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Great Business and Family Charlotte Links Let's Look at Some Homes! All Homes. Lets Look at Neighborhood Real Estate* *After a brief look around you will be asked to provide your name and e-mail. It is safe and won't be sold to anyone.
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Investment Real Estate Land Foreclosures Installment Sales 1031 Tax Free Exchange
Investing in real estate has made many fortunes and many millionaires in the United States. If offers tremendous advantages over many types of investments and each real estate investment strategy offers its own risks and rewards. People invest for income, for appreciation, for tax free growth, to pass wealth to heirs and shelter assets. I am a big believer in doing your homework, buying the right underlying asset, and then finding the most advantageous financing. Whenever considering a sale of an investment asset, you must consider the tax consequences. That said, investing in real estate can be exciting! Before you start, you should consult with qualified professionals to help you determine whether real estate is right for your investment portfolio and your personal tax situation. This is not only smart, they will point out advantages and disadvantages you may have missed. This should be required reading for all would be investors: Top Ten Ways To Fail In Real Estate. Everything on this site is intended only as an introduction to the subject; they are by definition introductions only to the subject. They are Not a replacement for a conversation with your CPA or qualified legal professional. It should be noted that I am not a big believer in the "no money down" mantra, however, it does work from time to time. But it is Not something for nothing, they ALWAYS have more risk. There are some great articles linked below and in the Real Estate Library. That said, there are a variety of ways to invest in real estate. The list below is by no means the entire list, but it does cover the major categories. I've left out buying mortgage notes, even though they are related to real estate and some include them her. Call me if you want to discuss notes. Terry, Lets see some homes! 1031 EXCHANGES- A favorite among savvy real estate investors, the 1031 Exchange is named after the Internal Revenue Service code that allows properly transferred real estate to avoid capital gains taxes. It really should be called a tax deferred strategy but this is a wonderful way to convert family land holdings to income producing commercial real estate, paid up investment property with no depreciation left for better tax deductions and appreciation on new property, or a whole host of other reasons. remember, 1031s can not be used on your primary residence or 2nd homes, or if you are a builder the last of your lot's (dealer) To qualify the exchange must be for like investment property- the IRS says all real estate is "Like Property," as long as your intent is to hold it. Flippers need not apply. It must have equal or greater debt and equity positions (effectively requiring you to trade equally or up) , it must be handled (transferred to and out of) a qualified intermediary, you may NOT take cash out (without paying taxes on that cash, called boot), you have 45 days after the a sale of the first property to select the new property, and 180 days to close on the second property. Warning- You must do this exactly right. Consult your qualified tax professional in advance. For example: Farmer Fisher passes away and leaves his farm to 5 heirs. The taxes on this valuable peace of real estate are over $35000 per year and it is a hardship for some of the heirs to just pay their share of the taxes every year. They decide to do a 1031 Tax Free Exchange, and buy a Shopping Center that will pay them income. In an actual case where one of the heirs was paying $7000 in taxes every year, to earning through his 1/5 share, more than $80,000 per year. The advantages of the 1031 are Huge but there are a few less obvious ones as well. For example, your profit grows tax free. It is even more important since that equity is leveraged in real estate in trying to control the largest amount of real estate possible with your next investment. In the example above, lets say the family holds the shopping center for 10 years, and lets say it appreciates $5,000,000 in that time, not an impossibility. At the future sale, assuming today's capital gain rate of 15%, they would be looking at a tax bill of approximately $750,000 on the appreciation, and a larger number on the recaptured depreciation. Another 1031 Exchange, done correctly, will allow them to trade up without tax consequence. In fact you could do this for a lifetime, and now with the end of estate taxes (through 2010 but expected to be made permanent- sometimes called the Paris Hilton Tax Cut), they're wouldn't even be a taxable event at your death. It is well worth your time to investigate and become proficient at 1031 deferred exchanges. It is still another reason real estate can be the most exciting of investments! I can help you with this from finding the replacement properties to finding qualified "Safe Harbors." Give me a call and we can work towards your first exchange. Remember, always consult with your qualified CPA before engaging in these types of transactions.
There are many ways to invest in many different types of real estate. All require careful and wise consideration, consult a professional for your specific needs. Here are some of the possibilities and opportunities provided by real estate investing. Installment Sales: Do you own a property outright, like to sell it but are afraid of the capital gain tax? Maybe you should consider owner financing. did you know that only 4.5% of conventional mortgages foreclose? And on top of that, you'll have a lump sum and annuity where you will only pay taxes on the income you receive. These can get your property sold quickly with lower closing costs, and spread out tax bite to possibly better tax years in the future. Low Capital: A co-worker has some rented condominiums listed which can be financed through Coldwell Banker Mortgage at 95% LTV and at vacation home rates. Investors can get in for as little as $1500 and collect rents with a positive cash flow. They can purchase up to 10 at the better vacation home rates. Some restrictions apply but still. ..take a look. Contact Terry Foreclosures: Foreclosures and pre-foreclosures are often a source of discounted real estate. Often distressed, in need of some repair, these can be had for 65-75 cents on the dollar. They are on the market constantly in all price ranges, in all parts of town and are available to individuals, partnerships and investment clubs. Establish your lender relationship before pursuing the foreclosure market, do your homework and choose wisely! Look at Some Foreclosures Contact Terry Apartment buildings, commercial buildings and hotels are excellent sources of income and, when chosen wisely, excellent appreciating assets. Investors like their predictable income and net. They are available to purchase individually, in partnerships and in larger publicly traded partnerships called REIT's. I have access to listings across the country, and here is a look at what they look like:
Land, those of you who know me know I love undeveloped land: Where the risks are large and the rewards larger. Excellent opportunities become available each year as Charlotte grows in a different spot. This year there are many interesting properties, and a few very good ones, becoming available along 485 in particular near the exits. These have been heating slowly but now that heat is flowing outward for 10 minutes or so around each exit. Hmmmmm. I know of a 70 acre tract, 10 minutes off 485, with water and sewer, zoned R-2,at 17,350 per acre. Let's Take a Look Or,. jsut like to find some do's and don'ts? Try the Lot tips from the Real Estate Library. You'll find good articles at Commercial Real Property ciremagazine.com and following the link to the Real Estate Library and excellent article on condo's and apartments from the HBA Please note: There is nothing here but an introduction to the subject and anyone interested in investing in real estate should contact their CPA or attorney for professional advice prior to making any investment decisions.
Buying●Selling●Relocating●Investing I sell homes so my clients can move into their future!
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