by on April 18, 2011 Leave a Comment

Real Estate Investors – Create Synergy Between Short and Long Term Investing – A Projected Case Study

Recently a post spoke of how those who buy, fix, and sell properties — flippers — can use that skill as a natural turbo charger for their long term investing Plan. You can read it here, it’s not too long.

A couple weeks ago I met a potential client, in San Diego for a work related conference. He’s a 30-something professional, married to the same. They have their first child, not even two months old yet. (Remember those days?) They’re both smart as whips, hard workers, way above average wage earners, and already building an incredible future. Also, just nice folk, both of ‘em.

‘Edmond’ is already doin’ the buy and fix-up thing. He’s now the proud owner of a few such properties. They’re old. They don’t have much of a future. But they will all show a profit, short term. He’s done well, and not only has he gone on a nearly vertical learning curve, he’s been able to apply lessons on the run, in real life/real time. [Read more...]

Filed Under: 1031 Exchanges, 401(k)'s & IRA's, EIUL
by on March 21, 2011 3 Comments

Real Estate Investing In Dayton, Ohio – Not Recommended

Today let’s look at what a duplex owner in Dayton, Ohio can do to improve their retirement. I’ve had a few conversations with Teri Lussier, a very good agent I know who lives and works there. She also sent me actual listings and records of sold properties. I wanted a middle-of-the-road, well maintained example, and I think I found one. It’s a duplex, and closed escrow about nine months ago in the 45414 zip code area. The price was $173,000.

It offered two bedroom units on each side, both of which sported fireplaces. It was very well maintained. The rents at the time of sale were $765 a side. Heck, it’s even at the end of a nice, quiet cul-de-sac. With forced air heat and central air, neither harsh Ohio summers or winters were gonna get the best of any tenant. Also, they’d given it the ‘once over’ before selling. Redone driveway, modernized windows, and the like.

Here’s a picture — the curb appeal is great. [Read more...]

Filed Under: 1031 Exchanges, Cash Flow, Retirement Income, San Diego Property Owners
by on February 23, 2011 Leave a Comment

What Should Ralph and Liz Do? Answer Lies In Their Primary Agenda

Establishing an agenda isn’t rocket science for most of us. Hit retirement in high gear with more than enough income to pay for the lifestyle we’ve chosen. It’s the details that can get a bit involved. :) We began the story of Ralph and Liz yesterday, as the facts of their real estate investment status quo were laid out. They needed to decide on a strategy — refinance their existing multifamily income property for cash to buy more — OR — complete a tax deferred exchange. Most people can do the simple arithmetic, comparing the results of each approach.

The objective Purposeful Plan factors

    What yields the highest retirement income?
    What are the differences in after tax benefits?
    How will the size of any future capital gain be affected?
    Given retirement is 15-20 years away, will operating expenses be an issue?
    What’s the difference in the time it’ll take to pay off all debt by retirement?

[Read more...]

Filed Under: 1031 Exchanges, Depreciation, Purposeful Planning, Retirement Income, San Diego Property Owners Tagged With:
by on February 22, 2011 5 Comments

To Refinance And Buy More OR Complete A Tax Deferred Exchange?

In a recent post about different Schools of Thought in real estate investing, a frequent reader said I’d ‘suggested’ a post topic. Before we get into it, my experience has clearly demonstrated to me there are schools of thought on most any topic related to investing. In fact, there are dueling schools even on sub-topics. What I’ve learned for sure in my 41 years, is that truly objective analysis never lies. An investor — given complete and reliable information, will almost always choose the strategy most personally beneficial. Even Captain Obvious rolled his eyes on that one.

The topic — refinancing vs completing a tax deferred exchange.

First, let’s set up the scenario most investors face when they’ve decided to make a move to improve their status quo with one or more multifamily properties. [Read more...]

Filed Under: 1031 Exchanges, Financing, Purposeful Planning, San Diego Property Owners
by on February 15, 2011 11 Comments

Schools of Thought — And What Works For Real Estate Investors’ Retirements

There are multiple schools of thought related to investing in real estate for retirement. Two dominate.

One says you buy property, holding it forever. When you’ve saved sufficient capital to buy additional property, you do — then hold IT for evermore too. The idea is you allow rental income to pay off debt as quickly as possible, arriving at the point of a debt free cash flow machine. Do this a buncha times and you’ve built the foundation for a nice retirement income stream.

Or so the doctrine goes.

The other school’s doctrine teaches cash flow comes from the yield on capital or equity in an asset. The bigger the capital amount or equity in the asset, the greater the income, measured in dollars. The ‘yield’ itself is expressed in terms of a percentage. For example, 7.5%. This commandment says that since the yield is equal, more or less, for a more substantial or less generous figure, why not arrive at retirement with the largest amount of capital and/or equity possible? [Read more...]

Filed Under: 1031 Exchanges, Capital Growth, Cash Flow, Retirement Income, San Diego Property Owners
« Older Posts
Newer Posts »