Some comments on the home market

February 27, 2012

A few comments on the home market because it can be a indicator for those investors looking at small rental properties. This does cross over into the commercial market as well.

Some of the recent news indicates the market may be on a uptrend and may have bottomed out.

According to information today at Realtor.org pending home sales are on an upward trend, which has been uneven but meaningful since reaching a cyclical low last April, and well above a year ago. The pending home sales index, a forward-looking indicator based on contract signings, rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December and is 8.0 percent higher than January 2011. This is the highest since April 2010.

According to Money Morning ‘The housing market has bottomed and there’s money to be made on its return,’. They point out that the National Association of Homebuilders’ Housing Market Index rose five points to 29 in February marking its fifth consecutive monthly increase. They point out that within housing; the important trend is that towards apartment building rather than single-family homes. That home ownership is in decline but the population continues to increase and job creation is healthy. That is confirmed by the details, in the February consumer price index, which show that rents have risen by 2.4% in the year to January, compared to a decline in the Case-Shiller home price index.

Warren Buffett said in his annual shareholder letter, posted this weekend, that he was “dead wrong” when he predicted last year that the rebound in U.S. home prices would begin within a year. This year, though, he’s betting again that the housing market will recover. During an appearance on CNBC this morning, Buffett said he would buy up millions of U.S. homes if it were possible.

So if the market is near or at the bottom, what opportunities does this provide for the investor or someone wanting to get into the market? Work with your agent and explore your options. I hope some of this news of today will help you.

 

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Incentives for renewable energy projects

February 20, 2012

The Database of State Incentives for Renewables and Efficiency is a good guide for finding financial incentives for your  projects.  It lists both federal and state incentives for renewable energy / energy efficiency projects on commercial and residential properties.

For Nebraska: http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=NE

For Iowa: http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=IA

 


Real Estate Investing Relationships

February 17, 2012

Relationships are important in so many business aspects, but I feel vital to Real Estate Investors. To develop ongoing relationships and build those relationships is maybe more important in today’s business climate that ever. To have a history and back ground with people you can work with, trust and grow is key to your success. Who are some of those that are important to have relationships with for the Real Estate investor?

Accountant, preferably a CPA that you can stay in touch with not only at time of transactions but ongoing to help get advice and stay current with changes and advise.

Commercial Real Estate Agent that you work with to keep a eye out for you, to guide you and to be your source of information and reference.

Construction Manager and Property Manager to help you with the management of your property and any improvements or build-out that will be needed.

Attorney, preferably a Real Estate attorney who knows the legalities of all your moves.

Mortgage Broker, someone to work with financing and other investors

Insurance Agent

Appraiser

You don’t have to have all the pieces of the puzzle together before you start but you do want to get some key relationship started.


Pending Federal Tax Changes and how they may affect you!

February 16, 2012

As a real estate investor or business owner, taxes affect our bottom line.  After attending a recent presentation given by Jeffrey J. Pirruccello from McGrath, North, Mullin & Kratz, PC LLO, I am convinced that we will be paying more taxes in one manner or the other in 2013.  We have heard of the annual battle to extend certain benefits or tax cuts and it will likely be that way in the late fall again this year.    Odds are going to be higher than in the past that we may see less of these benefits continued.  As it stands, the following tax cuts are going to be ending  12/31/12.

 Income Tax

-Higher AMT rates will be charged and personal credits including college expenses, state income and sales taxes may no longer be counted.

-First year depreciation is reduced and expensing of capital expenditures will be lowered.

-Dividend highest tax rates will be increased from 15% to 43.4%.

-Long term Capital gains will have a higher rate from 15% up to 23.8%.

-High income taxpayers will see a 3.8% surtax on investment income if they have an AGI of $200M/$250M (individual or joint).

Estate Tax

-Top Rates are scheduled to increase from 35% to 55%

-Exemption level is reduced from $5.12M to $1.0M.

Proposals currently being considered include: 

-Buffett Rule will have taxpayers with AGI over $1.0M paying at least an AMT of 30% or more.

-Elimination of deductions such as mortgage interest, health care costs, retirement plan contributions and child care for millionaires.

 

Income Tax Planning before 2013

You may want to consider some level of planning in anticipation of increasing tax rates

-Accelerating capital gains and deferring any capital losses.

-Think about accelerating any commissions or bonuses that you have earned to be received before year end.

As a real estate investor and business owner you know that there is uncertainty in the political future and things can change as we get closer to year end.  A prudent choice would be to make the effort to stay in contact with your tax advisor and consider some decisions about your business choices based on what the tax climate is by December.  Proactive measures could be worth a significant amount of money in tax savings and you may have a limited opportunity to get these actions implemented.

 

Disclaimer:  These points may change but as of this date, the best information indications are that you should plan ahead.  This is not meant to be tax or legal advice but opinions of the author. Seek professional advice.


