Real Estate in IRAs
Little-Known Secret Allows Real Estate Investors to Create True Wealth
Historically, real estate has given many Americans with a stable investment vehicle that provides both income and appreciation. One of the greatest tools available to real estate investors is government-sponsored retirement plans, such as IRAs and 401(k)s.
Most investors believe that their only IRA investment options are bank CDs, the stock market, and mutual funds.
Few Americans realize that they have the option to self-direct their IRAs and other retirement plans into real estate—and that they can benefit from the tax advantages those plans provide. IRA investments earn tax-deferred/tax-free profits.
Imagine not having to pay taxes right away—or ever—on your real estate deals. Instead of paying 25%, or 30%, or even 50% of your profits to the government in taxes, you keep it.
Additional advantages of the real estate IRAs include:
The power of compound interest
A reduction of taxable income
Asset protection
Estate planning
If you're a successful real estate investor, or if you're just looking to diversify your retirement portfolio, the combination of real estate and your IRA can be very powerful.
Showing posts with label las vegas commercial. Show all posts
Showing posts with label las vegas commercial. Show all posts
Monday, December 5, 2011
Tuesday, September 27, 2011
The Brutal Facfs
Brutal facts are not always pretty or inviting, but they are reality. Initially brutal news may take you back and even make you feel beat up. But take heart, it is good for bad news to travel fast. You are better off to hear negative news first, before the information becomes filtered through other perspectives, or the facts fester and become worse.
Brutal facts that are not given attention move from an inflamed infection to relational and organizational gangrene. Inevitably there follows an amputation; someone or something has be severed. This extreme action could have been avoided if the brutal facts had been revealed, recognized and acted upon early. Brutal facts are our friends; so do not dismiss the messenger because the message is bad, he or she is just the delivery person.
The wise receiver of brutal facts will extract the “chaff and keep the wheat”.
A brutal fact may relate to your finances and/or your property situation. What is the reality of your cash situation? Take care of your " financial business" or it will take care of you by tumbling down around you.
So where can we find these brutal facts? Your trusted advidsor, Your spouse, parent or friend that has some "horse sense" is a good starting point. They have a vested interest in you, so normally their perception of the facts is fairly accurate. Listen with an ear to learn, but if you become defensive or argumentative they will eventually shut down. Because they care, is why they want you to be aware.
Why not change on your own terms rather than being forced to change on another’s? This is the essence of brutal facts—there are some things that need to change. You, the work culture, and your family are always in flux, so use this as an opportunity to move from mediocrity to excellence. Embrace the brutal facts, learn from them and become better.
Do you currently have concerns that need to seriously consider? Askl youself, "How do I need to change"? "What trusted advisor can assit with making the right" decision.
Brutal facts that are not given attention move from an inflamed infection to relational and organizational gangrene. Inevitably there follows an amputation; someone or something has be severed. This extreme action could have been avoided if the brutal facts had been revealed, recognized and acted upon early. Brutal facts are our friends; so do not dismiss the messenger because the message is bad, he or she is just the delivery person.
The wise receiver of brutal facts will extract the “chaff and keep the wheat”.
A brutal fact may relate to your finances and/or your property situation. What is the reality of your cash situation? Take care of your " financial business" or it will take care of you by tumbling down around you.
So where can we find these brutal facts? Your trusted advidsor, Your spouse, parent or friend that has some "horse sense" is a good starting point. They have a vested interest in you, so normally their perception of the facts is fairly accurate. Listen with an ear to learn, but if you become defensive or argumentative they will eventually shut down. Because they care, is why they want you to be aware.
Why not change on your own terms rather than being forced to change on another’s? This is the essence of brutal facts—there are some things that need to change. You, the work culture, and your family are always in flux, so use this as an opportunity to move from mediocrity to excellence. Embrace the brutal facts, learn from them and become better.
Do you currently have concerns that need to seriously consider? Askl youself, "How do I need to change"? "What trusted advisor can assit with making the right" decision.
Sunday, July 17, 2011
Timing verses Location
One of the things that I have found over the years in working with clients that own real estate is that people love buying real estate. With that said some make critical mistakes when doing so. The starting point in deciding what to buy and how to buy it should begin with the answer to this question: Why Should I buy and what is it for?
This question that you ask yourself may sound ridiculous, however an important one for your financial future. Timing is so important. What was the famous line in real estate? Location, location, location. Look back at the years 2003 to 2008 at the feeding frenzy. If someone bought in those years they bought at the high part of the market; thus, the foreclosure and short sale phenonumen. The rule of thumb to any investing or any business is TIMING, TIMING, TIMING.
