1031 Exchange ? The Most Common Mistakes!

A property transaction related to a 1031 exchange into a Tenant in Common property could have a great impact on the financial stability of a person. Any mistake or a wrong decision in regards to a 1031 exchange can put you in deep trouble, besides unexpected financial liabilities.

It is often seen that most people interested for a 1031 exchange into a Tenant in Common property commit certain basic mistakes that jeopardize the whole transaction or results in a complicated legal situation leading to the client paying a huge tax or penalty amount.

Before I tell you about these common mistakes, let me first explain in brief what is 1031 exchange and how it helps.

Section 1031 of the IRC gives a chance to real estate buyers to defer the capital gain taxes that they incur by selling a property. It states, a real property owner can sell his property and then reinvest the proceeds to purchase of like-kind property and defer the capital gain taxes. Like-kind exchange is considered as one of the best-kept secrets of the Internal Revenue Code and very few CPAs, lawyers and financial advisors have proper knowledge about this.

By doing a 1031 exchange into a Tenants in Common (TIC) property, you can become a part owner of a large commercial property managed by professionals, who pay you a monthly income for the property. This is favorable for most people because it has got fewer strings attached compared to private annuity trusts, charitable trusts etc.

There are 3 Major mistakes that are generally committed by people going for a 1031 exchange into a Tenant in Common property.

a) Ensure that your investment company has their act together. Ask them for their history in TIC offerings, check referrals for satisfied clients. A good and experienced investment company should be able to provide you with multiple references of satisfied clients. Also check the properties available with them, a good investment property would only pick the best properties ? good real estate properties are hard to find and sells fast. While mediocre or small investment companies will deal with B grade or less desirable properties, the good investment firms will have only the best properties on offer.

If you are planning to do it privately, be cautious about getting into a Limited Partnership where only one or two members make all the decisions. Another alternative to could be to get a group of friends together and do it all by yourself, however, that is feasible only if you have extensive experience with commercial property and property management.

b) Choose a well-experienced qualified intermediary. A qualified intermediary is extremely instrumental in the successful completion of a 1031 exchange for Tenants in common property. They need to be well conversant with 1031 exchange rules. They ensure that all documentation and money transfer meets the guidelines set for the by section 1031 of the IRS.

Your Accommodators will set up your LLC. It is suggested that you should not work with an accommodator with whom you have an existing relationship. Your family attorney or estate planning attorney may not qualify as your accommodator. A small mistake here can lead to a hefty bill for taxes or penalties by the IRS, or even worse, the whole transaction might fail due to the incompetence of your accommodator or qualified intermediary.

c) Don?t try to cut corners on your property management company. This is extremely important for profitable performance of your investment. You will have to depend on your property management company for the day-to-day problems that will arise; they will be responsible for paying your property taxes in time and maintaining your building. Your property management company should be able to offer you a long term Triple Net Lease that has detailing of your annual income percentage along with scheduled increase. Only reputable management companies would be in a position to offer this. It is worth spending on a good property management company as you get a much higher return on your investment with them compared to any startup. Let your management company have a small profit because their performance is directly related to your investment stability and is going to get you multiples of that amount.

If you are hiring an experienced property management firm it is always a win-win situation of both the parties and you are sure to make the best out of your investment.

Avoid these common mistakes while planning your investment for 1031 exchange into Tenant in Common properties and you can ensure a continuous flow of monthly income while your investment experience a steady growth.

This article is written by Ray Smith, a marketing expert with years of experience in different industries and specialized knowledge on branding and Internet marketing. 1031 exchange rules

Protect Yourself with a Home Inspection

Home inspection plays a very important role in the real estate process. When you are buying or selling a home, you rely on a home inspector to provide an accurate and reliable inspection of a property. A home inspector will tell you about the condition of the home and help you avoid buying a home that needs major repairs. It is the perfect way to get an in-depth and impartial opinion of your next home before you buy it.

What to Expect

Typically, you will hire a home inspector either immediately before an offer is made on a home or as a contingency to a sale. Additionally, home inspections are ideal if you want to evaluate your home's condition or diagnose potential problems before they become serious issues.

