Real Estate Investment Software

More on 1031 Exchanges

admin — Mon, 09 Jun 2008 18:35:31 +0000

Managing a 1031 exchange is not difficult – but it does require adherence to strict 1031 tax exchange rules and regulations.You must enter into a 1031 exchange with the advice of a tax professional.Sell your Property Tax Free with a 1031 Exchange!

1031 Exchange–Don’t let the tax man get you yet

admin — Tue, 13 May 2008 15:45:43 +0000

In any real estate investment transaction, the property owner (seller) is taxed on the gains from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred.

Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a way for a property owner to trade properties for one or more replacement properties of “like-kind”. 1031 exchanges will defer federal and state taxes because it would be unfair to force the taxpayer to pay tax on a “paper” gain.

The like-kind 1031 exchange is tax-deferred, not tax-free. When the exchanged property is finally sold (not as part of another exchange), the original deferred gain, plus any additional gains since the purchase of the exchanged property, will be taxed.

Cap Rate–Calculating the Cap Rate

admin — Tue, 13 May 2008 15:25:24 +0000

The capitalization rate, a.k.a the–cap rate–is a way of measuring the ratio between cash flows an real estate investment property and the purchase price, or alternatively its current fair market value. Here is the formula for the cap rate:

* annual cash flow / cost (or value) = Capitalization Rate

For example, if a building is purchased for $500,000 and it produces $50,000 in positive net cash flow (costs are subtracted from gross income) during a year, then:

* $50,000 / $500,000 = 0.10 = 10%

The capitalization rate is ten percent.

The capitalization rate is measuring how fast an investment will pay back the original purchase price. from net cash flows. In the example above, the purchased building will be fully capitalized (pay for itself) after five years (100% divided by 10%). If the capitalization rate were 5%, the payback period would be twenty years.

Software Junk

admin — Tue, 13 May 2008 05:40:16 +0000

qarchive.org is a huge archive of software. Recently the giant went on a cleaning spree, and boy did they ever get rid of some junk. I remember not to long ago I could hardly find anything useful. I’m not saying they didn’t have useful software. I’m saying it was hard to find anything useful because of all the junk in the way. I suppose large archives get hit pretty bad. Although, they worked very hard getting rid of adult content and other content found in their servers. Now that it is all cleaned out, I bet the site runs much smoother. I just wanted to say thanks because now I might actually get things done. Great Job!

Real Estate Attorneys

admin — Sat, 10 May 2008 09:49:57 +0000

Finding a local real estate attorney you can count on could prove challenging. You could open your phone book and try to wade through the pile, or you could use find an attorney. I have been saved by this service so many times. Because I invest in real estate all over the country, it was impossible for me to just fly into a city and find an attorney I could count on–and that limited my abilities in that market.

I don’t have that problem anymore because I use these professionals:

Real Estate Bird-Dogging–Flipping

admin — Sat, 10 May 2008 07:50:48 +0000

A “Bird-Dog” is someone who finds Real Estate investment opportunities, then puts the property under contract and assigns that same contract to another investor–maybe a rehabber–for a fee. A good Bird-Dog will have an army of professionals in the business on standby. It’s not only important to have rehabber’ available to flip the property too, it’s just as important to have all of your note buyers, appraisers, insurance agents, title companies, and other knowledgeable individuals available to help you succeed. If you think you can just work without them–or maybe pick them up along the way–you couldn’t be more wrong. These contacts must be made before you even consider buying your first investment property.

Using Street View for your Real Estate Investment Business

admin — Sat, 10 May 2008 07:00:17 +0000

I ran across this video showing how to use Street View to help us manage and farm an area for our real estate investment business’. All I can say is–WOW. This is such a useful tool that cannot be overlooked. I’ll bet if you ask any real estate investor that was investing in real estate before *oogle was around that they’ll tell you they don’t know how they did it without it.

Using StreetView for Your Real Estate Investment Business

Below shows other videos related to real estate investing:

Watch the latest videos on YouTube.com

Note Buyers Instead of Traditional Mortgage Brokers

admin — Fri, 09 May 2008 12:59:30 +0000

Note buyers are a great way to obtain financing for your next real estate investment. In contrast to the traditional mortgage broker, using a note buyer keeps the transaction private. This is a better route because you will not be sacrificing your personal or business credit to purchase the investment property. In fact, most note buyers do not report to credit bureau’. You might ask, “How can a note buyer take such a risk?”. Well, it’s not really a risk because the transaction contracts have their own set of rules that bypass state laws when a breach of contract occurs. A note buyer is not in the business of funding traditional mortgage loans that require an expensive foreclosure process. Having a note buyer or two on standby is vital to any real estate investor–unless the investor can fund the note themselves.

Note buyers pioneered–the buy a home with no money down revolution. Without note buyers, real estate investing and the real estate market would not have earned the lucrative business reputation that investing in real estate truly is.

Many newbies in the real estate investing business don’t realize how important a note buyer is to them. The overlooking of the role a note buyer plays in any real estate investment consideration is probably the single most reason new real estate investors fail in the business.

Depreciation of Rental Properties

admin — Fri, 09 May 2008 05:50:57 +0000

Learning how to depreciate rental property is a vital skill to have for any landlord or real estate investor. There are two depreciation methods available–the straight line method, and the double declining balance method–for an investor to choose between. Since every property paired with a real estate investor is financially unique, the investor should run the calculation both ways to find out which way works best for their situation. The current insured replacement cost will help an investor obtain the data values needed to run the calculation. The land value, structure value, and fixture values are all used when calculating depreciation–regardless of the depreciation method being used. The real estate investor would also need to get the state and federal tax rates as well. Once this information has been obtained, the calculations can be performed.

Depreciation formula for the straight line method:
Current Value – Salvage Value / Years left of productive life

Depreciation formula for the double declining balance method:
(Current Value - Salvage Value) * (2 * 100% / Years left of productive life)

NPV–calculating the Net Present Value

admin — Fri, 09 May 2008 04:59:26 +0000

Learning how to calculate the NPV–Net Present Value–is one of many valuable skills to have if you want to invest in real estate. The NPV helps a real estate investor analyze a properties profitability. Although, many investors consider the NPV to be unreliable. The NPV relies on projected future cash inflows which is impossible to accurately forecast. Even when an investor realizes the NPV’ reliability, it is still calculated because it provides a guess estimate. It would be beneficial to be as realistic as possible when inputting future cash flow values. A good way to do this would be by guessing a high and low realistic amounts, and using the number between the two. However, a good way to ensure your being realistic would be by keeping the high and low amounts as close together as possible.

I suggest using the built in formula in Excel, or other popular spreadsheet programs to calculate the NPV. Here is the formula used for calculating the NPV: =NPV(discount rate, cash flow values).