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Colorado Financial Advisor
Real Estate
Colorado Financial Advisor Real Estate
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Colorado Springs
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Our other real estate pages: 1031 Exchange Tenant In Common (TIC) Properties
Real estate investments can add growth, income, diversification and tax benefits to your investment portfolio. There are many ways to invest in real estate. We have many years of experience and can help you choose, analyze and manage real estate investments wisely to achieve your financial goals. Real Estate Market Home Price Forecast 100 Largest US Markets, Money Magazine, May 2008. Only 25 of 100 markets are expected to rise in the next 12 months. Most markets are not expected to improve until 2009 or 2010. Quarterly House Price Trends for US Cities, States and Regions (Source: OFHEO, Office of Federal Housing Enterprise Oversight) (Note: this is a large PDF file, may be slow to download.) Article: Last of the Hot Real Estate Markets 2007-12-08 Monthly Chart of Housing Market Index (Source: National Association of Home Builders, www.NAHB.org) Caution! The Housing Market Index has dropped to the lowest levels since 1990-1991, when the US economy was in a recession. Mortgage Market Charts 4/23/2008 (weekly mortgage applications for purchases and refinance and mortgage rates, Source: Mortgage Bankers Association) Foreclosure Heat Map Q1 2008, color-coded USA map showing foreclosure rates by counties Foreclosure Report March 2008, foreclosures up 5% (monthly national foreclosure report from RealtyTrac.com) Foreclosure Report Q1 2008, foreclosures up 23% (quarterly national foreclosure report from RealtyTrac.com) Direct Real Estate Ownership. If you are willing to spend some time learning landlord/tenant laws and managing rental property, you might choose to become a landlord. Most landlords are not properly trained, use homemade leases and legal forms, and own their rental property as a sole proprietor. These are big mistakes that can lead to lawsuits, big losses and even bankruptcy. We highly recommend that you attend our monthly class titled Managing Rental Property to educate yourself on the many potential risks of landlording, and strategies to reduce and avoid risks. (See class description in our Seminars section.) Because of the potential for lawsuits, we suggest that you setup a limited liability company (LLC) to own your rental property, rather than you owning it personally as a sole proprietor. An LLC greatly reduces your risk by separating your personal assets from your rental property business. We can provide you with information to setup an LLC in your state or another state such as Nevada, Wyoming or Delaware. We can also help you choose a mortgage and give you referrals to mortgage lenders and brokers that work with LLCs, many do not. Rather than use a risky homemade lease, we recommend that you join your local Apartment Association chapter, and use the lease available to members. You can locate your local Apartment Association chapter in our Web Links section. There are local chapters in about 150 cities. Before buying any investment real estate, make sure you do a financial analysis of the expected income, expenses and appreciation. You can use our Rental Property Analyzer spreadsheet in our Library section to crunch the numbers and compare several choices before buying or to measure the performance of real estate you already own. Analyzing your rental property periodically will alert you to problems so that you can take steps to correct them or sell or exchange your real estate for a better investment. Tenant In Common real estate. For accredited investors (millionaires), we recommend that you read our Tenants In Common section for real estate investments in multi-million dollar properties available nationwide, where you can own a slice of a larger property along with a limited number of other investors. You can exchange real estate you currently own for ownership in TIC property, and receive a monthly check in your mailbox while a professional property manager handles the management for you. Real Estate Investment Trusts (REITs). REITs own various types of real estate such as apartments, manufactured housing communities, hotels, shopping centers, office buildings, industrial buildings, storage warehouses, medical facilities, nursing homes, prisons, golf courses, timberland and mortgage portfolios. You can buy and sell shares of publicly traded REITs just like stocks. Private REITs are also available with minimum investments of $5,000. REITs provide a way to invest in a diversified portfolio of commercial real estate, with no landlording duties for you, in different regions of the country, and most pay a monthly or quarterly distribution providing income as well as the potential for rising real estate values and share prices. There are also mutual funds that invest in REITs to provide you with more diversification. We can help you choose REITs or real estate mutual funds for your investment portfolio. Click here for a list of REITs. Trust Deeds.
You can invest in real estate loans
by buying notes and trust deeds (deed of trust, mortgages). The trust deed pays you a
high
interest rate of 8% to 14% annually, and is secured with real estate as collateral.
Trust deeds can provide a high monthly income, much better than the rate you get
at a bank, or with an annuity, and you can buy trust deeds in your self-directed IRA or Roth IRA, where the income
is tax-deferred or tax-free. We can advise you on trust deed investing and
manage a trust deed account for you. Contact us for more information on
this great real estate backed investment opportunity for high monthly income without landlording
duties and liabilities, tenant headaches or stock market volatility and risks.