Home inspectors perform the following duties:

-Evaluate the physical condition of a property, including the structure, construction and mechanical systems.

-Identify the items that should be repaired or replaced.

-Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure, and finishes.

Although inspections are primarily visual, inspectors may use tape measures, survey instruments, metering devices, and other equipment, such as concrete strength measurers, to aid in their inspection. They keep a log of their work, take photographs, and file a formal report.

The inspection usually takes two or three hours (depending on the age and size of the home). You should be present so you can ask questions and learn about areas that need additional work. All of the findings will be presented in a formal report that details the condition of the home.

A Close Look

The main purpose of the home inspector is to provide an objective viewpoint on the condition of a specific home at the time of inspection. The inspector does not evaluate the cost or value of the property, but provides a close examination of the following:

Structural Components: Foundations, floors and walls.

Exterior Components: Siding paint, windows, decks, garage doors, etc.

Roofing: Coverings, flashings, chimneys, etc.

Plumbing: Piping, fixtures, faucets, water heating and fuel storage systems, etc.

Electrical: Wiring, main service panels, conductors, switches, receptacles, etc.

Heating: Equipment, safety controls, distribution systems, chimneys, etc.

Air Conditioning and Heat Pumps: Cooling and air-handling equipment, controls and ducting, etc.

Interior: Partitions, ceilings, floors, railings, doors and windows, etc.

Insulation and Ventilation: Attics, walls, floors, foundations, kitchen and bathrooms, etc.

They will additionally perform the following services (sometimes for an extra fee): mold sampling, radon testing, asbestos evaluation, pests/wood destroying organisms, carbon monoxide testing, lead testing, and more. These services are not always available.

Make sure to protect your investment. Get a home inspection before you buy your next home!

http://www.realestatelicense.com http://www.homeinspectioncourse.com

Heather Brunson is a lead marketing writer for Allied Schools. She has a B.A. in Journalism with an emphasis on public relations. She has additional experience in technical writing.

San Diego Real Estate Agencies

Given the good performance of the real estate market in San Diego, you can expect that there would be a large number of agents and brokers who would want to actively participate in the market. However, this phenomenon can make choosing a realtor to help you in buying property in San Diego more difficult because choosing from too many choices can make picking the right realtor too time consuming. Here are a few tips that can help you find the right broker in San Diego.

Where to look

One place where you can start your search is on the Internet; there are a number of websites that offer listing on realtors based in San Diego. These websites also allow you to compare the services and charges that the realtors have, which can help you narrow your choices based on your needs and your budget. Some websites of the realtors themselves already have the listings of available properties, which can also save you time and effort. However, having a Web site is not a guarantee that the broker or the agent is reputable; this is why it is always a good idea to do a background check on the firms you are considering.

Realtor competencies you should look for

Apart from having large listings of available properties that are up for sale, there are a number of traits and competencies that you should look for in looking for a realtor. One of the first things you should make sure of is that the realtor you are talking with should have the proper license to engage in real estate transactions in San Diego. This can ensure that the transactions you will enter into are above board. Another thing you should look for is a deep knowledge of the San Diego real estate market because if a realtor has this, he can easily help you find a property in San Diego that fits your requirements.

Getting a realtor to help you in your real estate purchases can make looking for a property much easier. However, given the real estate boom that some areas like San Diego are experiencing, finding the right realtor can be a difficult task. It is then a good idea to have the right information on the realtors that you are considering, which includes checking out their reputations, their performance and certifications.

San Diego Real Estate provides detailed information on San Diego Real Estate, Buying Real Estate In San Diego, Downtown San Diego Real Estate, San Diego Real Estate Agencies and more. San Diego Real Estate is affiliated with Miami Beach Real Estate.

Real Estate Investment Companies

Real estate investment companies acts as brokers and represents both buyers and sellers and create ideal opportunities for real estate investors. They represent clients in the sale, purchase, exchange and the finance of the real estate investment. Real estate investment companies are ideal for individual investors who want to take advantage of the real estate market but are unable to spend time on it. Most companies give personal attention and due importance to individual investors as they are their primary and most crucial segment of business.

