Remembering President George H.W. Bush

Today we remember and honor

George Herbert Walker Bush, 41st President of the United States.

June 12, 1924 – November 30, 2018

georgebush

“I do not fear what is ahead. For our problems are large, but our heart is larger. Our challenges are great, but our will is greater. And if our flaws are endless, God’s love is truly boundless.”

–George H.W. Bush

Fractional Ownership

In 2004, the IRS released Revenue Ruling 2004-86, which allows the use of a DST to acquire real estate where the beneficial interests in the trust will be treated as direct interests in replacement property for purposes of IRC Section 1031.

For 1031s, Fractional interest can be in the form of TIC or DST interests.  For a broad comparison of both forms of ownership, click here for DST vs TIC comparison

For more information, please contact us.

Keeping Pace with Inflation

Inflation has been called the silent killer of wealth. It’s rarely discussed and many dollar picretirement income strategies ignore it completely. But over time, the steady increase in the cost of living can have a profound negative effect on your standard of living in retirement.

How inflation destroys wealth

As this chart shows, even at a modest rate of inflation, your spending power could decline by nearly 40% over the next 20 years.inflationNo one knows what the future may hold for inflation, but we do know that the Federal Reserve aims to keep the rate between 1% and 3% per year, and it has reached double digits in the 1950s, 1970s and 1980s.

DST’s: Advantages & Disadvantages

Potential Advantages of DST 1031 Properties:

  • Defer 100% Of Capital Gains Taxes
  • Ability to Diversify 1031 Exchange Equity *
  • Management Free – No More Tenants, Toilets and Trash!
  • Multiple Asset Classes – Multifamily Apartments, Triple Net Leased Properties (NNN), All-Cash/Debt-Free Properties, Medical Properties, Pharmacies, Fast Food, Dialysis Centers, Etc.
  • Mitigate 1031 Exchange Closing Risk – Typically Close In As little As 1-3 Business Days.

* Please note that diversification does not guarantee profits nor guarantee against losses.

Potential Disadvantages of Real Estate NNN, DST, TIC Properties and 1031 Exchanges:

  • No Guarantees For Distributions
  • No Guarantees For Appreciation
  • General Real Estate Risks
  • Real Estate and DST Properties are Illiquid Investments
  • Risk Of Lender Foreclosure
  • Risk Of A Loss Of Principal
  • Reliance On a Sponsor/Trustee To Make Management Decisions
  • Refinancing Risk
  • Economic Risk To The General Economy Of The United States
  • Economic Risk To The Local Economy A Property Is Located

For more information on DSTs please contact us

Happy Thanksgiving !

Please note our office will be closed on Thursday, November 22 and Friday, November 23, 2018 in observance of the Thanksgiving holiday.  Normal operating hours will resume on Monday, November 26, 2018.

Feel free to contact me should you have any questions or if you have specific needs that require special attention.  You can reach me at 239-287-3789 or via email at pmcintyre@namcoa.com.

Have a safe and happy holiday!

 

Due Diligence for Commercial Real Estate Transactions

Due diligence usually refers to the time after signing a contract that the buyer has to inspect the property and make a decision whether they want to buy the property or lease the property or otherwise go forward with the transaction.

It’s important during due diligence period that you gather all of your information. You have to get your inspections done, you have to get your environmental inspections done, you have to gather all the documents that relate to the property, you have to do your zoning checks and you generally have to be one hundred percent certain that you are going to go forward with this deal.

If you don’t gather all that information, when due diligence expires, your deposit money may become non-refundable. Before due diligence expires, you can still walk away. It’s what’s also called a Free Look Period. It’s important to have a good broker and a good team of professionals around you to conduct all of these inspections, gather all of the documents, tell you what everything means and advise you whether you should go forward or not. A good broker will quarterback all of these players and make sure that everything is done timely and keep you on track.

The scope, intensity and focus of any due diligence investigation of commercial real estate depends upon the objectives of the party for whom the investigation is conducted.

A  “Due Diligence Review” will address issues important to the Seller, Developer and Lender including:  

  • WHAT IS CONSIDERED TO BE “THE PROPERTY”Bank Property
  • PURCHASE PRICE & OTHER CONSIDERATION
  • TITLE
  • SURVEY
  • BUILDING INSPECTION
  • THIRD PARTY SERVICE AGREEMENTS
  • ZONING
  • EXISTING LEASES
  • PURCHASER FINANCING
  • ENVIRONMENTAL ISSUES