Posted on May 30, 2008 @ 10:56 pm - Written by BawldGuy
To my friends and all real estate investors in San Diego/California, here’s the tune you’ll be dancin’ to once yer Outa Dodge.
Not only does it rock, but so does your capital growth rate since you saw the light. Massively increase your net worth, tax shelter, flexibility, and best of all? Your retirement income. Purposefully Plan your way to the retirement you deserve.
Step away from the local real estate San Diego. Yer just a 1031 exchange away from jump starting your future back to life. Your retirement is dying a slow death here. Hhellllooooo!
Crank this one up to 11, kick back, and try to remember where you were the first time you heard this one.
Posted on May 22, 2008 @ 10:06 pm - Written by BawldGuy
I was due for the conversation that transpired recently. A friend of a currently inactive client was a few days from entering into a tax deferred exchange. My client called me to ask if I’d talk with their friend about what they were doing and why. Not a problem.
After the conversation with her investor buddy, it occurred to me she had an immediate problem which was easily remedied, but a much larger problem that was systemic. Her tax pro was allowing her to enter into a classic delayed exchange when there was another obviously superior option.
In a nutshell, the investor had unused depreciation in an amount sufficient to offset a pretty impressive hunk of the capital gain she was deferring. In plain English? She’d be able to take out over 1/3 of her net proceeds in cash — without ever paying capital gains taxes. She’d accumulated massive unused depreciation as a result of being barred from using any of it against her ordinary income. (read: job income) Hence, the unused accumulated tax shelter.
By executing a tax deferred exchange (1031) sans the huge tax free cash exit, she’d have been penalizing herself. Read the rest of this entry »
Posted on May 22, 2008 @ 1:31 am - Written by BawldGuy
Still draggin’ from spending three days in Hell’s Special Oven — more often called Phoenix. You don’t realize the toll taken by all the activity, plus intensity, plus the 198˚ heat. I’m exaggerating, as it never got above 154˚ even once.
As I was saying to some of the Phoenix guys there, “Dry heat my hinie. Ask a baked potato what he thinks of dry heat.”
The momentum is beginning to show as it relates to California real estate equity grabbin’ their spurs and headin’ to the Lone Star state. (Did I really write that sentence? See? I’m really that tired.)
When the average CA investor learns they can increase the value of their portfolio by 3-6 times, they sometimes began channeling Rod Serling, background music and all. Increase their tax shelter by 4-8 times? In no time, the only CA real estate left is where they sleep.
Posted on May 7, 2008 @ 9:27 pm - Written by BawldGuy
Caveat: There’s an old saying that says you shouldn’t buy real estate solely for the tax shelter. I’ve seen some exceptions to that rule. But just a handful, and they tended to prove the rule, not otherwise. Yer gonna get some tax shelter whether you want it or not. Of course, if you don’t want yours, we can talk.
Let’s all get on the same page first. What is tax shelter in real estate terms? Simply put, depreciation is the loss of value of your building. Land isn’t depreciated because it doesn’t wear out. Even better, depreciation shows up on your tax return as a loss — one you didn’t feel, ‘cuz it’s also known as a ‘phantom loss’. Make sense? You didn’t really lose any money — it’s a paper loss only. Yet you get to claim you lost money.
How cool is that? You mean you never got the memo?
This loss saves you money through income taxes you now don’t have to pay. Those are real dollars, and the taxes you aren’t paying are real return. Said another way — these are dollars that but for the depreciation would be leaving your Levi’s and heading towards the IRS. A quick example would be an investor with a $90,000 income from their day job. Read the rest of this entry »
Posted on April 29, 2008 @ 10:10 pm - Written by BawldGuy
Setting up a Purposeful Plan is not a walk in the park — not for us and not for our clients. It takes serious work on both sides. Between podcasts, case studies, white papers, and what I do here on a daily basis, you can pretty much ascertain how much is involved. Being serious isn’t an option, it’s a necessity.
Today let’s explore a potential case study. I’m using numbers obtained by a very experienced and competent pro in the midwest.
We’ll not dwell on the minutia, but instead take a broad view of the before and after. Let’s use an investor’s income property in an area which is probably not gonna grow much, and where the future is fine, but not nearly as promising as solid growth regions we’re now recommending. I say it won’t grow much since it’s averaged less than 2½% a year for what seems like forever — especially to the long suffering investor.
Here’s what we’re working with: Small income property worth around $250,000 — loan balance of around $135,000 — sales costs of around $20,000 or so.
Yer just a 1031 exchange away from jump starting your future back to life. Your retirement is dying a slow death here. Hhellllooooo!
