When I traveled to China in the early 2000s for business, I frequently explored Special Economic Zones (SEZs) that received preferential tax and incentives for businesses. With most of the economic growth centering around Beijing and Shanghai, the central government wanted to spread the wealth. As a result of tax incentives, business streamlining, foreign investment, and technology, SEZ cities such as Shenzhen and Zhuhai are now a couple of the richest and fastest growing cities in the country.

I’ve always wondered why the United States didn’t do the same. Sure, on a state level, governors can provide economic and tax incentives for businesses to set up shop in their respective states. But there was no such program on the federal level, where taxation and regulation are often the highest.

Until December 2017 that is when a new tax law was passed called the Investing In Opportunity Act. The law is designed to lure capital that faces heavy capital gains tax into Opportunity Funds, or O-Funds, which invest in roughly 8,700 Opportunity Zones, or O-Zones. These O-Zones are generally considered struggling cities or towns that are in need of redevelopment.

With home prices at record highs, it’s only natural that more homeowners are spending money on remodeling. I’ve personally remodeled three homes and I never want to remodel again!

But for those of you who want to suffer through the pain of remodeling, whether to get a better deal or earn some sweat equity, here are some top down views I have about the process:

1. Pay more for quality material since labor cost is relatively fixed
2. Get the proper permits to protect yourself from bad workmanship, while also boosting the value of your home through a more  comprehensive 3R report
3. Expect the overall job to cost 30% more and take 30% longer, but don’t let the contractor know
4. Adding livable space is the most valuable type of remodel
5. Always speak to the last contractor’s client at the very least
6. Great homes have wonderful outdoor space, don’t neglect landscaping
7. The value of a remodel fades over a 20-30 year period, at which point a new remodel may be due
8. Decide whether you’re remodeling for profit or for personal use

The big question every homeowner has when it comes to remodeling is how much they should actually spend to increase their chances of not only getting their money back, but also making a positive return if you decide to sell.

I believe the #1 remodeling error is spending outside the scope of the home. Let’s discuss a framework.

For those of you insisting on buying a home at or near record highs like I did many years ago, this post is for you.

Back in 2004, I was looking to upgrade to a three bedroom, two bathroom condo in San Francisco. I had bought a two bedroom, two bathroom condo in early 2003 for $580,000, but had a twinge of regret that I didn’t buy a larger place for more money because prices kept on going up. It was my first place, so I had decided it was better to be conservative.

What I discovered in my search for a new home was that the $900,000 – $1,400,000 price point for three bedroom, two bathroom condos was an absolute buyer’s frenzy. Every single condo I observed went for 10% – 20% over asking due to multiple offers. After getting blown out of the water on several places, I decided to temporarily shelve my plans for a larger condo. It was too disheartening.

Physical real estate is my second favorite asset class to build wealth. Online real estate is my first. Unfortunately, owning physical real estate can be a royal pain due to never-ending maintenance issues. You can buy new construction and I guarantee you there will be problems that need addressing within several years.

After inspecting hundreds of houses and buying and selling multiple properties over the years, let me share with you some sneaky tricks sellers deploy to make a house look better than it really is as well as some warning signs to be aware of.

In real estate, there’s a saying that goes, “money is made on the purchase, not on the sale.” With a well-timed purchase, you get to pay fewer property taxes over the life of ownership and generate a much higher compounded return due to a lower base.

The market is a wonderful place because it allows two people with opposing views to swap assets at an agreed upon clearing price. But I had to keep a poker face during my SF real estate purchases in 2003 and 2005 because deep down I was thinking, I can’t believe they are selling for so cheap! 

Even with my latest single family home purchase in 2014, I couldn’t believe they were selling a panoramic ocean view home on a double lot for 40% cheaper on a price/sqft basis than property on the east side of SF. No other major city in the world has ocean view properties that trade at a discount.

But now that the property market is hitting record highs across the country, it’s a good idea to negotiate more aggressively, just in case you buy at the top of the market. Here are three strategies that may get you up to a 5% fair market discount.