Another questions to ask yourself what time frame of investing, expectations, do you have the cash or financing and most importantly, whether the property will cash flow. Analyze the property, take all the expenses, taxes, hoa, maintenance, property manager, vacancy, home warranty, landlord insurance policy, holding the property in an LLC, etc. Find out what the property can be rented for. Find out the crime stats in the area and then do the math.
When buying real estate for income it is necessary to look at the type of income that you purchase. Single family homes in the Las Vegas area will be a great investment, for income if done correctly. Let me give you an example: A three bedroom home in Las Vegas, Nevada that would sell for 80,000 rents for $1,500 per month. Subtracting out the annual expenses of the debt service (mortgage payment), property taxes, insurance and the other expenses I mentioned above. It would not be uncommon for this property to net $7,200 yr after expenses. Take that to another level. Invest in 10 homes with that same outcome that would be $72,000 a year. Go a little further, invest in 20 homes would equal $144,000 a year. We have not even discussed the tax advantages. Your CPA would give you that information.
Let’s take a look at commercial property. Multiunit properties, apartments, or commercial properties may be far superior in terms of income than single family homes. In today’s market, you may be able to find a 4 unit property for $100,000. Obviously the figures are larger however so the return is. If done correctly.
Using leverage (OPM or OPC) may also allow for additional income on a property.
End Result: You need to do some planning prior to purchasing a property and find a knowledgeable real estate agent that has done investing for themselves. You should consider the types of properties, how to fund the property, whether to use leverage, who will manage the property, what improvements it may need, and what annual expenses it may have, among other items. The list of considerations is long, but the outcome will be well worth the hard work and profitable. Happy Investing!
This question that you ask yourself may sound ridiculous, however an important one for your financial future. Timing is so important. What was the famous line in real estate? Location, location, location. Look back at the years 2003 to 2008 at the feeding frenzy. If someone bought in those years they bought at the high part of the market; thus, the foreclosure and short sale phenonumen. The rule of thumb to any investing or any business is TIMING, TIMING, TIMING.
Another questions to ask yourself what time frame of investing, expectations, do you have the cash or financing and most importantly, whether the property will cash flow. Analyze the property, take all the expenses, taxes, hoa, maintenance, property manager, vacancy, home warranty, landlord insurance policy, holding the property in an LLC, etc. Find out what the property can be rented for. Find out the crime stats in the area and then do the math.
When buying real estate for income it is necessary to look at the type of income that you purchase. Single family homes in the Las Vegas area will be a great investment, for income if done correctly. Let me give you an example: A three bedroom home in Las Vegas, Nevada that would sell for 80,000 rents for $1,500 per month. Subtracting out the annual expenses of the debt service (mortgage payment), property taxes, insurance and the other expenses I mentioned above. It would not be uncommon for this property to net $7,200 yr after expenses. Take that to another level. Invest in 10 homes with that same outcome that would be $72,000 a year. Go a little further, invest in 20 homes would equal $144,000 a year. We have not even discussed the tax advantages. Your CPA would give you that information.
Let’s take a look at commercial property. Multiunit properties, apartments, or commercial properties may be far superior in terms of income than single family homes. In today’s market, you may be able to find a 4 unit property for $100,000. Obviously the figures are larger however so the return is. If done correctly.
Using leverage (OPM or OPC) may also allow for additional income on a property.
End Result: You need to do some planning prior to purchasing a property and find a knowledgeable real estate agent that has done investing for themselves. You should consider the types of properties, how to fund the property, whether to use leverage, who will manage the property, what improvements it may need, and what annual expenses it may have, among other items. The list of considerations is long, but the outcome will be well worth the hard work and profitable. Happy Investing!
Wednesday, February 2, 2011
The Real Estate Buzz
THE REAL ESTATE BUZZ!!
There’s something in the air. Have you noticed it? Downtown is busier, restaurants are crowded and retail sales are up. The same is true in the real estate market. Pending home sales improved in December, marking the fifth gain in the past six months. New home sales are up 17.5 % nationwide according to the Department of Housing and Urban Development.
Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), credits this upswing to affordability, favorable mortgage rates and an improving economy. Yun predicts, “The positive trend is likely to continue in 2011. Current activity suggests a sustainable, healthy volume of a mid-5 million in total home sales for this year.”
