexibility during longer daylight hours and more vacations and time off mean more shoppers. Also, if you have a sale in August or September you’ll benefit from the large number of college students who need to furnish their new dorms or apartments on a budget.

So what should you get rid of? The basic rule of thumb is if you haven’t used or worn something in two years then it’s probably time to get rid of it. The best-selling items at garage sales are typically baby goods such as strollers and high chairs, sporting goods, furniture, tools, books, kitchen items and toys. Clothes often do not sell very well. You will have to price them very low if you want them to move. Be sure to sort clothes by size for the customers to easily locate items that they are interested in. Presentation is key, clothes should be clean and wrinkle free.

Don’t have time for a garage sale? Sell your items on eBay or craigslist. Do your research and price your item comparably to the others on the market. A picture is worth a thousand words. Be sure to include pictures with any and everything you sell online. Don’t forget to include shipping costs when selling on eBay and make sure that your buyer has proper transportation to pick up the item if you’re selling on craigslist. There are also services available to you that you can drop off your items to a selling service and they will post them on eBay for you. Check out the websites www.i-soldit.com, www.orbitdrop.com or www.quikdrop.com for more information.

Do you have items left over from your garage sale? Donate to charity. When donating to charity make sure to get a receipt in the value of the items donated. Save these receipts for your taxes.

Remember, “One man’s trash is another man’s treasure”.

Back to School

Cool clothes, the right backpack, lunch box, notebook, calculator and more. In recent studies the National average cost to prepare your offspring for the fall migration back to school is nearly $600.

The most valuable gift you can give your school-bound children, however, doesn’t cost a cent – it’s your enthusiastic partnership in their education! Research studies have shown time and again that excellence in student achievement is closely linked to active parent participation.

Parents make a difference. Children of involved parents have better grades, better attitudes and better behavior.

o Develop a relationship with your child’s teacher. Volunteer in the classroom or go on field trips. Don’t miss Back to School Night or teacher conferences.

o Instill a love of reading. Have good books available for your children at every age.

o Limit TV and video games.

o Know your child. If you suspect a learning disability, take advantage of the vast resources available.

o Be available. Talk frankly to your children about the values you want for them.

You are the first and most important teacher your child will ever have. Don’t underestimate the value of your contribution. From kindergarten to college “back to school” is filled with emotion. Acknowledge the jumble of emotions your child may be experiencing and reassure them that today’s unknowns are tomorrow’s routines.

Tips for Smart Borrowing on a Home Equity Line of Credit

A Home Equity Line of Credit is a credit line secured by the equity in your home. You can use a HELOC to provide cash as needed for a purchasing a rental property, home improvement, bill consolidation, vacation, school tuition or whatever else you like. There is a pre-set limit and you can write yourself a check whenever you need it. Payments are determined only on the amount of funds that are owed.

A home can be a good way to build long-term wealth but be aware of what the risks are when borrowing against your equity. Be particularly wary of using home equity to pay off consumer debt. You may end up deeper in debt in the long run. In general, you don’t want the term of your loan to last longer than what you’ve purchased. For example, if you use a HELOC to buy a car, try to pay off the balance in a few years and definitely before you trade in for a new vehicle.

It is important to know what the tax rules are when it comes to HELOCs. The tax deductibility really depends on what you used the HELOC monies for. The tax break is limited to interest on loan amounts of $100,000 or less. You need to consult your accountant about the tax rules regarding your specific situation.

We have HELOCs available up to 90% of the value of your home. There is no cost to the borrower to do them. You may have a minimal recording fee and an annual fee on your credit line.

For more information on Home Equity Lines of Credit and how it may be beneficial to you contact my office. There are a lot of banks that are limiting availability of HELOCs, so this might be a good option for having available money now. Remember, there is NO FEES to do a HELOC!

It’s about time

I wanted to share with you a personal experience that just happened to me. Most of you do not know that I have not seen my father since I was two years old. It’s a long story, but basically my parents had me when they were 21 and they did not have the skills for marriage or to take care of a small child. Luckily, my grandparents, on my mother’s side, stepped in and raised me.

Two weeks ago, my uncle contacted me to tell me that my father was flying to the United States and that he wanted to meet me. My father currently resides in Thailand and Indonesia.

