Real Estate Network

Posts Tagged ‘Take’

(PRWEB) January 3, 2011

Camino Land Corporation recently released this report on inflation and how buying land compares to other types of investments. According to a recent Gallup poll taken earlier in 2010, more than half of Americans (55%) are very concerned about inflation and another 29% are somewhat concerned. And for good reason. The drastic steps taken by the federal government to boost the nations sagging economy also concern many economic experts and financial analysts. Before the year 2010 even began, The National Inflation Association considered the possibility of inflation to be a major economic threat and was especially concerned about the rising cost of fuel and food.

While no one can predict the future with certainty, we do know a few simple facts:

1. We know that the federal government has been rapidly creating money along with enormous budget deficits.

2. We know that both of these measures are classic indicators of coming inflation.

3. We also know that inflation is temporary low because banks are still not lending money and the economy remains weak.

The writing is on the wall. As the nation recovers, banks will start loaning out their hoards of reserves. When the available money outpaces the available goods, inflation is inevitable. Prices rise and the purchasing value of the dollar falls. We just dont know when inflation will hit and how quickly it will climb. We only know that it is coming. In fact, you may have noticed a difference in your grocery bills over the past several months.

Higher food prices are here, and dont expect a break soon was the headline of an article published by USA Today on November 30, 2010. Authors Erika D. Smith and Dana Hunsinger reported the U.S. Department of Agriculture as predicting that food prices will increase by 2% to 3% next year. However, that is an overall increase. Certain categories of food are already way up, including pork (13% up from a year ago), butter at 25%, and milk at 6%. The national and world demand for grains is on the rise so prices are up. Farmers use grains as food for livestock. With the cost of fuel on the rise, so is the cost of delivering products.

What can the average consumer do to prepare for inflation?

Dont bother listening to so-called financial advisors who say to stock up on canned and dry food while the prices are still low. Smart people will be doing more than saving a few dollars on groceries to prepare for future inflation. Smart people will be taking full advantage of a chance to leverage inflation in their own favor. They will be looking for quality, affordable investments and watching those values rise with inflation.

One of the safest ways to gain and not lose during an inflationary period is to buy quality land at todays discounted prices. Ricardo Pomar, President of Camino Real Land Corporation, states that he has never seen a better time to purchase the right cheap land: I have been in the land business since 1977 and I know firsthand how rapidly the market of affordable, quality real estate is dwindlingparticularly in rapid-growth states like Arizona where only 17% of the land is even available for private purchase.

Pomar goes on to explain that land has been and will always be a solid, safe investment because the supply is limited. No one is making any more land, he says. The price of land rises as the population grows, as urban areas sprawl, and as available land vanishes. Now add inflation to that equation! The value of land rises even more quickly. With todays depressed prices and tomorrows inflation, new buyers are looking at a once-in-a-lifetime golden opportunity.

He went on to explain that Camino Real is dedicated to offering only the finest pre-developed lots in the path of growth, surrounded by natural beauty, amenities, and world-class recreation: We have always been committed to having the right place and this is definitely the right time!

For more information on Camino Real Land Corporation and the selection of premier view lots that are still available at rock-bottom prices, visit http://www.sunsiteslandrush.com.

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New York, NY (PRWEB) June 23, 2011

According to RealtyPartner.com Research and Development, buyers from European countries like Spain , France and Italy and buyers all over the world are now taking advantage of the cheap US real estate market by investing heavily, as they believe that the values will go up in another 5 years, according to RealtyPartner.

The US real estate market is doomed; real estate price throughout the country is still on a free fall and there are no signs of the US real estate market recovering in the near future.

“The cheap real estate market surprisingly has now attracted number of foreign buyers, who are considering investing heavy in the US real estate market.” stated Mark Quinones, RealtyPartner’s Chairman and Founder past weekend at his investment seminar in New York City.

The reasons for foreigners to buy US real estate are simple; the prices are dead cheap and they can pick the best real estate they want without any conditions what so ever. Recent statistics released by RealtyPartner states that about $ 16 billion worth US real estate properties are bought by the foreign buyers, with 62% of the homes for sale properties being bought in cash.

Foreigners think that it is easy for them to market and sell the real estate properties bought as US has global reach. Many foreigners who live in the US are dying to buy a house for themselves as they consider it as an important accomplishment in their lives. Although the real estate market is sluggish, one can always sell their real estate (without expecting high price of course), if they are badly in need of cash.

