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Heritage News
Inside This Issue:
Winner in the Galaxy Tablet 2 Drawing

What is Passive Income?

FHA cuts waiting period to 1 year for buyers who earlier faced foreclosure

Add an Annuity to your retirement

Spotlight Events: Taste of Union City

Luxury Real Estate and Income Properties
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· Taste of Union City: Food, Blues and Music Fesival

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Winner in the Galaxy Tablet 2 Drawing
Thank you to everyone who signed up to receive our Heritage News newsletter. We hope that you are enjoying the articles, the fun events, and all of the information that we try to share. As advertised, we conducted a drawing with the names of all of our newsletter subscribers and chose one to win the Galaxy Tablet 2. 

Our winner was Winni Du. Congratulations Winni! Our winner will also be contacted by email.

For everyone else, do not worry. We will be extending another contest through the month of October and selecting another price. Please keep reading the newsletter to see what will will be giving away next.
What is Passive Income?

How much are you earning while you’re asleep?

If you’re like most people, then I’m sure it’s zero or very little. This is the reason why we go to work. We wake up everyday, dress up, go out into the world and use our skills and talents so we can earn the money to afford the things we need and spend on the things we want.

For several years, I thought that this was the only way to live. When I graduated from university, all I ever wanted was to find that perfect job. I searched and worked and jumped from one company to another.

Everything changed when I met a friend for coffee one afternoon. I mentioned to him that I was contemplating on joining another company by next year because I heard that it pays good there.

He showed a lack of enthusiasm towards my plan and said that I should instead learn how invest. He then introduced me to the different types of income and the importance of having passive income.

The Different Types of Income

In a broad sense, there are three types of income which a person can generate: earned, portfolio and passive. Any money which go into our pockets can generally be categorized under one of these three.

Active or earned income is defined as money that comes from working. Your salary as an employee is the best example. Activities such as gambling, running your own business and professional consultancy work are also considered earned income. If it needs you physically, then it is active or earned income.

Portfolio income is also called capital gains. It is basically the income you get from selling something for a higher price than which you bought it. Investing in the stock market is the most common example of this. Aside from trading paper assets and other investments which appreciate in value, one can also gain portfolio income from buying assets at bargain prices and selling them at market value.

Passive income is money you get from investments you have purchased or created. If you own a business which can operate by itself, then that can be considered passive income. The major difference of this type of income from the other two is that it generates cashflow with zero or very little effort coming from you. Owning an apartment and having it rented, getting money from royalties for an intellectual property or income from multi-level marketing investments are good examples of this type.

How important is passive income?

The amount of money we get from earned and portfolio income are dependent on our physical presence, skills, talents and knowledge. If we get sick, become inefficient or if the things we know become obsolete, then our earnings will stop or decrease.

However, passive income can continuously generate cashflow independent of our human limitations. It can financially provide for you and the next generations of your family.

The good news is that all of us have the power to create unlimited streams of passive income. It is just a matter of patience, perseverance and passion. It is the key to long-term wealth. 

Adapted from:

An article by

FHA cuts waiting period to 1 year for buyers who earlier faced foreclosure

From Nick Timiraos at the WSJ: New Lifeline for Home Buyers

A recent rule change lets certain borrowers who have gone through a foreclosure, bankruptcy, or other adverse event—but who have repaired their credit—become eligible to receive a new mortgage backed by the Federal Housing Administration after waiting as little as one year. Previously, they had to wait at least three years before they could qualify for a new government-backed loan.

To be eligible for the new FHA Loans, borrowers must show that their foreclosure or bankruptcy was caused by a job loss or reduction in income that was beyond their control. Borrowers also must prove their incomes have had a "full recovery" and complete housing  counseling before getting a new mortgage.
We started seeing "bounce back" buyers in 2011 (see: After Foreclosure: The Bounce Back Buyers). As Timiraos noted, the standard FHA waiting period is 3 years. The waiting period is 7 years for a conventional loan following a foreclosure (4 years for a conventional loan following a short sale). 

For more information on FHA loans or any other mortgage programs, contacts us at 510-269-7406 or 

Adapted from:

