REAL INFO
INDUSTRY INFO, NEWS & RATES
Real facts. Real News. Real Calcs. Really!
DO YOU KNOW?
Real Estate Provides Income from at least 3 Sources?
INCOME FROM OPERATIONS
(Simply Rents minus Expenses)
PAYING DOWN THE MORTGAGE
(Simply Rents minus Expenses)
CAPITAL APPRECIATION
(Property values typically increase over time)
What about Tax Benefits? Many folks consider tax benefits as an additional source. Although this is true, I don't like to count it mainly because most of the tax breaks in real estate are temporary in nature in that they are more of a tax deferment versus a permanent tax reduction.
YOUR NAME DOES NOT HAVE TO SHOW UP AS OWNER IN PUBLIC RECORDS?
Maintain your privacy. When you become a member of one of our LLCs, the LLCs name is listed in public records as the owner of the property. Most of the members (owners) of the LLC can remain private.
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Caveat - Companies do need to provide the name of the registered agent and company officers to the Secretary of State which does becomes public information. However, as a member of one of Denbar's LLCs we do not list our investor members names.
YOU CAN DEFER TAX ON CAPITAL GAINS WHEN YOU SELL A PROPERTY?
You have to reinvest the proceeds from your sale in "like-kind" property of equal or higher value. But still not a bad way to grow your portfolio. "Like-kind" is pretty much any investment property. So for example, we sold a couple of apartment buildings and rolled it into a gas station.
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Spoiler Alert - You can't sell your apartment property here and reinvest it in your dream house in Jamaica. (Believe me, we have tried!) The IRS does not consider US property and foreign property as "like-kind".
YOU CAN ELIMINATE TAX ON CAPITAL GAINS?
If you bequeath your property to someone else, your beneficiary inherits your property on a "stepped up basis" which is the fair market value of the property on the date of death. Therefore your beneficiary can sell the property (for fair market value) and avoid paying any capital gains.
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The bad news - Sure you can eliminate capital gains - but you have to die first!
YOU CAN INVEST USING YOUR RETIREMENT ACCOUNTS?
You can use the funds in a self directed 401K or IRA to purchase real estate directly or by owning a membership interest in an LLC. Don't have a self directed retirement account? It's easy to create one and rollover your money from your regular or Roth IRA. We are working on a section about investing in real estate using retirment accounts.
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Caution - You cannot personally guarantee a mortgage for property held in your retirement accounts. Most of our investments do not require you to personally guarantee a loan making them a good choice for IRA's b
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Caution - You may still have to pay a tax called UBIT. So please check with your tax advisor before using retirement funds.