People from Canada and China are the ones who have bought the highest number of US real estate, a statistic says. This buying spree may well lead to another real estate boom or at least will create new opportunities for local realtors who find it very hard to sell real estate properties In and around their area.

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The crash of the real estate market not only caused millions of people to lose their homes, their funds, and their jobs but also their trust in the economy. Billions of dollars of our government’s money have been wasted trying to bail out many banks and automobile companies alike. Despite the loss that occurred over the past year and a half, it has opened the doors to new buyers that would have never been able to afford quality houses and properties, until now.

It is a buyer’s market and if you have just a fraction of the resources that you once needed for a down payment then you are in business. Foreclosures, short sales, and discounting pricing are the norm these days and first time buyers are finding themselves in a very good spot to be in. There is no shame in taking advantage of the current real estate market. Buyers that would have never before been able to buy are finding themselves looking at homes that they never would have dreamed would be in their reach.

Buy Foreclosures and Short Sales Pennies to the Dollar

If you are in the market to buy a home or condo then congratulations, you have successfully managed your money to be able to become a homeowner. Second of all you must be aware that there are many different mortgage, brokerage, and real estate companies that want to get the most out of you. You have to be careful to not fall for variable rates that seem low in the beginning and then sky rocket in a couple of months.

There are many products out there that will help you to buy properties for pennies on the dollar. There are many cost cutting measures that can be enlisted that will end up saving you thousands and thousands of dollars. Don’t waste your time, money, and effort on people and products that are just going to try to get the most money out of you.

Learn how to buy a property without a hefty down payment

No longer do you have to save up for years on end to possibly afford a down payment on a house. If you are smart and enlist the right help, you will be in your new house in no time at all. There are many ways to go about potentially taking advantage of foreclosures and short sales, you just have to pick the right ones. On the other hand you don’t want to pay thousands of dollars just to end up getting ripped off.

Believe it or not but there are great resource available online that allow you to beat and take advantage of the real estate market. You will not only be able to learn the ways of the pros but you will be able to do it in a way that costs pennies and provides you with a home. Remember, you don’t need a lot of money to start out, you just need a little time and persistence.

For More Information on Real estate business opportunities visit to ProductReviewsOnline.com

For ProductReviewsOnline.com, Richard Moore has written hundreds of product reviews on Real estate business opportunities and Home Business opportunities that will help you in improving your economic success.

Taking your real estate investment business to the next level means going into territory you haven’t gone before to reap rewards you haven’t yet obtained.  I know a lot of people who do the same types of deals they did when they first started in real estate investing.  Now there’s nothing wrong with doing that if you’re content with what you’ve got.  But if you’re looking for something more, you’ve got to take on greater investment opportunities.  Here’s how to do just that.

I got into real estate investing because I wanted to make some serious cash.  I was sick and tired of struggling financially and I hated coming home tired every night.  Well, I found real estate.  I started doing some single family deals but after awhile, I found that I was still as broke as I was when I first started.  I needed cash flow and I needed it fast.  Go after bigger fish.  Commercial property investment deals offer some of the greatest cash flow and returns for an investment dollar.  The number of units and the size of the properties brought the largest returns for the amount of time and money I had invested in any deal.

To get to the next level in your real estate career, you must continually educate yourself.  Education enables you to find solutions to any challenges that may come up when you’re doing deals.  Education also helps to eliminate unnecessary risk.  Unfortunately, many investors believe that their lack of knowledge prevents them from doing the tougher types of deals like commercial properties.  That couldn’t be farther from the truth.  You must continually educate yourself.  Read books.  Attend seminars and don’t hesitate to ask questions.

A good mentor helps you gain practical experience much quicker and more easily compared to books and courses.  Mentors help you navigate deals and overcome any show stopping challenges that may arise.  Mentors are your safety net in areas where you don’t know where you’re headed.  If you’re serious about taking your real estate investments to the next level, a mentor will help you get there quicker and with much less risk than if you were to do it alone.

There are many people who shun the idea of new investors taking on the risk of large, complicated projects like commercial real estate investments.  They’re right.  Commercial property investing is not for inexperienced investors or for do-it-yourselfers, but here’s the idea – let the experts be experts.  Your team of experts works to eliminate the risk of your inexperience and lack of knowledge.  You can get to the next level in your real estate investment career when you have the expertise of people who already know how to navigate their way through a deal.

