Archive for the 'Multi-Family Property Investing' Category

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Absorbed surgeon closeupIt might seem like a stretch, but Realtors are like doctors.

Every doctor has a broad, basic knowledge of the human body. And yet, they aren’t all qualified to perform open heart surgery.

While a Realtor’s job isn’t necessarily a matter of life and death, when it comes to your investments and financial future, many duplex buyers and sellers ask a general practitioner to perform analysis best left to a specialist.

They should think again.

Here are 10 great reasons to hire a duplex or investment property specialist:

  1. Market Knowledge – Unlike Realtors whose primary focus is single family homes, agents who specialize in duplexes and investment property has a unique working knowledge that, for most, is acquired through extensive education and field experience. Duplex specialists understand  exactly how things like rental income impacts value, the going cap rates and gross rent multipliers of any given neighborhood, and what’s a reasonable market rent to expect in a vacant unit.
  2. Investment Analysis– Whether you’re buying or selling, an educated investment property Realtor can quickly determine whether or not a duplex cash flows and provides a good return, or it it will ultimately cost an investor money. Most residential agents do not have this working knowledge, and use single family home criteria to price a property; ultimately costing a buyer more and a seller valuable market time.
  3. Non-MLS Properties – Agents who specialize not only have a working knowledge of properties already on the market, but of those that may become available soon. These Realtors have a vast network of past clients, prospective sellers, and in today’s market, a comprehensive knowledge of duplexes facing short sales or foreclosures in the near term.
  4. Hands On Experience, Ongoing Education – Most investment property Realtors either own or have owned income proeprty themselves. They not only have first-hand knowledge of the benefits and pitfalls of duplex ownership, but also exposure to a network of client experiences and resolutions. These gents continuously enroll in and avail themselves of educational opportunities in order to have the most current and up-to-date information when it comes to market changes. Read the rest of this entry »

Comments Off on Duplex Investors Required To 1099 Starbucks

coffee cupsHidden in the text of last year’s health care bill was a small section that had nothing to do with health care and everything to do with owning duplexes.

Starting in 2012, investment property and other small business owners will be required to 1099 for all payments made to vendors they spend more than $600 a year with.

That isn’t limited to those who perform services like property maintenance.

In fact, it includes major corporations like Home Depot,Lowes, Starbucks

OK, if you’re spending more than $600 a year at Starbucks and writing it off as a business expense, you might raise other issues with the IRS. But let’s say it’s legitimate.

Guess what? Starbucks stores are franchises. So you’ll have to 1099 the owner of each store you visited.

I don’t know which thought is more entertaining; having to keep track of that or calling Home Depot and asking them to share their tax ID number.

There’s one way to solve some of this. If you use a business credit card to pay for your purchases, the credit card company will issue the 1099 on your behalf.

I wonder how much lobbying MasterCard and Visa did to get this passed.

Comments Off on What Are The Tax Benefits Of Investment Property?

Stack of hundred dollar bills laid out on top of IRS form,Don’t forget tonight’s free seminar detailing all of the tax advantages of rental property ownership.

CPA Pam Ricker will show those considering buying their first real estate investment property how doing so can save you hundreds, even thousands of dollars on your taxes.

For those who already own a rental single family home, duplex or multi-family property, she’ll offer helpful tips on how to make sure you’re doing all you’re allowed to reduce your tax liability in the coming year.

The seminar starts at 6:30 at the Keller Williams Realty office in Edina at 7401 Metro Blvd.

Comments Off on The Benefits Of Duplex Ownership: Principal Reduction

Nest eggWhen I ask the general public what the benefits of owning a duplex or investment property might be, most immediately come back with the term “cash flow”.

While that is certainly one of the reasons to own investment property, there are several others that are often overlooked, including: principal payoff, tax savings and appreciation.

Of these, principal reduction is probably the one most duplex buyers consider least when investing in real estate.

And yet, in a turbulent real estate market, it is the one that is most sure.

Every month when you pay the mortgage with the rent you’ve collected from your duplex, a portion of that payment goes toward paying off the balance of the loan.

