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Robert Cobean

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What is the Landlord Responsible for in a Triple Net Lease?

With a Triple Net Lease—sometimes referred to as "NNN"—the tenant assumes responsibility for all costs of the property, in addition to paying the rent. The tenant pays the utilities,  real estate taxes, building insurance, and maintenance. What the property owner remains liable for are structural issues, and of course, the mortgage.

Posted by Robert Cobean on Feb 23, 2021

UPREIT vs. REIT

Real estate investment trusts (REITs) are a popular investment vehicle for those who are interested in the potential benefits that come with real estate without actually having to buy and manage the property. 

Alternative REIT structures emerged to allow for different types of investors. One of these structures is known as an umbrella partnership real estate investment trust (UPREIT). How do REITs and UPREITs compare? We’ll cover the basics of each as well as their benefits and drawbacks. 

Posted by Robert Cobean on Feb 17, 2021

Delaware Statutory Trust Investment Property Offerings - How They Work and What You Need to Know

As a real estate investor seeking to maximize return and manage tax obligations, you may be interested in Delaware Statutory Trust offerings if you examine options for fractional participation. Like Tenant in Common investments, Delaware Statutory Trust participations are accepted by the IRS to reinvest the proceeds from the sale of a property and defer the realization of capital gains taxes. This status means that you can use a 1031 exchange to enter into or exit from a DST. Unlike a TIC structure, in a DST, the ownership of the properties is held by the trust, and the investors are beneficiaries of the trust. TICs are limited to 35 investors, while DST organizations do not restrict the number of participants.

Posted by Robert Cobean on Feb 14, 2021

Are Apartments Eligible For Qualified Opportunity Zones?

The IRS defines a Qualified Opportunity Zone (QOZ) as “an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” Since its implementation as part of the Tax Cuts and Jobs Act of 2017, many of those “new investments” in the federally designated Opportunity Zones consist of real estate renovation or development.

Posted by Robert Cobean on Feb 9, 2021

What Are Investing Activities In Cash Flow?

Cash flow is important because it is what ultimately gives you a paycheck. So, it is essential to the health of a business to understand what investing activities are and how they impact cash flow. 

Posted by Robert Cobean on Feb 5, 2021

What Does A Triple Net Lease Include?

The lease structure on a potential investment property means a lot in regards to how much skin you’ll have in the asset.

Triple net leases are among the most popular lease agreements in commercial real estate because they shift responsibility for a property’s variable costs and operating expenses from the owner to the tenant.

Posted by Robert Cobean on Feb 1, 2021

1031 Exchange Into Delaware Statutory Trust: What Terms Should I Know?

A Delaware Statutory Trust (DST) is one of the most common investment methods when considering a 1031 exchange.

Although Delaware is in the name, you can complete a DST investment anywhere in the United States. Neither the investor nor the property needs to be in Delaware.

A DST is a pre-packaged investment on a property put together by a sponsor. After the sponsor does due diligence, negotiates lease terms, and takes other steps to put the package together, then they offer equity to investors. The trustees pool their 1031 exchange funds for the investment and then receive cash distributions if the property is profitable.

Posted by Robert Cobean on Jan 28, 2021

Capital Gains Tax On Second Home: How Much Is It And Can It Be Avoided?

When selling a second home or vacation home, the taxpayer will incur capital gains taxes on any gain. These taxes would be treated as long-term capital gains if the home was held for more than a year. Long-term capital gains have rates of 0%, 15%, and 20%, dependent on the taxpayer’s income. 

Posted by Robert Cobean on Jan 23, 2021

What is a SERP Retirement Plan?

A SERP retirement plan, or supplement executive retirement plan, is a non-qualified deferred compensation retirement plan offered by companies in addition to the company standard retirement plan to highly paid employees. Because standard retirement plans such as the 401(k) have limited annual contributions, SERP retirement plans are used to reward top executives with supplemental retirement contributions. 

Posted by Robert Cobean on Jan 18, 2021

What Are Closing Costs, Who Pays For Them, And How Much Are They?

Closing costs are a part of almost every real estate transaction. The key questions we hear from clients are: 

  1. What are closing costs?
  2. Who pays them? 
  3. How much are they? 

There is no quick and easy answer because there are many variables that go into determining closing costs. It all depends on the type of loan, property cost, and location of the property. Each specific transaction will vary on who pays closing costs and exactly what they will be.

Posted by Robert Cobean on Jan 14, 2021

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