Any business will fail unless it’s marketed.  Taking your real estate business to the next level means you must develop your marketing skills by putting them into action.  For example, I started marketing my business using direct mail.  At the time, I believed that it was the only thing I could do.  As I started to get responses, I started networking myself at places like local real estate investment clubs and with bankers.  Basically, I took one marketing strategy, learned it, and honed it until it produced a reward for me.  Then I started working other forms of marketing.  Your business is going to go to the next level when you start learning about and working more marketing strategies.

Attitude makes all the difference.  A person who thinks that they can’t do a deal that will take their business to the next level has already shot himself in the foot.  Without even trying, he’s already doomed to failure.  Conversely, a person who is hungry enough for success will attain it simply because he hasn’t given up.

No matter where you are in your real estate career, these tips will help you get to the next level.  Commercial real estate is the right vehicle that provides some of the greatest cash flows in the industry.  When you combine education, expertise, marketing, and the right attitude, you’ve got the makings for attaining greater investments and receiving better cash flow deals.  The next step is to take action.

THE PURPOSE OF THIS ARTICLE is to give a friendly whack upside the head to people who own rental property. You probably made a good investment when you first bought the property. But have you owned it too long? Depending on how long you’ve held your property, it might not be a good investment anymore. I didn’t say not a good property; I said not a good investment. Read on to find a simple way to determine if your property is still measuring up. You may be in for a surprise!
First, let’s quickly review the four financial benefits of owning investment real estate:

1.CASH FLOW: After you pay all expenses and loan payments, cash flow is the money left over.

2.PRINCIPAL REDUCTION: The loan is paid down with money collected from tenants.

3.INCOME TAX SAVINGS: IRS rules allow property owners to take depreciation deductions, which shelter the cash flow and principal reduction. Any leftover depreciation creates a paper loss, which, in many cases, can be used to shelter other income – such as salary from your job.

4.APPRECIATION: Over time, the property increases in value. These four benefits are powerful! You earn tax-sheltered cash flow, your tenants buy you the building, you get to tell the IRS you’re losing money, and all-the-while, the property goes up in value. What a country! So why am I challenging you to reconsider whether your property is still a good investment? Simple! Your “return on equity” is probably low -and getting lower by the year! Let me show you an example. Don’t get all tangled up in the numbers. Just concentrate on the big picture and how it applies to you.

Return on Equity Drops from 18 to 7 Percent

Assume you bought a rental house 16 years ago for $ 70,000. You invested $ 10,000 and borrowed the rest. Your goal is to retire in another 15 years and use the rental house to provide retirement income. (A great plan!)

So, how good was your investment 16 years ago? Let’s total your benefits. Assume the cash flow, principal reduction and tax savings added up to $ 1,800 that first year. You were earning 18 percent ($ 1,800 divided by $ 10,000) on your investment. Not bad. Plus the rental house was appreciating. You’re an investment genius!

Fast-forward 16 years to the present. Let’s assume the following: Your yearly cash flow has increased to $ 5,000 and the principal reduction is $ 2,000; a total of $ 7,000 -just from the first two benefits! In addition, let’s assume the net value of your rental house has appreciated over the years so it’s now worth $ 120,000 and your loan has been paid down to $ 40,000.

However, because you’ve owned the property so long, the depreciation deductions (assume they’re $ 3,000) are no longer enough to shelter the $ 7,000 of cash flow and principal reduction. That leaves $ 4,000 of unsheltered (taxable) income. Instead of saving tax, you have to pay tax. If you’re in a 35-percent bracket, (combined federal and state), you pay $ 1,400 tax.

So, your benefits from the rental house now look like this: $ 5,000 cash flow, plus $ 2,000 principal reduction, minus $ 1,400 tax paid. A total of $ 5,600.

This is all summarized on the “Return on Equity Worksheet” on the next page. (The blanks in the right column are for you to use on your own property.)

It’s no wonder you consider yourself an investment genius if you measure the $ 5,600 against your original $ 10,000 investment: that’s a 56 percent return. But that’s where most people go wrong!
Your Original Investment Has Nothing to Do with Today’s Rate of Return!

Your investment is not the amount you originally invested years ago. You’ve got way more than $ 10,000 “tied up” today! Your investment is the amount you could get out of the property if you sold it today.

That’s called your “net equity.”