In the first year of the mortgage alone, this is often several thousand dollars; an amount which grows over the life of the loan.

Let’s say you went out this month and purchased a $150,000 duplex. Provided it has a positive cash flow, and you manage it well, thirty years from now you will have $150,000 in equity. And that’s in the unlikely event that the property never increases in value.

That’s like saving $150,000 for retirement.

The only difference here is all you contributed was the down payment; which could be as little as $5250 if you’re an owner occupant and $37,500 if you’re an investor.

By the way, investors, that’s a 400 percent return onyour initial down payment.

Not to mention that when it’s paid off it should cash flow beautifully; which should help supplement retirement.

Next week? Cash flow, appreciation and the tax benefits of duplex investing.

Comments Off on Free Investment Property Tax Benefit Seminar Just One Week Away!

close-up pen on the moneyDon’t forget to call or email your reservation for the free seminar, “Understanding The Tax Benefits of Rental Property Ownership”, Thursday, January 27, at 6:30 pm.

If you’re just considering buying investment property, the start of the year is a great time to strategize for all the ways investment property ownership can benefit your year-end tax bill. And if you’re a seasoned veteran, planning your year in advance can help you save hundreds if not thousands of dollars.

CPA PamRicker of Ricker & Associates will be leading the seminar at my new office at Keller Williams Realty in Edina.

She will cover a number of tax related topics, including what constitutes rental income, allowable deductible expenses, how vacation rental properties are taxes as well as the consequences of selling your investment property.

Anyone is welcome to attend, I just ask that you RSVP so I can make sure we have enough literature and refreshments for all.

Hope to see you next week!

Comments Off on Shhh! The Secret Bottom Of The Duplex Market

Top secret stampI’ll let you in on a little secret.

If you’ve been waiting for the bottom of the duplex market to invest, here it comes.

According to expert Rick Sharga, senior vice president of the leading resource for foreclosure data, RealtyTrac, in 2011 lenders will take back more homes than in any prior year.

Approximately 5 million property owners are at least two months behind on their payments. Not all of these delinquencies are the result of owing more than the duplex is worth.

Many are a result of job losses.

Sharga says, “2011 is going to be the peak” of the foreclosure wave. It is estimated that 1.2 million homes will be repossessed in the next 12 months.

That’s repossessed. Not notified that they were in default.

In 2010, 1 million properties went back to the bank. However, 2.9 million property owners; that’s one in every 45 households in the U.S., received notice of a foreclosure filing.

Minnesota fared slightly better than the rest of the country. In December, there were 2853 properties that received notice. That’s one in 817 households.

That isn’t the best ratio in the county. And it isn’t the worst.

And most of these properties will hit the market in the next 18-24 months.

So if you’ve ever thought of investing in real estate, but wanted to wait until the “bottom of the market”, here it comes.

But remember…secrets don’t ever stay that way for long.

Comments Off on Foreclosed Homeowners Looking For Places To Live

Help...There was some good news in the apartment sector of commercial real estate this week.

According to Reis, a company that tracks performance and vacancy rates in apartment buildings, vacancies fell by .5 percent in the last quarter of 2010. The previous quarter had seen drops as well, but apparently since nobody likes to move in winter, the fourth quarter drop came as a bit of a surprise.

Of course, with fewer apartments available, rent prices also improved by a half a percent.

Now duplexes aren’t apartment buildings, and I know of no national or local service that specifically tracks duplex vacancy rates. However, it would stand to reason that as more people lose their homes to foreclosure, they would need places to live.

For the next seven years.

Because a foreclosure on a credit report keeps someone from buying a property for at least that long.

I can’t say it enough. Whether it’s a condo, townhouse, single family home, duplex or larger apartment building, it is an excellent time to invest in real estate.

People are still losing their homes to foreclosure. And every single one of those folks is going to need to find someplace to live.

How To Make Duplex Ownership Less Taxing

said on January 6th, 2011 categorized under: Multi-Family Property Investing

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pam rickerThe start of a New Year is a great time to strategize for all the ways investment property ownership can benefit your year-end tax bill.