It was a whirlwind. I picked him up at Sacramento Airport on Thursday, May 22^nd, and he returned to L.A. on Saturday the 24^th. What an amazing 48 hours. It was really cool getting to know and learn more about him. We had a really good time. He stayed at my house and he saw up-close what it is like raising a 2 and 4 year old. He was blown away at how much energy Jackson and Max have.

It is really hard to put into words what the experience was like. My biggest take away from this is that how similar he and I are, but that particular choices have really put us in different places in life. I did see so many similarities: his looks, mannerism, speech patterns and much more. It was almost like those stories of twins that are separated at birth, and grow up to be so similar.

In all of this, I found out that I have a 5 year old half-sister that lives in Japan. Someday, when she is old enough to understand, I will have to find her.

Meeting my father really increased the level of appreciate I have for the Grandfather who raised me. I am the man I am today, because of his influence. Thank you POP!

My father and I left things open for future communication. I hope to get to know him more and more as time goes on. I am so glad that he finally decided to make the effort to meet me.

I hope this letter inspires you to do something that you have said you would do “some day”. “Some day” needs to be today.

If you have a something that are putting something off, do it now! My dad and I could have easily started this relationship 20 years ago if he or I would have made the effort. That is my big regret. My life and his could have been that much fuller if one of us would have made the effort sooner. Don’t put it off. Make the effort so your life can be fuller too!

It’s a good life,

Neal Smith

Spring has sprung, the flowers are blooming, the birds are serenading, which means it’s that time of year again – “spring cleaning” time! Although many of us dread spring cleaning, I do think that the following home maintenance tips are less tedious and important for your family’s safety.

1. Inspect your smoke detectors and make sure that there is at least one on each floor of your home. Test them every three months and replace the battery as needed.
2. Check the light bulbs in all of your fixtures and replace them with fluorescent bulbs that are energy efficient and don’t produce as much heat.
3. Keep a fire extinguisher accessible that is filled and ready for quick use if necessary.
4. Have your air conditioning system inspected to insure it’s working in proper order. Have your ducts cleaned if necessary.
5. In your yard, remove all dead trees and bushes. Keep all of the healthy trees and bushes trimmed and away from AC units and utility boxes.

Spring cleaning is a tradition that allows us to freshen up our homes and get a head start on the hectic seasons of spring and summer. If you need some help in your spring cleaning endeavors here are some helpful tips to get the entire family involved. Even the most unwilling helper can make a big difference in the work load.

1. Have everyone pick their favorite CD and take turns playing them while you clean.
2. Have good snacks and drinks on hand for break times. Choose your family’s favorites and set a time when you all can take a break to enjoy the snacks together.
3. Turn it into a contest by dividing the family into teams with equal amount of work. The team that accomplishes the most by the end time gets an extra treat or prize.
4. Plan a reward for when the entire job is finished. Take the family out to a movie or order a pizza and rent a movie so that you’ll all be able to lounge on the couch basking in the knowledge of a job well done.

This Crazy Real Estate Market – many unfortunate situations, but many opportunities

I don’t know about you, but I have never experienced such uncertainty in the real estate market.  Unfortunately, I am talking to at least one person a week that is on the verge of losing their home.   In many situations, people bought homes that they should not have or refinanced and got a very risky loan.  As you know I have been in the mortgage business for over 15 years.  I can remember many times where I advised the client not to purchase a home and they went elsewhere and did it from another mortgage lender.   I really wish that those people would have listened to me.  Many of them are in trouble today.  For many it was gambling with high stakes and now they have to pay the price. The good news is that for some families we are figuring a way for them to keep their home. 

The root cause of this is Wall Street creating a huge demand for these sub-prime loans.  Many of these loans should not have been done.   At the time, we were all reaping the benefit because home prices were increasing tremendously, but now we have a dose of reality. 

The chart bellow tracks the amount of loans that are scheduled to reset (adjust), since January of 2007 to December of 2009.  THIS CHART IS REALLY SCARY.  It shows that many more people are going to have significant increases in their mortgage payments now or very soon.  Most likely these people will not be able to afford it and they are going to lose their home.  Everywhere I turn I am hearing on the news or reading in the paper about the problems in the real estate market.   Right now we are in the 4^th inning of this problem.   

Notice the lines that are orange.  That is what I want us to focus on.  If you look at the chart there was $20-$50 billion dollars of sub-prime mortgage loans that their interest rates were going to change each month last year.  This year it is even worse.  The number is as high as $100 billion in March of this year.