Dear Home & Property Owner

A new year upon us and perhaps it is an appropriate time to review our investment portfolios, whether they include stocks, bonds, or real estate properties. Naturally, how we balance our portfolio depends on our short term as well as long term goals, and how our current portfolio choices are performing toward these goals.

With in the past couple of years, individual investor's confidence toward stocks and mutual funds has shaken as a result of mismanagement by corporate executives and fund managers. As we review our portfolios and our goals this year, we once again face with the question of how should we navigate the risks and rewards of today's uncertain markets? The common strategy is to diversify and distribute our portfolio toward investments that would help reach our goals while minimizing the risk of losing our assets. Our long term goals and risk tolerance will dictate the portion of our assets that we need to invest into relatively aggressive and defensive investments.

For example, investments in residential real estate present an optimum reward and risk characteristics for many investors. Historically real estate investments have been less volatile compared stocks and provided lower risk to investors. Additionally, investment in real estate not only provided lower risk, but also provided better returns and capital appreciation compared to stocks during the past three years. Moreover, real estate investments provide additional inherent advantages - tax shelter, income generation, inflation protection, and tax deferred exchange.

The 1031 tax deferred exchange gives you the ability to sell and buy properties without incurring a capital gain tax, state tax, and depreciation recapture tax, thereby allowing the earning power of the deferred taxes to work for you. The 1031 tax deferred exchanges provide investors with the opportunity to improve their investment position in many ways - increased asset growth rate, increased leverage, improved cash flow, increased depreciation deduction, diversification both geographically and by the type of investment property. The1031 exchange does not offer pre-tax contribution benefit; however it provides many other advantages - no time or age limits on cashing out your properties, no penalties, great potential for tax free income, and no limit on invested dollar amount.

In particular, this is a good time consider buying a property due to number of reasons. Most importantly, the interest rates are still historically low and continue to create many opportunities for refinancing, remodeling, or for buying new properties. Additionally, as we start the economic recovery, any increase in household income and consumer confidence will likely to add more buyers into the market, increasing the demand on housing.

The housing market has been characterized by unprecedented sales activity and impressive price appreciation in 2002, 2003, and will remain strong into 2004 as it benefits from a recovering economy. The median home price in California is projected to increase 13.0 percent this year according to California Association of Realtors. Price appreciation will be fueled in part by the continuing shortage of housing across much of the state. California typically adds 220,000 to 250,000 new households each year, yet only builds about 150,000 new housing units annually.

Whether you would like to buy a new investment property or you would like to upgrade your current investment property, please call me to schedule an appointment to discuss your specific investment objectives at no cost or obligation. I'll be happy to prepare the followings for you

• A Market Analysis Report for your primary residence
• A Market Profile for your investment property
• A sample 1031 tax deferred exchange benefits summary for your investment property

I have over 17 years of residential real estate experience, and I am specialized in the Silicon Valley and Santa Clara County area. I can guide you through the residential and investment property buying and selling process for a safe and sound investment.

I am looking forward to helping you reach toward your investment goals.