Our local market is reflecting this upswing. Builders are starting to build in preparation for sales at higher prices in the year to come. Inflation is a concern that drives some to buy now. By the end of February, more homes will come on the market. The spring season of March, April and May are traditionally very active. Now may be the time to evaluate your options and capitalize on the spring market.
JUST ASKQ: What are the new trends in remodeling?
A: Since December, there has been an upswing in remodeling nationwide according to the National Association of the Remodeling Industry (NARI). The cost of a remodel is running about 10 to 15% less than two years ago. In general, NARI reports that the project size is smaller.
Instead of expanding your home, consider borrowing space from oversized rooms. Instead of building a wine room, install a wine storage appliance. Instead creating a separate home theater in the basement, avoid the cost of expensive electronics and make a multipurpose room. I wonder whether the phase of bigger homes, bigger basements and bigger toys is ending or just slowing. Many clients say that they do not use those extra rooms. Let me know what you think.
MY TOWN
The National Restaurant Association's What's Hot in 2011 survey of more than 1,500 professional chefs revealed that local sourcing, healthy children's meals, sustainable seafood, and gluten-free cuisine will be among the hottest trends on restaurant menus in 2011. 30% of those surveyed said that pop-up restaurants will be the hottest trend in 2011.
Pop-up restaurants have been gaining notoriety in the world of “foodies” and mainstream America is starting to take notice. Rather than taking on the burden of a long term lease, a pop-up restaurant allows established, known chefs to temporarily rent space in a bakery or small restaurant and offer meals only at certain times. Bakeries and delis by day are transformed into high-end restaurants by night.
Ludo Levebre, one of the founders of this movement, earned Mobile Travel Guide Five Star awards at two of Los Angeles' most prestigious restaurants before opting for freedom. Chef Levebre’s website compares his traveling restaurant, LudoBites, to a band: “Like a club band we have been touring locally…and playing different parts of Los Angeles.”
Go online to find a pop-up restaurant near you. Search for: "pop up restaurants in (your city here) 2011," and peruse the options. Let me know if you try out one of the hottest food trends of 2011.
FYI
Got any home improvement plans lined up for the New Year? The following online programs are free and offer a great way to design your home projects before you start:
•Autodesk Homestyler is created by the same company that makes AutoCAD architectural software. This robust, easy-to-use application lets you arrange and design your project by simply dragging and dropping elements such as windows and doors, furniture and appliances.
•Google Sketchup is a sophisticated software application that lets you build 3D models of your home. Online video tutorials will help you get started. Users can upload their creations to a shared database where you can peruse others’ works for inspiration.
•Ikea Planner lets you build a room and furnish it with Ikea products.
For minor upgrades such as new flooring and paint colors, try these online resources.
•With Colorjive you can upload a photo of the room you want and try on new color schemes. Adjust lighting conditions then process your image to obtain the color index numbers for Sherman Williams and Benjamin Moore paints.
•Daltile’s website lets you design your own project, select and arrange coordinating tiles, and tally up the final price of your project.
•Armstrong Flooring displays stock photos demonstrating a number of flooring options from laminates to hardwood
There’s something in the air. Have you noticed it? Downtown is busier, restaurants are crowded and retail sales are up. The same is true in the real estate market. Pending home sales improved in December, marking the fifth gain in the past six months. New home sales are up 17.5 % nationwide according to the Department of Housing and Urban Development.
Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), credits this upswing to affordability, favorable mortgage rates and an improving economy. Yun predicts, “The positive trend is likely to continue in 2011. Current activity suggests a sustainable, healthy volume of a mid-5 million in total home sales for this year.”
Our local market is reflecting this upswing. Builders are starting to build in preparation for sales at higher prices in the year to come. Inflation is a concern that drives some to buy now. By the end of February, more homes will come on the market. The spring season of March, April and May are traditionally very active. Now may be the time to evaluate your options and capitalize on the spring market.
JUST ASKQ: What are the new trends in remodeling?
A: Since December, there has been an upswing in remodeling nationwide according to the National Association of the Remodeling Industry (NARI). The cost of a remodel is running about 10 to 15% less than two years ago. In general, NARI reports that the project size is smaller.
Instead of expanding your home, consider borrowing space from oversized rooms. Instead of building a wine room, install a wine storage appliance. Instead creating a separate home theater in the basement, avoid the cost of expensive electronics and make a multipurpose room. I wonder whether the phase of bigger homes, bigger basements and bigger toys is ending or just slowing. Many clients say that they do not use those extra rooms. Let me know what you think.
