Make a Good Life

From:	Missy Watts <missywatts@greenerealty.com>
Subject:
Reply:

For those of you looking to buy some real estate for rental purposes, now when prices are low, I  have again compiled a list of properties that may prove suitable for rental property.  Click on my latest list of properties that may be suitable for investors looking to hold onto some real estate for seven to ten years.   Many of these are in Yelm.....check out the darling new Victorian style one in Rochester.   Because I have so many questions about how to calculate whether or not an investment will "pencil out", I have found a great tool online.  Check out this Investment Property Calculator  (courtesy of Goodmortgage.com) to enter your own number and see your net, less depreciation, cost to hold, etc.  It is really a great tool!   Play around with your own numbers....it is very interesting!   Some of the properties on my list are "fixers" but not heavy fixers.  After showing you these properties I am available to help you figure out the cost involved in bringing these properties up to rental standards.   I have also removed any properties that are "short sales".  Short sale properties (when the property is being sold for less than what is owed on it, the lender holding the note must approve the "shortage") look like great deals on the surface, but are cumbersome, tedious and seldom close.  For these reasons, I do not choose these properties to show to clients.  Bank-owned properties are another story.....good deals that usually close.   I am always available to answer your real estate questions.  I want to be a valuable resource for you whether you are buying, selling, investing or just curious about what is going on in our market. I want to be your Realtor.   Missy Watts Greene Realty Group (360)280-0509 missywatts@greenerealty.com

Droning on....

Investing is the topic of the day, so I thought I would mention another vehicle....the TIC.  TIC, or Tenants in Common interest, is an undivided, fractional interest in real estate.  TICs allow investors to own a fraction of a company, warehouse, office building, retail center, etc. that would otherwise be out of their reach.

Another great benefit of the TIC is is the ability to diversify the investment into more than one property without the hassles of dealing with tenants, maintaining facilities, paying taxes, etc. 

The easiest way to invest in a TIC is to search out a sponsor.  Here in Olympia there are several commercial real estate agencies who offer TIC investment, but usually only to friends.  Finding a TIC sponsor is easy, but finding one to trust is less so...

There are basically two types of TIC sponsors:  Real Property TICs and Securitized TICs.  Both Real Property TICs and Securitized TICS seek out investment opportunites and offer them to investors in most any percentage desired.  The main difference between the two is that the Real Property TICS retain a portion of the property for themselves, so they have a vested interest in the investment.  Closing costs on these properties are negligible.  Securitized TICS have pretty heavy front-loaded fees and the will sell the complete investment without retaining any portion for themselves.

There is a lot more to know....and if you would like a list of my top three TIC sponsors (two are Real Property, one is Securitized), please email.  They offer opportunites all over the country and specialize in identifying emerging real estate markets to capture the best return.

Like for Like

OK-Say you have an investment property that is fully depreciated, or you have a rental home that has appriciated greatly and you want to turn the equity to buy three new rentals.  If you sell you will face capital gains tax of 15% in Washington on any profit over $250k.  What if there were a way to ROLL one investment into another without any tax penalty?

I have mentioned 1031 exchanges in this blog before, but no one has asked me about them in over a year.  1031 is a section of the Internal Revenue Code which allows up to 100% deferral of a realized gain in the sale of real estate.  For investors they are a really good option.  You can do a 1031 on either real or personal property.  For instance, with real property you could exchange a rental home for a warehouse, or for vacant land.  Personal property is more specific; for example you could exchange a boat for a boat, but not a sailboat for a motor yacht.

The process is simple, and I have an expert in place at a title company to facilitate the transaction.  Simply look at the investment property you have now...decide (with my help if you want it) if the investment is still working for you.  Identify a property you would liquidate, sell it and identify the replacement property within 45 days.  The total time allowed from the closing of one transaction to the closing of the next is 180 days (or the due date of your income tax return, whichever is sooner).

I try not to be too dry in these posts, but with investment products there is not always a lot of exciting fluff to soften the edges.  I really believe in real estate investing....I see it work every day.  The 1031 exchange is a great "shelter" for your hard-earned investment dollars that many new investors and real estate agents are unaware of.  I want to be able to provide my clients with exceptional service, and that means that I need to be aware of your life strategy, and the place your real estate purchases take in the big picture.

Do you want to eventuallly own a home in Mexico, the BVI or some other foreign locale?  You cannot do a 1031 exchange to properties outside the US, but call or email me and let me help you to structure a 10- year real estate investment plan to give you the cash to invest in foreign real estate while still sheltering your US dollars from the taxman in the process!