The real estate investment companies deal with active brokers, a wide variety of investors, vendors, consultants and governmental agencies. Individuals can avoid many dangers associated with real estate investment by investing through companies as most companies employ personals that are trained to handle the pressure situations that often crop up in real estate investment. The investors who see the market clearly and make decisions based on the best evidence would get much profit from the real estate investment company. The investors can achieve the financial security and freedom which enables them to pursue other involvements.

Acquisitions, property management, due diligence, redevelopment, leasing, debt analysis and procurement, tax documentation, disposition analysis and detailed monthly reporting are some of the important services provided by real estate investment companies. Real estate investment companies are also referred as Real estate investment trust (REIT). Real estate investment companies have special federal tax treatment and must comply with certain tax requirements. There is a slight difference between Real estate investment companies and real estate investment trusts. For a company to become a real estate investment trust, it should share out 90 percent or more of its taxable income to its shareholders once in a year.

Before selecting a particular company, look whether they are registered under proper acts. Get as much information on a company from as many sources you can.

Real Estate Investments provides detailed information on Real Estate Investments, Real Estate Investment Trusts, Real Estate Investment Loans, Real Estate Investment Financing and more. Real Estate Investments is affiliated with Buying Investment Properties.

Recognising the Potential in Property Deals

I found a nice little house for sale last week in a neighbouring town while I was driving home. I always keep and eye out for real estate investing opportunities. An old lady was in the front yard cleaning up some weeds. The property had two agents? boards out the front. I had noticed this place about six weeks earlier with a ?for private sale by owner? board out the front only. The owner was trying to sell the place privately. Now it had two agents? boards in the front yard.

When the private sale board was up I had enquired what the asking price was. It turned out the owners wanted $178000 for the home. I did some calculations at the time, but the figures did not add up to my requirements. So I did not pursue it any further.

When I noticed the two agents? signs this time and I saw the elderly lady in the front yard I thought I may as well make some new enquiries. The owner told me that there had been little enquiry for her property. No real estate investors had shown any interest even any real serious live in home buyers. Enid asked me if I wanted to look through the house. I had time and said if it was okay with her that would be great.

As I walked into the back yard I noticed how big it was. There was a gas line easement at the back and a large park out the front. The house is on the same road as the primary and secondary schools as well. Down the street past the schools about 400 meters is a new housing development that is adding massive value to the area for real estate growth and capital gains.

The block of land the house is on, is long enough to build two adjacent town houses. They would blend into the area very well. Especially with the parkland out front and no one able to build behind. I immediately began to think about the zoning of the block. If it was R1 or R2 zoned. I will enquire at the local council. If the zoning turns out to be R2 then I would be able to build a pair of three bedroom duplexes. It is only a short walk to the town centre as well. Another plus in this investment property?s favour.

I found this potentially great deal by always watching what is going on in my targeted areas. This is something that is important to any real estate investor. The other important aspect is to recognize the hidden potential that some properties have. Also you need to be able to capitalize on these opportunities. This all takes time to learn and to put into practice. But it is certainly worth the effort to ensure you move along with your wealth creation and retirement nest egg.

To your investing success

Leo Love

PS If any of your family or friends is interested please pass this on to them

http://www.therealestateinvester.com

I am an experienced and passionate investor. I buy typical mum and dad type houses that give me cash flow and capital growth. My website offers helpful tips and ideas for any type of investor to help you with your wealth creation. Using my site will help to prevent you falling into the traps the inexperienced investors do.

Marketing to Realtors: Create a Power Position in Your Marketing Efforts

Every day a real estate agent receives several marketing attempts from loan officers. In fact, this information comes in a steady, unrelenting stream. It is no wonder agents have become adept at tuning out the static of these marketing attempts.

Your challenge is to find a way to differentiate yourself from all the buzz of other loan officers. You do so by establishing your marketing position.

Your marketing position is what defines your business. Take a moment to browse your competition websites. Does their marketing position look identical to yours? If it were not for their logo on the top of the page, could it basically be your website?