MY TOWN
The National Restaurant Association's What's Hot in 2011 survey of more than 1,500 professional chefs revealed that local sourcing, healthy children's meals, sustainable seafood, and gluten-free cuisine will be among the hottest trends on restaurant menus in 2011. 30% of those surveyed said that pop-up restaurants will be the hottest trend in 2011.
Pop-up restaurants have been gaining notoriety in the world of “foodies” and mainstream America is starting to take notice. Rather than taking on the burden of a long term lease, a pop-up restaurant allows established, known chefs to temporarily rent space in a bakery or small restaurant and offer meals only at certain times. Bakeries and delis by day are transformed into high-end restaurants by night.
Ludo Levebre, one of the founders of this movement, earned Mobile Travel Guide Five Star awards at two of Los Angeles' most prestigious restaurants before opting for freedom. Chef Levebre’s website compares his traveling restaurant, LudoBites, to a band: “Like a club band we have been touring locally…and playing different parts of Los Angeles.”
Go online to find a pop-up restaurant near you. Search for: "pop up restaurants in (your city here) 2011," and peruse the options. Let me know if you try out one of the hottest food trends of 2011.
FYI
Got any home improvement plans lined up for the New Year? The following online programs are free and offer a great way to design your home projects before you start:
•Autodesk Homestyler is created by the same company that makes AutoCAD architectural software. This robust, easy-to-use application lets you arrange and design your project by simply dragging and dropping elements such as windows and doors, furniture and appliances.
•Google Sketchup is a sophisticated software application that lets you build 3D models of your home. Online video tutorials will help you get started. Users can upload their creations to a shared database where you can peruse others’ works for inspiration.
•Ikea Planner lets you build a room and furnish it with Ikea products.
For minor upgrades such as new flooring and paint colors, try these online resources.
•With Colorjive you can upload a photo of the room you want and try on new color schemes. Adjust lighting conditions then process your image to obtain the color index numbers for Sherman Williams and Benjamin Moore paints.
•Daltile’s website lets you design your own project, select and arrange coordinating tiles, and tally up the final price of your project.
•Armstrong Flooring displays stock photos demonstrating a number of flooring options from laminates to hardwood
Tuesday, November 16, 2010
10 Overvalued Global Real Estate Markets
10 overvalued global housing markets
I found a great article about the real estate market globally. Take a look by clicking the link below.....
U.S. market considered 'fairly valued'
BY INMAN NEWS, THURSDAY, OCTOBER 28, 2010
http://www.inman.com/news/2010/10/28/10-overvalued-global-housing-markets
I found a great article about the real estate market globally. Take a look by clicking the link below.....
U.S. market considered 'fairly valued'
BY INMAN NEWS, THURSDAY, OCTOBER 28, 2010
http://www.inman.com/news/2010/10/28/10-overvalued-global-housing-markets
Thursday, October 7, 2010
The Real Estate Buzz......
Real estate prices in our area continue to remain steady. After the tax credits for home buyers expired last May, there was concern that the market could tank. Yet, existing home sales have stabilized over the past year. Lawrence Yun, Chief Economist for the National Association of Realtors, reports that the housing market continues to recover on its own power without the homebuyer tax credit. The NAR reported in September that existing-home sales rose by 7.6% in August following a big correction in July.
I think people are beginning to hedge their bets. Prices haven’t been this good for a long time. Sellers are serious. The rate for a 30-year conventional fixed-rate mortgage fell to a record low of 4.43 in August according to Freddie Mac. Note that the rate was 5.19 percent in August 2009.
So what is holding back more buyers? The main reason given is a lack of confidence in our national economy. Many believe that the November elections will create a new direction and confidence will grow. If that is so, then buying now will be seen as the smart move.
JUST ASK
Q: What is a CMA?
A: A Comparative Market Analysis, or CMA, is an in-depth analysis of the home’s worth in today’s market. If you are thinking about selling your home, then we need to determine the fair market value first. There are online sites as well as newspaper listings that will give valuations. But each house is different and most sales are not posted publicly for months. It takes an expert who has walked through the recent homes for sale, knows the streets of the neighborhood, and knows the trends of real estate transactions to best assess which properties to compare to yours in order to create a realistic CMA.
MY TOWN
Any parent knows the value of good schools for their children. But the value of good schools doesn’t only affect children and their families, it also impacts neighborhoods and the property values of your home. Even if you don’t have school-age children, knowing the ratings of schools in your current home or prospective new homes will affect your pocketbook in the long run.
