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Why Real Estate Investors Continue To Make The Same Mistakes Over & Over Again?

Why Real Estate Investors Continue To Make The Same Mistakes Over & Over Again?

Due Diligence Will Reduce Mistakes For Real Estate Investors

Any time of day you turn on your television you can find several infomercials or shows which depict investing in real estate as an easy path to riches and wealth.  Every day you get in front of your computer screen you will run across ads and coy and clever marketing programs which also suggest that you should quit your job and begin a high-powered career in real estate investing.  The truth is that real estate investing, like every business requires significant education, due diligence, and perseverance.  Importantly, most new real estate investors make many mistakes along the way which are sometimes avoidable, but do help with the education process and learning curve.  Here are some very important topics which you need to become familiar with before you begin your journey down the path to real estate investing.

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Look Carefully At A Home’s Square Footage – It Might Not Be What You Think It Is

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If You Are Buying A Home Just For It’s Square Footage Think Again

How does the real estate marketplace calculate and represent square footage of listed homes in marketing materials and in the multiple listing services?  To be honest there are several common practices and it is quite possible that a home might have two or three square footages which are all close, but not the same.  Some people may include the garage square footage, some may include the basement, some may include unpermitted covered patios, and others may not include any of those areas.  To compound things there is no standard by which the entire real estate community utilizes, thus there will always be some ambiguity and lack of clarity as to the precise square footage of a home.

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To Gift Or Devise, That Is The Question!

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Tax and Estate Planning is Critical to Avoid Unnecessary Tax Burdens and Consequences

I have clients ask me all the time if it makes sense to give their property to their kids or should they wait to die and let their kids inherit it.  The practical answer from a tax planning perspective is to allow the property to transfer at the time of death.  If you haven’t spent any time planning your estate or your property succession strategy you should sit down and think about how you would like things to pass, and who should be the recipient of the properties.  If you have a substantial estate with multiple properties chances are you already have done this, if not an estate planning or trust attorney can help you through this process.  Planning now can prevent unnecessary taxes or burdens being placed on your loved ones.

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Six (6) Easy Ways to Save Money on Health Care Costs – And Invest in Real Estate with the Savings

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How much money do you spend on health care?  Each day that goes by your overall health care costs go up (even though you don’t realize it) for a few reasons; 1) inflation, 2) you get older every day, and 3) unless you are exercising regularly you are getting in worse shape day-by-day.  These three factors will drive up your long-term health care costs.  No matter how prepared you are for your retirement years these costs will continue to rise unless you do something about them.  I recently posted an article indicating the average American couple will spend $220,000 for health care costs during their retirement years – and introduced a real estate strategy to combat these costs.  This figure does NOT include long-term care such as a nursing home or other retirement facilities.  Please prepare for the future by looking at the short list below which can help you plan and reduce surprises.

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Most Common Real Estate Tax Audit Issues In 2014 And How To Avoid Them

Most Common Real Estate Tax Audit Issues In 2014 And How To Avoid Them

Selling, Exchanging and Facilitating a Tax Deferral Strategy Requiring the Use of a Qualified Intermediary and IRC 1031 Requires Careful Planning and a CPA or Tax Attorney

Internal Revenue Code Section 1031 Like-Kind Exchange Audits continue to find non-compliance in some common areas.  Specifically, the following list of items are repeatedly flagged for audit by the IRS.  Please take a close look at this list, which is by no means comprehensive, and always have your CPA or tax attorney help you prepare and file 1031 exchange paperwork and returns.

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The High Price To The Low Bid – Why You Should Never Hire An Unlicensed Contractor To Work On Your Property (When A License Is Required)

The High Price To The Low Bid – Why You Should Never Hire An Unlicensed Contractor To Work On Your Property (When A License Is Required)

It Never Makes Sense To Hire An Unlicensed Contractor – The Risks Far Outweigh Any Rewards And It’s Against The Law

In California, like many states, contracting for work where the labor and materials are greater than $500 requires a contractor’s license – there are no exceptions.  Month after month I hear stories of people, including other real estate agents, who hire unlicensed contractors (when the work unambiguously requires a contractor’s license) in an effort to save money.  In reality when they do so they are breaking the law, and exposing themselves and their brokers, and/or their clients, to unnecessary risk.  In addition to all of the potential workmanship issues associated with unlicensed contractors, the red-flag that is most prevalent and potentially damaging is the insurance issue.  Unlicensed contractors are NOT insured.  Unlicensed contractor’s work is NOT bonded.  Unlicensed contractor’s employees are NOT covered by worker’s compensation insurance.  Unlicensed contractor’s work is NOT guaranteed.

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Durable Power of Attorney – What Is It And Do You Need One?

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A Durable Power of Attorney Can Provide Peace Of Mind, Comfort, and Ease of Transition For Families

As baby boomers approach retirement age there are many considerations which should be addressed regarding preparation for transitions and changes in their lifestyle.  Generally, most people will have to rely on others to help them at some point in their lives, whether it’s daily or periodic help.  Additionally, unforeseen circumstances and events can transpire which can lead to disruption in their daily or future routines.  In order to be prepared everyone, including children of senior baby boomers, should understand what a Durable Power of Attorney (POA) is, and consider having them in place as soon as reasonably possible.

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Straight Facts about Reverse Mortgages

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Reverse Mortgages Are Not For Everyone, But They Are Great Products For Certain Individuals In Their Retirement Years With Limited Cash Flow

You have probably heard the term “reverse mortgage” but do you really understand what one is?  A reverse mortgage is basically a loan homeowners older than 62 years old can utilize to convert part of their equity in their home into cash.  Retirees with limited income streams were originally the target audience for this product – the idea was that folks in their retirement years could benefit from the equity in their homes by having the home/bank make payments back to the homeowner instead of the homeowner paying the bank.  A borrower is not required to pay back the loan until the home is sold or otherwise vacated.  As long as a borrower lives in the home they are not required to make any monthly payments towards the note balance, however the borrower must remain current on the property taxes, HOA dues, etc.

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Health Care Retirement Costs For Couples Top $220,000 – Imagine A Real Estate Strategy To Help Pay For That

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Planning For Retirement? Did You Know That The Average Couple Needs $220,000 For Health Care After 65?  Real Estate Investment Strategies Which Can Help You Meet Your Retirement Obligations And Allow You Benefits You Haven’t Thought Of Are Available For You

Wow, That’s A Lot Of Money

Research and recent data show that in order to be comfortable in retirement a retiree couple must figure that they will be spending an average of $220,000 during their retirement on health care costs.  Importantly, this amount does not include nursing home costs, or other long-term care expenditures.  If the average retirement lasts 25 years that is approximately $8,800 per year for two people – now that doesn’t sound as bad, correct?  No matter what the real number is it is imperative that people plan for these costs and expenses.

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Baby Boomers, Property Tax Relief, and Downsizing Strategies

Baby Boomers, Property Tax Relief, and Downsizing Strategies

Why Baby Boomers Should Take Advantage of

Prop. 60/90 and Transfer Their Property Tax Base

Many baby boomers (those people born between 1946 and 1964) are in the middle of their transitions from working to retirement.  During this time period it is difficult for many people to imagine their lives without the homes that they raised and educated their children in.   There are thousands of memories and a multitude of mementos scattered throughout the neighborhoods they have called home for so long. 

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