Over the past 16 years, your property has increased in value and your mortgage has been paid down. The current difference between the property’s net value (after selling expenses) and your mortgage balance is $ 80,000. In other words, if you sold the property today, you could walk away with $ 80,000.
However, if you keep the property, in effect you’re re-investing the $ 80,000 into the property. Now, how does your investment look?

Not so good. You’re earning $ 5,600 in benefits on an $ 80,000 investment – that’s only 7 percent! What if a REALTOR® called you up and said, “I’ve got a great real estate investment for you. You’ll earn a measly 7 percent.” You’d hang up on them! Well, you already own it!

If you wouldn’t buy a property like that, why would you continue to own it?
What if you did this instead? Use your $ 80,000 equity as the down payment on a different property – one that produces 18 percent again? With that down payment you could probably afford a $ 400,000 rental property. Once you’ve owned that property for a few years, your equity will have grown again (and your rate of return fallen), so you repeat the process. The goal is to maintain the highest possible rate of return, which will make a huge difference in your future wealth.

You’ll maximize your wealth by wisely moving your equity from your current property to another as soon as your rate of return would be greater in the next property.
Just for fun, take out your calculator and figure how much money you’d have in 15 years if you leave the $ 80,000 invested at 7 percent. Then calculate what $ 80,000 invested at 18 percent grows to in 15 years. 1 could give you the answer but you might not believe me – check for yourself. ..it’s gigantic!

Three Ways to Move Your Equity

Here’s a key point. If you decide it’s time to “move your equity,” be sure to explore all your options. There are three common ways to move equity.

1.SELL: You could sell your current property and buy another. The problem with selling is you have to pay capital gains tax.

2.REFINANCE: You could refinance your cur rent property and use the loan proceeds to buy another property. The problem with refinancing is you’re probably not able to borrow the entire $ 80,000 equity.

3.EXCHANGE: The third, and best, way to move your equity is to exchange. Exchanging allows you to move your entire $ 80,000 net equity to another property without paying tax. It’s wealth building’s most powerful tool.

So, what does this all mean? Well, if you own rental property, congratulations. Your investment brilliance shines brightly. However, the longer you own that property your glow begins to fade. The wise thing to do is re-evaluate your property every year. In essence, make the decision to “re-buy” the property. As soon as the rate of return on your equity could be higher in another property, it’s time to take action.

I challange you to take the return on Equity Challenge Worksheet after you read this article. Send me an email and I will send you one, you will be suprised what your return is. I will bet you a steak dinner on it.

I cannot take credit for this article – I got permission from the author below. I thougt it was so good I had to reprint it.

This article was reprinted with permission from Copyright Tom Lundsedt Seminars

Society is experiencing a financial recession at the present time and many industries are beginning to “hurt” from the impact. The real estate market is not any different. This market is also experiencing a negative impact at the present time. Some realtors are turning to the Internet for solutions. Online real estate marketing is becoming a fast-growing trend that you should take advantage of.

There are some realtors already who are taking advantage of this opportunity and they are experiencing the benefits. Online real estate marketing increases their potential income base by increasing their customer base.

Whenever the real estate market does turn around, do not get caught dragging up the rear. Make sure that you become the leader and not a follower. Be sure to stand out amongst the crowd and get noticed.

The Internet offers several different avenues for online real estate marketing that you can utilize. Social Networking, social bookmarking and blogging are just a few of the opportunities that are available. The best thing about this is: it is all free. Marketing your business for free is great on the balance sheet. Do you know of any other way to do that?

Myspace, Facebook and Twitter are just some of the most popular websites that are being used for online real estate marketing. All three sites are free. Each one offers different marketing opportunities for your business. The more sites that you can utilize, the better your chances will be of reaching a large audience. Just because you have a site on the Internet, does not mean that you will gain the traffic that you are looking for.

There are other websites that are available that are Industry specific. For the Real Estate Industry, try the site ActiveRain. It is for the Real Estate Industry only and it allows you to network with other professionals in your field. LinkedIn is another great business networking site. All members are professionals and are from one of the many industries in this country. You could make the connections that will help you to increase your income, by using this form of online real estate marketing.

Do not get left behind. Start your online real estate marketing campaign today. It will not happen overnight; it will take time to create a following. When you enter the online real estate marketing game, make sure that you are in it for the long haul. If you can, you can make this opportunity your own key to success, too.

Even if you have strong positive cash flow from your rental real estate, chances are you still have a loss for tax purposes due to the depreciation deduction.