The Internet offers some free resources to find school ratings. Check out www.greatschools.org for comprehensive school data nationwide. Peruse the website to find the top schools in small, medium, or large US cities (click Find a School tab, then Choose the Right School, then Moving with Kids). Or search for a specific city to review the Academic Performance Index results.
FYI
With a large amount of bank-owned properties on the market, it's a great time for homebuyers looking for good deals. But bidding on bank-owned homes also means the homebuyer has to compete with investors bringing cash offers.
Fannie Mae's got a new program for their Real Estate Owned (REO) properties. For homeowners, this is a way to buy properties that have reduced prices BEFORE investors can buy them. After the property hits the market, you've got fifteen days to look at the property.
Qualified homebuyers must be owner-occupants and can receive up to 3.5% of the final sales price, which can be used toward closing cost assistance including a home warranty, if desired and available. Eligible offers must be submitted on or after Sept. 23, 2010, and must close by Dec. 31, 2010. The sale must close within 60 days of the offer being accepted.
Let me know if you are interested in this program. It is being offered through real estate professionals to give their clients the heads-up. Properties available under this program can be viewed on the REO Web site www.HomePath.com.
I think people are beginning to hedge their bets. Prices haven’t been this good for a long time. Sellers are serious. The rate for a 30-year conventional fixed-rate mortgage fell to a record low of 4.43 in August according to Freddie Mac. Note that the rate was 5.19 percent in August 2009.
So what is holding back more buyers? The main reason given is a lack of confidence in our national economy. Many believe that the November elections will create a new direction and confidence will grow. If that is so, then buying now will be seen as the smart move.
JUST ASK
Q: What is a CMA?
A: A Comparative Market Analysis, or CMA, is an in-depth analysis of the home’s worth in today’s market. If you are thinking about selling your home, then we need to determine the fair market value first. There are online sites as well as newspaper listings that will give valuations. But each house is different and most sales are not posted publicly for months. It takes an expert who has walked through the recent homes for sale, knows the streets of the neighborhood, and knows the trends of real estate transactions to best assess which properties to compare to yours in order to create a realistic CMA.
MY TOWN
Any parent knows the value of good schools for their children. But the value of good schools doesn’t only affect children and their families, it also impacts neighborhoods and the property values of your home. Even if you don’t have school-age children, knowing the ratings of schools in your current home or prospective new homes will affect your pocketbook in the long run.
The Internet offers some free resources to find school ratings. Check out www.greatschools.org for comprehensive school data nationwide. Peruse the website to find the top schools in small, medium, or large US cities (click Find a School tab, then Choose the Right School, then Moving with Kids). Or search for a specific city to review the Academic Performance Index results.
FYI
With a large amount of bank-owned properties on the market, it's a great time for homebuyers looking for good deals. But bidding on bank-owned homes also means the homebuyer has to compete with investors bringing cash offers.
Fannie Mae's got a new program for their Real Estate Owned (REO) properties. For homeowners, this is a way to buy properties that have reduced prices BEFORE investors can buy them. After the property hits the market, you've got fifteen days to look at the property.
Qualified homebuyers must be owner-occupants and can receive up to 3.5% of the final sales price, which can be used toward closing cost assistance including a home warranty, if desired and available. Eligible offers must be submitted on or after Sept. 23, 2010, and must close by Dec. 31, 2010. The sale must close within 60 days of the offer being accepted.
Let me know if you are interested in this program. It is being offered through real estate professionals to give their clients the heads-up. Properties available under this program can be viewed on the REO Web site www.HomePath.com.
Thursday, September 9, 2010
73% of all homes in Clark County are down at leat 50%. And rents have held up well because the homeowners that are short-selling or vacating homes due to foreclosure must begin renting.
Choose the property wisely and you can get steady income and a good chance of solid appreciation over the next ten years. Seek out places that were growing before the recession and have something compelling to offer that will drive future growth. If you need a mortgage, make sure your monthly income will be enough to cover you loan payments plus a 20% cushion to cover repairs, vacancies and property management.
Real Estate is the only investment that gives you: Cash Flow. Appreciation, Depreciation and Equity Build Up.
Call for more information (702) 236-6266 or www.sharebuildersinc.com
Choose the property wisely and you can get steady income and a good chance of solid appreciation over the next ten years. Seek out places that were growing before the recession and have something compelling to offer that will drive future growth. If you need a mortgage, make sure your monthly income will be enough to cover you loan payments plus a 20% cushion to cover repairs, vacancies and property management.