That’s why CPA PamRicker of Ricker & Associates has agreed to come to my new digs at Keller Williams Edina and teach a free class on “Understanding The Tax Benefits of Rental Property Ownership”.

Pam will cover a number of tax related topics, including what constitutes rental income, allowable deductible expenses, how vacation rental properties are taxes as well as the consequences of selling your investment property.

The seminar begins at 6:30 pm on Thursday, January 27. Anyone is welcome to attend, I just ask that you RSVP so I can make sure we have enough literature and refreshments for everyone.

Comments Off on 10 Ways A Duplex Specialist Can Help You Get A Better Deal

expert in colourWith a MLS full of deeply discounted duplexes and continued low interest rates, there’s never been a better time to invest in real estate.

But as many wonderful investment real estate opportunities as there are out there, it’s important to remember that not every Realtor is qualified to help you. In fact, some agents may even cost you money.

Here are 10 ways a Realtor who specializes in duplexes and investment properties can help you get a better deal when you buy:

  1. Realtors who specialize in duplexes have and are tapped into a network of past clients who may consider selling, know of non-MLS short sales and foreclosures, and can share firsthand knowledge of properties that have either been cancelled or expired from the MLS and may still be available for sale.
  2. A duplex specialist lists and sells duplexes and income property. She’s seen property presently on the market, as well as properties that have recently sold; meaning she can quickly tell you whether a property is overpriced or the deal of a lifetime.
  3. A Realtor who works extensively with duplexes, triplexes and fourplexes has customized addendums and amendments specific to the purchase of rental property, insuring you get pro-rated rent, leases assigned to you and the complete transfer of security deposits.
  4. Investment property Realtors can literally save you hundreds and put thousands of dollars in your pocket simply by knowing when’s the best time to close on a duplex purchase.
  5. Duplex specialists can help you determine whether or not a duplex is, in fact, the best move for you. Perhaps you’re more suited to own an apartment building; or maybe a more hands-off investment like a townhouse is right for you. Regardless, a qualified Realtor can help you avoid costly mistakes and make the best move.
  6. An investment property Realtor is a teacher, coach and advocate. If you’re new to owning income property, she can teach you the difference between a cap rate and a gross rent multiplier. And if you’re a seasoned pro, odds are she can quickly tell you the cap rate or average rate of return in any given MLS district.
  7. A duplex specialist can spot and predict trends  in the local marketplace. For example, has she noticed clients looking for more walkable neighborhoods than in the past? Are more families moving into the rental market? How has the vacancy rate been impacted by foreclosure?
  8. Duplex agents can  provide a mathematical analysis of the property, including in those calculations local vacancy rates, present and market rents, and realistic predictions for expenses like repairs and maintenance.
  9. An experienced duplex agent can help identify areas of concern in existing leases, alert you to unusual utility bills, and help you find ways to improve the rate of return on your investment after closing.
  10. Duplex Chick specialists are an ongoing resource for property owners even after closing, offering a network of contact crucial to successful real estate investment. Need a good real estate attorney? Call your duplex specialist. Need a better insurance rate? Chances are your Realtor can recommend someone.

Whether buying a duplex in Minneapolis, St Paul or anywhere else in the United States is part of your 2011 goals, let us help you find a Realtor who will help you save money; while you’re making it.

Make Buying A Duplex A 2011 Goal

said on December 20th, 2010 categorized under: Multi-Family Property Investing

Comments Off on Make Buying A Duplex A 2011 Goal

2011As the year draws to an end, many of us are busy not only preparing for the holidays, but also goal planning for our business, financial and personal lives for the coming year.

Many of us have experienced financial frustration in the weeks and months of 2010. Our 401ks aren’t getting the return they once did and job insecurity is everywhere.

Perhaps it’s time to find a supplemental form of income or invest somewhere else.

While its reputation has been sullied somewhat with the collapse of the housing market, there truly has never been a better time to consider real estate as an investment.

Interest rates are low.

Prices are low.

And with more and more people losing their homes to foreclosure, there is an even greater demand for rental units than there has been for the last five years.

Yes, its reputation is battered. But remember, it’s still the only investment you can make where someone will lend you the money to buy it.