MOBC Business Networking Group

February 15, 2012

About the MOBC Business Networking Group

http://mobcomaha.com/

Our group started in April of 2005 with the idea of bringing business people together to share ideas and help each other grow our businesses.  We hope to improve our business networking techniques and grow our business by expanding our contacts and building relationships with other people.

We are a group of like-minded business people who meet on a weekly basis to help each other and develop lasting relationships. We realize networking is about finding out about people and their business and how we can help them. Effective networkers always aim to help others first. In business people buy people and they buy people they know, like & trust.
We only allow one person from each profession and make it our priority to help each other learn about new opportunities and keys to a successful business. The best way to get a referral is to GIVE one. We all have skills and knowledge that can be helpful to others. We try to be a resource for others.
http://mobcomaha.com/

Commercial Real Estate Ownership-Logical piece of your investment portfolio!

February 8, 2012

PropertyBanc has a unique history of providing investor opportunities in the commercial real estate market in Omaha.  A project-specific investment can give the individual a significantly greater return on their invested dollars versus the REIT alternative.  The flexibility that is available in this arrangement can allow for a tailoring of the specific investment amount and the complementing partnership.  Individual parameters of a comfort zone can be factored in to ensure the proper fit for the size of investment, the experience of the individual and their related risk tolerance.

An investor should find the relative low-risk real estate investment attractive and the combination of ongoing cash flow and potential appreciation will be a good fit to balance a portfolio.  This can be a passive investment choice which will not require significant amount of oversight or time commitment.

The opportunity to be an owner/user is also a unique advantage of the locally implemented partnership arrangement.  An on-site partner is an incredibly important advantage for the oversight of a commercial property.  While not absolutely necessary from a management perspective, it allows for another owner-oriented opinion of management improvements and upgrades that would not otherwise be available.  Long term, this helps to ensure the viability of the commercial properties.

The ongoing ownership of these real estate interests will be benefited by the low-cost approach of local management which we believe will lead to significantly stronger returns on the investment properties as opposed to a national management approach.  By partnering with like-minded investors, it may be possible to match a novice with more experienced owners who will add stability to the ownership group.

The principals of PropertyBanc maintain and cultivate a pool of investors who have enjoyed the benefits of ownership and they provide a source of replacement owners who would be interested in a fairly priced opportunity should an existing owner need to liquidate their position.  With the proper documentation in place, an investor should be comfortable knowing that they are able to step out of real estate investment if their individual needs require it.

Finally, our knowledge of various related programs such as a 1031 Exchange, available lender program details, and purchase strategies will provide significant benefit related to the financial aspect of an opportunity.


A Little History of the OMAR Baking Company Building

February 6, 2012

Erected in 1923 for the Omar Baking Company, the bakery and building still remain a memory for a few old timers as a friendly bakery that served its community well.   In its prime, the Omar Baking Company had bakeries in Omaha, Milwaukee, Columbus and Indianapolis. There were seventeen branches within a 100 mile area covering 1,346 communities.  Many of those who still remember the bakery can recall when the “Omar Man” made his routes and a few can even recite the Omar jingle.

“I’m the Omar man, (tap,tap,tap)

knocking at your door (rappa tap tap).

When you taste my bread (mmmm boy!),

you’re gonna want more (rappa tap tap).

Yes, everyone loves those cookies and cakes

and the wonderful bread the Omar bakes!

Get it from your Omar man!”

The baking company had been given the name by Mr. Coad, its president, inspired by Omar Khayyam’s famous lines, “A book of verse, a loaf of bread…”  The building was sold to a company who dealt in used fixtures that were acquired mostly from department stores. It was during this period that the property was allowed to go into decline.

Nearly  a century from its beginnings, the Omar is restored to a new purpose and a new future for its community.  The present Owner/Developer acquired the building in 2008 with the vision to create a center for non-profits that facilitates improved delivery of essential services to constituents — within a workable budget.  The mission included brining all the necessary components together into one setting: off street parking, public transportation, desirable access and identity, and functional space .  The developer felt that, in addition to all the requisites for a functional facility, the character of the OMAR property  brings with it a strong sense of intent and purpose that offers beauty and dignity for tenants and their clients; some call it just good energy.

LOCATION & TRENDS:  The intersection of Saddle Creek and Cuming Street places the Omar on the fringes of Destination Midtown and at the end of the Saddle Creek Realignment project.  Public transportation is within one and one half blocks of the property and two of Omaha’s largest and most respected medical centers and universities Creighton are book ends for the property. The Omar Building is located on one of Omaha’s major arterials, a connector to the CenturyLink Center (formerly Qwest Center), Downtown Omaha, and Eppley airport.

To see oportunities to lease in this building visit: http://www.realestateomaha.org/properties.html