If the answer is yes, your marketing position is too close to that of your competition. You are competing with them for a place in your prospects mind, and chances are you are not winning the battle for first place.

Take a look at your business and what can you offer that nobody else is doing? If you feel stymied by how you could possible differentiate yourself from your competition, think about a couple of examples of businesses that have done a remarkable job of creating a marketing position.

Federal Express is a great example. They started a business with a position no other shipper occupied. They advertised was when it absolutely, positively has to be there overnight, they were there to do it.

Dominoes Pizza started their business by emphasizing that they would delivery a pizza within 30 minutes of the order, or the pizza was free.

Southwest Airlines have marketed themselves as the low-fare airline.

What special skill or niche could you develop and use in your marketing materials and what can you use to set yourself apart from your competition? When your services are similar to another loan officer, real estate agents will look for ways to differentiate.

The more your services are scrutinized for differences, the more important it is to give details about how you are different. You need to accentuate those details.

Prices and rates are not necessarily the kind of difference that gets you noticed. In fact, most often it merely gets you into a bidding war. You should instead find an unexplored niche and specialize your services around it.

You can develop a unique niche within a product line like HUD, ARMs or Jumbo Loan expert.

You can develop a niche around details of the process for example, loan approvals within an hour (or less), loans that close 5 days ahead of COE, daily email updates to agents.

You can position yourself around gender, ethnicity, geography or another demographic, specializing in exclusively serving the Hispanic community, single professionals, Town & Country Ranch, etc.

Spend some time thinking about what makes you and your business unique and then market to that position.

Jeff Nelson helps loan officers increase loan originations by attracting quality relationships with real estate agents from the development of customized relationship-building strategies.

Click here to get a free copy of the Marketing Planning Guide, a 20-page workbook designed to help you outline a strategy to become an Agent Magnet.

Visit us at http://www.loan-officer-marketing.com

Property Price Gains Attract New Buyers To Malta

UK and European investors looking for high growth in 2007 are hoping for a repeat of the property inflation seen in Malta when it joined the EU in 2004, and it could become reality with the news that low cost airlines are to fly to the island, giving their real estate industry expectation that 2007 could be an exceptional year for price rises and sales.

In recent years the arrival of low cost - sometimes referred to as 'no frills' - airlines to a regional airport has seen property prices within a two hour drive escalate in popularity and price, especially among British buyers for France and Spain.

With the advent of these new flights to Malta, there is a possibility that demand for real estate in Malta will increase.

Commenting on the news, Malta holidays guide www.yourmalta.com say that a double digit property inflation figure for Malta is quite possible for 2007.

'Cheap airline destinations have proved to be a magnet for UK property investors, and if that trend continues then prices will go up in the next twelve to twenty four months', they say.

'Other than the local market, the UK provides most buyers for property in Malta, and with the British economy doing well it's quite possible that the island will be seen as a good investment opportunity'.

Malta Weather

Tribune Properties, a UK company specialising in Malta properties, agree that property prices could rise in 2007.

'With lower fares, Malta becomes a destination viable for 3 and 4 days trips a few times a year from the UK, and that will attract buyers to look at Malta in the same way they do France and Spain when considering where to buy a holiday home abroad. The weather in Malta and low fares could be a magnet for buyers.'

There is a warning however from YourMalta that property prices on the island might not necessarily escalate in the same way that regions of France have seen when low cost airlines have started flying to their region.

'The Malta government has allowed more land to be used for property, and we anticipate a lot more apartment blocks being built short and medium term. Supply might well meet demand. Unless the political map of Malta changes and with it a change of policy towards her environment, there is a danger of Malta becoming the Tower Hamlets of the Mediterranean, or 1970's Spain where development spoiled much of the coast.'

Concern has also been expressed on the island about the infrastructure, with some tourists and potential property investors berating the state of the roads and - compared to mainland European and UK standards - dangerous construction sites.

'The real winners from the low cost flights could be the Malta hotels rather than the property industry', conclude YourMalta. 'We envisage a lot more people taking short three and four day Malta holidays, often booking their flights and hotels on the internet rather than via a traditional high street travel agent store'.