Trust deed investing is one of the secrets of the wealthy. You can do it
too! Get started today! Homebuilders and Construction Stocks. You can buy stocks of homebuilders and construction companies as another way to invest in real estate. Construction is more cyclical and tied to interest rates and economic growth. If construction slows down and real estate stock prices fall, you can profit from a declining real estate market by buying options on some real estate stocks, ETFs and some REITs. There is also a bear market real estate mutual fund. Raw Land. Raw land can be a good investment choice if you shop wisely. It tends to go up in value over time, there are no tenants to deal with, and you might buy some land as a site for a future retirement home, vacation home or cabin. You might use it for camping or just as a quiet place to get away from the rat race of the city. Modern technology is making rural land less isolated and more valuable where there is satellite TV, cell phone service and wireless Internet service (WiFi or WiMax). By choosing a good location, you can enjoy fresh air, scenery, nature and wildlife, while still having phone and Internet service and highways with easy access to shopping, dining, health care and entertainment of a nearby city. You can do a lot of research online before buying land, such as checking ownership, assessed values and property liens in county records, aerial photos, topographical maps, road maps, and economic and demographic information. Parcels are available from under $1,000, depending on location, topography, utilities and amenities. You might wish to diversify, buying land in several different locations as a land portfolio, rather than buying a single large parcel. You can even buy land online using a credit card at websites and auctions (such as eBay.com Real Estate). Be sure to do research on the seller's reputation and look for a Warranty Deed rather than a Quit Claim Deed. Some land wholesalers buy land at county tax lien sales and then sell the land at a discount to make a quick profit rather than holding on to the land for a long term investment. You may find bargains this way, if you do your homework. Check the land value, ownership and liens listed in the county records before buying. You can generate income from land by buying at a discount price and then selling at retail price on an installment contract (land contract, contract for deed) at a high interest rate. Seller financing is common with land purchases. The buyer does not get the deed until all payments have been made. This is a secured real estate loan, with the land serving as collateral. If the buyer defaults, they forfeit their payments and you can sell the land to someone else. We have done research and invested in land in southern Colorado (Wild Horse Mesa, Sangre de Cristo Ranches), New Mexico (Taos, Belen, Elephant Butte) and Arizona (Navajo County). Call us for advice on land investments for your taxable account or your retirement account or college savings account. Owning Real Estate in an IRA or 401k. You can own real estate in your IRA and some 401k plans. It is simpler to buy the property free and clear rather than have a mortgage due to tax complications and Unrelated Business Taxable Income (UBTI) which can make your IRA income taxable at high tax rates for a trust. More advanced investors may choose to learn about UBTI and use a special non-recourse lender to finance their IRA real estate. Depending on the amount of money you have, this probably limits your choices to raw land, and less expensive real estate such as cabins, condos, townhomes and fixer-uppers. You can also buy mobile homes and manufactured homes. You can pool your money with other taxable investors or IRA accounts if you choose. IRS rules state that you cannot use the real estate while your IRA owns it. You can also buy tax liens or trust deeds that pay a high rate of interest, secured by real estate. We can show you how to buy real estate, tax liens or trust deeds with your IRA or 401k. IRA LLC. An IRA LLC is a special type of LLC designed to comply with IRS and DOL rules and regulations. It provides "checkbook control" of the IRA which can save hundreds of dollars every year in fees to the IRA custodian. It provides asset protection and also allows the LLC to move very quickly to take advantage of opportunities as soon as they arise, without waiting for slow custodians to grant approval of transactions and process paperwork. We can show you how to set up a self-directed IRA LLC, without paying high legal fees, often costing several thousand dollars. This IRA LLC knowledge is hard to find and few advisors know how to do it. For a low fee, we offer consulting and education that explains the process, step by step. Contact us for a Free Consultation. Property Management Advice. We have many years of experience in managing rental property and teaching property management classes. We can assist you with your property management questions and help you to avoid risks and lawsuits. BRAC List, May 2005, Military Base Realignments and Closures Check the BRAC list to see if there is any recommended increase or decrease in civilian and military personnel for military bases in your area. Base closures or expansions can influence real estate values due to supply and demand for housing and the impact of more or fewer customers on local businesses. Department of Defense BRAC website. Home Prices in Metro Areas Map View this housing valuation analysis map to see the median prices for homes in metro areas in the US. Graphs show which areas are considered overvalued or undervalued based on analysis of prices, wages, unemployment, population trends, etc. House Prices Report provides details. Click here for a Free Consultation on real estate investments. Disclaimer: Advisor Financial Services does not offer
legal, tax or accounting advice. Contact a licensed, qualified
professional for legal, tax or accounting advice. |
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