The Realized Team’s Picks
The Risks of Investing in Single Tenant NNN Properties
“Better safe than sorry” is an adage that often gets overlooked in the world of real estate investing. When evaluating a potential property, calculating the expected return is relatively easy, but understanding the associated risks is really difficult. What’s a real estate investor with a lower tolerance for risk to do?
Can Foreign Investors Do 1031 Exchanges?
Can foreign investors take advantage of IRS §1031 to execute a tax-deferred exchange when selling their U.S. real estate assets? The short answer is yes. The longer answer is a bit more complex. Congress enacted the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) to impose a tax on foreign investors selling real property assets in the United States. The act requires that anyone who buys real estate assets from foreign persons or entities must withhold a prescribed part of the purchase price, which would normally go to the foreign seller. Why exactly? To ensure that the foreign seller pays capital gains taxes when they are due.
What is a Credit Tenant?
Credit tenants generally provide cash flow reliability. These are larger, usually, publicly-traded companies that have investor-grade bond ratings. While that might sound attractive to landlords, it’s important to fully understand what a credit tenant is and which risks they may introduce. In this article, we’ll go over both.
How Do Opportunity Zones Help Communities?
The Opportunity Zone (OZ) program was created to help economically disadvantaged communities by providing tax incentives for private investments in those areas. These low-income communities have struggled while much of the rest of the country has grown. According to the Economic Innovation Group’s research, there are approximately 50 million Americans that live in communities that are struggling to attract investments and sustain economic opportunity for their residents. The country’s distressed zip codes contained 1.4 million fewer jobs in 2016 than they did in 2007. Through private investment, the hope is that jobs, new businesses, improved housing options, and general revitalization of these distressed communities will occur. As an incentive to get businesses involved in OZs, the federal government provides capital gains tax deferrals for any entities investing in OZs and no capital gains tax for gains earned from the OZ investment.
The Extension Of 1031 Exchange Deadlines: Are You Ready?
When the IRS announced various deadline extensions in April 2020, a large bulk of the U.S. population breathed a collective sigh of relief. The extension of quarterly tax payments and filing deadlines from April 15 to mid-July provided wiggle room for taxpayers dealing with COVID-19’s economic fallout.
The 1031 Exchange: Maintaining Wealth Through Passive Management
When individuals are younger, investment goals typically focus on wealth creation. In this situation, investors are able, and willing, to take on higher risk, with anticipation of higher rewards. Investors have a longer life span to experience the ebbs and flows of a capital market, and their risk appetite can prove very rewarding in the long game, albeit volatile in the short.
A Deep Dive into Real Estate Portfolio Diversification
Ask any investment banker or financial planner about the best advice when it comes to building and maintaining a portfolio designed to provide steady returns, and the answer generally boils down to one word: Diversification.
Solving The Real Estate Tax Problem
Individuals acquire and own real estate because it is considered to be a good investment. When handled correctly, ownership of an office building can produce a steady cash flow, and a profitable return when the asset is sold.
Managing Risk and Real Estate
There is a degree of risk when it comes to life, in general. Those who drive risk getting into accidents. Those who step off front-porch stairs risk tripping and falling. The good news here is that people are generally prepared to reduce, or mitigate, such risks. For instance, most will drive defensively, stopping at stop signs, looking before proceeding, and yielding the right of way. A home owner or house visitor will scope out any impediments before descending those porch stairs.
From Active Investing Through Direct Ownership To Passive Investing Through Realized Portfolio™
In an earlier blog/chapter in this e-book, we introduced the concept of Investment Property Wealth Management™ as an alternative to real property ownership. The idea behind the IPWM™ solution is to use commercial real estate as a foundation to generate passive income, an important factor for investors approaching retirement.