Article by Bill McBride on 9/2/2013

Add an Annuity to your retirement
A number of strategies can help you stretch your retirement savings over your lifetime. But when it comes to choices you control, only an annuity guarantees that your income—or a portion of your income—will continue no matter how long you live.
You can integrate an annuity into your retirement income strategy in a variety of ways (see Make Your Money Last). One popular method is to add up your regular expenses (such as housing, food, utilities, insurance premiums and out-of-pocket health care costs) and subtract any guaranteed sources of income (such as a pension and Social Security). Then buy an immediate annuity to provide enough income to fill in the gap. Once you know those costs are covered, you can invest the rest of your money more aggressively—providing extra funds to keep up with inflation, cover emergencies and other large outlays, or leave to your heirs.
The simplest way to provide lifetime income is with a single-premium immediate annuity: You hand over a lump sum to an insurance company when you retire, and it pays you a regular check for life (or for as long as you and a beneficiary live) starting right away. (With a deferred variable annuity with lifetime income benefits, another flavor of annuity usually sold to preretirees, you invest a chunk of money in mutual-fund-like accounts in exchange for a promise of a stream of income in the future.)
Immediate annuities may be simple, but they come with a couple of caveats: Because this type of annuity has fixed payouts that usually aren't adjusted for inflation, and because you can't reclaim the money once you commit it, you should invest only enough to help cover regular expenses and no more. More problematic are today's low interest rates; now is not a good time to lock in a fixed payout for the rest of your life.
"Because of historically low interest rates, an investor who purchases an immediate annuity now may be solving an emotional dilemma—fear of market risk or fear of loss of income—at the expense of their financial best interest," says Tim Maurer, a certified financial planner in Hunt Valley, Md. For example, if a 65-year-old man invests $100,000 in an immediate annuity now, he'll receive about $6,900 per year for life—about $1,800 a year less than if a 65-year-old had bought the annuity five years ago. Low rates translate into lower payouts because the insurer earns less on its money.
You can combat lower payouts a couple of ways: by laddering annuities or by buying a relatively new product that guarantees heftier payments if you pick a date down the road to begin receiving them.
The annuity ladder
One way to avoid locking in too much money at low rates is to buy an immediate annuity now with a portion of your savings and invest more in annuities every few years. Payouts will be higher because you'll be older; they'll also increase if interest rates rise.
Michael Ritschel of Colorado Springs retired four years ago as a financial consultant. He receives a small pension and Social Security, but most of his retirement income comes from his own savings. Ritschel, who is 73, has 20% of his portfolio in fixed-income investments and 60% in dividend-paying stocks. He plans to put the rest of his savings in immediate annuities to cover living expenses for himself and his wife. He recently bought his first annuity and plans to make two more purchases over the next six years. "My goal is to have enough income to cover the necessities and to provide growth with income that will keep up with inflation," he says.
The older you are when you buy an annuity, the higher the annual payouts—assuming interest rates don't fall further. For example, a 73-year-old man who invests $100,000 in an immediate annuity now could get $8,820 per year for life; a 75-year-old could get $9,432 per year for life; and a 77-year-old could get $10,200 per year for life. If interest rates rise by the time the man purchases the annuities, the payouts will be even higher.
You'll receive the highest payouts if you choose a life-only annuity, which stops paying when you die. (Ritschel chose that version because he already has a universal life insurance policy, with his wife as the beneficiary.) You'll receive a lower annual payout if you buy an annuity that pays out as long as you or your spouse lives. If you're worried that you might both die early, you can choose an option that guarantees payments (to you or your heirs) for at least ten years. A 70-year-old man who invests $100,000 in a single-life annuity could get $7,956 per year, or he could get $6,684 for payouts that continue as long as either he or his wife (also 70) lives. The income would be $6,588 per year if payouts continue as long as either spouse lives or for at least ten years.
Having the annuities to cover his retirement expenses allows Ritschel to feel comfortable investing his remaining savings more aggressively, because he won't need to sell his investments in a down market to pay his bills.
Defer the income?
Annuities can protect against outliving your income, but you don't really benefit from that protection early in retirement. For that reason, academics and actuaries have embraced products that delay payouts until much later—typically your seventies or eighties—when you're most concerned about outliving your savings. "If you focus your longevity-risk thinking on those later years, it's less expensive," says Tom Terry, president-elect of the American Academy of Actuaries.

Interpreted from:

Article by Kimberly Lankford
Spotlight Events: Taste of Union City
Join Heritage Fund Realty & Investments at the Taste of Union City Food, Blues, & World Music Festival: 
Saturday September 14th at Charles Kennedy Park in Union City. 
It will be a day filled with family activities, music on 3 stages, over 80 food vendors, and over 70 merchant booths for arts & crafts, clothing, as well as service merchants. 
The event goes from 9am-730pm...the day will be kicked off with an Umbrella & Parasol Parade at 8am...gate opens at 9am.
One of the highlights of the event will be the mini-job fair. There are going to be cooking contests with the Mayors of Union City, Newark, Fremont, and Hayward, the Police Departments, City officials, and culminating with our professional Golden Skillet contest for the best chef. The winner of the Golden Skillet contest will have the trophy and bragging rights for a 1 year period. We are also having cooking classes for kids and their families in Family World and other educational activities as well as games for the entire family.
Luxury Real Estate & Income Properties
Gorgeous Doug Dahlin designed equestrian estate.

8734 sf home on 47 Acres. 5 Bedroom 5 1/2 bath; infinity pool; 2 acre lake.
Los Altos Hills, California.  


7 Bedrooms 7 Bathrooms

Approximately 45 acres offers Bay Area living beyond your wildest dreams. Goodwin Steinberg home, incredible views, Palo Alto schools. 7 possible bedrooms, 4 full and 3 half baths.

4 unit in the HOT lcation of West Oakland
$380,000 asking price

Down Payment = $76,000

Mortgage = $304,000 @ 7 %

Cash-Flow = $1124 monthly

Cash on Cash return = 17% 
For information on these properties or other cash flow investments, contact us at or 510-269-7406
Heritage Fund Realty and Investments is one of the Bay Area’s leaders in Real Estate, Financial Services, and Financial Education. We aim to not only grow the wealth of our clients, but to grow the knowledge of our clients and our community.
Our areas of products and services are:
Buying and selling Real Estate
Mortgages (Purchase, Refinance, Commercial)
Real Estate Investment
Property Management
Life Insurance
Financial Planning and Education
We know real estate, we know financial services, We know the markets, and we know the area. We are passionate about our community and our goal is to provide the best services available.
Copyright © 2013 Heritage Fund Realty and Investment, All rights reserved.

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