What Gettin’ Outa Dodge Means To A Real Live San Diego Real Estate Investor
Posted @ 11:22 pm - Filed under 1031 Exchanges, Real Estate Investing, Purposeful Planning, Check This Out, Retirement, San Diego Property Owners, Retirement Income, Depreciation, Capital Growth, Tax Shelter
Here’s a real time example of what a San Diego income property owner can do — if they’re willing to Get Outa Dodge.
Example — investors met with us today. We’ll be keeping them anonymous of course. They own a handful of San Diego homes, which they bought as investments. I recommended they execute tax deferred exchanges on two of them. The others simply weren’t ready yet. Between the two, there is roughly $300,000 tradable equity.
They also have, give or take, $130-140,000 in cash to sweeten the pot.
Here’s a picture of how cool their retirement could be, after taking advantage of this opportunity. What does your retirement look like to you?
In the next few months they’ll be easily able to acquire around $3-3.25 Million in solid growth region ‘path of growth’ income property. Their tax shelter alone will increase by around $80-100,000 a year.
That’s a crucial number, ‘cuz in say, 5 years from now when they pull the trigger on another exchange they’ll have somewhere in the vicinity of $4-500,000 in accumulated, unused depreciation. What does that mean? In plain English — their Purposeful Plan will generate a huge increase in that figure by exiting hundreds of thousands of dollars from the exchange — tax free.
Ah, good times.
They were happy to learn they could literally more than triple the property they owned with the Plan we’ve been constructing for them. In their early 30’s, this move will vastly decrease the time it will take for them to reach retirement.
It’s meeting new investors like these that floats my boat big time. By the time they’re in their early to mid-40’s, their Purposeful Plan will find them with more annual cash flow than they ever made at their jobs — by a factor of two or three. If you can’t get excited about that, you don’t have a pulse. 
How fast should San Diego income property owners be moving their equities to better regions?
Here’s what Gettin’ Outa Dodge means to these good people. At 5% annual appreciation, in 5 years their gross equity will increase by well over $800,000. If they didn’t exchange this year? Geez, I dunno. How much more do you think San Diego real estate is gonna fall before it begins rising in value again? Even if it started going up 5% a year (hardly likely real soon), these two properties would net them just over $275,000 in gross equity increase in the same 5 years. Here’s a different way to look at it. His principal reduction alone will be $200,000 in 5 years — nearly as much as his old San Diego properties would appreciate — you know, using the fantasy 5% we alloted to San Diego in our comparison.
Let’s see — $800,000 $275,000 $800,000 $275,000 — your pick.
San Diego investment property owners, you gotta be askin’ yourselves a question.
Why haven’t I clicked the ‘Contact BawldGuy’ text to get my equity growing like that?
Exactly — Why haven’t you?
This entry was posted on Wednesday, April 23rd, 2008 at 11:22 pm and is filed under 1031 Exchanges, Real Estate Investing, Purposeful Planning, Check This Out, Retirement, San Diego Property Owners, Retirement Income, Depreciation, Capital Growth, Tax Shelter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.