Real Estate is the only investment that gives you: Cash Flow. Appreciation, Depreciation and Equity Build Up.
Call for more information (702) 236-6266 or www.sharebuildersinc.com
Tuesday, August 3, 2010
Defense for you Asset
I have had a discussion on this topic a few months back, however It seems I having the same conversation with many investors, homeowners, and business owners.
An important discussion is keeping your asset protected.
Living trusts are used by millions of people who wish to keep their assets from going through probate when they die. Most living trusts, however, are not adequate for protecting assets from creditors because the trusts are revocable. This means that the person setting up the trust can revoke or change the terms of the trust at any time. If you have a revocable trust, and you can get control of the assets, the courts have consistently held that your creditors can also get control of those assets.
Trusts that are irrevocable can be more successfully used to protect assets. Once you set up an irrevocable trust, you cannot change the terms or revoke it. In essence, you have given your assets away; they are no longer available to satisfy claims against you. A judgment creditor cannot get to these funds. These are just two trusts that are avaiavable, there are many more.
What about LLC's, S, Corps, C Corporations are another way of protection.
Real estate asset protection do you need it? Well, considering that real-estate is risky enough as it is, if someone gets killed or hurt you are likely to be sued by the injured victims or family members. That is a given as accidents do happen but lawsuits are more likely to happen when people know you own property. Particularity in this age where someone can sue a business because the coffee they were drinking was too hot or where a lady was awarded 12 million dollars in a foiled suicide attempt on the train tracks.
Consider this scenario you are sued for $2,000,000, your insurance will cover $1,000,000 but guess who is left with a $1,000,000 problem. The day before life was rosy but today you are in the poor house. You could of avoided that issue all together if you had real estate asset protection that is if you didn't have the property in your name.
The biggest mistake you can make is to put your real estate in your own name as it all a part of public record. Anyone can look at what you have determine its current market value and deduct what you owe to see what they can take you for. Putting your name out in public land registry is equivalent to painting a bulls eye on your back to prying eyes such as attorneys, creditors and even tenants.
But what entity is the real estate asset protection? What entity or corporate structure do I use to buy and sell to hold real estate? How can I limit my liability exposure? These are very good questions to ask and a good place to start.
Certainly your first protection is liability insurance, but should judgments exceed your insurance or should your insurance not cover you for whatever reason you need real estate asset protection.
A land trust is a form of an irrevocable living trust used to take title to real estate so the beneficiaries cannot be easily discovered. However the land trust is not considered to be a separate taxable entity and there are no tax benefits of transferring property in or out of it.
A corporation is an effective device to buy and sell real estate so if the beneficiary of the land trust is a corporation one can have the tax benefits of being taxed after expenses at a corporate rate rather than before expenses and at the higher rate of an individual. As an individual you may also be taxed as a dealer at 15% for buying and selling.
Depending on your tax situation you might be better off with a C Corporation rather than a S Corporation. A corporation is a C Corporation by default and files a separate tax return whereas a S corporation is specially set up so that it splits up its profits to its shareholders as dividends. The shareholders then report their income on their own personal tax returns. In most cases its better to start out as a S Corporation and later change into a C Corporation when the tax advantages become evident.
A LLC or limited liability company allows the shareholders to participate in the running of the company without sharing its liability. Like a S Corporation the profits and losses flow to the owners. Buying and selling may subject the owners as an active activity to a dealers tax of 15% making the C corporation a better choice. If the business is primarily rents the LLC may be better. Its conceivable that one can form an LLC for every property and file one personal income tax if there is only one owner.
In any case get as much insurance as your entity can sustain to cover your real estate and business activity. Insure the entity is the names insured. Making sure the entity holds title to all your real estate to insure you won't be named the defendant in any potential lawsuit.
Those are some areas to consider before you obtain further professional advice for getting the best real estate asset protection
An important discussion is keeping your asset protected.
Living trusts are used by millions of people who wish to keep their assets from going through probate when they die. Most living trusts, however, are not adequate for protecting assets from creditors because the trusts are revocable. This means that the person setting up the trust can revoke or change the terms of the trust at any time. If you have a revocable trust, and you can get control of the assets, the courts have consistently held that your creditors can also get control of those assets.
Trusts that are irrevocable can be more successfully used to protect assets. Once you set up an irrevocable trust, you cannot change the terms or revoke it. In essence, you have given your assets away; they are no longer available to satisfy claims against you. A judgment creditor cannot get to these funds. These are just two trusts that are avaiavable, there are many more.