This is a great tax strategy because your positive cash flow is sheltered from tax. But, it can be even better if you are able to take your losses against your other income (like your income from your job or the business that you run).

The general rule for rental real estate losses is that they are passive. This means they can only be taken against passive income. The income from your job and the business you run is active income so your rental losses cannot shelter this income. However, there are two exceptions to this rule.

** Exception #1: “Active Real Estate” exception. **

The Background on the Active Real Estate Exception

Rental real estate, in many cases, is held to provide financial security to individuals with moderate incomes. Because of this Congress believed that a rental real estate investment in which a taxpayer has significant responsibilities and which served a significant non-tax purpose should be treated differently than the activities meant to be limited under the passive loss provisions. So Congress created the active rental real estate exception.

- How It Works -

If you are active in your rental real estate activities you may be able to deduct up to $25,000 of your rental losses against other ordinary income. We say may be because there are income limitations which phase out the $25,000 deduction. The phase out will start when your adjusted gross income exceeds $100,000 and end when your adjusted gross income is at $150,000. This means that for every $2 over $100,000 of adjusted gross income you will lose $1 off the $25,000 deductible amount. For example if your adjusted gross income is $120,000 you will have to reduce the $25,000 exception by $10,000 and the most rental real estate losses you can deduct will be $15,000 for that tax year.

Don’t let your high income penalize you! Learn my tax secrets to increase your cash flow by uncovering the hidden cash flow in your real estate. Several of my secrets reveal how to legally get around these income limitations!

What constitutes active participation?

Active participation exists so long as you participate, in the making of management decisions or arranging for others to provide services (such as repairs), in a significant and bona fide sense. Also, you must have at least a 10% interest in the activity at any time during the year.

** Exception #2: “Real Estate Professional” exception. **

What is a Real Estate Professional?

First, let’s dispense with one myth: Real Estate Professional status does not mean you have to hold a real estate license. Rather, it is a designation you obtain by meeting certain specific requirements. If you qualify as a real estate professional you can deduct all your current year rental real estate losses against other income without limitations.

Requirement #1

The first requirement is that you spend more than 750 hours in real estate trades or businesses in which you materially participate.

What is a real estate trade or business? A real estate trade or business is defined as ANY real estate development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business.

The 750 hours test must be met for each activity. So for example, say you have three rental properties. The general rule is that you have to perform at least 750 hours on activities related to EACH of those three properties. Fortunately, there is an exception to this rule. If you make the election to aggregate all of your rental real estate activities into one activity, you only have to meet the 750 hours requirement once for the tax year.

What types of activities qualify as real estate professional activities? Activities such as:

- Searching for possible rental properties

- Attending real estate seminars or reading real estate books

- Meeting with real estate agents and viewing properties

- Meeting with mortgage brokers with regards to getting loans on properties

- Travel time to and from the seminars and your property searches

- Preparing your bookkeeping and tax information for your rental properties

- Time spend buying or selling properties (i.e. signing the closing documents)

- Studying and reviewing financial reports (Investor-type)

- Preparing summaries or analyses for personal use (Investor-type)

- Monitoring finances or operation in a non-managerial capacity (Investor-type)

An important note to the investor-type activities mentioned above is that these activities can only be counted towards real estate professional time if you are involved in the day-to-day operations or management of the activity for which you perform those tasks. Essentially, this means that if you have an independent property manager and your only real estate business is your rental properties, you probably will not qualify as a real estate professional.

Requirement #2

The second requirement is that you spend more time in your real estate trades or businesses than in ALL OTHER trades or businesses combined. Time spent as an employee in real estate activities is counted only if you are a more than a 5% owner in that business.

- What You Need to Do -

You have to meet the above requirements each year. So, you could be a real estate professional one year but not the next. Only one spouse needs to meet the requirements in order for a married couple to take advantage of the benefits provided by the real estate professional status.

The extent of an individual’s participation in an activity may be established by any reasonable means. Contemporaneous daily time reports, logs, or similar documents are not required if the extent of such participation may be established by other reasonable means. Documentation required includes the identification of services performed over a period of time and the approximate number of hours spent performing such services during such period, based on appointment books, calendars, or narrative statements.

If you are audited, the IRS will ask you to prove your real estate professional status. For more on how to be prepared, see my recent article titled: “Three (3) Things You Can Do To Be Prepared For An Audit”