by on October 31, 2011 Leave a Comment

Tax Considerations In Your Purposeful Plan

There are two basic approaches to real estate investing. Investing for current income or investing for future income. Both approaches are useful depending on where you want to go and where you are in your plan. This is where you might hear the BawldGuy talking about Purposeful Planning.

There are a number of ways real estate can create current income. The best examples would be through wholesaling and flipping. In this post, I want to look at rental property which can be selected to emphasize income or capital growth.

Rental property has four ways to create wealth or income.

• Cash flow
• Appreciation
• Equity buildup
• Tax savings

An investor can attempt to maximize one or more of these aspects of real estate. For those wanting to create the most current income would emphasize cash flow. An investor looking for capital growth might emphasize appreciation and/or equity buildup when selecting a property.
Regardless of your investment strategy, tax planning is an important consideration that needs to be planned for as well. Your Purposeful Plan should take advantage of tax strategies that minimize taxes during the investment period. [Read more...]

Filed Under: IRS, Purposeful Planning
by on October 18, 2011 6 Comments

The Paradox — Why San Diego and California In General Are Terrible Long Term Plays, But Sometimes Golden In the Short Run

So many of you who come here regularly know my professional opinion when it comes to investing in San Diego real estate long term — DON’T. Same goes for the rest of California and the west coast for that matter. Stayin’ away is your best approach.

Why?

The answer is simple, but multi-faceted. I’ll be brief. (Hey! I heard that snicker in the back.)

1. The vast majority of property out west is relatively older. In San Diego, anything built in the 80′s is called newer. :) If it makes sense to keep a property for the duration numbers wise, but it’s 40-100 at your retirement, your cash flow will suffer noticeably. [Read more...]

Filed Under: Capital Growth, Purposeful Planning, Retirement Income, San Diego Property Owners
by on September 29, 2011 Leave a Comment

Real Estate Investing For Retirement – A Short Review

Every year I’m blessed to have dozens and dozens of conversations (I call most of ‘em fixes.) with folks either wanting to get started on a real estate investment plan, or current investors who’d like to get back on track from a minor derailment. Both share a keen desire to achieve a magnificently abundant retirement. Sometimes I can help, sometimes not. I do my best to at least show them the direction in which to go.

Here are some things to ponder — food for thought if you will.

• Know where you are now. Rudimentary? You bet. But try gettin’ to any ‘Point B’ without knowin’ your ‘Point A’ and see how it works out. :)

• Understand how crucial it is to comprehend the difference between capital growth and cash flow — when to use one or the other — and when to shift gears from one to the other. [Read more...]

Filed Under: Purposeful Planning, Real Estate Investing
by on September 19, 2011 Leave a Comment

Becoming Your Own Phoenix – Rising From Real Estate Investment Ashes II

In the last epispode we left our real estate investor between a rock and an evil place. He owned props in both CA and Florida, and the news wasn’t good. Each market was racin’ the other one down, neither allowing a sale to happen no matter how hard he tried. $3-400,000 in net equity was beginning to look a whole bunch like well under $200,000. In sophisticated real estate investment circles we call that a bitter pill. :) And no, it ain’t funny. Been there, lived that more than once.

Allow me to suggest an alternate title for this piece.

How ’bout — My Name is K-Mart, But My Friends Call me BlueLight.

BawldGuy Axiom: If you’re investing for retirement, and contemplating a significant move/change, it better be a slam dunk no-brainer. Retirement planning isn’t a game. [Read more...]

Filed Under: Purposeful Planning, San Diego Property Owners
by on June 22, 2011 Leave a Comment

When Is PPP Valuable With Your Self-Directed IRA or 401K?

So, when is PPP valuable to use when establishing your Self-Directed (SD) IRA or 401K? Well….always!! But, wait, what is PPP? It is simply nothing more than Productive and Prudent Planning. So, you may say to yourself, well, “Duh”, but you may be surprised how many people do not take these two simple words to heart.

You see, as more and more people find out about the ability to self-direct their retirement assets, they become enamored with the process, want to get their plans established and then ask, “Now what?” While not discouraging in any way the establishment of these plans, one must take the responsibility to not only learn everything they can about such plans (and there are some definite things to learn), but also be productive and prudent with their planning so they really hit the ground running when their account has been established or shortly thereafter. And, by running, that doesn’t necessarily mean going out and investing right away, but knowing what conditions, terms, etc. you are wanting and/or needing to be met before you make an investment into a non-traditional asset. [Read more...]

Filed Under: 401(k)'s & IRA's, Purposeful Planning Tagged With:
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