What about LLC's, S, Corps, C Corporations are another way of protection.
Real estate asset protection do you need it? Well, considering that real-estate is risky enough as it is, if someone gets killed or hurt you are likely to be sued by the injured victims or family members. That is a given as accidents do happen but lawsuits are more likely to happen when people know you own property. Particularity in this age where someone can sue a business because the coffee they were drinking was too hot or where a lady was awarded 12 million dollars in a foiled suicide attempt on the train tracks.
Consider this scenario you are sued for $2,000,000, your insurance will cover $1,000,000 but guess who is left with a $1,000,000 problem. The day before life was rosy but today you are in the poor house. You could of avoided that issue all together if you had real estate asset protection that is if you didn't have the property in your name.
The biggest mistake you can make is to put your real estate in your own name as it all a part of public record. Anyone can look at what you have determine its current market value and deduct what you owe to see what they can take you for. Putting your name out in public land registry is equivalent to painting a bulls eye on your back to prying eyes such as attorneys, creditors and even tenants.
But what entity is the real estate asset protection? What entity or corporate structure do I use to buy and sell to hold real estate? How can I limit my liability exposure? These are very good questions to ask and a good place to start.
Certainly your first protection is liability insurance, but should judgments exceed your insurance or should your insurance not cover you for whatever reason you need real estate asset protection.
A land trust is a form of an irrevocable living trust used to take title to real estate so the beneficiaries cannot be easily discovered. However the land trust is not considered to be a separate taxable entity and there are no tax benefits of transferring property in or out of it.
A corporation is an effective device to buy and sell real estate so if the beneficiary of the land trust is a corporation one can have the tax benefits of being taxed after expenses at a corporate rate rather than before expenses and at the higher rate of an individual. As an individual you may also be taxed as a dealer at 15% for buying and selling.
Depending on your tax situation you might be better off with a C Corporation rather than a S Corporation. A corporation is a C Corporation by default and files a separate tax return whereas a S corporation is specially set up so that it splits up its profits to its shareholders as dividends. The shareholders then report their income on their own personal tax returns. In most cases its better to start out as a S Corporation and later change into a C Corporation when the tax advantages become evident.
A LLC or limited liability company allows the shareholders to participate in the running of the company without sharing its liability. Like a S Corporation the profits and losses flow to the owners. Buying and selling may subject the owners as an active activity to a dealers tax of 15% making the C corporation a better choice. If the business is primarily rents the LLC may be better. Its conceivable that one can form an LLC for every property and file one personal income tax if there is only one owner.
In any case get as much insurance as your entity can sustain to cover your real estate and business activity. Insure the entity is the names insured. Making sure the entity holds title to all your real estate to insure you won't be named the defendant in any potential lawsuit.
Those are some areas to consider before you obtain further professional advice for getting the best real estate asset protection
Thursday, July 1, 2010
First Time Home Buyers Tax Credit
Nevadans Receive Kudos For Efforts to Extend First Time Homebuyer's Tax Credit
2010 NAR President Vicky Cox Golder expressed her thanks to the NVAR Board of Directors for their efforts to extend the closing deadline for the Homebuyer Tax Credit. NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the Tax Credit Closing deadline will help provide additional stability to real estate markets across the nation.
Click here to read 2010 NAR President Vicky Cox Golder's letter.
2010 NAR President Vicky Cox Golder expressed her thanks to the NVAR Board of Directors for their efforts to extend the closing deadline for the Homebuyer Tax Credit. NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the Tax Credit Closing deadline will help provide additional stability to real estate markets across the nation.
Click here to read 2010 NAR President Vicky Cox Golder's letter.
Monday, June 28, 2010
Wealth Creation through Real Estate
I have found many people wanting to know how to create wealth through real estate but have not done anything about it. Reasons are many:
1. Scared and/or Fear
2. Do not know how or where to start
3. Have a mentor to show them
4. No Credit or Money
5. No time
The list goes on.
There is an easy way to create wealth through Real Estate!
Check out www.sharebuildersinc.com
1. Scared and/or Fear
2. Do not know how or where to start
3. Have a mentor to show them
4. No Credit or Money
5. No time
The list goes on.
There is an easy way to create wealth through Real Estate!
Check out www.sharebuildersinc.com
Saturday, June 26, 2010
Asset Protection
I have spoke with many buyers/investors in the last couple of weeks and I have been having the same conversation about asset protection. I have found that fewer buyers/investors even know what that is let alone how to do it. There is an excellent resource guide/book called Lawyers are Liars, Author is Mark Kohler, CPA and Lawyer. Here are a few tips:
A limited liability company (LLC), also known as a company with limited liability (WLL), is a flexible form of business enterprise that blends elements of partnership and corporate structures. It is a legal form of business company, in the law of the vast majority of United States jurisdictions, which provides limited liability to its owners. Often incorrectly called a "limited liability corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are).
An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation and it is well-suited for companies with a single owner.
It is important to understand that limited liability does not imply owners are always fully protected from personal liabilities. Courts can and do pierce the corporate veil of LLCs when some type of fraud or misrepresentation is involved, or under certain situations where the owner uses the company as an "alter ego."[1
A limited liability company (LLC), also known as a company with limited liability (WLL), is a flexible form of business enterprise that blends elements of partnership and corporate structures. It is a legal form of business company, in the law of the vast majority of United States jurisdictions, which provides limited liability to its owners. Often incorrectly called a "limited liability corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are).
An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation and it is well-suited for companies with a single owner.
It is important to understand that limited liability does not imply owners are always fully protected from personal liabilities. Courts can and do pierce the corporate veil of LLCs when some type of fraud or misrepresentation is involved, or under certain situations where the owner uses the company as an "alter ego."[1
Thursday, June 24, 2010
NO LIMITS!!
I had an incredible coach (Jordan Wirsz) share this information with me and I thought I would share it with you.
Do you know what a 10% stake in the Apple Inc. company is worth today? I do. $22 Billion to be exact. Did you know, there were actually THREE founders of Apple? His name was Ron Wayne, and was one of the three original founders of Apple. His story is a bit more unique than the typical Billionaire technology founder...Instead, he made a decision that would change his life (or maybe a better way to put it, would NOT change his life) forever. Only 11 days after the Apple enterprise was founded, Ron Wayne began to second guess himself and the other two Apple founders, including legendary Apple icon, Steve Jobs.
We all doubt ourselves at times...Our business, our thoughts, our "gut instincts," but what Ron Wayne did, was sold out. Literally. Only 11 days after his entry into the business, he sold his stake back to the other two founders for a mere $800, considering it "found money," at the time he was thrilled to have the $800. Today, that same 10% stake would be worth a staggering $22 Billion. Today, Ron Wayne lives in Pahrump Nevada, in a small single story house, with a metal carport, and living off of his social security check, going to the Casino's every day, hoping his luck will turn around.
Ron said, "I made the best decision I could at the time, with the information I had, and now I'm living with the decision."
Who would have known, right? I mean Apple, who would have thought? In 1976, that $800 was worth a lot more than it is today...And at the time, Ron's greed made him take the short, sweet, and easy way out of a partnership before it really even began. That greed driven decision cost him $22 Billion.
If you have a passion, a mission, drive, focus, dedication, determination, tenacity to succeed, then you need to know that there is absolutely NO limits to what can be accomplished. The only limits we have are the ones we give ourselves.
Do you know what a 10% stake in the Apple Inc. company is worth today? I do. $22 Billion to be exact. Did you know, there were actually THREE founders of Apple? His name was Ron Wayne, and was one of the three original founders of Apple. His story is a bit more unique than the typical Billionaire technology founder...Instead, he made a decision that would change his life (or maybe a better way to put it, would NOT change his life) forever. Only 11 days after the Apple enterprise was founded, Ron Wayne began to second guess himself and the other two Apple founders, including legendary Apple icon, Steve Jobs.
We all doubt ourselves at times...Our business, our thoughts, our "gut instincts," but what Ron Wayne did, was sold out. Literally. Only 11 days after his entry into the business, he sold his stake back to the other two founders for a mere $800, considering it "found money," at the time he was thrilled to have the $800. Today, that same 10% stake would be worth a staggering $22 Billion. Today, Ron Wayne lives in Pahrump Nevada, in a small single story house, with a metal carport, and living off of his social security check, going to the Casino's every day, hoping his luck will turn around.
Ron said, "I made the best decision I could at the time, with the information I had, and now I'm living with the decision."
Who would have known, right? I mean Apple, who would have thought? In 1976, that $800 was worth a lot more than it is today...And at the time, Ron's greed made him take the short, sweet, and easy way out of a partnership before it really even began. That greed driven decision cost him $22 Billion.
If you have a passion, a mission, drive, focus, dedication, determination, tenacity to succeed, then you need to know that there is absolutely NO limits to what can be accomplished. The only limits we have are the ones we give ourselves.
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